As filed with the Securities and Exchange Commission on October 15, 2001

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

                       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, 2001

                        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 2211, New York, NY 10005
                  (Address of Principal Executive Offices)


                                 (212) 804-5704
                (Registrant's Telephone No. including area code)



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 1, 2001 are as follows:


          Class of Securities                    Shares Outstanding
          -------------------                    ------------------
    Common Stock, $.0001 par value                   55,348,156


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

<PAGE>


                                TrackPower, Inc.
                          (A Development Stage Company)


                                      INDEX


   PART I.    Financial Information

   Item 1.    Financial Statements (unaudited)
                   Balance Sheet..........................................  3
                   Statements of Operations and Comprehensive Loss........  4
                   Statements of Cash Flows...............................  5
                   Notes to Financial Statements..........................  6

   Item 2.    Management's Discussion and Analysis or Plan of Operation...  9




   PART II.   Other Information

   Item 1.    Litigation.................................................. 16

   Item 2.    Change in Securities and Use of Proceeds.................... 16

   Item 3.    Defaults Upon Senior Securities............................. 16

   Item 4.    Submission of Matters to a Vote of Security Holders......... 16

   Item 5.    Other Information........................................... 16

   Item 6.    Exhibits and Reports on Form 8-K............................ 17
                        A)  Exhibit Schedule
                        B)  Reports Filed on Form 8-K

   Signatures............................................................. 19


<PAGE>

                          PART I. Financial Information

Item 1.  Financial Statements.


                                TrackPower, Inc.
                          (A Development Stage Company)
                                  Balance Sheet
                                   (UNAUDITED)
                                 August 31, 2001

<TABLE>
<CAPTION>
<S>                                                                                    <C>
ASSETS
Current assets:
  Cash                                                                                 $23,277
  Accounts receivable - other (including $7,163 due from related parties)                7,288
  Marketable securities                                                                 11,200
  Deposits, net                                                                         25,000
  Other current assets                                                                   2,265
----------------------------------------------------------------------------------------------

Total current assets                                                                    69,030
----------------------------------------------------------------------------------------------

Property and equipment                                                                 195,519
  Less:    Accumulated depreciation                                                   (142,759)
----------------------------------------------------------------------------------------------

     Net property and equipment                                                         52,760
----------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                          $121,790
==============================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable (including $129,728 due to related parties)                        $629,758
  Accrued transponder fees                                                             400,000
  Accrued professional fees                                                             15,000
  Accrued interest                                                                      96,494
  Accrued directors' Fees                                                               77,200
  Note payable                                                                          17,500
----------------------------------------------------------------------------------------------
     Total current liabilities                                                       1,235,952
----------------------------------------------------------------------------------------------

Long term debt:
8% senior subordinated convertible debentures due October 31, 2004                     809,000
----------------------------------------------------------------------------------------------
     Total liabilities                                                               2,044,952
----------------------------------------------------------------------------------------------

Shareholders' equity (deficit):
  Convertible preferred stock, no par value, unlimited shares
  authorized, 1,000,000 shares issued (liquidation value $1,000,000)                 1,000,000
  Common stock, $.0001 par value; unlimited shares authorized,
  48,409,269 shares, issued and outstanding                                              4,841
  Additional paid in capital                                                        19,189,324
  Common stock subscribed                                                              894,504
  Accumulated deficit (including $750,088 during the development stage)            (23,001,431)
  Accumulated other comprehensive loss                                                 (10,400)
----------------------------------------------------------------------------------------------
     Total shareholders' equity (deficit)                                           (1,923,162)
----------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                                  $121,790
----------------------------------------------------------------------------------------------
</TABLE>


                 See accompanying notes to financial statements.

                                       3
<PAGE>


                                TrackPower, Inc.
                          (A Development Stage Company)
               Statements of Operations and Comprehensive Loss
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   Three Months Ended                   Six Months Ended
                                                                       August 31,                          August 31,
                                                            ------------------------------      ---------------------------------
                                                                2001                 2000             2001               2000
<S>                                                         <C>               <C>               <C>                 <C>
 Revenue
   Royalties from distribution rights                       $         --      $      2,674       $        --         $     4,301
   Wagering commissions                                               --            37,185                --              83,622
   ATM revenue                                                       125                --                --                  --
   Other revenue                                                       2            26,659               396              26,797
------------------------------------------------------------------------------------------------------------------------------------
   Total revenue                                                     127            66,518               396             114,720

