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 September 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 September 30,
1998 was 14,658,644.
1<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements for the quarter ended September
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
September 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]
September 30, 1998
Index
Page
Balance Sheets............................... 3
Statements of Operations..................... 4
Statement of Stockholders' Equity (Deficiency) 5
Statements of Cash Flows..................... 6
Notes to Financial Statements................ 7
2<PAGE>
<TABLE>
<CAPTION>
Technical Maintenance Corporation [A Development Stage Company]
BALANCE SHEETS
As at:
<S> <C> <C>
September 30, December 31
1998 1997
[in U.S. dollars] $ $
-------------- -------------
(Unaudited) (Note)
ASSETS
Current
Cash 13,008 773
Prepaid music & performance rights 92,467 -
Other miscellaneous prepaids 62,944 -
-------------- -------------
Total current assets 168,419 773
-------------- -------------
Investment in jointly-controlled
company [note 2] 140,535 49,735
Jukeboxes for Leasing [note 1] 386,611 -
Other Fixed assets [note 1] 120,835 162,887
Non-competition agreement _ net of
accumulated amortization
of $350,000 [1997 _ $200,000]
[note 1] 650,000 800,000
Patents _ net of accumulated
amortization of $437,037
[1997 _ $301,360] [note 1] 557,186 558,309
-------------- -------------
2,023,586 1,571,704
-------------- -------------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
Current liabilities
Accounts payable 336,497 42,878
Due to jointly-controlled company
for jukeboxes 386,611 -
Due to jointly-controlled company
[note 2] 6,246,967 2,484,397
-------------- -------------
Total current liabilities 6,970,075 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)
Opening Deficit (4,452,613) (4,452,613)
Net Earnings (Loss) (3,990,918) -
-------------- -------------
Total stockholders' deficiency (4,946,489) (955,571)
-------------- -------------
2,023,586 1,571,704
-------------- -------------
</TABLE>
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.
3<PAGE>
<TABLE>
<CAPTION>
Technical Maintenance Corporation [ A Development Stage Company]
STATEMENTS OF OPERATIONS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1998
(with comparatives for the quarter and nine months ended September 30, 1997)
(Unaudited)
Quarter ended Nine months ended Quarter ended Nine month ended
Sept. 30, 1998 Sept. 30, 1998 Sept. 30, 1997 Sept. 30, 1997
$ $ $ $
<S> <C> <C> <C> <C>
------------ ----------- ----------- -----------
Expenses:
Research and development 232,121 667,839 281,696 539,867
Sales and marketing salaries 203,049 522,631 - -
Professional and consulting fees 516,867 826,085 48,719 351,298
Travel and transportation 117,965 291,693 63,513 157,499
Management fees 29,455 81,912 25,300 59,288
Selling and promotional expenses 252,048 436,454 78,569 110,818
Office expenses 234,323 421,436 37,650 81,228
Rent expense 76,437 166,280 16,790 35,514
Other taxes 116 11,555 - -
Depreciation & amortization 121,735 346,444 99,843 299,529
Interest expense [note 2] 108,942 240,711 40,145 40,145
Security Service 18,250 18,250 - -
Server Management Expense 32,245 32,245 - -
Education & Training 18,183 18,183 - -
------------ ----------- ----------- -----------
Net loss before share of net
income in jointly
controlled company 1,961,736 4,081,718 692,225 1,675,186
Share of net income in
jointly controlled company
[note 2] (28,925) (90,800) 9,700 6,050
------------ ----------- ----------- -----------
Net loss 1,932,811 3,990,918 701,925 1,681,236
------------ ----------- ----------- -----------
Per common share [note 3]
Basic net loss per share (0.13) (0.27) (0.05) (0.12)
See accompanying notes
</TABLE>
4<PAGE>
<TABLE>
<CAPTION>
Technical Maintenance Corporation [A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
Nine Months Ended September 30, 1998
(Unaudited)
Series A Class A
Preferred Common Stock
Stock
<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 _ _ _ _ _ _ (3,990,918) (3,990,918)
------- ------- ----------- ------- ----------- --------- ----------- -----------
Balances, September 30, 1998 100 1 14,658,644 14,659 3,483,382 (1,000) (8,443,531) (4,946,489)
------- ------- ----------- ------- ----------- --------- ----------- -----------
See accompanying note.
