UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission File No.: 333-7006
TECHNICAL MAINTENANCE CORPORATION
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Nevada 87-0485304
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1800 E. Sahara, Suite 107
Las Vegas, Nevada 89104
- ------------------------------------------------------------
(Address of principal executive offices, including zip code)
Issuer's telephone number, including area code (702)-734-7557
----------------
Issuer's facsimile number, including area code (702)-734-7500
----------------
Class A Common Stock (Par Value $.001 per share)
- ------------------------------------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. (x) Yes ( ) No
The total number of shares of Class A Common Stock outstanding on July 31,1998
was 14,658,644.
1<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements for the quarter ended June 30
1998, have been prepared in accordance with the instructions to Form 10-QSB
and, therefore, do not include all information and footnotes necessary for a
complete presentation of financial position, results of operations, cash flows
and stockholders' equity for the quarter then ended, in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature. Operating results for the quarter ended June
30,1998 are not necessarily indicative of the results that can be expected for
the year ending December 31, 1998. For further information, refer to the
financial statements and footnotes thereto included in the Registrants Annual
Report on Form 10-KSB for the year ended December 31, 1997.
FINANCIAL STATEMENTS
(UNAUDITED)
TECHNICAL MAINTENANCE CORPORATION
[A DEVELOPMENT STAGE COMPANY]
June 30, 1998
Index
Page
Balance Sheets............................... 3
Statements of Operations..................... 4
Statements of Stockholders' Equity (Deficiency) 5
Statements of Cash Flows..................... 6
Notes to Financial Statements................ 7
2<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
<TABLE>
<CAPTION>
BALANCE SHEETS
As at:
<S> <C> <C>
June 30, December 31
1998 1997
[in U.S. dollars] $ $
------------ ------------
(Unaudited) (Note)
ASSETS
Current
Cash 736 773
------------ ------------
Total current assets 736 773
------------ ------------
Investment in jointly controlled company [note 2] 111,610 49,735
Fixed assets 124,144 162,887
Non-competition agreement _ net of accumulated amortization
of $300,000 [1997 - $200,000] 700,000 800,000
Patents - net of accumulated amortization of $387,326
[1997 - $301,360] 472,343 558,309
------------ ------------
1,408,833 1,571,704
------------ ------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable _ 12,985
Accrued expenses 29,893 29,893
Due to jointly controlled company [note 2] 4,392,618 2,484,397
------------ ------------
Total current liabilities 4,422,511 2,527,275
------------ ------------
Contingent Liability [notes 2 & 4]
Stockholders' deficiency
Series A preferred stock, $.001 par value
Authorized: 10,000,000 shares
Issued and outstanding: 100 [1997 - 100] 1 1
Class A common stock, $.001 par value
Authorized: 25,000,000 shares
Issued and outstanding: 14,658,644 [1997 - 14,658,644] 14,659 14,659
Additional paid-in capital 3,483,382 3,483,382
Accumulated deficit (1,000) (1,000)
Deficit accumulated during the development stage (6,510,720) (4,452,613)
------------ ------------
Total stockholders' deficiency (3,013,678) (955,571)
------------ ------------
1,408,833 1,571,704
------------ ------------
<CAPTION>
See accompanying notes.
Note: The balance sheet at December 31, 1997, has been derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
</TABLE>
3<PAGE>
Technical Maintenance Corporation [ A Development Stage Company]
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1998
(with comparatives for the quarter and six months ended June 30, 1997)
(Unaudited)
Quarter ended Six months ended Quarter ended Six months ended
June 30, 1998 June 30, 1998 June 30, 1997 June 30,1997
$ $ $ $
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses:
Research and development 131,463 435,718 184,138 258,171
Sales and marketing salaries 159,157 319,582 - -
Professional and consulting fees 184,908 309,218 146,881 302,579
Travel and transportation 109,394 173,728 65,346 93,986
Management fees 26,395 52,457 19,910 33,988
Selling and promotional expenses 89,069 184,406 13,723 32,249
Office expenses 129,470 187,113 25,148 43,578
Rent expense 59,013 89,843 12,577 18,724
Other taxes 11,439 11,439 - -
Depreciation & amortization 112,414 224,709 99,843 199,686
Interest expense [note 2] (30,626) 131,769 - -
---------- ----------- --------- ---------
Net loss before share of net
income in jointly
controlled company 982,096 2,119,982 567,566 982,961
Share of net income in
jointly controlled company
[note 2] (19,224) (61,875) (3,650) (3,650)
---------- ----------- --------- ---------
Net loss 962,872 2,058,107 563,916 979,311
---------- ----------- --------- ---------
Per common share [note 3]
Basic net loss per share .066 .140 .039 .071
See accompanying notes
</TABLE>
4<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
Six Months Ended June 30, 1998
(Unaudited)
Series A Class A
Preferred Stock Common Stock
------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deficit
accumulated
Additional during the
paid-in Accumulated development
Shares Amount Shares Amount capital deficit period Total
$ $ $ $ $ $
------- ------- ----------- ------- ---------- ---------- ----------- -----------
Balances, December 31, 1997 100 1 14,658,644 14,659 3,483,382 (1,000) (4,452,613) (955,571)
Net loss _ _ _ _ _ _ (2,058,107) (2,058,107)
------- ------- ----------- ------- ---------- ---------- ----------- -----------
Balances, June 30, 1998 100 1 14,658,644 14,659 3,483,382 (1,000) (6,510,720) (3,013,678)
------- ------- ----------- ------- ---------- ---------- ----------- -----------
See accompanying notes.
