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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended June 30, 2007
 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: 000-25092
 ProLink Holdings Corp.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    30-0280392
(I.R.S. Employer
Identification No.)
 410 South Benson Ln., Chandler, AZ
(Address of principal executive offices)
    
    85224
(Zip Code)
 (480) 961-8800
 þ o
  o o þ
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PROLINK HOLDINGS CORP.
TABLE OF CONTENTS
 PART I
 Description
    
    PageItem 1.
    
    Financial StatementsUnaudited Condensed Consolidated Statement of Operations Three and Six Months Ended June 30, 2007 and July 1, 2006
    
    
    2Condensed Consolidated Balance Sheets
June 30, 2007 (Unaudited) and December 31, 2006
    
    
    3Unaudited Condensed Consolidated Statements of Cash Flows (Unaudited)Three and Six Months Ended June 30, 2007 and July 1, 2006
    
    
    4Notes to Unaudited Condensed Consolidated Financial Statements (Unaudited)
    
    
    5Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3.
    
    Controls and Procedures
    
    
    32PART IIDescriptionItem 1.
    
    Legal Proceedings
    
    
    33Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3.
    
    Defaults Upon Senior Securities
    
    
    34Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    34Item 5.
    
    Other Information
    
    
    35Item 6.
    
    Exhibits
    
    
    35Signatures
    
    
    39Exhibit 10.03Exhibit 10.2Exhibit 10.21Exhibit 10.22Exhibit 10.23Exhibit 10.24Exhibit 10.25Exhibit 31.1Exhibit 31.2Exhibit 32.1
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##### Table of Contents



PROLINK HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUES:New System Installation Revenue:Domestic
    
    $
    2,244,591
    
    
    $
    2,031,206
    
    
    $
    4,093,249
    
    
    $
    3,406,995International
    
    
    1,607,303
    
    
    
    1,763,800
    
    
    
    4,291,528
    
    
    
    4,018,027Upgrades
    
    
    806,516
    
    
    
    1,284,496
    
    
    
    1,475,297
    
    
    
    2,371,419Total New System Installation Revenue
    
    
    4,658,410
    
    
    
    5,079,502
    
    
    
    9,860,074
    
    
    
    9,796,441Service Revenue
    
    
    666,448
    
    
    
    787,746
    
    
    
    1,197,325
    
    
    
    1,219,532Finance Revenue, net
    
    
    
    
    
    
    347,315
    
    
    
    981,786
    
    
    
    1,012,475Advertising Revenue
    
    
    134,178
    
    
    
    28,430
    
    
    
    153,534
    
    
    
    28,580TOTAL REVENUE
    
    
    5,459,036
    
    
    
    6,242,993
    
    
    
    12,192,719
    
    
    
    12,057,028COST OF REVENUES:New System Installation Cost:Domestic
    
    
    1,186,748
    
    
    
    1,023,045
    
    
    
    2,085,412
    
    
    
    1,701,070International
    
    
    763,937
    
    
    
    941,008
    
    
    
    2,252,338
    
    
    
    2,164,174Upgrades
    
    
    383,806
    
    
    
    521,547
    
    
    
    701,073
    
    
    
    1,124,824Total New System Installation Cost
    
    
    2,334,491
    
    
    
    2,485,600
    
    
    
    5,038,823
    
    
    
    4,990,068Service Cost
    
    
    848,283
    
    
    
    694,318
    
    
    
    1,728,832
    
    
    
    1,387,644Other Cost
    
    
    86,666
    
    
    
    
    
    
    
    272,025
    
    
    
    TOTAL COST OF REVENUE
    
    
    3,269,440
    
    
    
    3,179,918
    
    
    
    7,039,680
    
    
    
    6,377,712GROSS MARGIN
    
    
    2,189,596
    
    
    
    3,063,075
    
    
    
    5,153,039
    
    
    
    5,679,316OPERATING EXPENSES:Sales and Marketing
    
    
    885,111
    
    
    
    756,749
    
    
    
    2,431,226
    
    
    
    1,407,886Partner Management and Customer Support
    
    
    759,469
    
    
    
    750,026
    
    
    
    1,253,698
    
    
    
    1,452,750Research and Development
    
    
    281,190
    
    
    
    171,799
    
    
    
    574,206
    
    
    
    358,921General and Administrative
    
    
    2,179,232
    
    
    
    1,340,269
    
    
    
    4,226,819
    
    
    
    2,527,317TOTAL OPERATING EXPENSES
    
    
    4,105,002
    
    
    
    3,018,843
    
    
    
    8,485,949
    
    
    
    5,746,881INCOME (LOSS) FROM OPERATIONS
    
    
    (1,915,406
    )
    
    
    44,232
    
    
    
    (3,332,910
    )
    
    
    (67,565
    )OTHER (INCOME) EXPENSE:Interest Expense
    
    
    205,920
    
    
    
    85,225
    
    
    
    685,824
    
    
    
    168,678Loss (Gain) on Early Extinguishment of Debt
    
    
    
    
    
    
    (929,577
    )
    
    
    
    
    
    
    (929,577
    )Other (Income) Expense
    
    
    (9,542
    )
    
    
    135,871
    
    
    
    (32,988
    )
    
    
    (389,318
    )TOTAL OTHER (INCOME) EXPENSE
    
    
    196,378
    
    
    
    (708,481
    )
    
    
    652,836
    
    
    
    (1,150,217
    )INCOME (LOSS) BEFORE TAXES
    
    
    (2,111,784
    )
    
    
    752,713
    
    
    
    (3,985,746
    )
    
    
    1,082,652Income Tax Provision
    
    
    
    
    
    
    213,434
    
    
    
    
    
    
    
    213,434NET INCOME (LOSS)
    
    
    (2,111,784
    )
    
    
    539,279
    
    
    
    (3,985,746
    )
    
    
    869,218Dividends on Series C Preferred Shares
    
    
    179,563
    
    
    
    
    
    
    
    (3,720,938
    )
    
    
    NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS
    
    $
    (1,932,221
    )
    
    $
    539,279
    
    
    $
    (7,706,684
    )
    
    $
    869,218BASIC EARNINGS (LOSS) PER COMMON SHARE
    
    $
    (0.05
    )
    
    $
    0.02
    
    
    $
    (0.20
    )
    
    $
    0.03DILUTED EARNINGS (LOSS) PER COMMON SHARE
    
    $
    (0.05
    )
    
    $
    0.01
    
    
    $
    (0.20
    )
    
    $
    0.02WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    39,912,583
    
    
    
    34,916,022
    
    
    
    38,339,842
    
    
    
    34,637,011Diluted
    
    
    39,912,583
    
    
    
    40,358,175
    
    
    
    38,339,842
    
    
    
    40,203,572
 The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements
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PROLINK HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEET
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,404,799
    
    
    $
    2,448,354Accounts receivable, net of an allowance for doubtful accountsof $690,333 and $628,660, respectively
    
    
    5,968,977
    
    
    
    2,701,343Inventories, net of allowance of $277,691 and $410,055
    
    
    2,549,060
    
    
    
    2,364,236Prepaid expenses and other current assets
    
    
    550,970
    
    
    
    559,562TOTAL CURRENT ASSETS
    
    
    10,473,806
    
    
    
    8,073,495EQUIPMENT, NET
    
    
    917,665
    
    
    
    855,383INTANGIBLE ASSETS, net of accumulated amortization of $904,797 and $726,465
    
    
    2,335,440
    
    
    
    2,308,239GOODWILL
    
    
    205,533
    
    
    
    INTEREST IN RESIDUAL LEASE EQUIPMENT
    
    
    4,686,954
    
    
    
    4,404,366DEPOSITS AND OTHER ASSETS
    
    
    1,703,056
    
    
    
    960,078TOTAL ASSETS
    
    $
    20,322,454
    
    
    $
    16,601,561LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Current portion of long-term debt and short-term financing
    
