##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 OR
 o
    
    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: 0-25092
 ProLink Holdings Corp.
  Delaware
    
    86-0766246(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)410 South Benson Ln., Chandler, AZ
    
    85224(Address of principal executive offices)
    
    (Zip Code)
 (480) 961-8800
 þ o
 o þ
  Class
    
    
    Outstanding at November 14, 2006Common Stock, $.0001 par value per share
    
    
    34,877,781
 o þ




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##### Table of Contents



PROLINK HOLDINGS CORP
TABLE OF CONTENTS
 PagePART IItem 1. Financial StatementsCondensed Consolidated Balance Sheets at September 30, 2006 (Unaudited) and December 31, 2005
    
    
    3Condensed Consolidated Statement of Operations for the Three and Nine Month Periods Ended September 30, 2006 (Unaudited) and October 1, 2005
    
    
    4Unaudited Condensed Consolidated Statement of Stockholders Equity for the Nine Months Ended September 30, 2006
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2006 (Unaudited) and October 1, 2005
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    14Item 3. Controls and Procedures
    
    
    18PART IIItem 1. Legal Proceedings
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 3. Defaults Upon Senior Securities
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19Signatures
    
    
    20EX-10.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
 2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
Financial Statements
 ProLink Holdings Corp.
 
  September 30, 2006
    
    
    December 31, 2005UnauditedASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    282,266
    
    
    $
    2,102,454Available-for-sale investments
    
    
    
    
    
    
    468,000Subscriptions receivable, common stock
    
    
    
    
    
    
    3,260,000Accounts receivable, net of an allowance for doubtful accounts of $424,708
and $440,815
    
    
    3,779,917
    
    
    
    787,825Inventories, net of an allowance of $678,986 and $1,167,723
    
    
    2,338,487
    
    
    
    1,034,932Prepaid expenses and other current assets
    
    
    247,823
    
    
    
    188,640TOTAL CURRENT ASSETS
    
    
    6,648,493
    
    
    
    7,841,851EQUIPMENT, net
    
    
    732,956
    
    
    
    484,185LICENSE, net of accumulated amortization of $646,809 and $464,894
    
    
    1,253,191
    
    
    
    1,435,106INTEREST IN RESIDUAL LEASE EQUIPMENT
    
    
    4,064,471
    
    
    
    1,889,571DEPOSITS AND OTHER ASSETS
    
    
    729,550
    
    
    
    106,722TOTAL ASSETS
    
    
    13,428,661
    
    
    
    11,757,435LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt and short-term financing
    
    $
    2,749,337
    
    
    $
    773,908Current maturities of long-term debt to related parties
    
    
    
    
    
    
    500,000Accounts payable
    
    
    4,351,796
    
    
    
    2,091,477Accrued liabilities
    
    
    828,075
    
    
    
    1,861,810Deferred revenue
    
    
    159,592
    
    
    
    322,303TOTAL CURRENT LIABILITIES
    
    
    8,088,800
    
    
    
    5,549,498DEFERRED INCOME TAX LIABILITY
    
    
    213,434
    
    
    
    LONG-TERM DEBT, net of current maturities
    
    
    1,432,921
    
    
    
    4,176,459TOTAL LIABILITIES
    
    
    9,735,155
    
    
    
    9,725,957STOCKHOLDERS EQUITY:Preferred stock, par value $.0001, 10,000,000 shares authorized;
zero shares issued and outstanding
    
    
    
    
    
    
    Common stock, par value $.0001, 200,000,000 shares authorized;
34,877,781 and 34,301,531 issued and outstanding at September 30, 2006
and December 31, 2005
    
    
    3,488
    
    
    
    3,430Additional paid-in capital
    
    
    14,929,600
    
    
    
    14,121,411Accumulated deficit
    
    
    (11,239,582
    )
    
    
    (12,093,363
    )TOTAL STOCKHOLDERS EQUITY
    
    
    3,693,506
    
    
    
    2,031,478TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    
    13,428,661
    