</TABLE>
5<PAGE>
Technical Maintenance Corporation [ A Development Stage Company ]
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 1998
(with comparatives for the quarter and six months ended June 30, 1997)
(Unaudited)
<S> <C> <C> <C> <C>
Quarter ended Six months ended Quarter ended Six months ended
June 30, 1998 June 30, 1998 June 30, 1997 June 30,1997
$ $ $ $
-------------- ----------------- -------------- -----------------
OPERATING ACTIVITIES
Net loss (962,872) (2,058,107) (563,916) (979,311)
Adjustments to reconcile net loss to net
cash used by operating activities:
Share of net income from jointly
controlled company (19,224) (61,875) (3,650) (3,650)
Depreciation and amortization 112,414 224,709 99,843 199,686
Changes in assets and liabilities:
Prepaid expenses - - - 21,306
Accounts payable (43,883) (12,985) 29,928 21,160
-------------- ----------------- -------------- -----------------
Cash used in operating activities (913,565) (1,908,258) (437,795) (740,809)
-------------- ----------------- -------------- -----------------
INVESTING ACTIVITIES
Investment in jointly controlled company - - - (583)
Increase in costs of patents - - - (131,909)
-------------- ----------------- -------------- -----------------
Cash used in investing activities - - - (132,492)
-------------- ----------------- -------------- -----------------
FINANCING ACTIVITIES
Amounts due to jointly
controlled company 913,565 1,908,221 438,590 873,850
Proceeds from sale of preferred stock - - - 150
-------------- ----------------- -------------- -----------------
Cash provided by financing
activities 913,565 1,908,221 438,590 874,000
-------------- ----------------- -------------- -----------------
Net Increase (Decrease) in cash - (37) 795 699
Cash, beginning of period 736 773 - 96
-------------- ----------------- -------------- -----------------
Cash, end of period 736 736 795 795
-------------- ----------------- -------------- -----------------
See accompanying notes
</TABLE>
6<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of operations
Technical Maintenance Corporation [the Company] is a development stage company
which has not generated any revenue since it commenced operations in 1994. The
Company's primary efforts have been directed at the development of a digital
jukebox, which will utilize digital audio transfer technology to distribute
music titles through a proprietary distribution network. The development of
the Company's commercial products will require additional funds. There is no
assurance that commercially successful products will be developed or that the
Company will achieve profitable operations.
The Company's operating expenses have been funded by TouchTunes Digital Jukebox
Inc. ["TouchTunes"], a jointly controlled Canadian entity [see note 2].
Substantially all of the developmental activities are conducted through
TouchTunes, for which the Company is charged all costs incurred in addition to
a 5% management fee.
Basis of presentation
Investments in which the Company exercises joint control are accounted for
using the equity method. Under this method, only the Company's share of net
income is recorded. Note 2 to the financial statements summarizes the effect
of the investments on the financial statements.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain 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.
Accordingly, actual results could differ from those estimates.
Fixed assets
Fixed assets consist of computer equipment and purchased software which are
stated at cost. Depreciation commenced in 1995 and is provided on a
straight-line basis over estimated useful lives of 5 years.
7<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Cont'd]
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are
translated into U.S. dollars at rates of exchange prevailing at the balance
sheet date. Revenues and expenses are translated into U.S. dollars at rates of
exchange in effect at the related transaction dates. Exchange gains and losses
arising from the translation of foreign currency items are included in the
determination of net earnings.
