Managment report:
December 1998
This past year has brought about a lot of change at QuesTec. The company has concentrated its efforts on restructuring the company, redesigning technology and positioning QuesTec as the "WorldWide" leader in sports computer visualization.
During this last fiscal year, management exited the Vancouver Stock Exchange to trade exclusively on the Bulletin Board Over The Counter (OTC) market. Almost immediately, daily volumes have averaged four times that of the VSE. This increase in daily volume created liquidity in the company's stock. In addition to leaving the VSE, management has also "continued" the incorporation of QuesTec Imaging, Inc. from British Columbia, Canada to the State of Wyoming. This means that QuesTec Imaging, Inc. is now a United States corporation, and is no longer considered a foreign company by the United States. These two actions are part of management's plan to prepare QuesTec for listing on a major US Exchange.
To continue this effort, management is seeking shareholder approval of a par valuation per share of $0.001. This will allow the corporation to be "continued" in either the State of Delaware, or the State of Nevada. This final move will facilitate management's efforts to prepare QuesTec for a new listing. Management is also seeking shareholder approval to cease reporting to the British Columbia Securities Commission (Canada), and to file and become a reporting company to the Securities and Exchange Commission (SEC), in the United States. Management believes that these efforts will enhance shareholder value and will assist in filing for listing on a US Exchange.
Since the release of the new graphic look for SuperVision, the management has spent a lot of time, money and effort to redesign the company's technology. In doing this, the company has formed two strategic alliances. One with Live Motion Company of Wiesbaden, Germany and the second with Atlantic Aerospace of Latham Massachusetts. Atlantic Aerospace has allowed the company to significantly improve its signal processing (tracking) capabilities. Atlantic's vast experience in tracking, communication and signal processing technologies have had a tremendous impact on QuesTec's existing products and will allow the company to develop and release new products on a regular basis. Live Motion Company has greatly assisted in the development and marketing of the company's new Tennis product, "TennisProView". QuesTec demonstrated TennisProView at the Davis Cup tournament last July and is currently scheduled to debut the product at the ATP World Championships in Hannover, Germany this November.
These relationships and the company's other development efforts have allowed QuesTec to expand its client base beyond television networks. QuesTec had been in discussions with ACTV since the summer of ‘97, to integrate SuperVision with their interactive television
system. Those efforts led to a contract in September in which QuesTec provided SuperVision as a main channel of content for ACTV during the broadcast of the Mets vs. Astros doubleheader on September 15, 1998. Of major significance was that aside from the cable television production on FOX Southwest, SuperVision was broadcast via the internet onto several large screen monitors at the All Star Café in Times Square New York. Invited quests of ACTV were able to see every pitch displayed by SuperVision in real-time over the internet. Management is
currently discussing integrating SuperVision into ACTV's upcoming regional and national launch of interactive television with TCI and FOX.
SuperVision made its second paid post season appearance during the San Diego Padres DLCS and NLCS games from San Diego, and the Padres World Series games from San Diego. Management had been in discussions with Choice Seat, a division of Williams Co., since the spring of ‘97, which resulted in the company's first contract with Choice Seat. SuperVision was provided to Choice Seat as a main channel of content on their in-house interactive infotainment system. Management is currently discussing SuperVision as well as other products for Choice Seat's 1999 productions.
During the 1998 regular baseball season, SuperVision was broadcast by FOX Sports Bay Area, Fox Sports Chicago, FOX Sports New York, FOX Sports Ohio, FOX Sports Southwest, Madison Square Garden Network and WABU Boston. Our productions with WABU came after 18 months of discussions and a NO for the 1997 season. During the second half of the season, SuperVision was sponsored by the "Gillette Mach3", on WABU's coverage of the Boston Red Sox.
In late August, QuesTec's GolfProView product was once again featured by The Sports Network (TSN), during their coverage of The Greater Vancouver Open. This was QuesTec's third appearance at the GVO, and the company's 5th PGA event. This year the GOLF Channel also aired the GVO, which allowed millions of viewers in the United States and Asia to see GolfProView. This year's production team was comprised of both QuesTec and Live Motion Company personnel. The GVO was the perfect training venue for our German partners.
GolfProView is currently being marketed for the PGA Tour and the European PGA Tour.
QuesTec has been in negotiations with FOX Sports Net for more than a year. Management realizes that shareholders' expectations often exceed company progress. To date, the company is able to fully comply with all of FOX Sports Net's production requirements. The company is waiting for FOX Sports Net to resolve their own "sponsorship rights issues". This is something that must be worked out between production and the two independent marketing organizations at FOX Sports Net. QuesTec management will make a public announcement at the appropriate time. Shareholders are asked not to ask or speculate on this matter until management has made a public statement.
The addition of Atlantic Aerospace as a strategic partner not only advances and greatly improves QuesTec's existing product base, but it allows the to step up development of new sports-related products for television and internet broadcasting. This relationship provides QuesTec a research and development organization that exceeds anything the company could put together on its own. Development will no longer be compromised by the company's cash flow or limited resources.
QuesTec has put together the most comprehensive and experienced computer visualization and production services team in the world. The company is aggressively marketing its products and production services on a global basis. QuesTec's services are being promoted to Leagues, Networks, Sponsors and internet providers on a world wide basis. The company is currently in discussions with an Australian company to provide products and services to the Pacific Rim.
Management has continued to pay down debt and clean up the company's financial statements. The company has been working closely with the Internal Revenue Service and the New York State Attorney General's office to ensure that QuesTec is and will continue to remain in full compliance.
Management of QuesTec believes that the developments of this last fiscal year have established the proper foundation for growth and expansion.
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