##### 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 July 1, 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
incorporation or organization)
    
    (I.R.S. Employer
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 August 11, 2006Common Stock, $.0001 par value per share
    
    34,877,781
  o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis or Plan of OperationItem 3. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. Exhibits and reports on Form 8-KSIGNATURESEX-10.1EX-10.2EX-10.3EX-10.4EX-31.1EX-31.2EX-32.1    Table of Contents  
  
 Item 1. Financial Statements
 ProLink Holdings Corp.
  July 1, 2006
    
    
    December 31, 2005UnauditedASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,056,320
    
    
    $
    2,102,454Available-for-sale investments
    
    
    652,000
    
    
    
    468,000Subscriptions receivable, common stock
    
    
    
    
    
    
    3,260,000Accounts receivable, net of an allowance for
doubtful accounts of $406,536 and $440,815
    
    
    3,384,503
    
    
    
    787,825Inventories, net of an allowance of $872,111 and $1,167,723
    
    
    1,833,486
    
    
    
    1,034,932Prepaid expenses and other current assets
    
    
    260,143
    
    
    
    188,640TOTAL CURRENT ASSETS
    
    
    7,186,452
    
    
    
    7,841,851EQUIPMENT, net
    
    
    778,965
    
    
    
    484,185LICENSE, net of accumulated amortization of $586,170 and $464,894
    
    
    1,313,830
    
    
    
    1,435,106INTEREST IN RESIDUAL LEASE EQUIPMENT
    
    
    3,567,910
    
    
    
    1,889,571DEPOSITS AND OTHER ASSETS
    
    
    979,407
    
    
    
    106,722TOTAL ASSETS
    
    $
    13,826,564
    
    
    $
    11,757,435LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt and short-term financing
    
    $
    2,853,488
    
    
    $
    773,908Current maturities of long-term debt to related parties
    
    
    
    
    
    
    500,000Accounts payable
    
    
    4,065,296
    
    
    
    2,091,477Accrued liabilities
    
    
    1,302,073
    
    
    
    1,861,810Deferred revenue
    
    
    163,185
    
    
    
    322,303TOTAL CURRENT LIABILITIES
    
    
    8,384,042
    
    
    
    5,549,498DEFERRED INCOME TAX LIABILITY
    
    
    213,434
    
    
    
    LONG-TERM DEBT, net of current maturities
    
    
    1,520,875
    
    
    
    4,176,459TOTAL LIABILITIES
    
    
    10,118,351
    
    
    
    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 July 1, 2006
and December 31, 2005
    
    
    3,488
    
    
    
    3,430Additional paid-in capital
    
    
    14,744,870
    
    
    
    14,121,411Accumulated other comprehensive income
    
    
    184,000
    
    
    
    Accumulated deficit
    
    
    (11,224,145
    )
    
    
    (12,093,363
    )TOTAL STOCKHOLDERS EQUITY
    
    
    3,708,213
    
    
    
    2,031,478TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    13,826,564
    
    
    $
    11,757,435
 The accompanying notes are an integral part of these condensed consolidated financial statements
 2




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ProLink Holdings Corp.
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Six Months EndedJuly 1, 2006
    
    
    July 2, 2005
    
    
    July 1, 2006
    
    
    July 2, 2005REVENUES:Net revenues
    
    $
    5,783,767
    
    
    $
    5,186,641
    
    
    $
    12,069,161
    
    
    $
    5,957,462Cost of sales
    
    
    3,035,423
    
    
    
    3,062,639
    
    
    
    6,747,498
    
    
    
    3,528,907Gross margin
    
    
    2,748,344
    
    
    
    2,124,002
    
    
    
    5,321,663
    
    
    
    2,428,555OTHER REVENUES:Service revenue net of allowance
    
    
    776,498
    
    
    
    714,794
    
    
    
    1,195,734
    
    
    
    1,163,806OPERATING EXPENSES:Customer support service
    
    
    1,197,575
    
    
    
