**United States**

**Securities & Exchange Commission**

**Washington,D.C. 20549**

 

**FORM 10-QSB**

 

 

| **(Mark One)** |   |                                                                                         |
|----------------|--------|----------------------------------------------------------------------------------------------|
| **ý**     |   | **QUARTERLY REPORT PURSUANT TO SECTION 13 or  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|           |   | **For the quarterly period ended September  30, 2002**                                       |
|           |   |                                                                                         |
| **o**          |   | **TRANSITION REPORT UNDER SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**      |

 

Commission filenumber **0-25764**

 

**OneLink, Inc.**

(Exact name of smallbusiness issuer as specified in its charter)

 

| **Minnesota**                      |   | **41-1675041**       |
|------------------------------------|--------|----------------------|
| (State or other  jurisdiction      |   | (IRS Employer        |
| of incorporation  or organization) |   | Identification  No.) |
|                               |   |                 |

**10340Viking Drive, Suite 150**

**EdenPrairie, MN 55344**

(Address of principalexecutive offices)

 

**952-294-3398**

(Issuer’stelephone number)

 

           Checkwhether the issuer (1) filed all reports required to be filed by section 13 or15(d) of the Exchange Act during the past 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.  YES ý      NO o

 

 

APPLICABLE TOCORPORATE ISSUERS

           Statethe number of shares outstanding of each of the issuer’s classes of commonequity, as of the latest practicable date: 9,861,254 shares of common stock outstanding as of November 18, 2002,par value $.01 per share.

 

           TransitionalSmall Business Disclosure Format (check one): YES o      NO ý

 

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OneLink, Inc.

Form 10-QSB

Quarter EndedSeptember 30, 2002

 

 

Table of Contents

 

 
| PART I        | Financial Information                                            |   |
|---------------|------------------------------------------------------------------|--------|
|          |                                                             |   |
| Item  1.      | Financial Statements  (Unaudited)                                |   |
|          |                                                             |   |
|          | Balance Sheets at September  30, 2002 and                        |   |
|          | December 31, 2001                                                |   |
|          |                                                             |   |
|          | Statements  of Operations for the three months and nine          |   |
|          | months  ended September 30, 2002 and 2001                        |   |
|          |                                                             |   |
|          | Statements  of Cash Flows for the nine months                    |   |
|          | ended  September 30, 2002 and 2001                               |   |
|          |                                                             |   |
|          | Notes to Financial  Statements                                   |   |
|          |                                                             |   |
| Item  2.      | Management’s  Discussion and Analysis or Plan of Operations |   |
|          |                                                             |   |
| Item 3.       | Controls and  Procedures                                         |   |
|          |                                                             |   |
| PART II       | Other Information                                                |   |
|          |                                                             |   |
| Item 6.       | Exhibits and  Reports on Form 8-K                                |   |
|          |                                                             |   |
| SIGNATURE     |                                                             |   |
|          |                                                             |   |
| CERTIFICATION |                                                             |   |

 

 

2

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**PARTI — Financial Information**