    $
    3,180,533
    
    
    $
    5,485,188Accounts payable
    
    
    4,927,295
    
    
    
    4,586,311Accrued liabilities
    
    
    1,008,772
    
    
    
    1,914,662Deferred revenue
    
    
    181,942
    
    
    
    316,276TOTAL CURRENT LIABILITIES
    
    
    9,298,542
    
    
    
    12,302,437LONG-TERM DEBT, NET OF CURRENT PORTION
    
    
    3,055,511
    
    
    
    3,708,805TOTAL LIABILITIES
    
    
    12,354,053
    
    
    
    16,011,242COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY (DEFICIT):Common shares, par value $.0001; 200,000,000 shares authorized;
46,276,946 and 34,927,781 issued and outstanding
at June 30, 2007 and December 31, 2006
    
    
    4,628
    
    
    
    3,493Additional paid-in capital
    
    
    31,407,008
    
    
    
    16,323,377Accumulated deficit
    
    
    (23,443,235
    )
    
    
    (15,736,551
    )TOTAL STOCKHOLDERS EQUITY (DEFICIT)
    
    
    7,968,401
    
    
    
    590,319TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
    
    $
    20,322,454
    
    
    $
    16,601,561
 The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements
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PROLINK HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Six Months EndedJune 30, 2007
    
    
    July 1, 2006Net income (loss)
    
    $
    (3,985,746
    )
    
    $
    869,218Adjustments to reconcile net income (loss) to cash used in operating activities:Depreciation and amortization
    
    
    343,525
    
    
    
    234,277Stock-based compensation
    
    
    701,160
    
    
    
    98,792Amortization of warrants related to financing
    
    
    7,465
    
    
    
    Loss on disposal of equipment
    
    
    
    
    
    
    16,298Gain on early extinguishment of debt
    
    
    
    
    
    
    (929,577
    )Residual value of leases
    
    
    (282,588
    )
    
    
    (528,146
    )Provision for uncollectible receivables
    
    
    61,673
    
    
    
    (34,459
    )Provision for obsolete and slow moving inventory
    
    
    
    
    
    
    (295,612
    )Accretion of discount on notes payable
    
    
    390,837
    
    
    
    Gain on reduction of reserves
    
    
    
    
    
    
    (397,201
    )Deferred income taxes
    
    
    
    
    
    
    213,434Changes in working capital components:Accounts receivable
    
    
    (3,329,304
    )
    
    
    (2,562,219
    )Inventories
    
    
    (184,825
    )
    
    
    (502,942
    )Prepaid expenses and other assets
    
    
    (733,717
    )
    
    
    (71,503
    )Accounts payable
    
    
    340,983
    
    
    
    1,973,819Accrued liabilities
    
    
    (849,832
    )
    
    
    (137,536
    )Deferred revenue
    
    
    (134,334
    )
    
    
    (159,618
    )Net cash used in operating activities
    
    
    (7,654,703
    )
    
    
    (2,212,975
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (127,475
    )
    
    
    (140,798
    )Purchase of Scorecast
    
    
    (429,150
    )
    
    
    Asset acquisition
    
    
    
    
    
    
    (1,600,000
    )Proceeds from the sale of fixed assets
    
    
    
    
    
    
    13,464Deposits, restricted cash and other assets
    
    
    
    
    
    
    (358,153
    )Net cash used in investing activities
    
    
    (556,625
    )
    
    
    (2,085,487
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on debt
    
    
    (6,224,452
    )
    
    
    (967,672
    )Proceeds from sale of common stock and receipt of stock subscriptions receivable
    
    
    
    
    
    
    4,260,000Proceeds from sale of Series C Convertible Preferred Stock
    
    
    10,164,247
    
    
    
    Proceeds from letter factoring agreement
    
    
    908,005
    
    
    
    Proceeds from credit facility
    
    
    1,900,000
    
    
    
    Fees paid in connection with financing transaction
    
    
    352,314
    
    
    
    (40,000
    )Proceeds on the borrowing on notes payable
    
    
    67,659
    
    
    
    Net cash provided by financing activities
    
    
    7,167,773
    
    
    
    3,252,328NET DECREASE IN CASH
    
    
    (1,043,555
    )
    
    
    (1,046,134
    )Cash and cash equivalents, at beginning of the period
    
    
    2,448,354
    
    
    
    2,102,454Cash and cash equivalents, at end of the period
    
    $
    1,404,799
    
    
    $
    1,056,320
 The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements
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1.
    
    DESCRIPTION OF BUSINESS AND ACCOUNTING POLICIESThe following represents a summary of our business and accounting policies. A more detailed
presentation can be found in our 2006 Annual Report on Form 10-KSB.Description of Business  The Condensed Consolidated Financial Statements
include the accounts of ProLink Holdings Corp. and its subsidiary ProLink Solutions, LLC
(collectively, ProLink, we, us or our). Our business involves the design, manufacture,
maintenance and sale of GPS golf course management systems and software to golf course owners
and operators worldwide, the sale of advertising space on the screens of the systems that we
sell, and the brokering of the financing of the systems that we sell and other capital
equipment for our golf course partners.Basis of Presentation  The Condensed Consolidated Financial Statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) and, in the opinion of management, include all adjustments necessary for a fair
presentation of the results of operations, financial position, and cash flows for each period
presented.The adjustments referred to above are of a normal and recurring nature. Certain prior year
amounts have been reclassified to conform to the current classifications with no effect on
results of operations. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally accepted in
the United States of America have been condensed or omitted pursuant to SEC rules and
regulations.The Condensed Consolidated Balance Sheet as of December 31, 2006 was derived from audited
financial statements, but does not include all disclosures required by accounting principles
generally accepted in the United States of America. These Condensed Consolidated Financial
Statements should be read in conjunction with our Annual Report on Form 10-KSB for the year
ended December 31, 2006.Operating results for the three and six months ending June 30, 2007 are not necessarily
indicative of the results expected in subsequent quarters or for the year ending December 31,
2007.Use of Estimates  The preparation of financial statements 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. Estimates also affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Significant items subject
to such estimates include valuation allowances for inventory and accounts receivable, including
the service receivables under Pay-for-Play agreements, asset impairment and accruals for
certain liabilities, including contingent liabilities accrued since inception, liabilities
related to potential litigation, valuation of options and warrants to purchase our common
stock, the carrying values of interests in residual lease equipment, intangible assets and
goodwill, and the valuation of acquired and repurchased assets.Revenue Recognition  System sales revenue is derived from the sale of our
GPS systems. Revenue from the sale, which includes new system installations and upgrades,
through our direct sales channels, other than distributors, is generally recognized upon
installation of the system and acceptance by the golf course customer. Sales to international
distributors is generally recognized upon shipment from our contract manufacturer.
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Service revenue is derived from service contracts in effect with users of our Systems is
recognized monthly at the time of billing. For service requirements outside of the scope of
service contracts, customers are billed on a time and materials basis. Service revenue from golf
course customers with Pay for Play leases is retained by third party lease companies until
certain escrow amounts are attained.Financing revenue is earned from providing or arranging financing with third party lenders for
golf courses for the purchase of the ProLink GPS system, turf and grounds equipment and other
capital needs. Revenue is earned upon the binding execution of the financing transaction. In
certain transactions, where we act strictly as an agent, the revenues are recorded on a net
basis.Advertising revenue is earned from sales of advertising space on our GPS system screen. We have
the ability to program or customize our golf course products. We entered into contracts with
advertising customers based on course locations, frequency of the advertisement, advertising by
the hole and price. We require golf course customers to sign an exclusivity agreement for the
advertising based on the remaining and/or full term of their service agreement. This entitles
the golf course to 50% of the net revenue earned from advertising. We do not act as an agent,
therefore, advertising revenue is recorded on a gross basis and earned ratably over the life of
the contract.Earnings (Loss) per Share  Earnings (loss) per share is computed in accordance with
Statement of Financial Accounting Standards (SFAS) 128, Earnings per Share. Basic earnings
per common share (Basic EPS) is computed by dividing loss attributable to common stockholders
by the weighted average number of common shares outstanding during the period. Shares issued
and shares reacquired during the period are weighted for the portion of the period they were
outstanding.Diluted earnings per common share (Diluted EPS) is computed similarly to Basic EPS except that
the weighted average number of shares outstanding is increased to include the number of
additional shares of common stock that would have been outstanding if potentially dilutive
 shares, options and warrants had been issued using the treasury stock method and the dilutive
effects of convertible instruments using the if-converted method. The Companys potentially
dilutive common shares consist of shares issuable upon exercise of the Companys convertible
preferred stock and exercise of unexercised stock options and warrants.The computation of diluted EPS does not assume conversion, exercise or contingent issuance of
securities that may have an antidilutive effect on earnings per share. Consequently, stock
options and warrants with a conversion or exercise price greater than the average market price
for the periods ended June 30, 2007 are not included in the computation of potentially dilutive
common shares. The following is the computation of basic and diluted EPS for the periods
presented:
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For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    July 1,
    
