Gate To Wire Solutions (GWIR) 10-Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the Quarterly Period Ended May 31, 2008
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE       ACT OF 1934.
	For the transition period from ______________ to ________________

Commission file number 000-28506

TrackPower, Inc.

 (Exact Name of Small Business Issuer as Specified in Its Charter)

Wyoming	13-3411167
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

3565 King Road, Suite 102

King City, Ontario, Canada L7B 1M3

(Address of Principal Executive Offices)

(905) 833-9845

(Issuer’s Telephone Number, Including Area Code)

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes X  No __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes __ No X

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: The number of shares of common stock outstanding as of July 15, 2008: 2,510,243,040

Transitional Small Business Disclosure format (Check one):  Yes __No X

TrackPower, Inc.

INDEX

PART I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheet	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis or Plan of Operation	9
Item 3.	Controls and Procedures	11
PART II.	Other Information
Item 2.	Unregistered Sales of Equity Securities	12
Item 3.	Defaults Upon Senior Securities	12
Item 6.	Exhibits	13
Signatures and Certifications		14

2

PART I. Financial Information

Item 1.  Condensed Financial Statements.

TRACKPOWER, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Unaudited)

Assets

	May 31, 2008			February 29, 2008
Current assets
Cash and cash equivalents	$	29,169		$	110,522
Due from related parties (Note 2)		8,045			-
Total current assets		37,214			110,522
License rights (Note 3)		50,000			50,000
Total assets	$	87,214		$	160,522
Liabilities Stockholders’ Deficiency and
Current liabilities
Accounts payable	$	215,295		$	263,726
Due to related parties (Note 2)		300,851			212,000
Restructured related party liabilities (Note 4)		-			99,875
Accrued expenses
Professional fees		53,760			34,000
Other		7,683			12,000
Total current liabilities		577,589			621,601
Total liabilities	$	577,589		$	621,601
Stockholders’ deficiency
Preferred stock, unlimited shares authorized, none outstanding		-			-
Common stock, $.0001 par value; unlimited shares  authorized, 2,510,243,040 shares issued and outstanding		251,024			98,530
Additional paid-in capital		33,732,382			30,137,832
Common stock subscribed		-			3,647,169
Accumulated deficit		(34,473,781	)		(34,344,610	)
Total stockholders’ deficiency		(490,375	)		(461,079	)
Total liabilities and stockholders’ deficiency	$	87,214		$	160,522

See notes to financial statements

3

TRACKPOWER, INC. AND SUBSIDIARY

Consolidated Statement of Operations

(Unaudited)

	Three Months Ended May 31,
	2008			2007
Revenues	$	-		$	-
Costs and expenses
Management fees - related party		78,919			60,000
Professional fees		8,855			4,397
General and administrative		41,397			19,989
Depreciation and amortization		-			382
Interest expense		-			26,466
Gain on disposal of marketable securities		-			(7,550	)
Total costs and expenses		129,171			103,684
Net loss		(129,171	)		(103,684	)
Preferred dividends		-			60,493
Net loss applicable to common shareholders	$	(129,171	)	$	(164,177	)
Loss per share of common stock	$	(0.000	)	$	(0.0002	)
Weighted average number of common shares outstanding		1,530,284,707			770,601,873

See notes to financial statements

4

TRACKPOWER, INC. AND SUBSIDIARY

Consolidated Statement of Changes in Stockholders’ Equity/ (Deficiency)

May 31, 2008

(Unaudited)

	Common Stock				Additional Paid-in		Common Stock			Accumulated
	Shares		Amount		Capital		Subscribed			(Deficit)			Total
Balance February 29, 2008		985,305,540		98,530		30,137,832		3,647,169			(34,344,610	)		(461,079	)
Common stock private placement		15,000,000		1,500		103,500		(105,000	)		-			-
Common stock issued pursuant to private placement associated with disposal of trade name		200,000,000		20,000		82,333		(102,333	)		-			-
Common stock issued to settle preferred share obligations		1,220,000,000		122,000		3,317,836		(3,439,836	)		-			-
Common stock issued pursuant to settlement with officers		89,937,500		8,994		90,881		-			-			99,875
Net loss for the three months ended May 31, 2008		-		-		-		-			(129,171	)		(129,171	)
Balance May 31, 2008		2,510,243,040		251,024		33,732,382		-			(34,473,781	)		(490,375	)

See notes to financial statements

5

TRACKPOWER, INC. AND SUBSIDIARY

Consolidated Statement of Cash Flows

(Unaudited)

