================================================================================

                       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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                                       1
<PAGE>

                                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


                                       2
<PAGE>

                          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.


                                       3
<PAGE>

                                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.


                                       4
<PAGE>

                                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.


                                       5
<PAGE>

                                       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.


                                       6
<PAGE>

                                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.


                                       7
<PAGE>

      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


                                       8
<PAGE>

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


                                       9
<PAGE>

$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.


                                       10
<PAGE>

      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


                                       11
<PAGE>

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


                                       12
<PAGE>

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.


                                       13
<PAGE>

                           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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<PAGE>

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)