As filed with the Securities and Exchange Commission on July 15, 1999
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549

                                   FORM 10-QSB

(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO 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 Quarter Ended May 31, 1999

                        Commission file number 000-28506

                      AMERICAN DIGITAL COMMUNICATIONS, INC.
        (Exact name of small business issuer as specified in its charter)

                Wyoming                         13-3411167
        (State of Incorporation)          (IRS. Employer ID No.)

            745 Fifth Avenue
        Suite 900, New York, NY                   10151
(Address of Principal Executive Offices)        (Zip Code)

             (212) 486-7424
 (Registrant's Telephone No. incl. 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 July 12, 1999 are as follows:

             Class of Securities                            Shares Outstanding
             -------------------                            ------------------
        Common Stock, $.0001 par value                          27,911,578

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

                      American Digital Communications, Inc.

<PAGE>

                                      INDEX

PART I      Financial Information

    Item 1.      Financial Statements
                 Balance Sheet...........................................   3
                 Statements of Operations................................   5
                 Statements of Cash Flows................................   6
                 Notes to Financial Statements...........................   7

    Item 2.      Management's Discussion and Analysis or Plan of
                 Operations..............................................   8


PART II.    Other Information

    Item 6.      Exhibits and Reports on Form  8-K.......................   12
                      A)  Exhibit 27 Financial Data Schedule
                      B)  Form 8-K  -  None


            Signatures....................................................  13


                                       2
<PAGE>

                      American Digital Communications, Inc.
                                  Balance Sheet
                                   (UNAUDITED)

<TABLE>
<CAPTION>

ASSETS                                                                  May 31,    February 28,
                                                                        -------    ------------
                                                                         1999          1999
                                                                         ----          ----
<S>                                                                     <C>            <C>
Current Assets:
   Cash                                                                 230,578        19,558
   Accounts receivable                                                      818            --
     Notes receivable                                                    10,764        10,764
     Marketable securities                                              493,492       616,880
     Other current assets                                                 4,000           331
---------------------------------------------------------------------------------------------

      Total current assets                                              739,652       646,064
---------------------------------------------------------------------------------------------

Property and equipment:
      Office equipment                                                  143,703       141,055
      Furniture and fixtures                                             26,082        26,082

---------------------------------------------------------------------------------------------

                                                                        169,785       167,137
          Less: Accumulated depreciation                               (147,592)     (146,519)
---------------------------------------------------------------------------------------------
              Net property and equipment                                 22,193        20,618


Other assets:
      Distribution rights, net of accumulated amortization              123,295       129,493
      Deposit on satellite uplink services                              150,000        64,000
      TrackPower trademarks and other intellectual property rights      373,511       378,491

---------------------------------------------------------------------------------------------
                                                                        646,806       571,984

            TOTAL ASSETS                                              1,408,651     1,238,666
---------------------------------------------------------------------------------------------
</TABLE>

                 See accompanying notes to financial statements.


                                       3
<PAGE>

                      American Digital Communications, Inc.
                                  Balance Sheet
                                   (UNAUDITED)


<TABLE>
<CAPTION>

LIABILITIES AND SHAREHOLDERS' EQUITY                                   May 31,    February 28,
                                                                           1999          1999
<S>                                                                     <C>           <C>
Current Liabilities:
      Accounts payable                                                  357,969       339,106
      Accrued expenses                                                   84,863        71,063
      Accrued interest                                                   78,049        75,242
       Note payable                                                     391,250       595,000
---------------------------------------------------------------------------------------------
      Total non-related party current liabilities                       912,131     1,080,411

      Accounts payable - related parties                                305,766       407,319
      Accrued interest - related parties                                 49,046        56,652
      Notes payable - related parties                                    10,370        30,370
      Current portion note payable - related party                      157,461       157,461
---------------------------------------------------------------------------------------------
      Total related party current liabilities                           522,643       651,802
---------------------------------------------------------------------------------------------

      Total current liabilities                                       1,434,774     1,732,213

Long term convertible note payable                                      505,000            --
---------------------------------------------------------------------------------------------

           Total liabilities                                          1,939,774     1,732,213

Shareholders' equity:
   Convertible  preferred  stock,  no  par  value,  unlimited         1,000,000     1,000,000
   shares authorized, (liquidation value $1,000,000)
   Common stock, $.0001 par  value; Unlimited shares                      2,616         2,516
   authorized, issued and outstanding 27,911,578 shares,
   issued and outstanding
   25,162,886 on February 28, 1999
   Additional paid in capital                                         7,294,600     7,169,700
      Common stock subscribed                                           283,222         7,500
   Accumulated deficit                                               (9,155,040)   (8,688,619)
   Accumulated other comprehensive income                                43,479        15,356
---------------------------------------------------------------------------------------------

      Total shareholders' equity                                       (531,123)     (493,547)
---------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                            1,408,651     1,238,666
---------------------------------------------------------------------------------------------
</TABLE>

                 See accompanying notes to financial statements.