		Three Months Ended May 31,
		2008			2007
Operating activities
Net (loss)		$	(129,171	)	$	(103,684	)
Adjustments to reconcile net (loss) to net cash (used) by operating activities:
Depreciation and amortization			-			382
Gain on disposal of marketable securities	��		-			(7,550	)
Changes in:
Prepaid expenses			-			(20,160	)
Due from/to  related parties			80,806			141,739
Accounts payable and accrued expenses			(32,988	)		(55,431	)
Net cash (used) in operating activities			(81,353	)		(44,704	)
Investing activities
Proceed on disposal of marketable securities			-			37,100
Net cash (used in) investing activities			-			37,100
Financing activities
Net cash provided by financing activities			-			-
Increase (decrease) in cash and cash equivalents			(81,353	)		(7,604	)
Cash and cash equivalents, beginning of year			110,522			11,833
Cash and cash equivalents, end of year		$	29,169		$	4,229

Non-cash activities:

During the three months ended May 31, 2008 the Company:

1.	issued 200,000,000 common shares valued at $102,333 pursuant to a private placement associated with disposal of trade name.
2.	issued 89,937,500 common shares valued at $99,875 pursuant to settlement with officers.
3.	issued 1,220,000,000 common shares valued at $3,439,836 pursuant to settlement of preferred share obligations.
4.	issued 15,000,000 common shares valued at $105,000 pursuant to common stock subscribed.

During the three months ended May 31, 2007 the Company:

1. issued 10,000,000 shares of its common stock, valued at $36,000 pursuant to a settlement agreement with the Company’s former CEO

The Company did not make cash interest or tax payments during the three month period ended May 31, 2008 or 2007.

See accompanying notes to financial statements

6

TRACKPOWER, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

May 31, 2008

Note 1 - Summary of Significant Accounting Policies

Nature of Business

Our present business strategy and direction is to develop and operate a horseracing video distribution venture in international markets.

Basis of Presentation

The accompanying unaudited consolidated 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 three months ended May 31, 2008 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2009. 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 29, 2008.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations during its operating history. The ability of the Company to continue as a going concern is dependent upon obtaining future financing and profitable operations. Management is in the process of evaluating future business opportunities, which would generate revenue to sustain the operations of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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. Significant estimates include the recoverability of assets and the fair value of common stock and other equity securities issued. Actual results could differ from those estimates.

Note 2 - Due to/from Related Parties

Periodically, the Company advances funds and pays expenses on behalf of related parties and funds are advanced and expenses are paid by related parties on behalf of the Company.  These transactions result in non-interest bearing payables or receivables to related parties.

Amounts due from related parties were:

	May 31, 2008
Entities with common directors and/or officers	$	8,045

7

Amounts due to related parties were:

	May 31, 2008
Entities with common directors and/or officers		85,851
Former officer and director		215,000
Total	$	300,851

Amounts due to or from related parties are non-interest bearing, unsecured and do not have any specific repayment terms.

Note 3 – Licensing Rights

During fiscal 2008, the Company acquired the exclusive licensing rights for Latin America for a horseracing proprietary video distribution service from Bettor Solutions Inc. Under the license the Company will share net revenues with Bettor Solutions Inc.

As of May 31, 2008 the Company had not yet begun to receive revenues under the arrangement, and therefore, the Company has not yet begun to amortize the intangible asset.

Note 4 - Restructuring of Liabilities and Preferred Stock

On February 29, 2008, the Company entered into a series of agreements to restructure certain related party liabilities and Series A convertible preferred shares.

Related Party Liabilities:

The Company agreed to issue 89,937,500 common shares to existing and former officers and directors for past  services provided of $99,875.  Such shares were issued in the three months ended May 31, 2008

Series A Convertible Preferred Stock:

The Company had $3,000,000 principal value of 8% Series A convertible preferred share obligations and $439,836 of accrued and unpaid dividends outstanding and the Company agreed to; 1) issue 1,220,000,000 restricted shares of its common stock valued at $3,439,836, and 2) provide an earn out arrangement of ten percent (10%) of cumulative earnings before interest, taxes, depreciation and amortization paid in cash, quarterly, 45 days following fiscal quarter end, to a maximum of $1,000,000, collectively, to the members and affiliates of Asolare II, LLC, (“Asolare”) as full and complete settlement of its preferred share obligations including any related obligations of Asolare to its affiliates.  The 1,220,000,000 restricted common shares were issued in the three months ended May 31, 2008.

Note 5 - Loss per Share

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

Note 6 - Related Party Transactions

During the three month period ended May 31, 2008, the Company paid $78,919 in compensation to officers and directors as management fees for their services. The Company also issued 89,937,500 to officers in payment of obligations owed.

8

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

Forward Looking Statements

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.  We are under no duty to update, and do not undertake to update, any of the forward-looking statements contained in this quarterly report to conform them to actual results or to changes in our expectations.