</TABLE>
5<PAGE>
<TABLE>
<CAPTION>
Technical Maintenance Corporation [ A Development Stage Company ]
STATEMENTS OF CASH FLOWS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1998
(with comparatives for the quarter and nine months ended September 30, 1997)
(Unaudited)
Quarter ended Nine months ended Quarter ended Nine months ended
Sept. 30, 1998 Sept. 30, 1998 Sept. 30, 1997 Sept. 30,1997
$ $ $ $
------------- ------------------ --------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss (1,932,811) (3,990,918) (701,925) (1,681,236)
Adjustments to reconcile net loss to net
cash used by operating activities:
Share of net income from jointly
controlled company (28,925) (90,800) 9,700 6,050
Depreciation and amortization 121,735 346,444 99,843 299,529
Changes in assets and liabilities:
Prepaid expenses (155,412) (155,412) - 21,306
Accounts payable 306,604 293,619 (10,703) 10,457
Advances from Affiliate - - 722,574 1,476,924
------------- ------------------ --------------- -----------------
Cash used in operating activities (1,688,809) (3,597,067) 119,489 133,030
------------- ------------------ --------------- -----------------
INVESTING ACTIVITIES
Investment in jointly controlled company - - - (583)
Increase in costs of patents (134,553) (134,553) (119,500) (131,909)
Purchase of capital assets (405,326) (405,326) - -
------------- ------------------ --------------- -----------------
Cash used in investing activities- (539,879) (539,879) (119,500) (132,492)
------------- ------------------ --------------- -----------------
FINANCING ACTIVITIES
Amounts due to jointly
controlled company 2,240,960 4,149,181 - -
Proceeds from sale of preferred stock - - - 150
------------- ------------------ --------------- -----------------
Cash provided by financing
activities 2,240,960 4,149,181 - 150
------------- ------------------ --------------- -----------------
Net Increase (Decrease) in cash 12,272 12,235 (11) 688
Cash, beginning of period 736 773 795 96
------------- ------------------ --------------- -----------------
Cash, end of period 13,008 13,008 784 784
------------- ------------------ --------------- -----------------
</TABLE>
See accompanying notes
6<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
September 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 product has been
developed and the first units were delivered to jukebox operators in August
1998. The Company expects to be revenue generating during the last quarter of
1998. The commercialization of the Company's products will require
additional funds. There is no assurance that the products will be commercially
successful 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.
Jukeboxes for Leasing consist of jukeboxes acquired from TouchTunes Digital
Jukebox Inc. under a capital lease and which are available for leasing to
Technical Maintenance Corporation's customers. Depreciation is on a straight-
line basis over an estimated economic life of five years, commencing with
commercial operation of the jukeboxes.
7<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
September 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. No internal
software development costs have been capitalized as of September 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. In 1998, legal costs of
approximately $135,000 have been capitalized to date.
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
September 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 TouchTunes.. On August 5, 1998, additional debentures of $2,000,000
US were issued. On November 2 1998, TouchTunes issued the remaining Debentures
of $4,000,000 US. 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 installment, concurrently with the payment
of the principal amount.
9<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
September 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.
Including the litigation initiated in July 1998, [see note 4], 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.
The Company is charged interest on the intercompany balance payable to
TouchTunes at a rate equal to Canadian prime rate plus 1.5%. The adjusted rate
as at September 30, 1998 was 8.5%.