    790,026
    
    
    
    2,190,321
    
    
    
    1,406,928Selling, general and administrative
    
    
    2,283,035
    
    
    
    1,362,106
    
    
    
    4,394,641
    
    
    
    3,059,250Total operating expenses
    
    
    3,480,610
    
    
    
    2,152,132
    
    
    
    6,584,962
    
    
    
    4,466,178Income (Loss) from Operations
    
    
    44,232
    
    
    
    686,664
    
    
    
    (67,565
    )
    
    
    (873,817
    )OTHER INCOME (EXPENSE):Investment income
    
    
    292
    
    
    
    
    
    
    
    15,636
    
    
    
    Interest expense, related parties
    
    
    
    
    
    
    (221,702
    )
    
    
    
    
    
    
    (371,813
    )Interest expense, other
    
    
    (85,225
    )
    
    
    (32,706
    )
    
    
    (168,679
    )
    
    
    (64,243
    )Loss on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (16,298
    )
    
    
    Gain (loss)
on reduction (increase) of reserves
    
    
    (132,799
    )
    
    
    
    
    
    
    397,201
    
    
    
    Gain on early extinguishment of debt
    
    
    929,577
    
    
    
    
    
    
    
    929,577
    
    
    
    Other income (expense), net
    
    
    (3,364
    )
    
    
    27,210
    
    
    
    (7,220
    )
    
    
    39,831Total Other Income and Expense
    
    
    708,481
    
    
    
    (227,198
    )
    
    
    1,150,217
    
    
    
    (396,225
    )Income (Loss) before Taxes
    
    
    752,713
    
    
    
    459,466
    
    
    
    1,082,652
    
    
    
    (1,270,042
    )Income tax expense
    
    
    213,434
    
    
    
    
    
    
    
    213,434
    
    
    
    NET INCOME (LOSS)
    
    $
    539,279
    
    
    $
    459,466
    
    
    $
    869,218
    
    
    $
    (1,270,042
    )WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    34,877,781
    
    
    
    13,342,790
    
    
    
    34,594,814
    
    
    
    13,342,790DILUTED
    
    
    39,872,225
    
    
    
    13,342,790
    
    
    
    40,075,981
    
    
    
    13,342,790NET INCOME (LOSS) PER SHARE:BASIC
    
    $
    0.02
    
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    (0.10
    )DILUTED
    
    $
    0.01
    
    
    $
    0.03
    
    
    $
    0.02
    
    
    $
    (0.10
    )
 The accompanying notes are an integral part of these condensed consolidated financial statements
 3




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ProLink Holdings Corp.
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF STOCKHOLDERS EQUITY
For the Six Months Ended July 1, 2006
 AccumulatedOther
    
    
    
    
    
    TotalCommon Stock
    
    Additional
    
    Comprehensive
    
    Accumulated
    
    StockholdersShares
    
    Amount
    
    Paid-In Capital
    
    Income
    
    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
    
    
    
    
    
    
    
    
    
    
    98,792
    
    
    
    
    
    
    
    
    
    
    
    98,792Unrealized gain on
available-for-sale investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184,000
    
    
    
    
    
    
    
    184,000Acquisition of remaining interest in ProLink Solutions from Parview, Inc. and other
    
    
    (423,750
    )
    
    
    (42
    )
    
    
    (435,233
    )
    
    
    
    
    
    
    
    
    
    
    (435,275
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    869,218
    
    
    
    869,218Balance at July 1, 2006
    
    
    34,877,781
    
    
    $
    3,488
    
    
    $
    14,744,870
    
    
    $
    184,000
    
    
    $
    (11,224,145
    )
    
    $
    3,708,213
 The accompanying notes are an integral part of these condensed consolidated financial statements
 4




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ProLink Holdings Corp.
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJuly 1, 2006
    
    
    July 2, 2005Net income (loss)
    
    $
    869,218
    
    
    $
    (1,270,042
    )Adjustments to reconcile net income (loss) to
cash used in operating activities:Depreciation and amortization
    