    
    
    11,757,435
 The accompanying notes are an integral part of these condensed consolidated financial statements
 3




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ProLink Holdings Corp.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    October 1,
    
    
    September 30,
    
    
    October 1,2006
    
    
    2005
    
    
    2006
    
    
    2005Unaudited
    
    
    
    
    
    
    UnauditedREVENUES:System sales and service
    
    $
    4,392,417
    
    
    $
    4,060,846
    
    
    $
    15,480,507
    
    
    $
    11,299,424Net financing revenue
    
    
    2,035,091
    
    
    
    870,427
    
    
    
    4,211,895
    
    
    
    870,427Total revenue
    
    
    6,427,508
    
    
    
    4,931,273
    
    
    
    19,692,402
    
    
    
    12,169,851Cost of system sales and service
    
    
    3,646,199
    
    
    
    3,163,849
    
    
    
    12,394,617
    
    
    
    7,999,827Gross margin
    
    
    2,781,309
    
    
    
    1,767,424
    
    
    
    7,297,785
    
    
    
    4,170,024OPERATING EXPENSES:Selling, customer support and general
and administrative expense
    
    
    2,662,281
    
    
    
    1,683,372
    
    
    
    7,246,315
    
    
    
    4,842,479Total operating expenses
    
    
    2,662,281
    
    
    
    1,683,372
    
    
    
    7,246,315
    
    
    
    4,842,479Income (loss) from operations
    
    
    119,028
    
    
    
    84,052
    
    
    
    51,470
    
    
    
    (672,455
    )OTHER INCOME (EXPENSE):Investment income
    
    
    10,649
    
    
    
    
    
    
    
    26,285
    
    
    
    Interest expense, related parties
    
    
    
    
    
    
    (367,042
    )
    
    
    
    
    
    
    (803,099
    )Interest expense, other
    
    
    (108,590
    )
    
    
    (155,081
    )
    
    
    (277,269
    )
    
    
    (81,190
    )Loss on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (16,298
    )
    
    
    Gain on reduction of reserves
    
    
    
    
    
    
    
    
    
    
    397,201
    
    
    
    Gain on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    929,577
    
    
    
    Other income (expense), net
    
    
    (36,525
    )
    
    
    19,223
    
    
    
    (43,751
    )
    
    
    (132,148
    )Total other income (expense)
    
    
    (134,466
    )
    
    
    (502,900
    )
    
    
    1,015,745
    
    
    
    (1,016,437
    )Income (loss) before income taxes
    
    
    (15,438
    )
    
    
    (418,848
    )
    
    
    1,067,215
    
    
    
    (1,688,892
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    213,434
    
    
    
    NET INCOME (LOSS)
    
    $
    (15,438
    )
    
    $
    (418,848
    )
    
    $
    853,781
    
    
    $
    (1,688,892
    )WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    34,877,781
    
    
    
    13,342,790
    
    
    
    34,692,799
    
    
    
    13,342,790DILUTED
    
    
    34,877,781
    
    
    
    13,342,790
    
    
    
    40,038,251
    
    
    
    13,342,790NET INCOME (LOSS) PER SHARE:BASIC
    
    $
    
    
    
    $
    (0.03
    )
    
    $
    0.02
    
    
    $
    (0.13
    )DILUTED
    
    $
    
    
    
    $
    (0.03
    )
    
    $
    0.02
    
    
    $
    (0.13
    )
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 4




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ProLink Holdings Corp.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT
 OF STOCKHOLDERS EQUITY
For the Nine Months Ended September 30, 2006
 TotalCommon Stock
    
    Additional
    
    Accumulated
    
    StockholdersShares
    
    Amount
    
    Paid-In Capital
    
    Deficit
    
    EquityBalance at December 31, 2005
    
    
    34,301,531
    
    
    $
    3,430
    
    
    $
    14,121,411
    
    
    
    ($12,093,363
    )
    
    $
    2,031,478Private placement of securities, net
    
    
    1,000,000
    
    
    