                                       4
<PAGE>

                      American Digital Communications, Inc.
                            Statements of Operations
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   Three Months  Ended May 31,

                                                                           1999          1998
                                                                           ----          ----
<S>                                                                       <C>           <C>
Revenue
      Royalties from distribution rights                                  2,948         4,629
      Subscription revenue                                                  818            --
    Other revenue                                                           644            --
---------------------------------------------------------------------------------------------
          Total revenue                                                   4,410         4,629

Operating expenses:
      TrackPower expenses - wages and consulting fees                    87,512            --
      TrackPower expenses - management fees related party                75,000            --
      TrackPower expenses - transponder fees                            100,000            --
      Non-recurring Denver office costs                                      --        48,778
      General and administrative expenses                                72,253       313,097
---------------------------------------------------------------------------------------------
Total operating expenses                                                334,765       361,875

Loss from operations                                                   (330,355)     (357,246)

Other expenses
      Interest on preferred shares                                       67,500            --
      Interest expense                                                   17,258       145,985
      Non-cash financing expense                                         32,725            --
      Realized losses on marketable securities                            6,331            --
      Depreciation and amortization                                      12,252        20,854
---------------------------------------------------------------------------------------------
Total other expenses                                                    136,066       166,839

---------------------------------------------------------------------------------------------

Net loss:                                                              (466,421)     (524,085)

Other comprehensive income:
Unrealized holding gain on marketable securities                         28,123       389,095
---------------------------------------------------------------------------------------------
Comprehensive loss                                                     (438,298)     (134,990)
---------------------------------------------------------------------------------------------

Net loss per share of common stock                                        (0.02)        (0.02)
---------------------------------------------------------------------------------------------

Weighted average number of common shares outstanding                 26,412,450    24,552,886
---------------------------------------------------------------------------------------------
</TABLE>

                 See accompanying notes to financial statements.


                                       5
<PAGE>

                      American Digital Communications, Inc.
                            Statements of Cash Flows
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                           Three Months
                                                                           Ended May 31,
Increase (Decrease) in Cash
                                                                          1999         1998
                                                                          ----         ----
---------------------------------------------------------------------------------------------
<S>                                                                    <C>           <C>
 Net cash used in operations
   Net loss                                                            (466,421)     (524,085)
   Adjustments to reconcile net loss to net cash used in operating
   activities:
      Depreciation and amortization                                      12,252        20,854
      Loss on sale of marketable securities                               6,331            --
      Issuance of stock for bridge financing                                 --        95,000
      Changes in:
         Accounts receivable                                               (818)           --
         Due to related parties                                        (129,159)      (34,044)
         Other current assets                                            (3,669)           --
         Accounts payable                                                18,863       (70,675)
         Accrued expenses                                                13,800       (58,797)
         Other accrued liabilities                                        2,807         7,233
---------------------------------------------------------------------------------------------
Net cash used in operating activities                                  (546,014)     (564,514)
---------------------------------------------------------------------------------------------
Cash flows from investing activities:
    Proceeds from sale of marketable securities                         145,179        58,267
    Deposits - payments                                                 (86,000)           --
    Purchase of fixed assets                                             (2,648)       (4,387)
---------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                      56,531        53,880
---------------------------------------------------------------------------------------------
Cash flows from financing activities:
    Proceeds from options exercised                                     125,000            --
    Proceeds from stock subscriptions                                   275,722            --
    Payment of notes payable                                           (203,750)           --
    Proceeds from issuance of notes payable                             505,000       500,000
---------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities:                    701,972       500,000
---------------------------------------------------------------------------------------------

Increase (decrease) in cash                                             212,489       (10,634)
---------------------------------------------------------------------------------------------
Cash,  beginning of period                                               18,089        19,558
---------------------------------------------------------------------------------------------
Cash,  end of period                                                    230,578         8,924
---------------------------------------------------------------------------------------------
</TABLE>

                 See accompanying notes to financial statements.