    
    234,277
    
    
    
    200,120Stock-based compensation
    
    
    98,792
    
    
    
    Loss on disposal of equipment
    
    
    16,298
    
    
    
    Gain on reduction of reserves
    
    
    (397,201
    )
    
    
    Gain on early extinguishment of debt
    
    
    (929,577
    )
    
    
    Interest on
residual value of leases
    
    
    (528,146
    )
    
    
    Provision
for uncollectible receivables
    
    
    (34,459
    )
    
    
    Provision
for obsolete and slow moving inventory
    
    
    (295,612
    )
    
    
    Deferred income taxes
    
    
    213,434
    
    
    
    Changes in working capital components:Accounts receivable
    
    
    (2,562,219
    )
    
    
    (642,599
    )Inventories
    
    
    (502,942
    )
    
    
    349,640Prepaid expenses and other current assets
    
    
    (71,503
    )
    
    
    (14,745
    )Accounts payable
    
    
    1,943,819
    
    
    
    154,285Accrued liabilities
    
    
    (137,536
    )
    
    
    242,078Accrued liabilities to related parties
    
    
    
    
    
    
    (948,123
    )Deferred revenue
    
    
    (159,618
    )
    
    
    (1,228,756
    )Net cash used in operating activities
    
    
    (2,212,975
    )
    
    
    (3,158,142
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (140,998
    )
    
    
    (113,289
    )Asset acquisition
    
    
    (1,600,000
    )
    
    
    (200,000
    )Proceeds from the sale of fixed assets
    
    
    13,464
    
    
    
    Deposits, restricted cash and other assets
    
    
    (358,153
    )
    
    
    Net cash used in investing activities
    
    
    (2,085,487
    )
    
    
    (313,289
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on debt
    
    
    (964,672
    )
    
    
    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
    
    
    
    
    
    
    3,838,916Net cash provided by financing activities
    
    
    3,252,328
    
    
    
    3,838,916NET (DECREASE) INCREASE IN CASH
    
    
    (1,046,134
    )
    
    
    367,485CASH and cash equivalents, at beginning of the period
    
    
    2,102,454
    
    
    
    7,540CASH and cash equivalents, at end of the period
    
    $
    1,056,320
    
    
    $
    375,025
 The accompanying notes are an integral part of these condensed consolidated financial statements
 5




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1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
 Reclassifications
 Use of Estimates
 Earnings (Loss) Per Share
 New Accounting Pronouncements
 2. SHARE-BASED PAYMENTS
    6




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Total Options
    
    Options Vested or
    
    OptionsOutstanding
    
    Expected to Vest
    
    ExercisableNumber of options
    
    
    9,623,538
    
    
    
    9,545,838
    
    
    
    9,105,538Aggregate intrinsic value
    
    $
    6,674,055
    
    
    $
    6,674,055
    
    
    $
    6,674,055Weighted average remaining contractual term
    
    
    9.5
    
    
    
    9.5
    
    
    
    9.5Weighted average exercise price
    
    $
    0.79
    
    
    $
    0.79
    
    
    $
    0.75
  3. STOCKHOLDERS EQUITY
 Private Placement of Securities 
   7




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Stock Purchase Warrants
 Number of
    
    Weighted AverageShares Issuable
    
    Exercise PriceOutstanding, beginning of period
    
    
    2,180,121
    
    
    $
    1.33Granted
    
    
    130,000
    
    
    $
    1.50Exercised
    
    
    
    
    
    $
    Outstanding at end of the period
    
    
    2,310,121
    
    
    $
    1.34
  4 COMPREHENSIVE INCOME (LOSS)
  Three Months Ended
    
    
    Six Months EndedJuly 1, 2006
    
    
    July 2, 2005
    
    
    July 1, 2006
    
    
    July 2, 2005Net income (loss)
    
    $
    539,279
    
    
    $
    459,466
    
    
    $
    869,218
    
    
    $
    (1,270,042
    )Other comprehensive income:Unrealized gain on available-for-sale investments
    
    
    100,000
    
    
    
    
    
    
    
    184,000
    
    
    
    Comprehensive income (loss)
    
    $
    639,279
    
    
    $
    459,466
    
    
    $
    1,053,218
    
    
    $
    (1,270,042
    )
 5. INCOME TAXES
   6. ASSET ACQUISITION
   8




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##### Table of Contents



AllocatedAmountsInterest in residual lease equipment
    
    $
    1,150,193Member interest held by Parview, Inc.
    