    
    June 30,
    
    
    July 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss) applicable to common shareholders
    
    $
    (1,932,221
    )
    
    $
    539,279
    
    
    $
    (7,706,684
    )
    
    $
    869,218Weighted-average common shares outstanding (for basic EPS)
    
    
    39,912,583
    
    
    
    34,916,022
    
    
    
    38,339,842
    
    
    
    34,637,011Add:Dilutive share-based employee compensation (a)
    
    
    
    
    
    
    5,024,526
    
    
    
    
    
    
    
    5,106,971Dilutive warrant shares (a)
    
    
    
    
    
    
    417,627
    
    
    
    
    
    
    
    459,590Weighted-average common shares outstanding (for diluted EPS)
    
    
    39,912,583
    
    
    
    40,358,175
    
    
    
    38,339,842
    
    
    
    40,203,572Basic EPS
    
    $
    (0.05
    )
    
    $
    0.02
    
    
    $
    (0.20
    )
    
    $
    0.03Diluted EPS
    
    $
    (0.05
    )
    
    $
    0.01
    
    
    $
    (0.20
    )
    
    $
    0.02
 (a)
    
    2,326,224 and 2,495,295 of unexercised employee stock options and warrants were not
included in the computation of diluted EPS for the three and six months ended June 30, 2007 because
to do so would have been antidilutive.
 Income Taxes  We reported zero and $213,434 income taxes for the three and six months ended
June 30, 2007 and 2006. Based on historical operating losses and projections for future taxable
income, the Company concludes it is more likely than not that the Company will not fully realize
the benefits of its net operating loss carryforwards. The Company has not, therefore, recorded a
tax benefit from its net operating loss carryforwards for the periods ended June 30, 2007 or
July 1, 2006. Our effective tax rate during the three months and six months ended June 30, 2007
is zero. Our effective rates for the three months and six months ending July 1, 2006 were 19.7%
and 28.4% percent, respectively.Recent Accounting Pronouncements  In June 2006, the FASB ratified the Emerging Issues
Task Force (EITF) issue 06-3, How Taxes Collected From Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That Is Gross Versus Net Presentation)
(EITF 06-3). EITF 06-3 addresses income statement presentation and disclosure requirements for
taxes assessed by a governmental authority that are directly imposed on and concurrent with a
revenue-producing transaction between a seller and a customer, including sales, use, value-added
and some excise taxes. EITF 06-3 permits such taxes to be presented on either a gross basis
(included in revenues and costs) or on a net basis (excluded from revenues). The Company has
historically presented and will continue to present such taxes on a net basis.In September 2006, the FASB ratified Emerging Issues Task Force Issue (EITF) No. 06-1,
Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of
Equipment Necessary for an End-Customer to Receive Service from the Service Provider. This
guidance requires the application of EITF No. 01-9, Accounting for Consideration Given by a
Vendor to a Customer, when consideration is given to a reseller or manufacturer for benefit to
the service providers end customer. EITF No. 01-9 requires the consideration given be recorded
as a liability at the time of the sale of the equipment, and provides guidance for the
classification of the expense. EITF No. 06-1 is effective for the first fiscal year that
begins after June 15, 2007. We do not expect the adoption EITF No. 06-1 to have a material
impact on our financial position or results of operations.
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In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157). The objective of the statement is to define fair value,
establish a framework for measuring fair value and expand disclosures about fair value
measurements. SFAS 157 will be effective for interim and annual reporting periods beginning
after November 15, 2007. We do not expect the adoption SFAS 157 to have a material impact on
our financial position or results of operations.In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). The Statement
permits entities to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently without having
to apply complex hedge accounting provisions. SFAS 159 will be effective for the first fiscal
year that begins after November 15, 2007. We have not yet determined whether we will adopt the
alternatives provided in this standard.2.
    
    ACQUISITION OF SCORECASTOn January 17, 2007, we acquired substantially all of the operating assets of ScoreCast,
Inc., including a scoring software used in the golf industry, ScoreCast Golf Tournament
Software, for approximately $429,000 in cash plus warrants to purchase 150,000 shares of our
common stock at an exercise price $1.60 per share. Details of the equity and cash used in
the acquisition of Scorecast are as follows:
 Purchase Price:Cash
    
    $
    429,150Stock warrants issued
    
    
    81,916Total purchase price
    
    
    511,066Allocated as follows:Property and equipment
    
    
    100,000Excess purchase price to be allocated
    
    $
    411,066Excess purchase price allocated as follows:Goodwill
    
    $
    205,533Other intagible assets
    
    
    205,533Total allocated
    
    $
    411,066
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3.
    
    STOCK BASED COMPENSATIONWe have a 2006 Stock Option Plan and a 2005 Stock Option Plan. All options granted under the
2006 and 2005 Stock Option Plans have been granted with exercise prices at or above the
market price on the day of the grant. There are 10,000,000 shares reserved under the 2005
Stock Option Plan and 5,000,000 shares reserved under the 2006 plan. Stock based employee
compensation cost is recognized as a component of selling, customer support and general and
administrative expense in the Condensed Consolidated Statement of Operations. The Company
values all share-based payments to employees at fair value on the date of grant and expenses
this value over the applicable vesting period. The Companys policy for graded vesting
awards is to recognize compensation expense on a straight-line basis over the vesting
period. In addition, the Company also has historically granted a smaller number of
stock-based awards at various times during the year for new employees, promotions and
performance achievements.Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS 123R,
using the modified-prospective transition method. Under that transition method, employee
compensation cost recognized includes: (i) compensation cost for all share-based payments
granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair
value estimated in accordance with the original provisions of SFAS 123 and (ii) compensation
cost for all share-based payments granted subsequent to January 1, 2006 based on the grant
date fair value estimated in accordance with the provision of SFAS 123R.The fair value of options granted is estimated using the Black-Scholes option-pricing
model. The assumptions used in the Black-Scholes option-pricing model include (i) annual
dividend yield, (ii) weighted-average expected life, (iii) risk-free interest rate and (iv)
expected volatility.The following assumptions were used in estimating the fair value of our options granted:
 For the Six Months EndedJune 30, 2007
    
    
    July 1, 2006Risk-free interest rate
    
    
    4.71% - 5.30
    %
    
    
    4.58
    %Expected holding period  years
    
    
    3
    
    
    
    3Expected volatility
    
    
    60
    %
    
    
    60
    %Expected dividends
    
    
    
    
    
    
    