Intangibles
Software development costs
Costs related to the conceptual formation and design of internally developed
software are expensed as research and development as incurred. It is the
Company's policy that certain internal software development costs, incurred
after technical feasibility has been demonstrated and which meet recoverability
tests, are capitalized and amortized over the economic life of the product.
The establishment of technical feasibility and the ongoing assessment of
recoverability of those costs requires judgment by management with respect to
certain external factors including, but not limited to, anticipated future
gross revenue, estimated economic life and changes in technology. No internal
software development costs have been capitalized as of June 30, 1998.
Patents
Patents consist primarily of processes and systems related to the operation of
a digital jukebox and the interactive program distribution for
telebroadcasting. In 1995, patents contributed by stockholders in exchange for
shares of common stock were valued at the shareholder's cost, which was
approximately $500,000.
The patents and the related intellectual property are amortized on a straight-
line basis over their estimated economic life of 5 years. The Company is in
the process of having these patents registered in various countries. Costs of
registering the patents, consisting primarily of legal fees, are capitalized as
part of the cost of the patents. In 1997, legal costs associated with the
registration of patents were approximately $251,000.
Non-competition agreements
The Company has non-competition agreements with the provider of computer
operating systems and several system programmers who assisted in the
development of the system. The agreements are effective January 1, 1997 and
cover the succeeding five years. The costs are amortized on a straight-line
basis over the five-year life of the agreements.
8<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Cont'd]
Currency of measurement
The currency of measurement used in the preparation of these financial
statements is the U.S. dollar.
Income taxes
The Company accounts for income taxes using the liability method. Under this
method, deferred income tax assets and liabilities are determined based on the
differences between the financial reporting and tax basis of assets and
liabilities using currently enacted tax rates and laws.
Net loss per share
Net loss per share is computed using the weighted-average number of shares of
common stock outstanding during the year or period.
Reclassification
Certain 1997 balances have been reclassified to conform to the 1998
presentation.
2. INVESTMENT IN JOINTLY CONTROLLED COMPANY
On March 21, 1997, the Company acquired 800 shares of Class A common stock of
TouchTunes for a total consideration of $584.
The Company controls 50% of the votes of TouchTunes and has the ability to
elect 50% of the Board of Directors. Pursuant to an agreement with the other
50% shareholders of TouchTunes [the "Canadian Investors"], such shareholders
can exchange their Class B and Class C common shares in TouchTunes into shares
of the Company at any time. The Company would then own 100% of TouchTunes.
On February 11, 1998, the holders of the Class B and C shares subscribed for an
aggregate principal amount of $4,000,000 U.S. of debentures ("Debentures")
issued by the Company. On August 5, 1998, additional debentures of $2,000,000
US were issued. The Debentures are payable by TouchTunes on demand, only after
the occurrence of an event of default as defined by the subscription agreement.
Upon such demand, the Debentures would bear interest at a rate of 12% per
annum, payable in one single instalment, concurrently with the payment of the
principal amount. At any time prior to February 11, 1999, TouchTunes has the
right to require the holders of the Class B and C shares to purchase
additional Debentures up to an an aggregate principal amount of $4,000,000 U.S.
bearing the same terms and conditions in four increments of $1,000,000 U.S.
each. TouchTunes expects to issue additional Debentures for an aggregate
principal amount of $4,000,000, prior to February 11, 1999.
9<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
On February 11, 1998, the Company entered into a "Debenture Put Right
Agreement" with the Canadian Investors, providing them with the right and
option to require the Company to purchase all or any part of the principal
amount of Debentures they have acquired (up to $10,000,000 in principal
amount), at an exchange rate of $2.00 per share, for the issuance by the
Company of up to 5,000,000 shares of its Series A preferred stock, convertible
at the option of the holders, share for share, into an aggregate of up to
5,000,000 shares of the Company's Common Stock.
TouchTunes' revenues are derived from development services provided to the
Company as well as interest earned on its balance due from Technical
Maintenance Corporation. Some interest revenue has also been earned through the
investment of surplus funds. In addition, TouchTunes has derived revenues in
relation to research and development tax credits.
Including the litigation initiated in July 1998, [see note 5], TouchTunes is
involved in a total of two litigation cases, the outcomes of which are not yet
determinable. However, based on information presently available, management
does not expect any material adverse results and believes the litigations are
without merit.
During the quarter the Company renegotiated the interest rate on the
intercompany balance payable to TouchTunes to Canadian prime rate plus 1.5%,
retroactively to January 1, 1998. The adjusted rate as at June 30, 1998 was
8%.
