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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549


                                   FORM 10-QSB

(Mark One)
[X]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934.

[   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934.

                For the Quarterly Period Ended November 30, 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)


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 December 17, 1999 are as follows:

            Class of Securities                             Shares Outstanding
       Common Stock, $.0001 par value                           31,945,959

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<PAGE>

                                TrackPower, Inc.


                                      INDEX


    PART I     Financial Information

    Item 1.    Financial Statements (unaudited)
                      Balance Sheet.......................................... 3
                      Statements of Operations and Comprehensive Income...... 5
                      Statements of Cash Flows............................... 6
                      Notes to Financial Statements.......................... 7

    Item 2.    Management's Discussion and Analysis or Plan of Operation..... 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..............................14
                         A)  Exhibit Schedule
                         B)  Reports Filed on Form 8-K

    Signatures...............................................................17

<PAGE>

                          PART I. Financial Information

Item 1.  Financial Statements


                                TrackPower, Inc.
                                  Balance Sheet
                                   (UNAUDITED)

ASSETS                                                November 30,  February 28,
                                                              1999         1999
                                                           -------     --------
Current Assets:
Cash                                                       41,690        18,089
Accounts receivable                                        40,081            --
   Notes receivable                                        10,764        10,764
   Inventory                                               70,928            --
   Marketable securities                                    6,545       616,880
   Other current assets                                     5,723           331
-------------------------------------------------------------------------------
Total current assets                                      175,731       646,064
-------------------------------------------------------------------------------
Property and equipment:
   Property and equipment                                 190,815       167,137
       Less: Accumulated depreciation                    (151,423)     (146,519)
-------------------------------------------------------------------------------
          Net property and equipment                       39,392        20,618

Other assets:
       Distribution rights, net of accumulated
       amortization                                       110,897       129,493
       Deposit on satellite uplink services                    --        64,000
       TrackPower trademarks and other intellectual
       property rights                                    363,550       378,491
-------------------------------------------------------------------------------
                                                          474,447       571,984
-------------------------------------------------------------------------------
            TOTAL ASSETS                                  689,570     1,238,666
-------------------------------------------------------------------------------

                See accompanying notes to financial statements.


                                       3
<PAGE>

                                TrackPower, Inc.
                                  Balance Sheet
                                   (UNAUDITED)

<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY                                               November 30,        February 28,
                                                                                           1999                1999
                                                                                           ----                ----
<S>                                                                                   <C>                   <C>
Current Liabilities:
   Accounts payable                                                                   1,222,582             339,106
   Accrued expenses                                                                      72,870              71,063
   Accrued interest                                                                      58,261              75,242
   Note payable                                                                              --             595,000
--------------------------------------------------------------------------------------------------------------------
       Total non-related party current liabilities                                    1,353,713           1,080,411

   Accounts payable - related parties                                                   332,379             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                                          342,749             651,802
--------------------------------------------------------------------------------------------------------------------

       Total current liabilities                                                      1,696,462           1,732,213

Long term debt:
8% senior subordinated convertible debenture due June 10, 2004                        1,250,000
8% senior subordinated convertible debenture due October 31, 2004                     1,480,000                   -
--------------------------------------------------------------------------------------------------------------------

       Total liabilities                                                              4,426,462           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,               2,934               2,516
   29,340,401 shares, issued and outstanding on November 30, 1999 and 25,162,886
   shares, issued and outstanding on February 28, 1999.
   Additional paid in capital                                                         7,813,954           7,169,700
     Common stock subscribed                                                              7,500               7,500
     Warrants issued for guarantee                                                      649,500                  --
   Accumulated deficit                                                              (13,239,937)         (8,688,619)
   Accumulated other comprehensive income                                                29,157              15,356
--------------------------------------------------------------------------------------------------------------------
       Total shareholders' equity                                                    (3,736,892)           (493,547)
--------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              689,570           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            Nine Months Ended
                                                                  November 30,                 November 30,
                                                             1999           1998            1999          1998
                                                             ----           ----            ----          ----
<S>                                                          <C>            <C>            <C>           <C>
Revenue
    Royalties from distribution rights                       3,393          2,378          7,909         10,125
    Net subscription revenue                                25,489             --         30,152             --
    Wagering commissions                                     8,750             --          9,312             --
    Other revenue                                              133             --          4,430             --
---------------------------------------------------------------------------------------------------------------
    Total revenue                                           37,765          2,378         51,803         10,125