** **

**Item 1.  Financial Statements**

** **

** **

**OneLink, Inc.**

Balance Sheets

 
|                                                                                                                                                             |   | **September  30,** |    | **December  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|-------------------|--------|
|                                                                                                                                                             |   | **2002**           |    | **2001**          |   |
|                                                                                                                                                             |   | **(unaudited)**    |    |              |   |
| Assets                                                                                                                                                           |   |               |    |              |   |
| Current assets:                                                                                                                                                  |   |               |    |              |   |
| Cash and cash  equivalents                                                                                                                                       |   | $                  | 13,838  |              | $      | 147,768 |   |
| Trade accounts  receivable                                                                                                                                       |   | 1,513              |    | 145,761           |   |
| Receivable, sale  of TeleSmart & TeleMetrics Products                                                                                                        |   | 100,000            |    | 0                 |   |
| Prepaid expenses                                                                                                                                                 |   | 55,270             |    | 65,207            |   |
| Total current  assets                                                                                                                                            |   | 170,621            |    | 358,736           |   |
|                                                                                                                                                             |   |               |    |              |   |
| Property and  equipment:                                                                                                                                         |   |               |    |              |   |
| Furniture and  equipment                                                                                                                                         |   | 49,927             |    | 513,793           |   |
| TeleSmart  equipment                                                                                                                                             |   | 0                  |    | 997,171           |   |
| Product  equipment                                                                                                                                               |   | 0                  |    | 214,505           |   |
| Web-based  software                                                                                                                                              |   | 0                  |    | 745,940           |   |
| Total property  and equipment                                                                                                                                    |   | 49,927             |    | 2,471,409         |   |
| Accumulated  depreciation and amortization                                                                                                                       |   | (49,194            | )       | (2,089,050        | )      |
|                                                                                                                                                             |   | 733                |    | 382,359           |   |
| Other assets:                                                                                                                                                    |   |               |    |              |   |
| Long-term  prepaid expense, net of amortization                                                                                                                  |   | 0                  |    | 516,509           |   |
| Deposits                                                                                                                                                         |   | 22,040             |    | 11,465            |   |
|                                                                                                                                                             |   | 22,040             |    | 527,974           |   |
|                                                                                                                                                             |   |               |    |              |   |
| Total assets                                                                                                                                                     |   | $                  | 193,394 |              | $      | 1,269,069 |   |
|                                                                                                                                                             |   |               |    |              |   |
| Liabilities and  Shareholders’ Equity                                                                                                                       |   |               |    |              |   |
|                                                                                                                                                             |   |               |    |              |   |
| Current  liabilities:                                                                                                                                            |   |               |    |              |   |
| Accounts payable                                                                                                                                                 |   | $                  | 49,215  |              | $      | 54,305 |   |
| Accrued payroll  and related taxes                                                                                                                               |   | 0                  |    | 33,212            |   |
| Accrued expenses                                                                                                                                                 |   | 60,393             |    | 62,110            |   |
| Deferred revenue                                                                                                                                                 |   | 0                  |    | 103,356           |   |
| Total current  liabilities                                                                                                                                       |   | 109,608            |    | 252,983           |   |
|                                                                                                                                                             |   |               |    |              |   |
| Shareholders’  equity:                                                                                                                                      |   |               |    |              |   |
| Series A  Convertible Preferred Stock, par value $.01 per share, Authorized shares3⁄41,400,000; Issued and outstanding shares: 2002 and  2001— 1,320,000 |   | 13,200             |    | 13,200            |   |
|                                                                                                                                                             |   |               |    |              |   |
| Common Stock,  par value $.01 per share, Authorized shares3⁄4                                                                                                 |   |               |    |              |   |
| 50,000,000;  Issued and outstanding shares: 2002 and 2001— 9,861,254                                                                                        |   | 98,612             |    | 98,612            |   |
|                                                                                                                                                             |   |               |    |              |   |
| Additional paid-in  capital                                                                                                                                      |   | 16,116,976         |    | 16,116,976        |   |
| Stock-subscription  receivable                                                                                                                                   |   | (223,922           | )       | (223,922          | )      |
| Accumulated  deficit                                                                                                                                             |   | (15,921,080        | )       | (14,988,780       | )      |
| Total  shareholders’ equity                                                                                                                                 |   | 83,786             |    | 1,013,086         |   |
|                                                                                                                                                             |   |               |    |              |   |
| Total  liabilities and shareholders’ equity                                                                                                                 |   | $                  | 193,394 |              | $      | 1,269,069 |   |

 

*Seeaccompanying notes to financial statements*.