Operating expenses:
   Wages and consulting fees                                     141,677           186,536           224,927             363,658
   Management fees - related parties                             111,200            75,000           286,200             150,000
   Transponder fees                                                   --           400,000                --           1,000,000
   Advertising and marketing                                      12,500             3,008            12,500              26,896
   Professional fees                                              49,292           164,159            74,836             367,076
   General and administrative                                     55,309           130,309           108,142             287,303
------------------------------------------------------------------------------------------------------------------------------------
   Total operating expenses                                      369,978           959,012           706,605           2,194,933

Loss from operations                                            (369,851)         (892,494)         (706,209)         (2,080,213)

Other expenses:
   Interest                                                       15,836            96,578            37,434             197,830
   Non-cash financing expense                                         --                --                --              49,750
   Depreciation and amortization                                   3,366            13,451             6,445              26,568
   Write-off of non-refundable acquisition deposit                    --           125,000                --             125,000
------------------------------------------------------------------------------------------------------------------------------------
   Total other expenses                                           19,202           235,029            43,879             399,148

Net loss                                                        (389,053)       (1,127,523)         (750,088)         (2,479,361)
   Preferred dividends                                           (17,500)          (17,500)          (35,000)            (35,832)
------------------------------------------------------------------------------------------------------------------------------------
Net loss applicable to common shareholders                  $   (406,553)     $ (1,145,023)      $  (785,088)        $(2,515,193)
------------------------------------------------------------------------------------------------------------------------------------

Basic and diluted loss per share of common stock            $      (0.01)     $      (0.03)      $     (0.02)       $      (0.07)
------------------------------------------------------------------------------------------------------------------------------------

Weighted average number of common shares outstanding         48,375,9363         6,317,233        48,136,863          35,599,139
------------------------------------------------------------------------------------------------------------------------------------

                                                                   Comprehensive Loss

Net loss                                                    $   (389,053)     $ (1,127,523)     $   (750,088)       $ (2,479,361)
Other comprehensive loss:
Unrealized holding gain/(loss) on marketing securities             3,200          (115,040)          (10,400)           (115,040)
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                          $   (385,853)     $ (1,242,563)     $   (760,488)       $ (2,594,401)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                 See accompanying notes to financial statements.

                                       4
<PAGE>


                                TrackPower, Inc.
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       Six Months Ended
                                                                          August 31,

                                                                     2001           2000
------------------------------------------------------------------------------------------
<S>                                                            <C>           <C>
  Net cash from operations
        Net loss                                               $ (750,088)   $(2,479,361)
        Adjustments to reconcile net loss
        to net cash used in operating activities:
        Depreciation and amortization                               6,445         26,568
        Issuance of common stock for consulting fee                67,500              -
        Non-cash financing expense incurred in connection
          with issuance of convertible debentures                       -         49,750
        Write-off of acquisition deposit                                         125,000

     Changes in:
        Accounts receivable                                        21,480         51,293
        Prepaid transponder fees                                        -        200,000
        Other current assets                                       18,735         (2,646)
        Accounts payable and accrued expenses                     181,803        644,298
        Accrued interest                                           30,680        184,827
------------------------------------------------------------------------------------------
  Net cash used in operating activities                          (423,445)    (1,200,271)
------------------------------------------------------------------------------------------
  Cash flows from investing activities:
      Marketable securities purchased                                   -       (240,000)
      Deposits                                                    (25,000)       (57,072)
      Deposit on acquisition                                            -       (125,000)
      Purchase of property and equipment                           (5,354)       (16,690)
------------------------------------------------------------------------------------------
  Net cash used in investing activities                           (30,354)      (438,762)
------------------------------------------------------------------------------------------
  Cash flows from financing activities:
      Proceeds from options exercised                                   -        846,633
      Proceeds from common stock subscribed                       564,603
      Proceeds from warrants exercised                                  -        157,478
      (Repayment) of notes payable                                (87,130)       (10,370)
      Proceeds on issuance of convertible debentures                    -        429,000
------------------------------------------------------------------------------------------
  Net cash provided by financing activities                       477,473      1,422,741
------------------------------------------------------------------------------------------
  Increase (decrease) in cash                                      23,674       (216,292)
------------------------------------------------------------------------------------------
  Cash,  beginning of period                                         (397)       251,488
------------------------------------------------------------------------------------------
  Cash,  end of period                                            $23,277        $35,196
------------------------------------------------------------------------------------------
</TABLE>

Noncash activities:
During the six month  period ended  August 31,  2001,  the Company  recorded the
following non cash activities:

-    issued  618,871  shares of its common stock upon  conversion of convertible
     debentures  with a principal  balance of $282,500  and accrued  interest of
     $26,936.

-    Issued  391,556  common  shares  after the quarter end upon  conversion  of
     convertible  debentures  with a principal  balance of $100,000  and accrued
     interest  of $9,578.  The total  principal  and  interest  of  $109,578  is
     currently  reflected on the August 31, 2001 balance  sheet as common shares
     subscribed.