    100
    
    
    
    959,900
    
    
    
    
    
    
    
    960,000Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    283,522
    
    
    
    
    
    
    
    283,522Acquisition of remaining interest in
ProLink Solutions from
Parview, Inc. and other (Note 5)
    
    
    (423,750
    )
    
    
    (42
    )
    
    
    (435,233
    )
    
    
    
    
    
    
    (435,275
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    853,781
    
    
    
    853,781Balance at September 30, 2006
    
    
    34,877,781
    
    
    $
    3,488
    
    
    $
    14,929,600
    
    
    
    ($11,239,582
    )
    
    $
    3,693,506
 The accompanying notes are an integral part of these condensed consolidated financial statements
 5




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##### Table of Contents



ProLink Holdings Corp.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30, 2006
    
    
    October 1, 2005UnauditedNet income (loss)
    
    $
    853,781
    
    
    
    ($1,688,892
    )Adjustments to reconcile net income (loss) to cash used in operating activities:Depreciation and amortization
    
    
    359,522
    
    
    
    276,304Stock-based compensation
    
    
    283,522
    
    
    
    25,000Loss on disposal of equipment
    
    
    16,298
    
    
    
    Gain on reduction of reserves
    
    
    (397,201
    )
    
    
    Gain on early extinguishment of debt
    
    
    (929,577
    )
    
    
    Non-cash component of Yamaha gain
    
    
    (441,123
    )Residual value of leases
    
    
    (583,585
    )
    
    
    Provision for uncollectible receivables
    
    
    (16,107
    )
    
    
    185,821Provision for obsolete and slow moving inventory
    
    
    (295,612
    )Deferred income taxes
    
    
    213,434Gain on sale of available-for-sale investments
    
    
    (10,649
    )Changes in working capital components:Accounts receivable
    
    
    (2,975,985
    )
    
    
    (1,163,103
    )Inventories
    
    
    (1,007,943
    )
    
    
    150,650Prepaid expenses and other assets
    
    
    (167,478
    )
    
    
    (53,288
    )Accounts payable
    
    
    2,260,319
    
    
    
    (226,080
    )Accrued liabilities
    
    
    (636,534
    )
    
    
    (1,455,861
    )Accrued liabilities to related parties
    
    
    
    
    
    
    (876,975
    )Deferred revenue
    
    
    (162,711
    )
    
    
    (1,129,633
    )Net cash used in operating activities
    
    
    (3,637,629
    )
    
    
    (5,956,057
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (159,395
    )
    
    
    (22,816
    )Asset acquisition
    
    
    (1,600,000
    )
    
    
    Proceeds from the sale of fixed assets
    
    
    13,464
    
    
    
    Proceeds from sale of available-for-sale investments
    
    
    478,649
    
    
    
    Net cash used in investing activities
    
    
    (1,267,282
    )
    
    
    (22,816
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on debt
    
    
    (1,172,789
    )
    
    
    Proceeds from sale of common stock and receipt of stock subscriptions receivable
    
    
    4,260,000
    
    
    
    Fees paid in connection with financing transaction
    
    
    (40,000
    )
    
    
    Proceeds from borrowing on notes payable
    
    
    37,512
    
    
    
    6,236,873Net cash provided by financing activities
    
    
    3,084,723
    
    
    
    6,236,873NET INCREASE (DECREASE) IN CASH
    
    
    (1,820,188
    )
    
    
    258,000CASH and cash equivalents, at beginning of the period
    
    
    2,102,454
    
    
    
    7,540CASH and cash equivalents, at end of the period
    
    $
    282,266
    
    
    $
    265,540
 6




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##### Table of Contents



PROLINK HOLDINGS CORP.
 
 NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
 Reclassifications
 Use of Estimates
 Earnings (Loss) Per Share
  2. SHARE-BASED PAYMENTS
  7




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Total Options
    
    Options Vested or
    
    OptionsOutstanding
    
    Expected to Vest
    
    ExercisableNumber of options
    
    
    9,999,694
    
    
    
    9,863,171
    
    
    
    9,105,538Aggregate intrinsic value
    
    $
    7,094,978
    
    
    $
    7,091,608
    
    
    $
    7,072,506Weighted average remaining contractual term
    
    
    9.3
    
    
    
    9.3
    
    
    
    9.3Weighted average exercise price
    
    $
    0.82
    
    
    $
    0.81
    
    
    $
    0.75
 3. STOCKHOLDERS EQUITY
 Private Placement of Securities
   Stock Purchase Warrants
 8




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##### Table of Contents



Number of
    
    Weighted AverageShares Issuable
    
    Exercise PriceOutstanding, beginning of period
    
    
    2,310,121
    
    
    $
    1.34Granted
    
    
    500,000
    
    
    $
    1.60Exercised
    
    
    
    
    
    $
    Outstanding, end of period
    
    
    2,810,121
    
    
    $
    1.38
  4. INCOME TAXES
  5. ASSET ACQUISITION
   AllocatedAmountsInterest in residual lease equipment
    
    $
    1,150,193Member interest held by Parview, Inc.
    
    
    435,275Leases receivable
    
    
    514,532$
    2,100,000
 6. LONG TERM DEBT
  9




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7. LEGAL PROCEEDINGS
     10




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##### Table of Contents



8. RELATED PARTY TRANSACTIONS
   9. SUBSEQUENT EVENTS
 Senior Subordinated Secured Notes
  11




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##### Table of Contents



Comerica
Facilities
      Settlement
of Litigation and License Agreement
 12




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##### Table of Contents



13




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##### Table of Contents



Item 2. Managements Discussion and Analysis or Plan of Operation.
  Overview
      14




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RESULTS OF OPERATIONS
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine months EndedSeptember 30,
    
    
    October 1,
    
    
    Change
    
    
    September 30,
    
    
    October 1,
    
    
    Change2006
    
    
    2005
    
    
    Amount
    
    
    Percent
    
    
    2006
    
    
    2005
    
    
    Amount
    
    
    PercentSystem sales and service
    
    $
    4,392,417
    
    
    $
    4,060,846
    
    
    $
    331,571
    
    
    
    8.2
    %
    
    $
    15,480,507
    
    
    $
    11,299,424
    
    
    $
    4,181,083
    
    
    
    37.0
    %Net
financing revenue
    
    
    2,035,091
    
    
    
    870,427
    
    
    
    1,164,664
    
    
    
    133.8
    %
    
    
    4,211,895
    
    
    
    870,427
    
    
    
    3,341,468
    
    
    
    383.9
    %Total revenue
    
    
    6,427,508
    
    
    
    4,931,273
    
    
    
    1,496,235
    
    
    
    30.3
    %
    
    
    19,692,402
    
    
    
    12,169,851
    
    
    
    7,522,551
    
    
    
    61.8
    %Cost of
system sales and services
    
    
    3,646,199
    
    
    
    3,163,849
    
    
    
    482,350
    
    
    
    15.2
    %
    
    
    12,394,617
    
    
    
    7,999,827
    
    
    
    4,394,790
    
    
    
    54.9
    %Total revenue less cost of sales
    
    
    2,781,309
    
    
    
    1,767,424
    
    
    
    1,013,885
    
    
    
    57.4
    %
    
    
    7,297,785
    
    
    
    4,170,024
    
    
    
    3,127,761
    
    
    
    75.0
    %Customer support service
    
    
    272,298
    
    
    
    200,410
    
    
    
    71,888
    
    
    
    35.9
    %
    
    
    713,666
    
    
    
    554,131
    
    
    
    159,535
    
    
    
    28.8
    %Selling, general and administrative
    
    
    2,389,983
    
    
    
    1,482,962
    
    
    
    907,021
    
    
    
    61.2
    %
    
    
    6,532,649
    
    
    
    4,288,348
    
    
    
    2,244,301
    
    
    