 

3

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**OneLink, Inc.**

Statements of Operations

(unaudited)

 
|                                                              |   | **Three  months ended September 30,** |     | **Nine  months ended September 30,** |   |
|-------------------------------------------------------------------|--------|---------------------------------------|----------|--------------------------------------|--------|
|                                                              |   | **2002**                              |     | **2001**                             |   | **2002** |   | **2001** |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |
| Revenues                                                          |   |                                  |     |                                 |   |   |   |   |   |
| TeleSmart                                                         |   | $                                     | 0        |                                 | $      | 243,747 |   | $ | 419,517 |   | $ | 764,444 |   |
| Consulting                                                        |   | 0                                     |     | 73,750                               |   | 65,153 |   | 391,863 |   |
| Product/Set-up fees                                               |   | 0                                     |     | 9,655                                |   | 12,525 |   | 24,785 |   |
| Customer Service                                                  |   | 0                                     |     | 35,149                               |   | 59,854 |   | 100,218 |   |
| Total Revenues                                                    |   | 0                                     |     | 362,301                              |   | 557,048 |   | 1,281,310 |   |
| Cost of revenues                                                  |   | 2,528                                 |     | 252,964                              |   | 390,801 |   | 825,080 |   |
| Gross profit (loss)                                               |   | (2,528                                | )        | 109,337                              |   | 166,247 |   | 456,230 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |
| Operating expenses:                                               |   |                                  |     |                                 |   |   |   |   |   |
| Selling                                                           |   | 0                                     |     | 29,684                               |   | 32,285 |   | 353,438 |   |
| General and administrative                                        |   | 144,674                               |     | 391,881                              |   | 709,489 |   | 1,361,098 |   |
| Research and product development                                  |   | 0                                     |     | 31,826                               |   | 40,067 |   | 425,778 |   |
| Restructuring Fees                                                |   | 0                                     |     | 29,906                               |   | 0 |   | 29,906 |   |
| Impairment charge related to TeleSmart and TeleMetrics Products   |   | 0                                     |     | 0                                    |   | 336,507 |   | 0 |   |
| Total operating expenses                                          |   | 144,674                               |     | 483,297                              |   | 1,118,347 |   | 2,170,220 |   |
| Operating loss                                                    |   | (147,202                              | )        | (373,960                             | )      | (952,100 | ) | (1,713,990 | ) |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |
| Interest income                                                   |   | 0                                     |     | 3,725                                |   | 458 |   | 17,575 |   |
| Other income                                                      |   | 12,305                                |     | 0                                    |   | 19,342 |   | 0 |   |
| Net loss                                                          |   | $                                     | (134,897 | )                                    | $      | (370,235 | ) | $ | (932,300 | ) | $ | (1,696,415 | ) |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |
| Net loss per common share:                                        |   |                                  |     |                                 |   |   |   |   |   |
| Basic and Diluted                                                 |   | $                                     | (0.01    | )                                    | $      | (0.04 | ) | $ | (0.09 | ) | $ | (0.17 | ) |
| Weighted average number of shares outstanding (Basic and Diluted) |   | 9,861,254                             |     | 9,861,254                            |   | 9,861,254 |   | 9,861,254 |   |

 

*Seeaccompanying notes to financial statements.*

 

4

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** **

**OneLink, Inc.**

Statements of Cash Flows

(unaudited)