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In addition, SFAS 123R requires the estimation of forfeitures when recognizing compensation
expense and that this estimate of forfeitures is adjusted over the requisite service period
should the actual forfeitures differ from such estimates. Changes in estimated forfeitures
are recognized through a cumulative adjustment in the period of the change, which impacts
the amount of unamortized compensation expense to be recognized in future periods.Stock option exercise prices are equal to the market value of our common stock on the date
of the grant. During the three months ended June 30, 2007 and July 1, 2006, 515,000 and
285,000 employee options were granted, zero and 12,000 options were forfeited, respectively.
During the six months ended June 30, 2007 and July 1, 2006, 555,500 and 285,000 employee
options were granted, and 9,500 and 16,000 options were forfeited, respectively.During the three and six months ended June 30, 2007, stock based employee compensation
expense was $226,854 and $605,353, respectively, compared to $39,256 and $63,198 of stock
based employee compensation expense during the three and six months ended July 1, 2006.As of June 30, 2007, $1,710,064 of total unrecognized compensation cost related to employee
stock options is expected to be recognized over a weighted average period of 2.5 years.
Additional information relative to our employee options outstanding as of June 30, 2007 is
summarized below:
 Options
    
    
    Options
    
    
    OptionsOutstanding
    
    
    Expected to Vest
    
    
    ExercisableTotal number of options
    
    
    9,530,884
    
    
    
    8,937,855
    
    
    
    6,395,280Aggregate intrinsic value of options
    
    $
    3,303,007
    
    
    $
    3,209,910
    
    
    $
    929,800Weighted average remaining
contractual term (years)
    
    
    8.8
    
    
    
    8.8
    
    
    
    8.6Weighted average exercise price
    
    $
    0.93
    
    
    $
    0.90
    
    
    $
    1.03
 Options exercised during the three and six month period ended June 30, 2007 were 50,000 and
2,862,723 shares, resulting in the issuance of 46,875 and 2,691,319 common shares.4.
    
    INTEREST IN RESIDUAL LEASE EQUIPMENTDuring 2006 and 2005, we acquired interest in residual lease equipment and recorded these
interests at their estimated fair value at the time of acquisition based upon the assumption
that the equipment will be resold upon expiration of the related leases to new or existing
customers. In addition, during the year ended December 31, 2006 the Company commenced
recording a residual value on all new system installations. Based on our historical
operating activity these residual values are recorded at approximately $250 or $600 per
unit, depending upon the unit installed.
Residuals, acquired or originated as the result of a system sale, are valued at the lower of
cost or fair market value. Interest in Residual Lease Equipment consist of the following:
  10




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##### Table of Contents



June 30,
    
    
    December 31,2007
    
    
    2006Residual interests in equipment purchased from E-Z-Go
    
    $
    1,561,706
    
    
    $
    1,760,152Parview residuals acquisition
    
    
    505,802
    
    
    
    601,061Residuals recognized on system sales
    
    
    2,228,146
    
    
    
    1,626,365Yamaha residuals acquisition
    
    
    391,300
    
    
    
    416,788Interest in residual lease equipment
    
    $
    4,686,954
    
    
    $
    4,404,366
 5.
    
    DEBTDebt consists of the following:
 June 30,
    
    
    December 31,2007
    
    
    2006Revolving credit facility
    
    $
    1,233,200
    
    
    $
    Credit facility, 91/4% senior secured term loan due 2009
    
    
    1,683,334
    
    
    
    2,395,83415% FOC letter of factoring agreement
    
    
    908,005
    
    
    
    12% Senior secured notes due 2007 (net of discount of $360,376)
    
    
    
    
    
    
    4,139,6244% Optimal license agreement due 2013
    
    
    1,047,023
    
    
    
    1,169,02041/4% GPSI license agreement due 2011
    
    
    767,705
    
    
    
    842,24473/4% Microsoft Capital notes payable due 2010
    
    
    192,759
    
    
    
    221,39873/4% Microsoft Capital notes payable due 2011
    
    
    209,698
    
    
    
    232,06283/4% Microsoft Capital notes payable due 2011
    
    
    86,274
    
    
    
    94,603107/10% First Insurance Funding notes
payable due 2007
    
    
    17,968
    
    
    
    52,500First Insurance Funding note payable
    
    
    53,036
    
    
    
    Capital lease obligations
    
    
    37,042
    
    
    
    46,708Total debt
    
    
    6,236,044
    
    
    
    9,193,993Less: Current portion
    
    
    (3,180,533
    )
    
    
    (5,485,188
    )Long-term debt, net of current maturities
    
    $
    3,055,511
    
    
    $
    3,708,805
 Credit Facilities
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12




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##### Table of Contents



12% Senior Secured Notes
   13




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15% Revolving Note
   License Agreements
   Microsoft Notes Payables
   14




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6.
    
    ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIESOther accrued liabilities and current liabilities consist of the following as of June 30,
2007 and December 31, 2006:
 June 30,
    
    
    December 31,2007
    
    
    2006Wages, commissions and related benefits
    
    $
    748,711
    
    
    $
    928,253Professional fees
    
    
    79,634
    
    
    
    183,446Accrued vendor liability
    
    
    
    
    
    
    307,294Accrued liability for predecessor claims
    
    
    54,545
    
    
    
    200,000Accrued interest payable
    
    
    10,315
    
    
    
    65Accrued liability for lease buyouts
    
    
    
    
    
    
    281,754Sales tax payable
    
    
    40,547
    
    
    
    13,850Other accrued expenses and current liabilities
    
    
    75,020
    
    
    
    Total accrued expenses and other current liabilities
    
    $
    1,008,772
    
    
    $
    1,914,662
 During the six months ended June 30, 2007, accrued expenses and other current liabilities
decreased due to a reduction in our accrued vendor liability of $307,294, a decrease in our
liability for predecessor claims by $145,455 due to a settlement in December 2006, a
decrease in our accrual for lease buyouts by $281,754 and a decrease of approximately
$112,000 in legal accruals.7.
    
    COMMITMENTS AND CONTINGENCIESLitigation  We are involved in other disputes arising in the ordinary course of
business. Such disputes taken in the aggregate are not expected to have a material adverse
impact on ProLink. As of June 30, 2007, we have no accrual related to litigation.Registration Payment Arrangements  During the first quarter of 2007, through a
private offering, we completed a sale of an aggregate of 1,142 shares of our Series C
Convertible Preferred Stock, par value $0.001 per share, and five-year warrants to acquire
up to 4,225,400 shares of our common stock, at an exercise price equal to $1.40 per share,
for gross proceeds to us of $11,420,000. In addition, pursuant to a Registration Rights
Agreement, we agreed to register the resale of the shares of common stock underlying the
Series C Preferred Stock sold in the offering and the shares of common stock issuable upon
exercise of the warrants. As of June 30, 2007 we have an effective registration statement
covering these shares. See Note 8 for additional information.Letter of Intent with EluminaOn January 18, 2007, we signed a non-binding letter
of intent to acquire our largest distributor, Elumina and all of Eluminas operating
subsidiaries. The acquisition is subject to the signing of a definitive purchase agreement,
audits for required reporting periods, completion of due diligence, and various regulatory
and shareholder approvals. As of June 30, 2007, the Company is still working on the items
subject to the signing the purchase agreement.
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8.
    