Recent Developments

On July 1, 2008 the Company announced at the next Annual Meeting of Shareholders, shareholders will be asked to consider and act upon a proposal to ratify and approve an Agreement and Plan of Merger providing for the merger of the Company with Gate to Wire Solutions, Inc., a Nevada corporation which is a newly formed special purpose wholly owned subsidiary of the Company.

Plan of Operations

Bettor Solutions Inc. Agreement

On December 4, 2007, the Company announced that it entered into an agreement with Bettor Solutions Inc. (BSI) to jointly develop and market BSI's proprietary Video Distribution Service in Latin America.

This is TrackPower's first major step in a restructuring strategy, as it positions itself to offer a range of products and services to the Latin American marketplace. TrackPower and BSI are combining efforts to deliver a package of products, services and advisory expertise to racing and wagering interests to this region.

TrackPower obtained an exclusive license to operate the Video Distribution Service in Latin America in exchange for 50,000,000 shares of its common stock. Pursuant to the license, TrackPower and BSI agree to share the net profit from the video distribution and wager processing on a 50/50 basis. TrackPower will be responsible for the expenses associated with obtaining distribution agreements and BSI will be responsible for delivering the technology and operational support on a day-to-day basis. The initial term for the license runs until November 21, 2009 and may be extended for additional one-year terms.

The Company will need to raise additional cash to continue to pay its operating expenses in the next twelve months until the distribution from the new ventures exceed the day to day operating costs. The Company also plans to seek other racing and gaming opportunities in the United States.

The Company plans to raise additional funds, in the next twelve months, through the issuance of its common stock or through a combination of equity and debt security instruments. It is anticipated that the debt security instruments will have conversion features that would cause further dilution to existing shareholders.

Results of Operations

For the three month period ended May 31, 2008 and 2007

Costs and expenses totaled $129,171 during the three-month period ended May 31, 2008 approximately $35,006 lower than during the three month period ended May 31, 2007.  The Company experienced very little activity during the first quarter of the current year as management and directors transitioned our business strategy and direction to develop and operate a horseracing video distribution venture in international markets.

Professional and consulting fees for the three month period end May 31, 2008 was $8,855 in comparison to $4,397 for the prior year. For the three month period end May 31, 2008 the professional and consulting fees consisted of: $6,500 in audit fees; $1,990 in director fees; and $365 in legal costs.

9

General and administrative expenses were $41,397 during the three month period ended May 31, 2008 compared to $19,989 during the three month period ended May 31, 2008. General and administrative expenses are substantially higher than the previous year due to managements transition of the company’s business strategy. General and administrative expenses during the three month period ended May 31, 2008 included: 1) travel, meals and entertainment of $17,312, 2) corporate promotion and advertising of  $12,145, 3) insurance of $3,037, 4) foreign exchange losses of $2,161 5) miscellaneous corporate costs of $6,742.

Amortization decreased from $382 during the three month period ended May 31, 2007 to $nil during the current quarter.

Interest expense during the three month period ended May 31, 2008 was nil and $26,466 in the prior year. Interest expense has been reduced due to the Company settling a 15%, $700,000 promissory note.

The Company disposed of its remaining investment in Baymount securities during the three month period May 31, 2007.

Critical Accounting Policies and Estimates

The discussion and analysis of results of operations and financial condition are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management evaluates the estimates on an on-going basis, including those related to bad debts, investments, customer accounts, intangible assets, income taxes, and contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Note 2 of the "Notes to Financial Statements" of the Company’s Annual Audited Financial Statements includes a summary of the significant accounting policies and methods used in the preparation of the financial statements. The following is a brief description of the more significant accounting policies and methods the Company uses.

Fair Value of Financial Instruments:

Cash, accounts payable, accrued expenses, note payable and loans receivable are carried in the financial statements at amounts which approximate fair value.

Financial Condition

During the three month period ended May 31, 2008, total assets decreased from $160,552 to $87,214. The decrease is primarily the result of the loss from operations for the three month period and payment of liabilities.

The most significant asset of the Company is its license rights, which it carries at $50,000 (unchanged since last fiscal year end).

The Company’s liabilities declined from $621,601 at the beginning of the year to $577,589 at May 31, 2008. The decrease is primarily a result of the settlement with former officers and directors for past services provided in which the Company issued 89,937,500 common shares valued at $99,875.

Accounts payable decreased from$263,726 at the beginning of the year to $215,293 at May 31, 2008.

 Due to related parties increased from $212,000 at February 29, 2008 to $300,851 at May 31, 2008. Periodically, the Company are advanced and expenses are paid by related parties on behalf of the Company.  Amounts due to related parties are unsecured, non-interest bearing and have no specific repayment terms.