 
|                                                                               |   | **Nine  months ended September 30,** |       |
|------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                               |   | **2002**                             |       | **2001** |   |
| **Operating activities:**                                                          |   |                                 | ** ** |   | ** ** |
| Net loss                                                                           |   | $                                    | (932,300   | ) | $ | (1,696,415 | ) |
| Adjustments to  reconcile net loss to net cash used in operating activities:       |   |                                 |       |   |   |
| Depreciation and  amortization                                                     |   | 210,326                              |       | 444,457 |   |
| Net gain on sale  of property and equipment                                        |   | (7,241                               | )          | 0 |   |
| Loss on sale of  TeleSmart and TeleMetrics Products                                |   | 336,507                              |       | 0 |   |
| Changes in  operating assets and liabilities:                                      |   |                                 |       |   |   |
| Accounts  receivable                                                               |   | 144,243                              |       | 196,757 |   |
| Prepaid expenses  and deposits                                                     |   | 85,447                               |       | 155,629 |   |
| Accounts payable  and accrued expenses                                             |   | (40,019                              | )          | (79,572 | ) |
| Deferred revenue                                                                   |   | (53,916                              | )          | 124,701 |   |
| Net cash used in  operating activities                                             |   | (256,949                             | )          | (854,443 | ) |
|                                                                               |   |                                 |       |   |   |
| **Investing activities:**                                                          |   |                                 | ** ** |   | ** ** |
| Proceeds from  sale of property and equipment                                      |   | 123,019                              |       | 257 |   |
| Purchases of  property and equipment                                               |   | 0                                    |       | (83,422 | ) |
| Net cash  provided by (used in) investing activities                               |   | 123,019                              |       | (83,165 | ) |
|                                                                               |   |                                 |       |   |   |
| **Financing activities:**                                                          |   |                                 | ** ** |   | ** ** |
| Proceeds from  issuance of Series A convertible preferred stock, net               |   | 0                                    |       | 615,833 |   |
| Net cash  provided by financing activities                                         |   | 0                                    |       | 615,833 |   |
|                                                                               |   |                                 |       |   |   |
| Decrease in cash  and cash equivalents                                             |   | (133,930                             | )          | (322,475 | ) |
| Cash and cash  equivalents at beginning of period                                  |   | 147,768                              |       | 653,602 |   |
| Cash and cash  equivalents at end of period                                        |   | $                                    | 13,838     |   | $ | 331,127 |   |
|                                                                               |   |                                 |       |   |   |
| **Supplemental Disclosures of Cash  Flow Information:**                            |   |                                 |       |   |   |
| Cash paid during  the period for interest                                          |   | $                                    | 0          |   | $ | 0 |   |
| Cash paid during  the period for taxes                                             |   | $                                    | 0          |   | $ | 0 |   |
|                                                                               |   |                                 |       |   |   |
| **Supplemental Disclosure of Non-cash  Investing and Financing Activities:**       |   |                                 |       |   |   |
| Accounts  receivable related to the sale of the TeleSmart and TeleMetrics Products |   | $                                    | 214,300    |   | $ | 0 |   |

 

*See accompanying notes to financial statements.*

 

5

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**OneLink,Inc.**

Notes to FinancialStatements

September 30, 2002and 2001

(unaudited)

 

**Note1.  Summary of Significant AccountingPolicies.**

 

*Interim Financial Information*.  Theaccompanying unaudited financial statements have been prepared in accordancewith accounting principles generally accepted in the United States of Americaand pursuant to the rules and regulations of the U. S. Securities and ExchangeCommission for interim financial information. Accordingly, certain information and footnote disclosures normallyincluded in financial statements prepared in accordance with accountingprinciples generally accepted in the United States of America have been omittedpursuant to such rules and regulations. Operating results for the nine and three months ended September 30, 2002are not necessarily indicative of the results that may be expected for the yearending December 31, 2002.  Theaccompanying financial statements and related notes should be read inconjunction with our audited financial statements, and notes thereto, for thefiscal year ended December 31, 2001, contained in our Annual Report on Form10-KSB for the year ended December 31, 2001 (Readers should also carefullyreview Note 2 below discussing the sale of assets).

 

The financial information furnished reflects, in theopinion of management, all adjustments, consisting of normal recurringaccruals, necessary for a fair presentation of the results of the interimperiods presented.

 

*Revenue Recognition*.  Revenue forservices is recognized at the end of each month in which services are provided.Revenue for product sales is recorded upon shipment.  Revenue on certain contracts may require revenue recognitionunder contract accounting rules, whereby revenue is recognized on apercentage-of-completion basis. Billings in excess of costs and estimated earnings are included in deferredrevenue.  The Company ensures that thetransactions comply with the seven conditions and six considerations containedin Accounting and Auditing Enforcement Release No. 108 of the SEC.