Operating expenses:
    TrackPower  - wages and consulting fees                194,756        112,178        362,080        397,664
    TrackPower  - mgmt fees related party                   75,000         75,000        225,000        225,000
    TrackPower  - transponder fees                       1,200,000             --      2,200,000             --
    Non-recurring Denver office costs                           --             --             --         48,778
      Advertising & marketing costs                        300,421             --        450,425             --
      General & administrative                             225,923         48,385        526,004        284,058
---------------------------------------------------------------------------------------------------------------
    Total operating expenses                             1,996,100        235,563      3,763,509        955,500

Loss from operations:                                   (1,958,335)      (233,185)    (3,711,706)      (945,375)

Other expenses:
    Interest on preferred shares                                --             --         67,500             --
    Interest                                                34,034         25,522         79,909             --
    Non-cash financing expense                                  --             --        682,225        287,170
    Realized gains on marketable securities                     --         (6,849)       (28,463)        (6,849)
    Depreciation and amortization                           12,970         20,850         38,441         62,554
---------------------------------------------------------------------------------------------------------------
    Total other expenses                                    47,004         39,523        839,612        342,875

Net loss                                                (2,005,339)      (272,708)    (4,551,318)    (1,288,250)
Other comprehensive income:
Unrealized holding (loss) gain on marketable                (3,773)       131,481         13,801       (390,159)
securities
---------------------------------------------------------------------------------------------------------------
Comprehensive loss                                      (2,009,112)      (141,227)    (4,537,517)    (1,678,409)
---------------------------------------------------------------------------------------------------------------

Net loss per share of common stock                           (0.07)         (0.01)         (0.16)         (0.07)
---------------------------------------------------------------------------------------------------------------

Weighted average number of common shares outstanding    29,199,151     25,127,886     28,133,203     24,897,330
---------------------------------------------------------------------------------------------------------------
</TABLE>

               See accompanying notes to financial statements.


                                       5
<PAGE>

                                TrackPower, Inc.
                            Statements of Cash Flows
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                            Three Months Ended          Nine Months Ended
                                                              November 30,                November 30,
   Increase (Decrease) in Cash
                                                          1999           1998           1999          1998
                                                          ----           ----           ----          ----
-----------------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>         <C>           <C>
Net cash used in operations
    Net loss                                           (2,005,339)     (272,708)   (4,551,318)   (1,288,250)
    Adjustments to reconcile net loss
      to net cash used in operating activities:
         Depreciation and amortization                     12,970        20,850        38,441        62,554
         Gain on sale of marketable securities                 --        (6,849)      (28,463)       (6,849)
     Changes in:
         Accounts receivable                              (19,464)           --       (40,081)           --
         Due to related parties                           (25,852)       (1,012)     (466,513)      (23,713)
         Inventory                                           (597)           --       (70,928)           --
         Other current assets                               1,723           300        (5,392)           --
         Accounts payable                                 686,466       195,713       883,476       183,525
         Accrued expenses                                   1,255           706         1,807       (57,891)
         Accrued interest                                  33,776            --       (16,981)           --
         Other accrued liabilities                             --        25,500            --        51,233
-----------------------------------------------------------------------------------------------------------
Net cash used in operating activities                  (1,315,062)      (37,500)   (4,255,952)   (1,079,391)
-----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
      Proceeds from sale of marketable securities              --       135,576       652,598       193,843
      Deposits - recovery                                      --            --        64,000            --
      Sale/(purchase) of fixed assets                      (2,632)           --       (23,678)       (4,387)
-----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities       639,021       135,576       692,920       189,456
-----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
      Proceeds from options exercised                      28,251            --       263,751            --
      Proceeds from sale of common stock, net                  --            --       348,196            --
      Warrants issued as guarantee fee                         --            --       649,500            --
      Non-cash financing expense                               --            --        32,725       144,001
      Proceeds/(repayment) of notes payable                    --            --      (437,539)      850,000
      Proceeds on issuance of convertible debentures    1,230,000            --     2,730,000            --
-----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities:    1,258,251            --     3,586,633       994,001
-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------
Increase (decrease) in cash                               (59,443)       98,076        23,601       104,066
-----------------------------------------------------------------------------------------------------------
Cash,  beginning of period                                101,133        25,548        18,089        19,558
-----------------------------------------------------------------------------------------------------------
Cash,  end of period                                       41,690       123,624        41,690       123,624
-----------------------------------------------------------------------------------------------------------
</TABLE>

               See accompanying notes to financial statements.


                                       6
<PAGE>


                                TrackPower, Inc.

                          Notes to Financial Statements
                                November 30, 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
of the Company as of November  30, 1999 and February 28, 1999 and the results of
operations  and cash flows for the periods ended  November 30, 1999 and November
30, 1998.