Interest expense on TouchTunes' Debentures previously charged to the Company by
TouchTunes was cancelled. Under present conditions, it is unlikely that
interest would have to be paid on the Debentures. In the event TouchTunes
would have to pay interest on the Debentures, the amounts would be $120,000 for
the quarter ended June 30, 1998, and $185,000 from the date of issuance of the
Debentures.
This investment is accounted for on the equity basis. The following summarizes
the balance sheet of TouchTunes as at June 30, 1998:
$
- ------------------------------------------------------------
Assets
Cash -
Term Deposit 1,406,494
Accounts receivable 201,034
R&D Income Tax Credits 87,053
Due from Technical Maintenance Corporation 4,392,618
Accounts receivable _ shareholder of the Company 48,528
Accounts receivable _ other 10,018
Prepaid expenses 290,710
Fixed assets 1,887,274
- -----------------------------------------------------------
8,323,729
- ------------------------------------------------------------
10<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
Liabilities
Bank Overdraft 132,532
Accounts payable and accrued liabilities 283,877
Income taxes payable 112,585
Deferred grant 55,304
Current portion of capital lease obligation 104,284
Debenture payable-shareholders 4,000,000
Long-term portion of capital lease obligation 678,908
- --------------------------------------------------------
5,367,490
- --------------------------------------------------------
Shareholders'Equity 2,956,239
- --------------------------------------------------------
8,323,729
- --------------------------------------------------------
For the six months ended June 30, 1998, the results of TouchTunes' operations
were as follows (in U.S. dollars):
$
- --------------------------------------------------------
Development Fees Earned 942,267
Interest Income 158,106
R&D Tax Credits Earned 88,132
- --------------------------------------------------------
Total Revenue 1,188,505
- --------------------------------------------------------
Expenses 983,507
- --------------------------------------------------------
Earnings from operations 204,998
- --------------------------------------------------------
Income taxes 81,248
- --------------------------------------------------------
Net earnings 123,750
- --------------------------------------------------------
<TABLE>
<CAPTION>
3. LOSS PER SHARE
<S> <C> <C> <C> <C>
Quarter ended Six months ended Quarter ended Six month ended
June 30, 1998 June 30, 1998 June 30, 1997 June 30,1997
$ $ $ $
-------------- ----------------- -------------- ----------------
Numerator for basic loss per share -
Loss to common shareholders 962,872 2,058,107 563,916 979,311
-------------- ----------------- -------------- ----------------
Denominator for basic loss per share -
weighted-average shares issued
and outstanding 14,658,644 14,658,644 14,584,707 13,746,854
-------------- ----------------- -------------- ----------------
Basic loss per share .066 .140 .039 .071
-------------- ----------------- -------------- ----------------
</TABLE>
11<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
3. CONTINGENT LIABILITY
In July 1998, the Company and TouchTunes became jointly involved in a
litigation case, the outcome of which is not yet determinable. However, based
on information presently available, management does not expect any material
adverse result and believes the litigation is without merit.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(a) Plan of Operations
The Registrant has completed the development of the Digital Jukebox.
Commercial production commenced in July 1998. The first units are expected to
be delivered to jukebox operators in August 1998. The cost of producing these
initial units will be financed through the Registrant's existing financial
resources. From the indications of interest received thusfar, the Registrant
estimates that between 4,000 and 6,000 Digital Jukebox units will be ordered,
manufactured, assembled and delivered to jukebox operators under its proposed
lease arrangements over an eighteen month period commencing August 1998. The
Registrant has generated no revenue to date, and none is expected until it
begins commercial delivery and operation of Digital Jukeboxes. There can be no
assurance that the Registrant's marketing strategy will be successful or
profitable.
(b) Liquidity and Capital Resources
The Registrant will use its existing capital resources, including funds
raised through the issuance of additional TouchTunes' Debentures (invested by
the Canadian Investors as described in previous filings), to commence
production, delivery and operation of Digital Jukeboxes. The Registrant must
obtain additional financing prior to the end of the current fiscal year, to
continue producing, delivering and operating the Digital Jukeboxes, as
anticipated. Based on the Registrant's estimate that it can lease between
4,000 and 6,000 Digital Jukebox units to prospective jukebox operators over a
period of eighteen (18) months, the Registrant must raise between $20,000.000
and $30,000,000 (US) for the manufacturing and distribution costs of such
units. The Registrant is negotiating with several financial institutions for
its short term and long term financing requirements, however, there can be no
assurances that it will be able to raise funds on terms satisfactory to the
Registrant, or at all.