 

*Net Loss Per Share*.  Basic anddiluted loss per share is computed by dividing net loss by the weighted-averagenumber of common shares outstanding for the reporting period.  Dilutive common-equivalent shares have notbeen included in the computation of diluted net loss per share because theirinclusion would be antidilutive. Antidilutive common equivalent shares issuable based on future exerciseof stock options or warrants could potentially dilute basic loss per share insubsequent years.  All options andwarrants outstanding were antidilutive for the nine and three months endedSeptember 30, 2002 and 2001.

 

 

6

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**Note 2.  Sale ofAssets**

 

OnApril 24, 2002, the Company announced that its ability to generate cash flowwas severely impacted by the downturn in the telecommunications market.  The severe downturn greatly delayed thedeployment of the Company’s products by Regional Bell Operating Companies.  On June 3, 2002, the Company announced thata letter of intent was signed with CallVision, Inc. pursuant to which CallVisionagreed in principle to purchase substantially all of the Company’s assets.  The Company entered into an asset purchaseagreement with CallVision, Inc. on June 28, 2002, and ceased operations as ofJuly 1, 2002.  The proceeds to bereceived from the sale of the Company’s assets are not expected to besufficient to allow the Company to make any distributions to the Company’sshareholders.

 

Pursuantto the asset purchase agreement with CallVision, the Company will sellsubstantially all its assets in exchange for cash payments of up to$214,300.  Upon the execution anddelivery of the asset purchase agreement, CallVision paid the Company $100,000in cash, plus an additional $14,300 in cash for the Company’s June 2002 officerent and T-1 bandwidth.  At the closingof the asset sale, CallVision will pay the Company $100,000 in cash and anamount equal to 15% of revenue generated from certain sales of current orfuture versions of the Company’s TeleSmart and TeleMetrics products during theperiod from closing through December 31, 2003. The closing of the asset purchase agreement is contingent upon theapproval of the asset sale by the Company’s shareholders.  The Company has called a special meeting ofthe shareholders to be held on Friday, November 22, 2002, in order to approvethe asset sale.  During the nine monthsended September 30, 2002, the Company record an impairment loss on along-term prepaid expense, and property and equipment sold to CallVision ofapproximately $336,000 in connection with the proposed asset sale toCallVision.

 

**Note3.  Recently Issued AccountingPronouncements**

In October 2002, the Financial Accounting Standards Board (FASB) issuedStatement of Financial Accounting Standards (SFAS) No. 147, “Acquisitions ofCertain Financial Institutions.”  SFASNo. 147 is effective October 1, 2002. The Company believes the adoption of SFAS No. 147 will not have amaterial effect on the Company’s financial position or results of operations.

 

 

7

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**Item2.  Management’s Discussion and Analysisor Plan of Operations**

 

Theaccompanying management’s discussion and analysis of our financial conditionand results of operations should be read in conjunction with Management’sDiscussion and Analysis of Financial Condition and Results of Operations andour audited financial statements, and notes thereto, for the fiscal year endedDecember 31, 2001, included in our Annual Report on Form 10-KSB for the yearended December 31, 2001.

 

**Results of Operations**

 

Thefollowing table sets forth certain Statements of Operations data as apercentage of revenues (percentages are not included for the three-monthperiods since no revenues were recorded during the three months ended September30, 2002).