This investment is accounted for on the equity basis. The following summarizes
the balance sheet of TouchTunes as at September 30, 1998:
$
- ----------------------------------------------------------------------------
Assets
Cash 244,516
Term Deposit 564,541
Accounts receivable 116,170
R&D income tax credits 165,907
Prepaid Expenses 153,694
Inventory of jukebox components 172,701
Due from Technical Maintenance Corporation 6,246,967
Due from Technical Maintenance Corporation re: Jukeboxes sold 386,611
Accounts receivable _ shareholder of the Company 46,057
Accounts receivable _ other 17,607
Fixed assets 2,189,765
- ----------------------------------------------------------------------------
10,304,536
- ----------------------------------------------------------------------------
10<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
Liabilities
Accounts payable and accrued liabilities 312,722
Income taxes payable 145,713
Deferred grant 17,691
Capital lease obligations 784,887
Debenture payable-shareholders 6,000,000
- --------------------------------------------------------
7,261,013
- --------------------------------------------------------
Shareholders'Equity 3,043,523
- --------------------------------------------------------
10,304,536
- --------------------------------------------------------
For the nine months ended September 30, 1998, the results of TouchTunes'
operations were as follows (in U.S. dollars):
$
- --------------------------------------------------------
Development fees earned 1,549,565
Interest income 219,351
Foreign exchange (loss) gain 98,750
- --------------------------------------------------------
Total Revenue 1,867,666
- --------------------------------------------------------
Expenses (net of R&D tax credits) 1,568,922
- --------------------------------------------------------
Earnings from operations 298,744
- --------------------------------------------------------
Income taxes 117,144
- --------------------------------------------------------
Net earnings 181,600
- --------------------------------------------------------
3. LOSS PER SHARE
<TABLE>
<S> <C> <C> <C> <C>
Quarter ended Nine months ended Quarter ended Nine month ended
Sept. 30, 1998 Sept. 30, 1998 Sept. 30, 1997 Sept. 30,1997
$ $ $ $
-------------- ----------------- ---------------- ----------------
Numerator for basic loss per share
Loss to common shareholders 1,932,811 3,990,918 701,925 1,681,236
-------------- ----------------- ---------------- ----------------
Denominator for basic loss per share _
weighted-average shares issued
and outstanding 14,658,644 14,658,644 14,584,707 14,026,138
-------------- ----------------- ---------------- ----------------
Basic loss per share .13 .27 .05 .12
-------------- ----------------- ---------------- ----------------
</TABLE>
11<PAGE>
Technical Maintenance Corporation [A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
4. 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 were delivered
to jukebox operators in August 1998. There are approximately 75 jukeboxes
currently installed and operating in various locations in several states within
the United States. The cost of producing these initial units were financed
through the Registrant's existing financial resources. From the indications of
interest received thusfar, the Registrant continues to estimate 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, however, expects to begin generating revenue during the
last three months of 1998 and projects to earn a small operating profit during
the second half of its 1999 fiscal year. There can be no assurance that the
Registrant's marketing strategy will be successful or profitable.
(b) Liquidity and Capital Resources
The Registrant will continue to 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 produce, deliver and operate its Digital Jukeboxes. The
Registrant must obtain additional financing during the first quarter of the
1999 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
13<PAGE>
Registrant's Form 10-K for the fiscal year ended December 31, 1994,
which Exhibit is incorporated herein by reference.
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.
14<PAGE>
10. (xvi) OEM Purchase and Development Agreement with Bose Corporation, dated
March 1997. Reference is made to Exhibit 10(xvi) of Registrant's
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.
3. Form 8-K filed for the month of July 1998, dated September 2, 19988.
Items 1,5 and 7.
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: November 11, 1998 Per: /s/Tony Mastronardi
---------------------------
Tony Mastronardi
Chief Executive Officer,
President and Director
Dated: November 11, 1998 Per: /s/Guy Nathan
---------------------------
Guy Nathan
Senior Vice President,
Secretary and Director
16<PAGE>
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