-    recorded share  subscriptions of $142,164 which consisted of the conversion
     of liabilities to Directors of $132,605 and conversion of accrued debenture
     interest to a Director of $9,559.

-    issued  200,000 shares as a partial  settlement of accounts  payable in the
     amount of $22,000.

-    reclassed $78,159 of related party debt to common shares subscribed.


                 See accompanying notes to financial statements.


                                       5
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


Summary of Significant Accounting Policies

      Nature of Business

      The Company was organized on June 30, 1993 under the laws of Wyoming.  The
Company had been  providing live video  services  broadcast  digitally from July
1999  through  August 2000  through the  Echostar  Dish  Network  (Echostar)  to
Echostar's current subscribers.  In August 2000, the Company ceased pursuing the
TrackPower video broadcasting and wagering  commission  business strategy and is
currently  considered  to be in the  development  stage as defined by  Financial
Accounting Standards Board No. 7.

      TrackPower's  present business strategy and direction is to deploy leading
edge  kiosk  technology  combined  with  Automated  Teller  Machines  (ATMs)  to
effectively  provide integrated  information  services at racetracks,  Off Track
Betting (OTB) establishments and other gaming facilities in North America.  When
fully developed the kiosk/ATM system will deliver information, cash, advertising
content,  loyalty programs,  integrated race  information,  entries and results,
live and archived horse racing video, e-commerce and other future applications.


      Recent Developments

      On May 15,  2001,  the Company  announced it had entered into an Exclusive
Worldwide  Distribution  Agreement  with  Post  Time  Technologies,  Inc,  (PTT)
effective  June 1, 2001,  under which the  Company  would  become the  exclusive
re-seller of PTT's  RaceVision  Kiosk product when combined with an ATM solution
in racetracks and gaming related  facilities.  RaceVision is a horseracing video
replay and archiving service available to customers via a kiosk located within a
racetrack or gaming facility.

      Under the terms of the  Agreement PTT will receive  100,000  shares of the
Company's  common  stock for each ATM and kiosk  installation,  Hardave  Gill (a
principal of PTT) will become  President  and a Director of the  Company,  Vicky
Stickwood-Hislop  (also a  principal  of PTT)  will  become  a  Director  of the
Company,  PTT and the Company  will enter into a  management  services  contract
under  which the  Company  will pay PTT  $30,000  per  month,  PTT will  receive
warrants to purchase  2,000,000  common shares of the Company's  common stock at
$0.10 per share and Gill and Stickwood-Hislop  will collectively receive a total
of 1,500,000  options to purchase the Company's common stock at $0.10 per share.
As part of this transaction, Stephen L. Cussons resigned as President and CEO of
the Company,  John G.  Simmonds was  appointed CEO and Lawrence Aziz and Charles
Cernansky resigned as directors.

      On June 12,  2001,  the  Company  entered  into an  exclusive  three  year
Automated  Teller  Machine (ATM) Services  Agreement with 4CASH ATM Services,  a
division of Pivotal  Self-


                                       6
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


Service  Technologies Inc.  (formerly Wireless Ventures Inc.), a related entity.
Under the terms of the  Agreement,  TrackPower  granted  to 4CASH the  exclusive
right to act as their ATM  partner to  install,  maintain  and  operate  ATMs in
locations  that  TrackPower  contracts  with at any Racetrack or Gaming  related
facility.  4CASH  will  supply,  install  and  commission  the ATM's to  process
transactions  and other  services at its  expense,  with  surcharge  and revenue
sharing  structure as set out in the agreement.  4CASH granted to TrackPower the
exclusive  right to act as  their  sales  and  marketing  representative  to any
Racetrack or Gaming related facility.

      On August 3, 2001,  the Company  announced that it had installed its first
ATM under the 4CASH  Agreement at Elmira  Raceway in Ontario.  The  installation
contract is for a three year period.

      On August 31, 2001,  the Company  announced that it had signed a letter of
intent  with  PTT to  create  a joint  venture,  which  would  provide  Internet
streaming video services for the North American horse racing industry. Under the
contemplated  agreement,  if  consummated,  PTT would  license  its  proprietary
TrackVision  Internet streaming video distribution  system to the joint venture.
The joint  venture  then plans to launch a content  driven,  subscription  based
Internet website that would provide live streaming video,  on-demand replays and
other racing related content for racetracks in North America.

      The  Company  in  co-operation  with  Standardbred  Canada  provided  live
streaming  video of the Canadian  Classic  Yearling Sale on September 14, 15 and
16th. On October 4, 2001,  the Company  announced  that  broadcast was a success
with over 2,000 viewers watching the sale live on the Web.