    
    435,275Leases receivable
    
    
    514,532$
    2,100,000
 7. LONG TERM DEBT
  8. LEGAL PROCEEDINGS
   9




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10




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##### Table of Contents



9. SUBSEQUENT EVENTS
 Referral and Recourse Agreement
  Loan Default
  10. MAJOR CUSTOMER
  
 Item 2. Managements Discussion and Analysis or Plan of Operation
  Overview
     11




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##### Table of Contents



RESULTS OF OPERATIONS
  Three Months Ended
    
    
    Change
    
    
    Six Months Ended
    
    
    ChangeJuly 1, 2006
    
    
    July 2, 2005
    
    
    Amount
    
    
    Percent
    
    
    July 1, 2006
    
    
    July 2, 2005
    
    
    Amount
    
    
    PercentNet revenues
    
    $
    5,783,767
    
    
    $
    5,186,641
    
    
    $
    597,126
    
    
    
    11.5
    %
    
    $
    12,069,161
    
    
    $
    5,957,462
    
    
    $
    6,111,699
    
    
    
    102.6
    %Service revenue, net
    
    
    776,498
    
    
    
    714,794
    
    
    
    61,704
    
    
    
    8.6
    %
    
    
    1,195,734
    
    
    
    1,163,806
    
    
    
    31,928
    
    
    
    2.7
    %Total revenue
    
    
    6,560,265
    
    
    
    5,901,435
    
    
    
    658,830
    
    
    
    11.2
    %
    
    
    13,264,895
    
    
    
    7,121,268
    
    
    
    6,143,627
    
    
    
    86.3
    %Cost of sales
    
    
    3,035,423
    
    
    
    3,062,639
    
    
    
    (27,216
    )
    
    
    -0.9
    %
    
    
    6,747,498
    
    
    
    3,528,907
    
    
    
    3,218,591
    
    
    
    91.2
    %Total revenue less cost of sales
    
    
    3,524,842
    
    
    
    2,838,796
    
    
    
    686,046
    
    
    
    24.2
    %
    
    
    6,517,397
    
    
    
    3,592,361
    
    
    
    2,925,036
    
    
    
    81.4
    %Customer support service
    
    
    1,197,575
    
    
    
    790,026
    
    
    
    407,549
    
    
    
    51.6
    %
    
    
    2,190,321
    
    
    
    1,406,928
    
    
    
    783,393
    
    
    
    55.7
    %Selling, general and administrative
    
    
    2,283,035
    
    
    
    1,362,106
    
    
    
    920,929
    
    
    
    67.6
    %
    
    
    4,394,641
    
    
    
    3,059,250
    
    
    
    1,335,391
    
    
    
    43.7
    %Total expenses
    
    
    3,480,610
    
    
    
    2,152,132
    
    
    
    1,328,478
    
    
    
    61.7
    %
    
    
    6,584,962
    
    
    
    4,466,178
    
    
    
    2,118,784
    
    
    
    47.4
    %Income (Loss) from operations
    
    
    44,232
    
    
    
    686,664
    
    
    
    (642,432
    )
    
    
    -93.6
    %
    
    
    (67,565
    )
    
    
    (873,817
    )
    
    
    806,252
    
    
    
    92.3
    %Other income (expense)
    
    
    708,481
    
    
    
    (227,198
    )
    
    
    935,679
    
    
    
    411.8
    %
    
    
    1,150,217
    
    
    