                                       6
<PAGE>

                      American Digital Communications, Inc.

                          Notes to Financial Statements
                                  May 31, 1999

Summary of significant accounting policies

        Basis of presentation:

        The accompanying  financial statements have been prepared by the Company
without  audit.  In  the  opinion  of  management,  the  accompanying  unaudited
financial  statements  contain  all  adjustments   (consisting  of  only  normal
recurring  accruals) necessary for a fair presentation of the financial position
as of May 31, 1999 and February 28, 1999, and the results of operations and cash
flows for the periods ended May 31, 1999 and 1998.

        Nature of business

        The Company was organized  June 30, 1993 under the laws of Wyoming.  The
Company was in the  wireless  telecommunications  business  and had  intended to
provide  two-way  communications  in the 220 mHz. Band. The Company held various
distribution  rights for certain Midland brand commercial land mobile radios and
radio parts. The distribution rights were acquired in separate transactions over
the period 1995 and 1996. During fiscal year 1998 the Company sold, sub-licensed
or wrote off all remaining distribution rights. On January 15, 1998, the Company
acquired the TrackPower trade name and other  intellectual  property rights. The
TrackPower  service,  when fully implemented,  will distribute live horse racing
video to subscribers'  homes via satellite and such  subscribers will be able to
place  wagers  interactively  through  the world  wide web and  television.  The
Company  will not  accept or place any  wagering  transactions,  but  intends to
deliver the wager to a state licensed account wagering entity.

        Certain  matters  discussed  in this  Quarterly  Report  may  constitute
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995 (the "Reform  Act") and as such may involve risks
and  uncertainties.  These  forward-looking  statements  relate to,  among other
things,  expectations of the business environment in which the Company operates,
projections of future  performance,  perceived  opportunities  in the market and
statements   regarding  the  Company's  goals.  The  Company's  actual  results,
performance,  or  achievements  expressed  or  implied  in such  forward-looking
statements  may differ.  For  discussion  of the factors that might cause such a
difference,  see  Item  2  Management's  Discussion  and  Analysis  or  Plan  of
Operations.

        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.

        Marketable securities:

        The Company's marketable securities consist of unrestricted common stock
of publicly  traded  companies.  The securities are considered held for sale and
therefore are recorded at the market value at the balance sheet date.


                                       7
<PAGE>

        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.

        Amortization of intangibles:

        The cost of the remaining Midland  distribution  rights, which have been
sub-licensed to a third party, are being amortized over 10 years.  However,  due
to uncertainty  surrounding  future revenues from the distribution  rights,  the
Company uses the cost recovery  method if that method  produces a greater amount
of amortization.

        The  TrackPower  trademark and other  intellectual  property  rights are
being  amortized  over 20  years,  the  period  estimated  by  management  to be
benefited.

        Measurement of intangibles impairment:

        The  Company  annually  reviews  the amount of the  recorded  intangible
assets for  impairment.  If the sum of expected  cash flows from these assets is
less than the carrying  amount of these  assets,  the Company will  recognize an
impairment loss in such period.

        Net loss per share:

        Basic loss per common share is based on the weighted  average  number of
shares outstanding  during each period presented.  Options to purchase stock are
included as common stock equivalents when dilutive.

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

        Overview

        The business  focus of the Company,  during the first  quarter,  was the
initial  launch of the  TrackPower  service.  The  Company is in the  process of
implementing  a  multi-stage  business  plan which it  believes  will enable the
Company to achieve break even cash flow at achievable subscriber levels.

        Recent developments include the following:

        On April 1, 1999, the Company launched the TrackPower  service under the
"Sky Vista" service.  This service is a joint venture between EchoStar Satellite
Communications Inc. and Loral SpaceCom Corporation.

        On April 29, 1999,  the Company  entered into a binding letter of intent
with Penn National Gaming Inc. pursuant to which Penn National will serve as the
Company's  exclusive  wagering  hub  operator.  Under the terms of the letter of
intent,  Penn National  will pay the Company a wagering fee, of up to 4.75%,  on
all wagers processed from TrackPower subscribers.