      The  Company and PTT as its  technology  partner  announced  on October 3,
2001, that approximately 6,800 accesses were made to their webcast of the USTA's
"Little  Brown Jug" finals held on  September  19th and 20th.  In addition  over
6,800 replays of races were also streamed from PTT's TrackVision system over the
two-day period.


      Basis of Presentation

      The accompanying  unaudited financial statements of TrackPower,  Inc. have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial  information and with the instructions to Form 10-QSB and item
310  (b)  of  Regulation  S-B.  Accordingly  they  do  not  include  all  of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been  included.  Operating  results for the six months  ended
August  31,  2001 are not  necessarily  indicative  of the  results  that may be
expected for the fiscal year ending February 28, 2002. For further  information,
refer  to  the  financial  statements  and  footnotes  thereto  included  in the
Company's  annual  report on Form 10-KSB for the fiscal year ended  February 28,
2001.


      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



                                       7
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


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.


      Marketable Securities

      The Company's marketable  securities consist of restricted common stock of
a publicly  traded company.  The securities are considered  "available for sale"
and therefore have been recorded at market value with  unrealized  gains(losses)
included  as  a  separate  component  of  stockholders'   equity(deficit).   Any
unrealized  losses which are considered "other than temporary" are classified as
realized losses through  operations.  During the three month period ended August
31, 2001 the market value as quoted on the OTCBB  increased from $0.10 per share
to $0.14 per share and  accordingly  the  Company  recorded a $3,200  unrealized
holding gain on marketable securities.


      Deposit

      During the quarter ended May 31, 2001, the Company advanced $25,000 to PTT
to be applied against future revenues under the June 1, 2001 Exclusive Worldwide
Distribution  Agreement.  The  advance  will be drawn down based on the  payment
terms to PTT of the future revenues as defined in the Agreement.


      Convertible Debentures

      During the quarter  ended August 31,  2001,  debenture  holders  converted
debentures  having a face value of $100,000 plus accrued and unpaid  interest of
$9,578 into shares of the Company's  common stock which are currently  reflected
as common stock subscribed. In connection with these conversions,  warrants will
be issued to purchase shares of common stock at $0.75.

      During the six month  period  ended  August 31,  2001,  debenture  holders
converted  debentures  having a face value of $382,500  plus  accrued and unpaid
interest of $36,514 into 618,871  issued shares and 391,556  shares to be issued
of the Company's common stock. In connection with these conversions, warrants to
purchase  618,871  shares of common  stock at $0.75 were  issued  while  391,556
warrants at $0.75 are to be issued.

      At August 31, 2001, $809,000 in convertible debentures was outstanding for
which interest due on October 31, 2000 remains  unpaid.  Non payment of interest
could  constitute  an event of default if notice were served.  As of October 11,
2001, the Company has not received any notices of default.


      Common Stock Subscribed

      During the first quarter of fiscal 2002, the Company  authorized a private
placement of 20,000,000 common shares at $0.05 per share payable in four monthly
installments  beginning  in May 2001.  As of August 31,  2001,  the  Company had
received  $706,767 under this private  placement plan including  $142,164 in the
form of the reduction of liabilities to Directors'. As at


                                       8
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


August 31, 2001,  common stock  subscribed  also includes  $109,578 in debenture
conversions  relating  to shares  issued  after the  quarter  end and $78,159 in
shares to be issued as a partial settlement of a liability to a related party.

      Subsequent to August 31, 2001, the  Company issued 6,938,887 of its common
shares.


      Net Loss per Share

      Basic loss per common  share is based on the  weighted  average  number of
shares outstanding during each period presented. Convertible securities, options
to purchase  stock and warrants are  included as common stock  equivalents  only
when dilutive.  Potential common stock  equivalents  totaling  approximately 2.6
million  shares at August 31,  2001 have been  excluded  as the  effects of such
shares would have been anti-dilutive.


Item 2.  Management's Discussion and Analysis or Plan of Operation.

      Overview

      During fiscal 2001,  the Company made the decision to no longer pursue the
TrackPower  video  distribution  and  wagering   commission  business  strategy,
primarily due to competitive  reasons.  During fiscal 2002, the Company  entered
into an  agreement  with PTT whereby  PTT would  provide  the  Racevision  Kiosk
product to the Company when installed in conjunction with an ATM at horse racing
tracks and gaming  related  facilities.  Also during  fiscal  2002,  the Company
entered  into an  agreement  with  4CASH ATM  Services  a  division  of  Pivotal
Self-Service  Technologies  Inc.  (formerly  Wireless  Ventures  Inc., a related
entity)  whereby 4CASH would become the Company's  ATM service  provider.  These
agreements have effectively  positioned the Company for a new business  strategy
that initially  will provide  archived  horseraces  and cash to Racetracks  with
other incremental revenue streams to accrue as they are developed in the future.