    STOCKHOLDERS EQUITY (DEFICIT)
  TotalCommon Stock
    
    
    Additional
    
    
    Accumulated
    
    
    Stockholders'Shares
    
    
    Amount
    
    
    Paid-In Capital
    
    
    Deficit
    
    
    EquityBalance as December 31, 2006
    
    
    34,927,781
    
    
    $
    3,493
    
    
    $
    16,323,377
    
    
    $
    (15,736,551
    )
    
    $
    590,319Series C Preferred Shares converted to common
stock
    
    
    8,623,846
    
    
    
    862
    
    
    
    11,640,090
    
    
    
    
    
    
    
    11,640,952Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,720,938
    )
    
    
    (3,720,937
    )Common stock and warrants issued
    
    
    34,000
    
    
    
    3
    
    
    
    2,838,458
    
    
    
    
    
    
    
    2,838,461Stock-based compensation*
    
    
    
    
    
    
    
    
    
    
    605,353
    
    
    
    
    
    
    
    605,353Exercises of stock-based options* and warrants
    
    
    2,691,319
    
    
    
    270
    
    
    
    (270
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,985,746
    )
    
    
    (3,985,746
    )Balance as of June 30, 2007
    
    
    46,276,946
    
    
    $
    4,628
    
    
    $
    31,407,008
    
    
    $
    (23,443,235
    )
    
    $
    7,968,401
  Common Stock
  Series C Convertible Preferred Stock
    16




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Stock Purchase Warrants
    17




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As of June 30,
    
    
    As of December 31,2007
    
    
    2006Number of
    
    
    Warrant
    
    
    Number of
    
    
    WarrantWarrants
    
    
    Price Ranges
    
    
    Warrants
    
    
    Price RangesWarrants outstanding at the
beginning of the period
    
    
    5,371,773
    
    
    $
    1.00 to $2.00
    
    
    
    3,080,121
    
    
    $
    1.00 to $1.50Warrants issued
    
    
    4,719,801
    
    
    $
    1.35 to $1.60
    
    
    
    2,291,652
    
    
    $
    1.35 to $2.00Warrants outstanding
    
    
    10,091,574
    
    
    $
    1.00 to $2.00
    
    
    
    5,371,773
    
    
    $
    1.00 to $2.00Warrants exercisable
    
    
    9,358,241
    
    
    $
    1.00 to $2.00
    
    
    
    4,938,440
    
    
    $
    1.00 to $2.00
 The weighted average exercise price of warrants that were exercisable as of June 30, 2007
and December 31, 2006 was $1.36 and $1.32, respectively. The weighted average remaining
contractual life of warrants outstanding as of June 30, 2007 was 4.35 years.During the three and six months ended June 30, 2007, warrant expense was $57,823 and
$103,272, respectively, compared to $7,712 and $35,558 warrant expense during the three and
six months ended July 1, 2006. We utilize the same assumptions for calculating the fair
value of warrants as we use in calculating the fair value of stock
options. See Note 3.9.
    
    RELATED PARTY TRANSACTIONSFOC Financial LP  On June 6, 2007, we entered into a Letter Agreement with FOC
Financial Limited Partnership (FOC). Steven D. Fisher, one of the Companys board of
directors, is the General Partner of FOC. Pursuant to the Letter Agreement, FOC, in its
sole discretion, may make advances to PSL from time to time in an amount not to exceed
$1,500,000 (the Loan), to be collateralized by golf course management systems sold to golf
courses. Advances may be borrowed, repaid, and reborrowed on a revolving basis through June
6, 2009. Upon the fulfillment of the loan conditions, including certification by PSL that it
has executed lease documents, approved credit with a lease financing source and has shipped
a system to a course, FOC will advance 90% of the gross proceeds of such sale, less a 1%
origination fee. If any system funded pursuant to the Letter Agreement is rejected or
returned, PSL has agreed to provide priority remarketing for that system. The Loan is
evidenced by a Revolving Promissory Note that bears interest at 15% per annum on its
outstanding principal balance. Further, in order to induce FOC to enter into this Letter
Agreement, the Company agreed to issue a warrant to purchase 300,000 shares of the Companys
common stock to FOC at an exercise price of $1.35 per share, which was the market value as
of 4 p.m. on June 6, 2007, and with a term of 10 years.On June 22, 2007, we entered into an Amended and Restated Letter Agreement with FOC. Pursuant
to the Amended and Restated Letter Agreement, FOC, in its sole discretion, may make advances to
PSL from time to time in an amount not to exceed $1,500,000 (the Amended and Restated Loan),
to be collateralized by golf course management systems sold to golf courses. The Amended and
Restated
Loan eliminates the requirement that domestic receivables have prior credit approval and allows
borrowing on foreign receivables. In addition, FOC will advance 100% of any accounts receivable
related to a foreign purchaser. The Amended and Restated Loan is evidenced by an Amended and
Restated Revolving Promissory Note that bears the same terms as the original Loan (see above).
No additional warrants were issued in connection with the amendment of the loan.
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On September 18, 2006, we entered into a Letter Factoring Agreement with FOC Financial L.P..
The Loan was evidenced by a revolving promissory note. In order to induce FOC to enter into
this Letter Factoring Agreement, we agreed to issue a warrant to purchase 250,000 shares of
our common stock to FOC at an exercise price of $1.60 per share with a term of 10 years. We
borrowed and repaid an aggregate of $846,892 under this agreement and paid fees of $4,214 to
FOC prior to its expiration during 2006.Andrew Wing  On July 10, 2006, we appointed Mr. Andrew L. Wing as a member of the
Board of Directors. In connection with such appointment, we entered into a Consulting
Agreement, dated July 10, 2006 with Mr. Wing. The Consulting Agreement provides that Mr.
Wing will provide certain advertising sales services to us in exchange for commissions, 5%
for the first three years and 2% for the fourth and fifth years, that will be paid for with
revenues received by us from advertisers. After the fifth year, no further commissions will
be paid. The Consulting Agreement shall continue on a month-to-month basis and may be
terminated by us upon written notice. ProLink has not paid any commissions to Mr. Wing as
of June 30, 2007.10.
    
    CONCENTRATIONSInternational Revenue  International revenue, derived primarily from customers in
Europe and Asia, was approximately $1,607,303, or 29.4%, of total revenue for the three
months ended June 30, 2007 and $1,763,800, or 28.3%, for the three months ended July 1,
2006. For the six months ended June 30, 2007 and July 1, 2006, International revenue was
approximately $4,291,528, or 35.2%, and $4,018,027, or 33.3%, respectively, of total
revenue.We have an exclusive licensing and distribution agreement with Elumina pursuant to which
Elumina acts as an exclusive distributor of our products in Europe, the Middle East,
Australia, Malaysia, and South Korea. The Company has no international assets. Therefore,
all of our International revenue in both periods presented was generated from our European
distributor, Elumina. As of June 30, 2007 and December 31, 2006 accounts receivable due
from Elumina were $3,475,681 and $393,187, respectively.Additionally, on January 18, 2007, we signed a non-binding letter of intent to acquire
Elumina and all of its operating subsidiaries. The acquisition is subject to the signing of
a definitive purchase agreement, audits for required reporting periods, completion of due
diligence, and various regulatory and shareholder approvals. As of June 30, 2007, the
Company is still working on the items subject to the signing the purchase agreement.Significant Vendor  During the six months ended June 30, 2007, we utilized two
vendors for substantially all of the manufacturing of our GPS systems. Historically, we
utilized only one vendor to manufacture our GPS systems.
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11.
    