 
|                                |   | **Nine**               |   | **Nine**                |   |
|-------------------------------------|--------|------------------------|--------|-------------------------|--------|
|                                |   | **Months**             |   | **Months**              |   |
|                                |   | **Ended**              |   | **Ended**               |   |
|                                |   | **September 30, 2002** |   | **September  30, 2001** |   |
| Revenues                            |   | 100.0                  | %      | 100.0                   | %      |
| Cost of revenues                    |   | 70.2                   |   | 64.4                    |   |
| Gross profit                        |   | 29.8                   |   | 35.6                    |   |
| Operating  expenses:                |   |                   |   |                    |   |
| Selling                             |   | 5.8                    |   | 27.6                    |   |
| General &  administrative       |   | 127.4                  |   | 106.2                   |   |
| Research &  product development |   | 7.2                    |   | 33.2                    |   |
| Impairment  charge                  |   | 60.4                   |   | 0.0                     |   |
| Total operating  expenses           |   | 200.8                  |   | 169.4                   |   |
| Other income  (expense)             |   | 3.6                    |   | (1.4                    | )      |
| Net loss                            |   | (167.4                 | )%     | (132.4                  | )%     |

 

*Revenues*. Revenues for the third quarter 2002 were $0 compared to $362,301 for thethird quarter of 2001.  In 2002,year-to-date revenues were $557,048, a decrease of $724,262 or 57% compared to2001 year-to-date revenues of $1,281,310. The decrease in revenues is a result of (i) fewer consulting projectsdone for existing customers in 2002, (ii) a decline in TeleSmart revenuesmainly due to the loss of the Company’s major customer and the downturn in thetelecommunications market, and (iii) the cessation of the Company’s operationson July 1, 2002.  The Company does notexpect to have any revenues in the near future.

 

*Cost of Revenues*. The cost of revenues for the third quarter of 2002 was $2,528, adecrease of $250,436 or 99% compared to $252,964 for the third quarter of2001.  Year-to-date cost of revenues for2002 decreased to $390,801 from$825,080 in 2001.  This was a decreaseof $434,279 or 53%.  The decrease wasprincipally caused by (i) reductions of external-consulting costs byapproximately $123,000 from the same period in 2001, (ii) workforce reductionsin 2002, and (iii) the cessation of the Company’s operations on July 1,2002.  Because the Company ceasedoperations on July 1, 2002, the Company expects any future cost of revenues tobe minimal.

 

 

8

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*Gross Margin*.  Our gross profit margin was $(2,528) for the three months endedSeptember 30, 2002 compared to $109,337 for the three months endedSeptember 30, 2001.  The decrease in thegross margin for the three months ended September 30, 2002 relates to theCompany not having any sales during the quarter.  For the nine months ended September 30, 2002, our gross profitmargin was 30% compared to 36% for the nine months ended September 30,2001.  The decrease for the nine monthsended September 30, 2002 versus 2001 primarily relates to a decrease inconsulting revenues (which revenues generally result in a higher gross margin)and the cessation of the Company’s operations beginning on July 1, 2002.

 

*Selling Expenses*. Selling expenses for the third quarter of 2002 were $0 compared to$29,684 for the third quarter of 2001. Year-to-date selling expenses for 2002 were $32,285 compared to $353,438for the year-to-date 2001, a decrease of $321,153 or 91%.  Management minimized any excessive sellingexpenses during 2002 in anticipation of the sale of assets to CallVision, Inc.and the decision to cease operations. Sales personnel positions were eliminated and the use of outsideconsultants was discontinued.

 

*General and Administrative Expenses*.  General and administrative expenses for thethird quarter of 2002 were $144,674 compared to $391,881 for the third quarterof 2001, a decrease of $247,207 or 63%. Year-to-date general and administrative expenses were $709,489 comparedto $1,361,098 for the same period in 2001, a decrease of $651,609 or 48%.  The year-to-date decrease from 2001 mainlyresulted from reductions in external-consulting costs due to less need tooutsource work and reductions of overall expenses of the Company.