(c) Forward Looking Statements
Certain matters discussed within this filing may constitute forward
looking statements within the meaning of the federal securities laws. Although
the Registrant believes these statements are based on reasonable assumptions,
it can give no assurance that its expectations will be attained. Actual
results and the timing of certain events referred to, could differ materially
from those projected in or contemplated by the forward looking statements due
to a number of factors which are not within the Registrant's control.
12<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Index To Exhibits
Exhibit
Number Description
- --------- --------------
3. (i) Registrant's Amended and Restated Articles of Incorporation.
Reference is made to Exhibit 8 of Registrant's Form 8-K for the month
of March 1997, which Exhibit is incorporated herein by reference.
3. (ii) Registrant's Bylaws. Reference is made to Exhibit 3 (i) of
Registrant's Registration Statement on Form SB-2, File No. 33-7006,
which Exhibit is incorporated herein by reference.
4. Form of Registrant's Common Stock certificates. Reference is made to
Exhibit 3 (ii) of Registrant's Registration Statement on Form SB-2,
File No. 33-7006, which Exhibit is incorporated herein by reference.
9. Shareholder Agreement between Techno Expres S.A. the majority
shareholder of Registrant and the Selling Shareholders dated March
21, 1997, relative to their shares of Registrant. Reference is made
to Exhibit 7 of Registrant's Form 8-K for the month of March 1997,
which Exhibit is incorporated herein by reference.
10. (i) Agreement of Sale between Touchtunes Jukebox Joint Venture and
Registrant, dated December 9, 1994, relative to transfer of patent
rights in exchange for 1,000,000 shares of Common Stock of
Registrant. Reference is made to Exhibit A of Registrant's Form 10-K
for the fiscal year ended December 31, 1994, which Exhibit is
incorporated herein by reference.
10. (ii) Summary of International Patent Application for the Digital Jukebox.
Reference is made to Exhibit B of Registrant's Form 10-K for the
fiscal year ended December 31, 1994, which Exhibit is incorporated
herein by reference.
10. (iii) Development Agreement between Touchtunes Jukebox Inc. and Registrant,
dated March 8, 1995. Reference is made to Exhibit C of Registrant's
Form 10-K for the fiscal year ended December 31, 1994, which Exhibit
is incorporated herein by reference.
10. (iv) Agreement between Oraxium International, Inc. and Registrant, dated
January 30, 1995, relative to the acquisition of a computer operating
system. Reference is made to Exhibit A of Registrant's Form 8-K for
the month of March 1995, which Exhibit is incorporated herein by
reference.
10. (v) Agreement between S.G.R.M. Inc. and Registrant, dated March 6, 1995,
relative to the acquisition of patent rights in exchange for
10,000,000 shares of Common Stock. Reference is made to Exhibit B of
Registrant's Form 10-K for the fiscal year ended December 31, 1994,
which Exhibit is incorporated herein by reference.
13<PAGE>
10. (vi) Amended Agreement between S.G.R.M. Inc., Techno Expres, S.A. and
Registrant, dated November 30, 1995, relative to the acquisition of
patent rights in exchange for 10,000,000 shares of Common Stock.
Reference is made to Exhibit C annexed to Registrant's Form 8-K for
the month of November 1995, which Exhibit is incorporated herein by
reference.
10. (vii) Subscription Agreement for the purchase of 100 Class B shares and 20
Class C shares of TouchTunes Digital Jukeboxes Inc., dated March 21,
1997. Reference is made to Exhibit 1 of Registrant's Form 8-K for
the month of March 1997, which Exhibit is incorporated herein by
reference.
10.(viii) Escrow Agreement for the deposit of $3,400,000 CDN and 680 Class C
shares of TouchTunes by the Selling Shareholders, dated March 21,
1997. Reference is made to Exhibit 2 of Registrant's Form 8-K for
the month of March 1997, which Exhibit is incorporated herein by
reference.
10. (ix) Agreement between TouchTunes and Registrant, relative to work to be
rendered in connection with Registrant's Digital Jukebox project.
Reference is made to Exhibit 4 of Registrant's Form 8-K for the month
of March 1997, which Exhibit is incorporated herein by reference.
10. (x) Stock Exchange Agreement between Registrant and Selling Shareholders
for the exchange by the Selling Shareholders of their Class B and
Class C shares of TouchTunes for Series A Preferred shares of Regis-
trant. Reference is made to Exhibit 5 of Registrant's Form 8-K for
the month of March 1997, which Exhibit is incorporated herein by
reference.