    SALES AND MARKETING AND FINANCING AGREEMENTSE-Z-Go Sales and Marketing Agreement  In August 2000, ProLink, Inc. entered
into a sales and marketing agreement with E-Z-Go. As part of the agreement, E-Z-Go arranged
for system sales to a financing company who then leased the systems to golf courses.
ProLink, Inc. and subsequently ProLink, received its cost plus a standard markup, with the
remaining profit split between ProLink and E-Z-Go. ProLink also receives 50% of the
Pay-for-Play revenue generated from the lease, after deductions for finance company debt
service, administration fee, and maintenance. We receive 70% of the administration fee and
E-Z-Go receives 30% of the fee. We provide maintenance and service for these courses and
receive compensation for these services. The E-Z-Go agreement expired in 2005.The Company has a past due receivable from E-Z-Go recorded at June 30, 2007 in
connection with funds due the company for services rendered under Pay-for-Play agreements
billed and administered by E-Z-Go. E-Z-Go disagrees with our calculation of the past due
receivable amount and actually claims an amount due to them. However, we believe that we
have a strong position and will recover all amounts due.Purchase of Assets from E-Z-Go  On June 1, 2005 we purchased certain assets
from E-Z-Go, a division of Textron, Inc., in exchange for cash and debt. We purchased 2,945
ProLink video display units and roofs, 900 ProLink computer units, the assignment of 24 golf
lease contracts in default at the time of the transaction and E-Z-Gos residual interest in
all systems that were leased under leases that matured prior to the date of the agreement or
were in default as of March 25, 2005 and E-Z-Gos residual interest in all systems that are
leased under leases that mature without default in the future. The asset purchase was
allocated as follows: $416,160 to inventory, $153,000 to service inventory, $1,889,571 to
residual interests in leased GPS systems installed at golf courses and $1,143,723 to satisfy
an obligation of ProLink, Inc., a predecessor company.In June 2006, under the terms of the asset purchase agreement, we prepaid our
obligation to E-Z-Go and received a prepayment discount of $929,577, which is recorded as a
Gain on Early Extinguishment of Debt on the Condensed Consolidated Statement of
Operations..Financing Agreement  The Company and E-Z-Go were parties to a financing
arrangement with an independent third party, NC Golf (NCG), a division of National City
Bank. This agreement expired as of December 31, 2005. Under the agreement, NCG obtained the
right of first refusal to finance new sales. Prior to expiration, all NCG Pay-for-Play
leases were placed in a pool. ProLink provided NCG a limited guarantee of the performance of
the Pay-for-Play leases in the portfolio, which has now expired.We and E-Z-Go have also agreed to remarket, on a best efforts basis, any course assets
that do not meet minimum performance criteria. We will be compensated for any remarketing
activity.During the term of the lease, all Pay-for-Play revenue after payment of debt service
and a monthly processing fee of $7,500 is deposited into an escrow account. Debt Service
is defined as the amount needed to fully amortize to zero NCGs purchase costs plus a rate
of return, over the life of the lease. Funds will be released from escrow when the minimum
reserve amount (less amounts paid by E-Z-Go or us) is accumulated in the escrow account.
After payment of the service and administration cost, any remaining funds will be
distributed 90% to us and 10% to NCG. If
course assets are sold, any residual amount after payment of debt service (if any is
owed) will be distributed under the same formula. See Note 4 for the our interest in
residual lease equipment.
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Certain service revenues associated with Pay-for-Play leases are administered under an
arrangement with NCG. Under the terms of the program, the Pay-for-Play transactions are
pooled and are subject to a maximum reserve of 10% of the leases entered into during the
first twelve months of the agreement. Further, any revenues received from Pay-for-Play
transactions in excess of the debt service amount is held in escrow, up to an amount equal
to the maximum reserve. As of June 30, 2007 and December 31, 2006, the reserve, presented
in Deposits and Other Assets on the Condensed Consolidated Balance Sheets was $856,410 for
both periods presented.12.
    
    SUBSEQUENT EVENTSOn July 9, 2007, we entered into letter agreements with Robeco WPG Distressed/Special Situations
Overseas, L.P. (Special Situations) and Robeco Event-Driven Multi-Strategy Overseas, L.P.
(Multi-Strategy, together WPG). Pursuant to the Letter Agreements, Special Situations and
Multi-Strategy, in their sole discretion, may make advances to ProLink from time to time in an
amount not to exceed an aggregate of $1,500,000 (the Loans), to be collateralized by golf
course management systems sold to golf courses. Advances may be borrowed, repaid, and
reborrowed on a revolving basis through July 6, 2009. Upon the fulfillment of the loan
conditions, including certification by ProLink that it has executed lease documents, approved
credit with a lease financing source and has shipped a system to a course, WPG will advance 90%
of the base purchase price of a ProLink GPS System less a 1% origination fee. In addition, WPG
will advance 100% of any accounts receivable related to a foreign purchaser. If any system
funded pursuant to the letter agreement is rejected or returned, we have agreed to provide
priority remarketing for that system. The Loans are evidenced by revolving promissory notes that
bear interest at 15% per annum on its outstanding principal balance. Further, in order to
induce Special Situations and Multi-Strategy to enter into these agreements, we agreed to issue
10 year warrants to purchase up to 300,000 shares of common stock at an exercise price of $1.35
per share. Of the warrants, 60,000 were issued upon execution of the loans, and the remaining
240,000 were issued in accordance with the loan documents upon the first draw against the loans.On August 17, 2007, we entered into a security agreement with Calliope. The parties to the
agreement also entered into certain related ancillary documents. The credit facility made
available under the agreement is in the aggregate principal amount of $9.0 million, consisting
of a $5.0 million revolving loan and a $4.0 million term loan. The revolver has a two year
term, while the term loan matures in five years and requires amortization of its principal
balance in 48 equal monthly payments beginning on September 1, 2008. On and after the first
anniversary of the date of the agreement, Calliope shall have the right to convert principal due
under the term loan into the Companys common stock at a fixed conversion price per share of
common stock of (i) $1.40 with respect to the first $1,333,333 of the principal amount; (ii)
$1.50 with respect to the next $1,333,333 of the principal amount; and (iii) $1.67 with respect
to the remaining $1,333,334 of the principal amount. The proceeds of the loans are to be used
to refinance our existing indebtedness, with the remaining balance available for general working
capital purposes. Pursuant to and in connection with the agreement, we have granted to Calliope
a security interest in all of our assets and intellectual property, and the Company has pledged
its ownership interest in ProLink Solutions.
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22




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    RISK FACTORS
   23




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If we fail to maintain an effective system of internal controls and disclosure controls and
procedures, we may not be able to accurately report our financial results.
  Critical Accounting Policies
   Revenue Recognition
   24




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Overview
      Results of Operations
   25




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Three Months Ended June 30, 2007 and July 1, 2006
 Three Months EndedJune 30,
    
    
    July 1,
    
    
    Change2007
    
    
    2006
    
    
    $
    
    
    %REVENUES:System Installation Revenue
    
    $
    4,658,410
    
    
    $
    5,079,502
    
    
    $
    (421,092
    )
    
    
    -8.3
    %Service Revenue
    
    
    666,448
    
    
    
    787,746
    
    
    
    (121,298
    )
    
    
    -15.4
    %Finance Revenue, net
    
    
    
    
    
    
    347,315
    
    
    
    (347,315
    )
    
    
    -100.0
    %Advertising Revenue
    
    
    134,178
    
    
    
    28,430
    
    
    
    105,748
    
    
    
    n/aTotal Revenue
    
    
    5,459,036
    
    
    
    6,242,993
    
    
    
    (783,957
    )
    
    
    -12.6
    %COST OF REVENUES:System Installation Cost
    
    
    2,334,491
    
    
    
    2,485,600
    
    
    
    (151,109
    )
    
    
    -6.1
    %Service Cost
    
    
    848,283
    
    
    
    694,318
    
    
    
    153,965
    
    
    
    22.2
    %Other Cost
    
    
    86,666
    
    
    
    
    
    
    
    86,666
    
    
    
    n/aTotal Cost of Revenue
    
    
    3,269,440
    
    
    
    3,179,918
    
    
    
    89,522
    
    
    
    2.8
    %Gross Margin
    
    
    2,189,596
    
    
    
    3,063,075
    
    
    
    (873,479
    )
    
    
    -28.5
    %Operating Expenses
    
    
    4,105,002
    
    
    
    3,018,843
    
    
    
    1,086,159
    
    
    
    36.0
    %Income (Loss) from Operations
    
    
    (1,915,406
    )
    
    
    44,232
    
    
    
    (1,959,638
    )
    
    
    n/aTotal Other (Income) Expense
    
    
    196,378
    
    
    
    (708,481
    )
    
    
    904,859
    
    
    
    n/aIncome (Loss) Before Taxes
    
    $
    (2,111,784
    )
    
    $
    752,713
    
    
    $
    (2,864,497
    )
    
    
    n/a
 Revenue
   Cost of Revenues
   26




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##### Table of Contents



Gross Margin
  OPERATING EXPENSES
 Total Operating Expenses
  Sales and Marketing
  General and Administrative
   27




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##### Table of Contents



Other (Income) Expense
  Six Months Ended June 30, 2007 and July 1, 2006
 Six Months EndedJune 30,
    