        On June 4, 1999, the Company entered into an agreement with  Transponder
Encryption   Services   Corporation,   a   subsidiary   of  EchoStar   Satellite
Communications  Inc. to have the TrackPower  service broadcast under the broader
coverage of the  EchoStar's  Dish  Network  rather  than the Sky Vista  service.
EchoStar's  Dish Network  currently has over two million  subscribers  while Sky
Vista  has  approximately   10,000.  The  TrackPower  service  was  successfully
relaunched under the Dish Network on July 1, 1999.


                                       8
<PAGE>

        Although the Company was able to attract subscribers under the Sky Vista
service, management believes that the Company's prospects under the Dish Network
have improved. The Company is in the process of exchanging Dish Network hardware
for Sky Vista equipment.  Therefore,  subscription  revenues were  insignificant
during the three month period ended May 31, 1999. In addition,  wagering revenue
did not  accrue  under  the  Penn  National  agreement  because  the  definitive
agreement  had not been  legally  executed  during the first  quarter.  The Penn
National agreement was completed in July 1999.

        Results of operations

        For the three month period ended May 31, 1999

        Revenues  during the three month  period  ended May 31, 1999 were $4,410
representing  royalties  received under a Midland land mobile radio  sub-license
distribution agreement, subscription revenue and other miscellaneous revenue.

        Costs  incurred  during the quarter to directly  operate the  TrackPower
service totaled $262,512.  The Company incurred $87,512 in wages,  technical and
financial  consulting  fees,  $75,000 in  management  fees to  Simmonds  Capital
Limited  for the  services  of key senior  corporate  officers  and  $100,000 in
transponder fees.

        General and  administrative  expenses  were  $72,253,  representing  the
administrative  costs of the Company as opposed to expenses  directly related to
the TrackPower business initiative.

        The Company sold  marketable  securities  at a loss of $6,331 during the
quarter.  The Company  sold 57,800  Intek  Global  Corporation  shares at prices
between $2.03 and $2.61 for a book loss of $5,207 and 270,000 Ventel Inc. shares
at prices between $.059 and $.082 for a book loss of $1,124.

        The Company  recorded an  unrealized  holding  gain  $28,123  during the
quarter, due to the appreciation of the market value of Intek shares from $2.313
to $2.375 and the Ventel shares from $.066 to $.271 during the quarter.

        The Company  issued  429,963  shares of common stock of the Company,  to
Simmonds Capital Limited  ("SCL"),  for payment of interest on the $1,000,000 in
preferred shares held by SCL. Interest at 6% is paid in shares and is calculated
using the closing share price each month.

        Amortization and depreciation  totaled $12,252,  which represents normal
depreciation of capital assets and the amortization of the Midland  distribution
rights and the TrackPower technology rights.

        The loss from operations  during the first quarter was $330,355 compared
to a loss of $357,246  during the  comparative  period last year.  The net loss,
prior to unrealized holding gains on marketable securities,  was $466,421 during
the first quarter  compared to $524,085 last year.  The  comprehensive  loss was
$438,298 compared to $134,990 last year. The net loss per common share, prior to
holding gains, was $.02.

        The  Company  expects  to  post  losses  until   break-even   levels  of
subscribers are achieved.  Management believes that this will occur later during
fiscal year ended February 29, 2000.

        For the three month period ended May 31, 1998

        Revenues  during the three month  period  ended May 31, 1998 were $4,629
representing  royalty  revenue from  Midland  distribution  rights.  General and
administrative  expenses were $313,097 and consisted primarily of key consulting
and  management   services  agreements  required  for  the  development  of  the
TrackPower  business and the costs of operating a TrackPower  MMDS test pilot in
Canada.


                                       9
<PAGE>

        Financing costs totaled $145,985,  including  interest,  commitment fees
and legal costs.

        The Company incurred $48,778 in travel, moving and rent costs related to
the shut down of the Company's previous corporate office in Denver, Colorado.

        The Company recorded an unrealized holding gain on marketable securities
of $389,095  due  primarily to the increase in market value of Intek shares from
$2.97 to $4.00 during the quarter.

        The net loss  (prior to  unrealized  holding  gains) for the quarter was
$524,085 or a loss of $.02 per share.

        Financial Condition

        Total assets  increased from $1,238,666 to $1,408,651  during the period
March 1 to May 31, 1999. The increase is primarily  attributable  to the rise in
the market value of the Company's marketable  securities and cash received under
a subscription of new long term convertible notes.