    (396,225
    )
    
    
    1,546,442
    
    
    
    390.3
    %Income (Loss) before taxes
    
    
    752,713
    
    
    
    459,466
    
    
    
    293,247
    
    
    
    63.8
    %
    
    
    1,082,652
    
    
    
    (1,270,042
    )
    
    
    2,352,694
    
    
    
    185.2
    %Income tax expense
    
    
    213,434
    
    
    
    
    
    
    
    213,434
    
    
    
    100.0
    %
    
    
    213,434
    
    
    
    
    
    
    
    213,434
    
    
    
    100.0
    %Net income (loss)
    
    $
    539,279
    
    
    $
    459,466
    
    
    
    79,813
    
    
    
    17.4
    %
    
    $
    869,218
    
    
    $
    (1,270,042
    )
    
    
    2,139,260
    
    
    
    168.4
    %Per share-Basic
    
    $
    0.02
    
    
    $
    0.03
    
    
    
    
    
    
    
    
    
    
    $
    0.03
    
    
    $
    (0.10
    )Per share-Diluted
    
    $
    0.01
    
    
    $
    0.03
    
    
    
    
    
    
    
    
    
    
    $
    0.02
    
    
    $
    (0.10
    )
 Revenue
 Three Months Ended July 1, 2006 and July 2, 2005
  Six Months Ended July 1, 2006 and July 2, 2005
  12




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Cost of Revenue
 Three Months Ended July 1, 2006 and July 2, 2005
  Six Months Ended July 1, 2006 and July 2, 2005
  Total Revenue Less Cost of Sales
 Three Months Ended July 1, 2006 and July 2, 2005
  Six Months Ended July 1, 2006 and July 2, 2005
  Customer Support Service
 Three Months Ended July 1, 2006 and July 2, 2005
  Six Months Ended July 1, 2006 and July 2, 2005
  Selling, General and Administrative
 Three Months Ended July 1, 2006 and July 2, 2005
  13




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Six Months Ended July 1, 2006 and July 2, 2005
   Other Income (Expense)
 Three Months Ended July 1, 2006 and July 2, 2005
  Six Months Ended July 1, 2006 and July 2, 2005
  14




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LIQUIDITY AND CAPITAL RESOURCES
     
 Item 3. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  15




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Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Nominee
    
    For
    
    WithheldSteven D. Fisher
    
    
    19,466,326
    
    
    
    106,227William D. Fugazy, Jr.
    
    
    19,492,553
    
    
    
    80,000Lawrence D. Bain
    
    
    19,492,553
    
    
    
    80,000Barry I. Regenstein
    
    
    19,492,553
    
    
    
    80,000Jay Wolf
    
    
    19,492,553
    
    
    
    80,000Rob Ellin
    
    
    19,492,553
    
    
    
    80,000
  Abstentions (other thanProposal
    
    For
    
    Against
    
    broker non-votes)
    
    Broker Non-VotesAdopt the 2005
Employee, Director
and Consultant
Stock option Plan
    
    
    17,126,542
    
    
    
    557,514
    
    
    
    583,876
    
    
    
    1,304,621Ratify the
selection of Semple
& Cooper, LLP as
independent
auditors
    
    
    19,572,553
    
    
    
    0
    
    
    
    0
    
    
    
    0
 
 Item 5. Other Information
  
 Item 6. Exhibits
  ExhibitNumber
    
    Title of Document
    
    Notes10.1
    
    Loan and Security Agreement dated June 30, 2006
    
    *10.2
    
    Promissory Note dated June 30, 2006
    
    *10.3
    
    Intellectual Property Security Agreement dated June 30, 2006
    
    *10.4
    
    Waiver Agreement with Comerica
Bank, dated August 11, 2006
    
    *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 16




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##### Table of Contents



SIGNATURES
  PROLINK HOLDINGS CORP.By
    
    /s/ Lawrence D. BainLawrence D. BainPresident and Chief Executive Officer
 17