    
    July 1,
    
    
    Change2007
    
    
    2006
    
    
    $
    
    
    %REVENUES:System Installation Revenue
    
    $
    9,860,074
    
    
    $
    9,796,441
    
    
    $
    63,633
    
    
    
    0.6
    %Service Revenue
    
    
    1,197,325
    
    
    
    1,219,532
    
    
    
    (22,207
    )
    
    
    -1.8
    %Finance Revenue, net
    
    
    981,786
    
    
    
    1,012,475
    
    
    
    (30,689
    )
    
    
    -3.0
    %Advertising Revenue
    
    
    153,534
    
    
    
    28,580
    
    
    
    124,954
    
    
    
    n/aTotal Revenue
    
    
    12,192,719
    
    
    
    12,057,028
    
    
    
    135,691
    
    
    
    1.1
    %COST OF REVENUES:System Installation Cost
    
    
    5,038,823
    
    
    
    4,990,068
    
    
    
    48,755
    
    
    
    1.0
    %Service Cost
    
    
    1,728,832
    
    
    
    1,387,644
    
    
    
    341,188
    
    
    
    24.6
    %Other Cost
    
    
    272,025
    
    
    
    
    
    
    
    272,025
    
    
    
    n/aTotal Cost of Revenue
    
    
    7,039,680
    
    
    
    6,377,712
    
    
    
    661,968
    
    
    
    10.4
    %Gross Margin
    
    
    5,153,039
    
    
    
    5,679,316
    
    
    
    (526,277
    )
    
    
    -9.3
    %Operating Expenses
    
    
    8,485,949
    
    
    
    5,746,874
    
    
    
    2,739,075
    
    
    
    47.7
    %Loss from Operations
    
    
    (3,332,910
    )
    
    
    (67,558
    )
    
    
    (3,265,352
    )
    
    
    n/aOther (Income) Expense
    
    
    652,836
    
    
    
    (1,150,217
    )
    
    
    1,803,053
    
    
    
    n/aIncome (Loss) Before Taxes
    
    $
    (3,985,746
    )
    
    $
    1,082,659
    
    
    $
    (5,068,405
    )
    
    
    n/a
 Revenue
  Cost of Revenue
   28




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##### Table of Contents



Gross Margin
  OPERATING EXPENSES
 Total Operating Expenses
  Sales and Marketing
  General and Administrative
   29




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##### Table of Contents



Other (Income) Expense
  Liquidity And Capital Resources
        30




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##### Table of Contents



Recent Accounting Pronouncements
      31




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##### Table of Contents



Item 3. Controls and Procedures
    32




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
       33




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##### Table of Contents



Item 3. Defaults Upon Senior Securities
   
 Item 4. Submission of Matters to a Vote of Security Holders
  1)
    
    To elect seven directors to serve one-year terms expiring in 2008.
 Candidate
    
    For
    
    
    Votes WithheldWilliam D. Fugazy, Jr.
    
    
    26,521,162
    
    
    
    482,319Steven D. Fisher
    
    
    26,596,162
    
    
    
    407,319Lawrence D. Bain
    
    
    26,519,887
    
    
    
    483,594Jay Wolf
    
    
    26,496,162
    
    
    
    507,319Andrew L. Wing
    
    
    24,496,162
    
    
    
    507,319Barry I. Regenstein
    
    
    26,988,553
    
    
    
    14,453David F. Chazen
    
    
    26,965,730
    
    
    
    37,753
 2)
    
    To authorize the board of directors of the Company (the Board) to amend our
certificate of incorporation to effect a 1-for-3, 1-for-4 or 1-for-5 reverse stock split of
our issued and outstanding shares of common stock to decrease the number of issued and
outstanding shares of common stock, the final ratio of the stock split to be determined
within the sole discretion of the Board and such stock split to occur within a year from
authorization by the Board.
 For:
    
    
    26,867,061Against:
    
    
    136,420Abstain:
    
    
    0
 3)
    
    To adopt the 2006 Employee, Director and Consultant Stock Option Plan and to authorize
the issuance of 5,000,000 shares upon the exercise of options granted thereunder.
 For:
    
    
    26,089,697Against:
    
    
    809,575Abstain:
    
    
    104,209
 4)
    
    To ratify the appointment of Semple, Marchal & Cooper as the Companys independent
public accountants for the fiscal year ending December 31, 2007.
 For:
    
    
    27,000,934Against:
    
    
    2,547Abstain:
    
    
    0
  34




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##### Table of Contents



Item 5. Other Information
  
 Item 6. Exhibits:
 ExhibitNumber
    
    Description3.0
    
    Certificate of Incorporation of United Health Management,
Inc., as filed with the Secretary of State of the State of
Delaware on March 7, 1996, and previously filed as Exhibit
3.1 on Form 10SB12G filed on October 30, 1998, which is
hereby incorporated by reference.3.1
    
    By-laws of Prolink Holdings Corp, previously filed as Exhibit
3.5 on Form 10-KSB filed on March 17, 2007, which is hereby
incorporated by reference.3.2
    
    Contribution Agreement between Amalgamated Technologies, Inc.
and ProLink Solutions, LLC, dated December 23, 2005,
previously filed as Exhibit 10.1 on Form 8-K filed on
December 23, 2005, which is hereby incorporated by reference.3.3
    
    Certificate of Ownership and Merger as filed with the
Secretary of State of the State of Delaware on January 20,
2006 and effective as of 12:01 a.m. on January 23, 2006, and
previously filed as Exhibit 3.1 on Form 8-K filed January 26,
2006, which is hereby incorporated by reference.3.4
    
    ProLink Holdings Corp. Corporate Code of Conduct and Ethics,
previously filed as Exhibit 14.1 on Form 10-KSB/A filed on
May 1, 2006, which is hereby incorporated by reference.3.5
    
    Certificate of Designation, Preferences and Rights of Series
C Convertible Preferred Stock, filed with the Secretary of
State of the State of Delaware on December 29, 2006 and
previously filed as Exhibit 99.4 on Form 8-K on January 8,
2007, which is hereby incorporated by reference.3.6
    
    Certificate of Amendment to the Certificate of Designation,
Preferences and Rights of Series C Convertible Preferred
Stock, filed with the Secretary of State of the State of the
State of Delaware on January 3, 2007, and previously filed as
Exhibit 99.2 on Form 8-K on January 29, 2007, which is hereby
incorporated by reference.4.0
    
    Form of Common Stock certificate, previously filed as an
exhibit on Form 10SB12G filed on October 30, 1998, which is
hereby incorporated by reference.
  35




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##### Table of Contents



ExhibitNumber
    
    Description4.1
    
    Form of Warrant to Purchase Common Stock of the Company,
previously filed as Exhibit 4.1on Form 10-KSB on April 17,
2006, which is hereby incorporated by reference.4.2
    
    Form of Warrant to Purchase Common Stock of the Company,
previously filed as Exhibit 99.2 on Form 8-K on January 8,
2007, which is hereby incorporated by reference.4.3
    
    Form of Warrant to Purchase Common Stock of the Company,
previously filed as Exhibit on Form 8-K on January 29, 2007,
which is hereby incorporated by reference.10.0
    
    Loan and Security Agreement by and among Comerica Bank,
ProLink Holdings Corp. and ProLink Solutions LLC, dated
October 23, 2006, previously filed as Exhibit 10.1 on Form
8-K on October 27, 2006, which is hereby incorporated by
reference.10.01
    
    Revolving Promissory Note dated October 23, 2006, previously
filed as Exhibit 10.2 on Form 8-K on October 27, 2006, which
is hereby incorporated by reference.10.02
    
    Term Promissory Note dated October 23, 2006, previously filed
as Exhibit 10.3 on Form 8-K on October 27, 2006, which is
hereby incorporated by reference.10.03*
    