10. (xi) Subscription Agreement for the purchase of 100 Series A Preferred
shares of Registrant by the Selling Shareholders. Reference is made
to Exhibit 6 of Registrant's Form 8-K for the month of March 1997,
which Exhibit is incorporated herein by reference.
10. (xii) Shareholder Agreement between Techno Expres S.A., the majority
shareholder of Registrant and the Selling Shareholders, relative to
their shares of Common Stock of Registrant. Reference is made to
Exhibit 7 of Registrant's Form 8-K for the month of March 1997, which
Exhibit is incorporated herein by reference.
10.(xiii) Employment and Non-Competition Agreement between Registrant and Tony
Mastronardi. Reference is made to Exhibit 9 of Registrant's Form 8-K
for the month of March 1997, which Exhibit is incorporated herein by
reference.
10. (xiv) Employment and Non-Competition Agreement between Registrant and Guy
Nathan. Reference is made to Exhibit 10 of Registrant's Form 8-K for
the month of March 1997, which Exhibit is incorporated herein by
reference.
10. (xv) Lease for premises at One Commerce Place, Nun's Island, Verdun
(Quebec), Canada, H3E 1A2 between TouchTunes Digital Jukebox Inc. and
landlord of said premises. Reference is made to Exhibit 10(xv) of
Registrant's Registration Statement on form SB-2, File No. 33-7006,
which Exhibit is incorporated herein by reference.
10. (xvi) OEM Purchase and Development Agreement with Bose Corporation, dated
March 1997. Reference is made to Exhibit 10(xvi) of Registrant's
14<PAGE>
Registration Statement on Form SB-2, File No. 33-7006, which Exhibit
is incorporated herein by reference.
10.(xvii) Jukebox License Office Certificate, dated March11, 1997. Reference
is made to Exhibit 10(xvii) of Registrant's Registration Statement on
Form SB-2, File No. 33-7006, which Exhibit is incorporated herein by
reference.
10.(xviii)Jukebox License Agreement with the American Society of Composers
Authors and Publishers, Broadcast Music Inc. and SESAC, Inc., dated
March 11, 1997. Reference is made to Exhibit 10(xviii) of
Registrant's Registration Statement on Form SB-2, File No. 33-7006,
which Exhibit is incorporated herein by reference.
10. (xix) Subscription Agreement dated February 11, 1998, by and among Societe
Innovatech du Grand Montreal, Sofinov Societe Financiere d'Innovation
Inc. and TouchTunes Digital Jukebox Inc. for the purchase of up to an
aggregate of $10,000,000 (US) Debentures. Reference is made to
Exhibit 2 of Registrant's Form 8-K for the month of February 1998,
which Exhibit is incorporated herein by reference.
10. (xx) Debenture Put Right Agreement dated February 11, 1998, by and among
Societe Innovatech du Grand Montreal, Sofinov Societe Financiere
d'Innovation Inc. and Technical Maintenance Corporation. Reference
is made to Exhibit 3 of Registrant's Form 8-K for the month of
February 1998, which Exhibit is incorporated herein by reference.
10. (xxi) Amended and Restated Shareholders' Agreement dated February 11, 1998,
by and among Techno Expres S.A., Societe Innovatech du Grand
Montreal, Sofinov Societe Financiere d'Innovation Inc. and Technical
Maintenance Corporation. Reference is made to Exhibit 4 of
Registrant's Form 8-K for the month of February 1998, which Exhibit
is incorporated herein by reference.
16. Letter from prior auditor, Armstrong Gilmour Accountancy Corporation,
relative to the information set forth in Item 4 of Registrant's Form
8-K/A for the month of February 1998, which Exhibit is incorporated
herein by reference.
27. Financial Data Schedule.
15<PAGE>
Reports on Form 8-K
Report
Number Description
- ------- -----------------
1. Form 8-K filed for the month of February 1998, dated March 30, 1998.
Items 1, 4 and 7.
2. Form 8-K/A filed for the month of February 1998, dated April 9, 1998.
Item 4.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TECHNICAL MAINTENANCE CORPORATION
Dated: August 14, 1998 Per: /s/Tony Mastronardi
---------------------------------
Tony Mastronardi
Chief Executive Officer,
President and Director
Dated: August 14, 1998 Per: /s/Guy Nathan
---------------------------------
Guy Nathan
Senior Vice President,
Secretary and Director
16<PAGE>
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