      Results of Operations

      For the three month period ended August 31, 2001

      Revenues  for the three  month  period  ended  August  31,  2001 were $127
compared to $66,518 during the comparative period in the prior year.

      Other  income  during  the  quarter  was $127  compared  to $26,659 in the
comparative  period in the prior year.  Other  income in the current  quarter is
comprised of ATM revenue earned under the revenue  sharing  agreement with 4CASH
on the first ATM installation.  The prior year revenue consists primarily of the
sale of redundant set top box and dish equipment  previously  written off by the
Company.

      During the three month period ended  August 31, 2000,  the Company  earned
wagering  commissions  of $37,185 under an agreement  with Penn National  Gaming
Inc. As detailed in the Overview section,  the Company is no longer pursuing the
previous  business  plan  and  therefore  will  not  earn  wagering  commissions
subsequent to August 2000.

      Also,  during the three month period  ended  August 31, 2000,  the Company
recorded  revenue of $2,674 relating to royalties under a sub-license  agreement
on Midland brand two-way


                                       9
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


radio sales in certain  territories of Canada.  During the quarter ended May 31,
2001 the sub-licensee  informed the Company of their decision not to exercise an
option to acquire  the  rights  outright.  Therefore  the  Company  did not earn
royalties during the current quarter.


      Operating  expenses totaled  $369,978 during the three-month  period ended
August 31, 2001,  substantially  lower than the $959,012  during the comparative
period in the prior year.

      Management  fees charged by related parties were $111,200 during the three
month period ended August 31, 2001  compared to $75,000  during the  comparative
period in the prior year. The current  quarters  expense is comprised of $21,200
charged by IRMG Inc.  (IRMG) and $90,000  charged by PTT. PTT earns a management
fee of $30,000 per month  beginning June 2001 and the IRMG  management  services
contract  is  currently  being  renegotiated.  The  prior  quarter  expense  was
comprised of $75,000 charged by Simmonds Capital Limited ($25,000 per month).

      Wages and  consulting  costs were  $141,677  during the three month period
ended August 31, 2001 compared to $186,536 during the comparative  period in the
prior year. The wages and  consulting  costs  consisted  primarily of $86,666 in
executive  salaries  as well as  $42,850  in  consulting  fees.  The  wages  and
consulting costs in the prior period primarily  represented the employment costs
related to the video distribution and wagering commission business strategy.

      General and  administrative  expenses were $55,309  during the three month
period  ended  August  31,  2001 down  significantly  from  $130,309  during the
comparative period in the prior year. The reduction is the result of the Company
no longer  pursuing  the video  distribution  and wagering  commission  business
strategy.

      Professional  fees were $49,292 during the current quarter,  a significant
decrease  from $164,159  during the  comparative  period in the prior year.  The
decrease is primarily attributable to a reduced level of activity.

      There was no transponder  fees expense in the current quarter  compared to
$400,000 in the prior  quarter.  The decrease is due to the change in the nature
of the business of the Company as discussed earlier.

      Advertising  and  Marketing  expense  was  $12,500  during the three month
period ended August 31, 2001 compared to $3,008 during the comparative period in
the prior year. The current quarters expense was comprised of costs incurred for
investor  relations  activity.   The  expense  in  the  prior  period  primarily
represented the costs related to the video distribution and wagering  commission
business strategy.

      The loss from  operations has been reduced,  due to the change in business
strategy,  from $892,494  during the three month period ended August 31, 2000 to
$369,851 during the three month period ended August 31, 2001.

      Other expenses  totaled $19,202 during the three month period ended August
31, 2001 down from  $235,029  during the  comparative  period in the prior year.
Interest  expense has been reduced from $96,578 a year ago to $15,836 during the
current  quarter as a result of the


                                       10
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


conversion  of  a  significant  portion  of  the  Company's  senior  convertible
debentures  to common  stock.  Depreciation  and  amortization  expense has been
reduced from $13,451 a year ago to $3,366 during the current quarter as a result
of the  Company's  decision to write off all  intangible  assets at February 28,
2001.  Other  expenses  during the three  month  period  ended  August 31,  2000
included the write-off of a non-refundable acquisition deposit of $125,000.

      The net loss for the three month period ended August 31, 2001 was $389,053
($0.01 per share) compared to a loss of $1,127,523  ($0.03 per share) during the
comparative  period in the prior year. The decrease is a result of the change in
the nature of the business.