    52.3
    %Total expenses
    
    
    2,662,281
    
    
    
    1,683,372
    
    
    
    978,909
    
    
    
    58.2
    %
    
    
    7,246,315
    
    
    
    4,842,479
    
    
    
    2,403,835
    
    
    
    49.6
    %Income (Loss) from operations
    
    
    119,028
    
    
    
    84,052
    
    
    
    34,976
    
    
    
    41.6
    %
    
    
    51,470
    
    
    
    (672,455
    )
    
    
    723,925
    
    
    
    -107.7
    %Other income (expense)
    
    
    (134,466
    )
    
    
    (502,900
    )
    
    
    368,434
    
    
    
    -73.3
    %
    
    
    1,015,745
    
    
    
    (1,016,437
    )
    
    
    2,032,182
    
    
    
    -199.9
    %Income (loss) before taxes
    
    
    (15,438
    )
    
    
    (418,848
    )
    
    
    403,410
    
    
    
    -96.3
    %
    
    
    1,067,215
    
    
    
    (1,688,892
    )
    
    
    2,756,107
    
    
    
    -163.2
    %Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    213,434
    
    
    
    
    
    
    
    213,434
    
    
    
    0.0
    %Net income (loss)
    
    $
    (15,438
    )
    
    $
    (418,848
    )
    
    
    403,410
    
    
    
    -96.3
    %
    
    $
    853,781
    
    
    $
    (1,688,892
    )
    
    
    2,542,673
    
    
    
    -150.6
    %Per share-Basic
    
    $
    
    
    
    $
    (0.03
    )
    
    
    
    
    
    
    
    
    
    $
    0.02
    
    
    $
    (0.13
    )Per share-Diluted
    
    $
    
    
    
    $
    (0.03
    )
    
    
    
    
    
    
    
    
    
    $
    0.02
    
    
    $
    (0.13
    )
 15




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Revenue
 Three Months Ended September 30, 2006 and October 1, 2005
  Nine months Ended September 30, 2006 and October 1, 2005
  Cost of Revenue
 Three Months Ended September 30, 2006 and October 1, 2005
  Nine months Ended September 30, 2006 and October 1, 2005
  Gross Margin
 Three Months Ended September 30, 2006 and October 1, 2005
  Nine months Ended September 30, 2006 and October 1, 2005
  16




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Customer Support Service
 Three Months Ended September 30, 2006 and October 1, 2005
  Nine months Ended September 30, 2006 and October 1, 2005
  Selling, General and Administrative
 Three Months Ended September 30, 2006 and October 1, 2005
   Nine months Ended September 30, 2006 and October 1, 2005
   17




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Other Income (Expense)
 Three Months Ended September 30, 2006 and October 1, 2005
  Nine months Ended September 30, 2006 and October 1, 2005
  LIQUIDITY AND CAPITAL RESOURCES
     Senior Subordinated Secured Notes
   
 Item 3. Controls and Procedures
  18




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PART
II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
 
 
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits:
 ExhibitNumber
    
    Title of Document
    
    Notes10.1
    
    GPSI  Executed Settlement and License Agreement
    
    *31.1
    
    Certification of Chief Executive Officer
Pursuant to Securities and Exchange Act Rule
13a-14, as Adopted Pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.
    
    *31.2
    
    Certification of Chief Financial Officer
Pursuant to Securities and Exchange Act Rule
13a-14, as Adopted Pursuant to Section 302 of
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
    
    *
 
 *
    
    Filed herewith 19




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##### Table of Contents



SIGNATURES
    
 20




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Title of Document
    
    Notes10.1
    
    GPSI  Executed Settlement and License Agreement
    
    *31.1
    
    Certification of Chief Executive Officer
Pursuant to Securities and Exchange Act Rule
13a-14, as Adopted Pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.
    
    *31.2
    
    Certification of Chief Financial Officer
Pursuant to Securities and Exchange Act Rule
13a-14, as Adopted Pursuant to Section 302 of
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
    
    *
 
 *
    
    Filed herewith