         Nature of business

         The Company was  organized  on 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 from Simmonds Capital Limited ("Simmonds Capital").
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 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 Operation" 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 of the  securities 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 $450,425 in the nine month period ended November 30, 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, which is the period estimated by management to be
the useful life of such rights.

         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 on four channels under
the  EchoStar  DishNetwork  service on July 1, 1999 with a  subscription  fee of
$19.99 per month or $125 per annum.  During the three month  period ended August
31,  1999,  the  Company  also  began  earning  wagering  commissions  under its
agreement with Penn National Gaming, Inc. ("Penn Gaming"). Subsequent to the end
of the quarter  ended  November 30, 1999 and  effective  January 10,  2000,  the
Company  reduced the number of  channels to two and no longer  charged a fee for
the service.


                                       8
<PAGE>

         The  decision  to reduce  the  number of  channels  and  eliminate  the
subscription  fee was a significant  step forward for the Company in response to
changes in the marketplace.  The reduction in channels has reduced the satellite
transponder costs from $400,000 to $200,000 per month.  Despite the reduction in
the number of channels,  the Company will effectively double the capacity of the
previously-used  four channel  service by adding new  switching  and  production
equipment.  The Company will now focus on marketing the wagering  opportunity to
horseracing  fans.  The free  channels  allow  the  Company  access  to a larger
audience.   The  Company  will  also  focus  more  resources  on  marketing  its
interactive  WebTV(TM)  and  computer  platforms  expected  to be  available  in
February 2000.

         Television Games Network ("TVG"), a service similar to TrackPower which
is  also  free of  charge,  was  launched  in the  fall  of  1999 on  EchoStar's
DishNetwork.  TVG accepts  wagering from three U.S.  States.  The Racing Network
("TRN"),  also a similar service on EchoStar's  DishNetwork,  charges $24.99 and
does not offer any wagering  services.  TrackPower's  free  channels  will allow
access  to  many  of the  TVG and TRN  customers.  TrackPower  has  launched  an
extensive marketing campaign offering the wagering opportunity to this audience.

         Management  believes that the TrackPower service is oriented toward the
more  serious  core  wagerer  and  therefore  has made the  decision to focus on
wagering by  eliminating  the  subscription  fee.  Management  is  attempting to
attract  more core  wagerers to subscribe  to the  TrackPower  service and begin
wagering  through  Penn  Gaming,  thereby  increasing  the  amount  of  wagering
commissions earned by the Company.

         The Company has also hired key spokespeople,  such as D. Wayne Lukas, a
top thoroughbred  trainer,  and John Campbell,  a top harness racing driver,  to
promote the service and gain credibility with the horseracing  fans. The Company
has also hired a top handicapper and a  well-recognized  wagering  consultant to
assist in marketing the product to active heavy wagerers.
         The  decision to reduce to two channels  from four has reduced  monthly
fixed  transponder fees from $400,000 to $200,000.  Management is of the opinion
that if the  Company  succeeds  in  accelerating  the  sign up rate of  wagering
account holders, a breakeven level of operations will occur sooner. In addition,
due to the  reduced  costs  the  risk  of the  Company  being  unable  to  raise
sufficient financing to fund interim operating losses has been reduced.

         In November 1999,  management changed the marketing campaign to refocus
on attracting  bettors to the  TrackPower  service rather than  attracting  mass
levels of satellite subscribers.  The marketing campaign has a specific focus on
attracting heavy wagerers.  Initial plans include offering a loyalty program and
running a large handicapping  tournament,  the TrackPower National  Handicapping
Challenge  with a total  purse of  $200,000.  Management  believes  that the key
statistics  that will measure the  performance  of the Company have shifted from
number of satellite  subscribers to wagering  revenue and the number of wagering
accounts,  number of active account  holders,  and the amount wagered per active
account.

         Results of operations

         For the three month period ended November 30, 1999

         Revenues  for the three  month  period  ended  November  30,  1999 were
$37,765,


                                       9
<PAGE>

representing  Midland  royalty  revenue of $3,393,  TrackPower net  subscription
revenue of $25,489,  wagering commissions of $8,750 and miscellaneous revenue of
$133.

         Operating  expenses  totaled  $1,996,100  during the three month period
ended  November 30, 1999.  Transponder  fees were  $1,200,000,  advertising  and
marketing  costs  were  $300,421,   general  and  administrative  expenses  were
$225,923,  wages and consulting  costs totaled  $194,756 and management  fees to
Simmonds Capital totaled  $75,000.  As described in the Overview section of this
Form 10-QSB  transponder  fees have been reduced to $200,000 per month effective
January 10, 2000.