    First Modification to Loan and Security Agreement by and
among Comerica Bank, ProLink Holdings Corp. and ProLink
Solutions LLC, dated May 24, 2007 previously filed as Exhibit
10.1 on Form 8-K on May 5, 2007, which is hereby incorporated
by reference.10.1
    
    Subscription Agreement between the Company and Investors,
dated March 31, 2006, previously filed as an exhibit Form 8-K
on April 4, 2006, which is hereby incorporated by reference.10.11
    
    Securities Purchase Agreement dated as of October 10, 2006,
previously filed as Exhibit 10.1 on Form 8-K on October 17,
2006, which is hereby incorporated by reference.10.12
    
    Security Agreement dated as of October 10, 2006, previously
filed as Exhibit 10.2 on Form 8-K on October 17, 2006, which
is hereby incorporated by reference.10.13
    
    Form of Senior Secured Note due April 11, 2007, previously
filed as Exhibit 10.3 on Form 8-K on October 17, 2006, which
is hereby incorporated by reference.10.2*
    
    Amended and Restated Letter Factoring Agreement between the
Companys wholly-owned subsidiary ProLink Solutions, LLC and
FOC Financial L.P., dated June 22, 2007.10.21*
    
    Amended and Restated Revolving Promissory Note between the
Companys wholly-owned subsidiary ProLink Solutions, LLC and
FOC Financial L.P., dated June 22, 2007.
  36




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##### Table of Contents



ExhibitNumber
    
    Description10.22*
    
    Letter Factoring Agreement between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG Event-Driven
Multi-Strategy Overseas, L.P., c/o Robeco Investment
Management, Inc., dated July 5, 2007.10.23*
    
    Letter Factoring Agreement between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG
Distressed/Special Situations Overseas, L.P., c/o Robeco
Investment Management, Inc., dated July 5, 2007.10.24*
    
    Revolving Promissory Note between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG Event-Driven
Multi-Strategy Overseas, L.P., c/o Robeco Investment
Management, Inc., dated July 5, 2007.10.25*
    
    Revolving Promissory Note between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG
Distressed/Special Situations Overseas, L.P., c/o Robeco
Investment Management, Inc., dated July 5, 2007.10.3
    
    Securities Purchase Agreement dated as of December 31, 2006,
previously filed as Exhibit 99.2 on Form 8-K filed on
December 29, 2006, which is hereby incorporated by reference.10.31
    
    Securities Purchase Agreement dated as of January 23, 2007,
previously filed as Exhibit 99.1 on Form 8-K filed on January
29, 2007, which is hereby incorporated by reference.10.32
    
    Registration Rights Agreement dated as of January 8, 2007
previously filed as Exhibit 99.4 on Form 8-K filed on
December 29, 2006, which is hereby incorporated by reference.10.33
    
    Registration Rights Agreement dated as of January 23, 2007,
previously filed as Exhibit 99.3 on Form 8-K filed on January
29, 2007, which is hereby incorporated by reference.10.4
    
    Purchase and Sale Agreement between ProLink Solutions, LLC
and, the entities described in Exhibit A thereto, the Putters
Group and Signal Systems Associates LLC, previously filed as
Exhibit 10.1 on Form 8-K filed on March 1, 2006, which is
hereby incorporated by reference.10.41
    
    Commercial Promissory Note, dated February 23, 2006, by
ProLink Solutions, LLC issued to David S. Band and Stanley B.
Kane, as co-trustees of the Putters Loan Trust, previously
filed as an Exhibit on Form 8-K filed on March 1, 2006, which
is hereby incorporated by reference.10.42
    
    License Agreement, by and between ProLink/ParView, LLC and
Optimal Golf Solutions, Inc., dated January 22, 2004,
previously filed as an Exhibit on Form 8-K filed on December
23, 2005, which is hereby incorporated by reference.10.43
    
    Amended and Restated Sales and Marketing Agreement, and
between ProLink/ParView, LLC and Textron Inc., dated April
2002, previously filed as an Exhibit on Form 8-K filed on
December 23, 2005, which is hereby incorporated by reference.10.5
    
    Settlement Agreement, dated October 26, 2006, by and among
GPS Industries, Inc., ProLink Solutions LLC, Elumina Iberica
S.A. and Elumina Iberica Limited, previously filed as an
Exhibit on Form 8-K filed on October 31, 2006, which is
hereby incorporated by reference.10.51
    
    Amended and Restated Exclusive Licensing and Distribution
Agreement with Elumina Iberica, S.A., dated May 8, 2006,
previously filed a an Exhibit on Form 8-K filed on May 12,
2006,
which is hereby incorporated by reference.10.6
    
    Compensation Agreement with Michael S. Browne, CPA (CFO)
dated July 18, 2006 previously filed as an exhibit on Form
8-K filed on October 27, 2006, which is hereby incorporated
by
reference.**10.61
    
    Consulting Agreement with Mr. Andrew L. Wing, the Companys
director, dated July 10, 2006, previously filed as an exhibit
on Form 8-K filed on July 13, 2006, which is hereby
incorporated by reference.**10.62
    
    Offer Letter of Employment by ProLink Solutions, LLC, to Dave
Gomez, dated September 6, 2005, previously filed as an
exhibit on Form 8-K filed on December 23, 2005, which is
hereby incorporated by reference.**
  37




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##### Table of Contents



ExhibitNumber
    
    Description10.63
    
    Offer Letter of Employment by ProLink Solutions, LLC, to
Danny Lam, dated September 6, 2005, previously filed as an
exhibit on Form 8-K filed on December 23, 2005, which is
hereby incorporated by reference.**10.64
    
    Non-Qualified Stock Option Agreement, previously filed as
Exhibit 10.2 on Form 8-K filed on December 26, 2006, which is
hereby incorporated by reference.10.65
    
    ProLink Holdings Corp. 2006 Employee, Director and Consultant
Stock Plan, previously filed as Exhibit 10.2 on Form 8-K
filed on December 26, 2006, which is hereby incorporated by
reference.31.1*
    
    Certificate 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*
    
    Certificate 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**
    
    Represents an employment agreement
  38




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##### Table of Contents



SIGNATURES
 th
 PROLINK HOLDINGS CORP.By:
    /s/ Lawrence D. BainLawrence D. BainChief Executive Officer  39




---



##### Table of Contents



SIGNATURES
 th
 PROLINK HOLDINGS CORP.By:
    /s/ Michael S. BrowneMichael S. BrowneChief Operating Officer and
Chief Financial Officer  40




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.03*
    
    First Modification to Loan and Security Agreement by and
among Comerica Bank, ProLink Holdings Corp. and ProLink
Solutions LLC, dated May 24, 2007 previously filed as Exhibit
10.1 on Form 8-K on May 5, 2007, which is hereby incorporated
by reference.10.2*
    
    Amended and Restated Letter Factoring Agreement between the
Companys wholly-owned subsidiary ProLink Solutions, LLC and
FOC Financial L.P., dated June 22, 2007.10.21*
    
    Amended and Restated Revolving Promissory Note between the
Companys wholly-owned subsidiary ProLink Solutions, LLC and
FOC Financial L.P., dated June 22, 2007.10.22*
    
    Letter Factoring Agreement between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG Event-Driven
Multi-Strategy Overseas, L.P., c/o Robeco Investment
Management, Inc., dated July 5, 2007.10.23*
    
    Letter Factoring Agreement between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG
Distressed/Special Situations Overseas, L.P., c/o Robeco
Investment Management, Inc., dated July 5, 2007.10.24*
    
    Revolving Promissory Note between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG Event-Driven
Multi-Strategy Overseas, L.P., c/o Robeco Investment
Management, Inc., dated July 5, 2007.10.25*
    
    Revolving Promissory Note between the Companys wholly-owned
subsidiary ProLink Solutions, LLC and Robeco WPG
Distressed/Special Situations Overseas, L.P., c/o Robeco
Investment Management, Inc., dated July 5, 2007.31.1*
    
    Certificate 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*
    
    Certificate 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
  41