        The Company disposed of 57,800 Intek Global  Corporation  shares for net
proceeds  of  approximately  $128,500  and 270,000  Ventel  Inc.  shares for net
proceeds of  approximately  $16,700.  On May 31, 1999 the Company  held  199,000
Intek Global  Corporation shares and 76,999 Ventel Inc. shares, for a total book
value of $493,492.  The Company  recorded an unrealized  holding gain of $12,338
and $15,785 on Intek and Ventel shares respectively.  All of the remaining Intek
shares were sold during the second quarter.

        The Company  increased  it's  security  deposit to Loral from $64,000 to
$150,000.  Concurrent  with the EchoStar  Dish Network  relaunch  this  security
deposit will no longer be necessary.

        During the quarter  ended May 31, 1999,  the Company's  working  capital
ratio  increased from .37:1 to .51:1.  The increase is primarily the result of a
subscription of new long term convertible  notes and certain other notes payable
holders opting to convert their debt into common equity.  A substantial  portion
of the remaining current liabilities are to related parties. The working capital
ratio,  after  adjusting for related party current  liabilities,  increased from
 .6:1 to .8:1.

        The Company's  shareholders  equity  deficit  increased from $493,547 at
February 28, 1999 to $531,123 at May 31, 1999. Management expects the deficit to
continue to rise until break even levels of subscribers are achieved.

        Liquidity and Capital Resources

        The  Company's  ability to fund losses  arising  from costs and expenses
exceeding  revenue is  connected  to its ability to raise  additional  financing
prior to achieving  break even levels of  subscribers.  Thus far the Company has
been successful in financing its growth.  Initially the Company borrowed amounts
by  way of  short  term  notes  payable  secured  by  the  Company's  marketable
securities and secondarily  through an issue of new long term convertible notes.
In order to launch  the  business  in April,  individuals  close to the  Company
exercised  stock options in order to provide the  necessary  funding to make the
satellite facility deposit.

        SCL has  provided  two  guarantees  to the  Company;  the first  being a
general  guarantee of all the obligations of the Company until March 1, 2000 and
the second being the  Company's  obligations  under the  Transponder  Encryption
Services Corporation agreement.  In exchange, SCL received 1,000,000


                                       10
<PAGE>

warrants to purchase the  Company's  common stock at $2.50 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.  SCL has funded and will  continue to fund day to day  operating  cash
flow shortages.

        The Company approved an issue of $1,250,000 of new convertible long term
notes  during  the  first  quarter.  The  notes  are for a term of 5 years,  pay
interest at 8% and are convertible into common equity at $1.25.  Prior to end of
the first  quarter  $505,000 was received  under these new notes.  SCL agreed to
convert  $250,000 of its existing  debt into new notes.  As of July 13, 1999 the
Company has received $1,200,000 in subscriptions of the new convertible notes.

        Subsequent  to the end of the quarter,  the Company  sold its  remaining
Intek  shares.  Proceeds  of  approximately  $500,000  were  used to  repay  the
remaining $391,250 in old notes payable and other working capital purposes.

        Approximately  $111,000 in old notes  payable  were  converted to common
equity at $.15 per share during the quarter.

        Year 2000

        The Company is developing the new TrackPower  technology to be Year 2000
compliant.  The Company will, prior to consummating any new business agreements,
require Year 2000 compliance certification from the contracting party.

        The incremental  cost of Year 2000 compliance is not known at this time,
however, the Company is of the belief that due to the outsourcing  philosophy of
the majority of the operating  tasks,  the cost will not be significant.  If the
systems  of the  Company's  business  partners  are not Year 2000  compliant  at
December  31,  1999,  the  Company  may be  subject to  material  effects to its
financial condition and results from operations.


                                       11
<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

        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

Exhibits.             None.

EX-27                 Financial Data Schedule

Form 8-K       None.


                                       12
<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:   JULY 15, 1999                BY:

                                                /s/ John G. Simmonds
                                     ------------------------------------------
                                                  John G. Simmonds
                                             President / CEO / Director
                                            (principal executive officer)


DATE:   JULY 15, 1999                BY:

                                                /s/ Gary N. Hokkanen
                                     ------------------------------------------
                                                  Gary N. Hokkanen
                                              Chief Financial Officer,
                                            (principal financial officer)

                                       13