      For the six month period ended August 31, 2001

      Revenues for the six month period ended August 31, 2001 were $396 compared
to $114,720  during the  comparative  period in the prior year. The revenues are
primarily  comprised  of $127 of ATM revenue  earned  under the revenue  sharing
agreement  with  4CASH  on the  first  ATM  installation  as  well  as  $269  in
commissions  earned  from a  horse  racing  information  services  provider  for
purchases made by TrackPower subscribers.

      During the six month  period ended  August 31,  2000,  the Company  earned
wagering  commissions  of $83,622 under an agreement  with Penn National  Gaming
Inc. As detailed in the Overview section,  the Company is no longer pursuing the
previous  business  plan  and  therefore  will  not  earn  wagering  commissions
subsequent to August 2000.

      The Company also received  $4,301 during the six month period ended August
31, 2000, for royalties  under a sub-license  agreement on Midland brand two-way
radio sales in certain  territories of Canada. At the beginning of the year, the
sub-licensee informed the Company of their decision not to exercise an option to
acquire  the rights  outright.  Therefore  the Company  will not earn  royalties
during fiscal 2002.

      Operating  expenses  totaled  $706,605  during the six month  period ended
August 31, 2001, a substantial  decrease from $2,194,933  during the comparative
period in the prior year.

      Management  fees charged by related  parties were $286,200  during the six
month period ended August 31, 2001 compared to $150,000  during the  comparative
period in the prior year.  Management  fees  expense is comprised of $196,200 by
IRMG Inc. and $90,000 by PTT. Management fees expense in the prior year consists
solely of fees  charged  by  Simmonds  Capital  Limited  at  $25,000  per month.
TrackPower had contracted with IRMG effective January 2001 to manage the affairs
of the  Company for a  contracted  fee of $75,000 per month.  The  contract  was
cancelled  in May 2001 upon the  signing of the PTT  agreement.  PTT will earn a
management fee of $30,000 per month  beginning June 2001 and the IRMG management
services contract is currently being renegotiated.

      Wages and consulting costs were $224,927 during the six month period ended
August 31, 2001 compared to $363,658 during the comparative  period in the prior
year.  The wages and  consulting  costs during the six month period ended August
31,  2001  consisted  primarily  of $86,666  in  executive  salaries  as well as
$126,100 in consulting  fees. The wages and consulting costs in the prior period
primarily represented the employment costs related to the video distribution and
wagering commission business strategy.


                                       11
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


      General and  administrative  expenses were  $108,142  during the six month
period  ended  August  31,  2001 down  significantly  from  $287,303  during the
comparative period in the prior year. The reduction is the result of the Company
no longer  pursuing  the video  distribution  and wagering  commission  business
strategy.

      Professional  fees were  $74,836  during the six month period ended August
31, 2001, a significant  decrease from $367,076 during the comparative period in
the prior year. The decrease is primarily attributable to a decline in activity.

      There was no  transponder  fees  expense  for the six month  period  ended
August 31, 2001 compared to $1,000,000  in the  comparative  period in the prior
year. The decrease is due the change in the business of the Company.

      Advertising and marketing  expense was $12,500 during the six month period
ended August 31, 2001 compared to $26,896 during the  comparative  period in the
prior year.  The current  years  expense was  comprised  of costs  incurred  for
investor  relations  activity.   The  expense  in  the  prior  period  primarily
represented the costs related to the video distribution and wagering  commission
business strategy.

      The loss from  operations has been reduced,  due to the change in business
strategy, to $706,209 during the six month period ended August 31, 2001 compared
to $2,080,213 in the prior period.

      Other  expenses  decreased  to $43,879  during the six month  period ended
August 31, 2001 compared to $399,148 during the comparative  period in the prior
year.  Interest  expense  decreased  from  $197,830 in the prior year to $37,434
during the current year as a result of the conversion of a significant amount of
the Company's senior  convertible  debentures to common stock.  Depreciation and
amortization  expense  decreased from $26,568 in the prior year to $6,445 during
the  current  year due to the  Company's  decision  to write off all  intangible
assets at February 28, 2001.  Other  expenses  during the six month period ended
August 31, 2000 included non-cash financing expenses of $49,750 representing the
fair value of warrants  issued to third parties as commissions  for  introducing
investors.  Also,  the prior year  included the  write-off  of a  non-refundable
acquisition deposit of $125,000.

      The net loss  during  the six  month  period  ended  August  31,  2001 was
$750,088 ($0.01 per share)  compared to $2,479,361  ($0.07 per share) during the
comparative  period in the prior year. The decrease is a result of the change in
business strategy.