The stockholders’ deficiency increased from $461,079 at February 29, 2008 to $490,375 at May 31, 2008. The increase is substantially attributable to an increase in the accumulated deficit arising from the $129,171 loss for the three month period ended May 31, 2008.

10

Liquidity and Capital Resources

Operations were financed primarily through related parties with common officers and directors. During the three month period ended May 31, 2008, the Company used $81,353 in cash from operating activities primarily as a result of operating losses and adjustments to working capital accounts. Related parties provide $80,806 during the three month period ended May 31, 2008.

Cash provided by financing activities for the three month period ended May 31, 2008 totaled $nil

The revenues of the Company during the three month period ended May 31, 2008 were zero therefore did not play a significant role in financing operations. The Company in the past has financed operations through the issuance of restricted equity securities and has occasionally relied heavily on that practice. There can be no assurance that the Company’s ability to raise capital through private placements will continue.

Management is hopeful that the future business direction of the Company will substantially decrease the history of operating losses and provide the ability to improve the Company’s liquidity.  The Company will require additional capital over the next year in order to satisfy existing liabilities and to provide further capital contributions to its investments.  Failure to obtain such capital could adversely impact the Company's operations and prospects.

Off-balance sheet arrangements.

The Company does not have any off balance sheet arrangements.

Item 3. Controls and Procedures.

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934 (the “Exchange Act”). Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There have been no changes in the Company’s internal controls over financial reporting during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

11

PART II. Other Information

Item 2.  Unregistered Sales of Equity Securities.

The Company issued the following unregistered securities during the three month period ended May 31, 2007.

		Number of
Date	Securities Issued To	Shares
March 3, 2008	1677692 Ontario Ltd.		5,000,000
March 3, 2008	MMJM Investments Inc.		10,000,000
March 6, 2008	Gracom Holdings Ltd.		40,000,000
May 14, 2008	Carrie Weiler		16,645,833
May 14, 2008	Michael Connell		6,645,833
May 14, 2008	John Simmonds		115,145,834
May 14, 2008	Gary Hokkanen		20,000,000
May 14, 2008	Timothy Usher-Jones		57,350,000
May 14, 2008	Michael Usher-Jones		57,350,000
May 14, 2008	Shannon McCarthy		57,350,000
May 14, 2008	Shane McCarthy		57,350,000
May 14, 2008	Randi Atlin		18,792,200
May 14, 2008	Michael Scott		18,792,000
May 14, 2008	Paul Marsiglio		35,457,800
May 14, 2008	Catharine Doncaster		35,457,800
May 14, 2008	Dana Gilman		9,300,000
May 14, 2008	Margaret Bertram		9,300,000
May 14, 2008	Kenneth J. Adelberg		155,000,000
May 14, 2008	Graham Simmonds		100,000,000
May 14, 2008	Raymond Veeneman		10,000,000
May 14, 2008	Maury Ezra		17,500,000
May 14, 2008	Mark Gregory		100,000,000
May 14, 2008	David Tingley		25,000,000
May 14, 2008	Jim Anderson Professional Corp.		2,500,000
May 14, 2008	Glen Gregory		110,000,000
May 14, 2008	Helmut Biemann		7,500,000
May 14, 2008	Eric Rahn		10,000,000
May 14, 2008	Adam Szweras		5,000,000
May 14, 2008	Northmount Capital Corp.		25,000,000
May 14, 2008	Rosemary Gillespie		75,000,000
May 14, 2008	Raymond Veeneman		10,000,000
May 14, 2008	Morningside Capital Ltd.		75,000,000
May 14, 2008	The Woodham Group Inc.		22,500,000
May 14, 2008	Brimas Consulting Inc.		5,000,000
May 31, 2008	ETIFF Holdings LLC		200,000,000
TOTAL			1,504,937,500

Item 3. Defaults Upon Senior Securities

None

12

Item 6.  Exhibits and Reports on Form 8-K

a)   Exhibits

Exhibit No.	Description
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

(*)           Filed with this Report.

b)           Reports on Form 8-K

On March 6, 2008, the Company filed form 8-K providing details in which itdisposed of its remaining interest in American Racing and Entertainment LLC and restructured its preferred stock obligations.

(Remainder of page left intentionally blank)

13

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: July 14, 2008	By:	/s/ John G. Simmonds
		Name: John G. Simmonds
		Title:   President and Chief Executive Officer

Date: July 14, 2008	By:	/s/ Gary N. Hokkanen
		Name: Gary N. Hokkanen
		Title:   Chief Financial Officer
		(Principal Financial Officer)