         Other  expenses  totaled  $47,004  during the three month  period ended
November 30, 1999, including interest of $34,034, depreciation of capital assets
and amortization of Midland distribution rights and TrackPower technology rights
of $12,970.

         The  Company   recorded  an  unrealized   holding  loss  on  marketable
securities of $3,773 during the three month period ended  November 30, 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 $0.67 to $0.425  during the  quarter.  The Company held 15,400 Fifty
Plus Network common shares at November 30, 1999.

         The net loss  during the three month  period  ended  November  30, 1999
(prior to  unrealized  holding  gains or losses on  marketable  securities)  was
$2,005,339  and  $2,009,112  after the  unrealized  holding  loss on  marketable
securities.

         For the three month period ended November 30, 1998

         During the three month  period ended  November  30,  1998,  the Company
collected $2,378 on Midland distribution rights.

         The Company  sold 87,400  Intek  shares  during the three month  period
ended  November  30,  1998 at an average  price of $1.47 for total  proceeds  of
$128,327  representing a gain of $5,421. The Company also sold 70,000 Fifty Plus
Network Inc.  (formerly Ventel Inc.) shares at an average price of approximately
$0.10 for total proceeds of $7,250, representing a gain of $1,428.

         Operating  expenses for the three month period ended  November 30, 1998
were $235,563  consisting of $112,178 in wages and consulting costs,  $75,000 in
management  fees to Simmonds  Capital and $48,385 in general and  administrative
costs.

         Financing  costs  totaled  $25,522  during the three month period ended
November 30, 1998, consisting primarily of interest.

         The closing  trading value of the Company's  investment in Intek common
shares increased from $1.56 at August 31, 1998 to $1.84 at November 30, 1998 and
the trading  value of Fifty Plus  Network,  Inc.  common shares closed at $0.52.
Accordingly,  the Company  recorded an  unrealized  holding  gain on  marketable
securities of $131,481 during the three month period ended November 30, 1998.


                                       10
<PAGE>


         During  the  three  month   period  ended   November   30,  1998,   the
comprehensive loss was $141,227 or $0.01 per share.

         For the nine month period ended November 30, 1999

         Revenues  for the nine  month  period  ended  November  30,  1999  were
$51,803,  comprised of net TrackPower subscription revenues of $30,152,  Midland
distribution  right  royalties of $7,909,  TrackPower  wagering  commissions  of
$9,312 and miscellaneous revenues of $4,430.

         Operating  expenses for the nine month  period ended  November 30, 1999
were $3,763,509,  comprised of $2,200,000 in EchoStar  transponder fees, general
and  administrative  expenses of $526,004,  advertising  and marketing  costs of
$450,425,  wages and consulting  costs of $362,080 and  management  fees paid to
Simmonds Capital of $225,000.

         Other  expenses for the nine month period ended  November 30, 1999 were
$839,612,  consisting of a one time $649,500 non cash guarantee fee, $147,409 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 $38,441.

         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 for the nine month period ended  November 30, 1999,  prior
to unrealized holding gains or losses on marketable securities, was $4,551,318.

         The  Company   recorded  an  unrealized   holding  gain  on  marketable
securities of $13,801 due to the  appreciation in the market value of Fifty Plus
Network shares from $0.33 on February 28, 1999 to $0.425 on November 30, 1999.

         The comprehensive  loss for the nine month period November 30, 1999 was
$4,537,517 or $0.16 per share.

         For the nine month period ended November 30, 1998:

         Revenues  during the  nine-month  period  ended  November 30, 1998 were
$10,125, consisting of Midland royalty revenues.

         Operating  expenses,  for the nine month period ended November 30, 1998
were $955,500 consisting of $397,664 in wages and consulting costs,  $225,000 in
management  fees to Simmonds  Capital,  $284,058  in general and  administrative
costs and $48,778 of nonrecurring costs to close down the former head office.


                                       11
<PAGE>

         Other  expenses  totaled  $342,875,  during the nine month period ended
November 30, 1998, and consisted of $287,170 in non-cash financing costs (common
shares  issued in  connection  with notes payable for the purpose of funding the
operations  of the  company),  a  gain  of  $6,849  on the  sale  of  marketable
securities  and  depreciation  of  capital  assets and  amortization  of Midland
distribution rights totaling $65,554.

         During the nine month  period  ended  November  30,  1998,  the Company
recorded an unrealized holding loss on marketable  securities of $390,159 due to
the decline in value of the Company's Intek and Fifty Plus Network shares.

         The comprehensive loss was $1,678,409, $0.07 per share, during the nine
month period ended November 30, 1998.