      Financial Condition

      During the three month period ended August 31, 2001, assets increased from
$106,958 to $121,790.  The increase was primarily attributable to an increase in
current assets.

      Current  assets  increased  from  $56,186  to  $69,030.  The  increase  is
attributable to an increase in cash from $17,461 to $23,277, accounts receivable
other  from $0 to $7,288  and  marketable  securities  from  $8,000  to  $11,200
partially offset by a decrease in prepaid expenses from $5,725 to $2,265.


                                       12
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


      During the three month  period  ended May 31,  2000,  the Company  made an
investment  in 80,000  common  shares of Vianet  Technologies  Inc. at $3.00 per
share.  Vianet  common  shares trade under the symbol  "VNTK" on the OTCBB.  The
Company  also  received  120,000  warrants to purchase  common  shares of Vianet
Technologies  at $4.50 at any time over the next three  years.  The Company made
the investment  based on the  compression  technology  held by the investee that
would be used in the video distribution  business  strategy.  During the current
quarter the market value of Vianet common shares  increased from $0.10 per share
to $0.14 per share.  Accordingly,  the value of this investment has increased to
$11,200 at August 31, 2001.

      Liabilities of the Company  decreased  from  $2,339,271 at May 31, 2001 to
$2,044,952 at August 31, 2001. Current liabilities  decreased from $1,430,271 at
May 31 2001 to $1,235,952 at August 31, 2001.  Long term  liabilities  decreased
from  $909,000  at May 31,  2001 to  $809,000  at  August  31,  2001  due to the
conversion of debentures.

      Accounts  payable  decreased  from  $789,530  (including  $249,682  due to
related parties) at May 31, 2001 to $629,758  (including $129,728 due to related
parties) as at August 31, 2001.  The  decrease is primarily  due to a settling a
portion of a related party liability in the form of common shares.

      Accrued  expenses  decreased  from $620,741 at May 31, 2001 to $588,694 at
August 31, 2001, a decrease of $32,047.  The decrease is primarily  attributable
to a decrease in accrued directors' fees of $28,150 due to treating a portion of
the liability as a payment toward the share subscription.

      Notes payable  decreased from $20,000 at May 31, 2001 to $17,500 at August
31, 2001 due to payments during the quarter.

      Convertible  debentures of the Company  decreased from $909,000 at May 31,
2001 to $809,000 at August 31, 2001 as a result of debenture holders  converting
$100,000  in  debentures  plus  accrued  interest  of  $9,578  to  shares of the
Company's common stock.  These debentures and accrued interest  converted during
the quarter is reflected on the August 31, 2001 balance  sheet as common  shares
subscribed.

      The  shareholders'  deficit  decreased from  $2,232,313 at May 31, 2001 to
$1,923,162  at  August  31,  2001.  The  decrease  is the  result  of  debenture
conversion to common stock, settling a portion of the liabilities in the form of
common shares,  and proceeds from new common shares subscribed for offset by the
loss for the period.

      Common stock and additional paid in capital  increased from $19,154,667 at
May 31, 2001 to  $19,194,165  at August 31, 2001.  The increase is due to common
stock  accrued as  payment of the  dividend  on the  preferred  share as well as
200,000  common  shares  valued at $22,000  issued to third parties as a partial
settlement of a liability.

      The  Company  also  received  $706,767  under a common  stock  four  month
installment private placement plan. During fiscal 2002, the Company authorized a
private  placement of  20,000,000  common shares at $0.05 per share paid in four
consecutive monthly  installments at the beginning of the month beginning in May
2001.


                                       13
<PAGE>

                                TrackPower, Inc.

                          (A Development Stage Company)
                          Notes to Financial Statements
                                 August 31, 2001


      The  Company's  accumulated  deficit  increased  from  $22,594,880  at the
beginning of the current quarter to $23,001,431 at the end of the quarter,  as a
result  of the  Company's  loss of  $389,053  during  the  quarter  and  accrued
preferred share dividends of $17,500.

      At  August  31,  2001 the  Company  also  recorded  an  accumulated  other
comprehensive  gains of $3,200 due to an  unrealized  holding gain on marketable
securities.


      Liquidity and Capital Resources


      Since inception, the Company has supported operations through the issuance
of common stock and convertible debt and other  securities.  During fiscal 2001,
the Company  ceased  pursuing the video  distribution  and  wagering  commission
business strategy and has since taken steps to implement a new business strategy
involved  in  deploying  leading  edge  kiosk  technology  combined  with  ATMs.
Management  hopes that the new  business  will be  successful  and will  provide
higher levels of operating cash flow.