         Financial Condition

         Total assets  decreased from $744,786 on August 31, 1999 to $689,570 on
November 30, 1999. The decrease is primarily the result of a $59,443 decrease in
cash  offset  by a $3,773  reduction  in the value of the  Company's  marketable
securities.

         The decrease in cash during the three month  period ended  November 30,
1999 was caused by $1,258,251 of new funding  being  insufficient  to offset the
$1,315,062 used in operations and $2,632 in capital asset acquisitions.

         The value of marketable securities, which consists of 15,400 Fifty Plus
Network  common  shares,  decreased from $10,318 at August 31, 1999 to $6,545 at
November 30,  1999.  At November 30, 1999 the  Company's  marketable  securities
consisted  of 15,400  shares of Fifty Plus  Network  valued at a market price of
$0.425 per share.

         The working capital deficit, after adjusting for related party amounts,
increased  from  $411,607 at August 31, 1999 to $1,177,982 at November 30, 1999.
The change resulted from a significant  increase in accounts payable relating to
transponder fees.

         The Company's  shareholders equity deficit increased from $1,756,031 at
August 31, 1999 to $3,736,892 at November 30, 1999.  The increase in the deficit
during the  current  quarter  is a result of $2.0  million  comprehensive  loss.
Management  expects the deficit to continue to rise until a break-even  level of
operations is achieved.

         Options   exercised  to  purchase  common  shares  of  the  Company  by
management during the three month period ended November 30, 1999 totaled 188,333
shares for an increase in stockholders capital of $28,251.

         Liquidity and Capital Resources

         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 has and  continues to raise funds  primarily by issuing new  convertible
debt.


                                       12
<PAGE>

         At November 30, 1999 there were  $2,730,000  outstanding in convertible
debentures.  Debentures  totaling  $1,250,000 issued on June 10, 1999 which were
convertible  into common  shares of the  Company at $1.25,  were  converted,  on
December 17, 1999,  by special  resolution of the Board of Directors at $.50 per
share.  At November  30,  1999 there was  $1,480,000  face value in  convertible
debentures  outstanding with conversion privileges at $.60 per share, which were
also amended,  by special  resolution  of the Board of Directors,  to adjust the
conversion  rate to $.50.  Both  special  resolutions  were  approved  to assist
management  in raising  sufficient  financing to continue to fund the  operating
losses.

         As of January 14, 2000 the Company  has  received  commitments  for the
issuance of $5,000,000 in new convertible  debentures,  of which  $3,626,000 has
been received by the Company.

         Simmonds Capital has provided two guarantees to the Company:  a general
guarantee  of all the  obligations  of the  Company  until  March 1,  2000 and a
guarantee of the Company's obligations under the Transponder Encryption Services
Corporation  agreement.  In exchange,  during the quarter ended August 31, 1999,
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.


                                       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.

         Not applicable.

Item 5.  Other Information.

         Not applicable.

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

(a)      Exhibit Schedule.

Exhibit Page No.                    Document
----------------                    --------

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
                                    the Company's 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 the Company's  Report on Form
                                    8-K dated July 14, 1993)
3.03                                Bylaws  of  the  Company   (incorporated  by
                                    reference  to Exhibit  3.2 to the  Company's
                                    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


                                       14
<PAGE>

                                    by reference to Exhibit 4.1 to the Company's
                                    Report on Form 8-K dated July 14, 1993)
4.02                                Form of  Warrant  issued by the  Company  to
                                    various  investors,  dated as of  April  17,
                                    1998  (incorporated  by reference to Exhibit
                                    4.1 to the  Company's  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 the  Company's
                                    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 the  Company's
                                    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 the  Company's
                                    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  the
                                    Company's  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  Company's  Form  10-KSB for the year
                                    ended February 28, 1997)
10.06                               Agreement,  dated January 15, 1998,  between
                                    Simmonds  Capital  Limited  and the  Company
                                    (incorporated  by  reference  to  Exhibits 2
                                    through 2.6 of the Company'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
                                    Company  in favor of  Pellinore,  for itself
                                    and   as   agent   for   certain   investors
                                    (incorporated  by  reference to Exhibit 10.1
                                    of the  Company's  Report  on 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


                                       15
<PAGE>

                                    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

Report on Form 8-K dated July 21, 1999


                                       16
<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:  JANUARY 14, 2000                  BY: /s/ John G. Simmonds
                                            -----------------------------------
                                                John G. Simmonds
                                                President / CEO / Director
                                                (principal executive officer)


DATE:   JANUARY 14, 2000                 BY: /s/ Gary N. Hokkanen
                                            -----------------------------------
                                                 Gary N. Hokkanen
                                                 Chief Financial Officer,
                                                 (principal financial officer)


                                       17