      The  Company  expects  to  receive  funds in the  third  quarter  totaling
approximately  $115,000  as a result  of the  balance  of the  installments  due
relating to the $1,000,000 private placement  discussed  earlier.  The Company's
ability to continue to fund losses  arising  from costs and  expenses  exceeding
revenue is  connected  to its  ability to raise  additional  financing  prior to
achieving a break even level of  operating  results.  The Company  continues  to
raise funds primarily by issuing common stock and convertible debt.

      As of August 31,  2001,  the  Company had cash  reserves  of  $23,277,  an
investment in marketable  securities of $11,200 and a working capital deficit of
$1,166,922.  For the six  month  period  ended  August  31,  2001,  cash used by
operating  activities  amounted to $423,445,  primarily as a result of operating
losses for the period.  Cash used by investing  activities  during the six month
period  ended  August 31, 2001  amounted to $30,354 and  consisted  of a $25,000
advance to Post Time  Technologies  and  purchase of property  and  equipment of
$5,354. Cash provided by financing  activities during the six month period ended
August 31, 2001  amounted to  $477,473  and  resulted  primarily  from  $564,603
received under the Company's installment private placement plan.

      The Company has taken steps to reduce  monthly  operating  costs to lessen
the burden on raising further funds. In August 2000, the Company ceased pursuing
the video distribution and wagering  commission  business strategy and has since
opted to pursue a new business plan .


      Forward Looking Comments

      Certain  matters   discussed  in  this  Quarterly  Report  may  constitute
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995 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.


                                       14
<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.

      During  the  three  month  period  ended  August  31,  2001,  $100,000  of
convertible debentures and accrued interest of $9,578 were converted into shares
to be  issued  of the  Company's  common  stock.  The  debentures  and  interest
converted  during the quarter is reflected on the August 31, 2001 balance  sheet
as common shares subscribed.



Item 3.  Defaults Upon Senior Securities.

      Not applicable.


Item 4.  Submission of Matters to a Vote of Security Holders.

      Not applicable.


Item 5.  Other Information.

      Not applicable.




                                       15
<PAGE>


Item 6.  Exhibits and Reports on Form 8-K.

      (a)   Exhibits.


Exhibit     Document
-------     --------

  1         Underwriting Agreement

  1.1       Placement  Agent   Agreement,   between   Registrant  and  Pellinore
            Securities   Corporation   ("Pellinore"),   dated   April  17,  1998
            (incorporated by reference to Exhibit 1 of the Registrant's Form 8-K
            dated May 7, 1998).

  2         Plan of  Acquisition,  Reorganization,  Arrangement,  Liquidation or
            Succession

  2.01      Articles of Merger as filed with the New York Department of State on
            February  11,  1994  (incorporated  by  reference  to Exhibit 2.1 to
            report on Form 8-K dated February 14, 1994).

  2.02      Articles of Merger as filed with the Wyoming  Secretary  of State on
            February  14,  1994  (incorporated  by  reference  to Exhibit 2.2 to
            report on Form 8-K dated February 14, 1994).

  2.03      Agreement  and Plan of Merger dated July 1, 1993 between the Company
            and Mont Rouge Resources, Inc. (incorporated as Exhibit A to Exhibit
            2.2 above).

  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 Amendment of American  Digital  Communications,  Inc. as
            filed with the Wyoming Secretary of State on September 7, 1999.

  3.03      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).

  3.04      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,  distribution rights, and right to acquire
            up to  $1,000,000  in  certain  inventory  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)

                                       16
<PAGE>


 Exhibit    Document
 -------    --------

  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 favor  of  Pellinore,  for  itself  and as agent  for
            certain investors  (incorporated by reference to Exhibit 10.1 of the
            Registrant's Form 8-K dated September 10, 1998).

  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).

  16        Letter on Change in Certifying Accountants

  16.01     Letter of Causey, Demgen & Moore, dated March 24, 1998 (incorporated
            by reference to Exhibit  [____] to the  Registrant's  report on Form
            8-K, dated April 13, 1998).

  16.02     Letter  of Stark  Tinter  &  Associates,  LLC,  dated  May 13,  1998
            (incorporated by reference to Exhibit 16 to the Registrant's  report
            on Form 8-K, dated May 22, 1998).



     (b)    Reports on Form 8-K


            Resignation  of Certain  Directors  (incorporated  by  reference  to
            Exhibit  99.3 to  Registrant's  report on Form 8-K  dated  August 3,
            2001)



                  (Remainder of page left intentionally blank)





                                       17
<PAGE>


                                   SIGNATURES


In accordance with 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, 2001               BY: /s/ John G. Simmonds
                                          -----------------------------------
                                          John G. Simmonds
                                          President / CEO / CFO / Director
                                          (principal executive officer)








                                       18