 

*Research and Product Development Expenses*.  Research and product development expensesfor the third quarter of 2002 were $0 compared to $31,826 for the third quarterof 2001.  Year-to-date 2002 research andproduct development expenses were $40,067 compared to $425,778 for the sameperiod in 2001, a decrease of $385,711 or 91%. To minimize costs and preserve capital, the Company discontinued anyprojects related to research and product development during the second quarterof 2002.  The Company did not engage inany research and development projects in the third quarter of 2002, and doesnot anticipate engaging in any research and development projects in the nearfuture.

 

*Other Income and Expense*.  Interest income for the third quarter of2002 was $0, compared to $3,725 for the third quarter of 2001.  For the nine months ended September 30,2002, interest income was $458, a decrease of $17,117 or 97% compared to$17,575 in the same period in 2001.  Thedecrease was a result of lower cash and cash equivalents held during the threeand nine-month periods ended September 30, 2002.  We had no interest expense in 2002 or 2001.  During the nine months ended September 30,2002, the Company recorded an impairment loss on a long-term prepaid expenseand property and equipment sold to CallVision, Inc. of $336,507.  Other non-interest income was $12,305 forthe three months ended September 30, 2002, including finance charges and a gainfrom the sale of miscellaneous property and equipment.

 

*NetLoss*.  We incurred a net loss of $134,897 for thethird quarter of 2002 compared to a net loss of $370,235 for the third quarterof 2001, a decrease of $235,338 or 64%. For 2002 year-to-date, we incurred net losses of $932,300 compared to$1,696,415 for 2001 year-to-date, 

 

9

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which represents a decrease of $764,115 or 45%.  The decrease in our net loss resulted fromdecreased operating and depreciation expenses in connection with our decisionto cease operations on July 1, 2002 and other factors noted above.

 

**Liquidity and Capital Resources**

 

We had cash of$13,838 and working capital of $61,013 as of September 30, 2002.  Cash used in operating activities during thenine months ended September 30, 2002 was $256,949.  Cash provided by investing activities during the same nine-month periodwas $123,019, which sum was related to the sale of miscellaneous property andequipment and the sale of TeleSmart and TeleMetrics products.  The Company does not have enough capital tofund its current minimal operations for more than three fiscal quarters(assuming the receipt of the remaining $100,000 due from CallVision, Inc. uponthe consummation of the asset sale).

 

On July 1, 2002the Company ceased business operations. Accordingly, the Company engaged in no business operations during thethree months ended September 30, 2002, and does not expect to resume businessoperations (of any character) in the near future.  Because the Company does not anticipate engaging in any businessoperations, the Company does not expect to have any income from operations inthe near future.

 

On June 28, 2002,the Company entered into an asset purchase agreement with CallVision, Inc., aWashington corporation, pursuant to which the Company has agreed to sellsubstantially all of its assets to CallVision. The Company has ceased conducting business operations and hastransferred physical possession of its operating assets to CallVision.  The consummation and closing of the assetsale is contingent upon the approval of the Company’s shareholders.

 

To date, we havenot generated revenues sufficient to break even, and have supported businessoperations through a combination of borrowings and equity sales.  Important factors in the board of director’sdetermination to enter into the proposed asset sale with CallVision, Inc.included but were not limited to the following:

 

•                  our inability to continue funding existing operations with our currentcash flow

•                  our inability to obtain additional equity or debt financing

•                  our financial projections, which indicated that we could not increaserevenues quickly enough to achieve positive cash flow prior to exhausting ourworking capital

•                  the slowdown in the telecommunications industry resulting from thegeneral economic recession, and the concomitant significant reduction inspending on advertising, marketing and promotion by telephone companies

•                  after seeking strategic partners and/or potential purchasers for ourassets, we were unable to find a superior alternative to the proposed sale ofassets to CallVision

 

Our board of directors believes that the proposedasset sale is in the best interests of OneLink and its shareholders.  Accordingly, our board of directors hasunanimously approved the form, terms and provisions of the asset sale; determinedthat the asset sale is fair to and in the 

 

 

10

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best interests of OneLink and its shareholders; approved and declaredthe asset sale advisable pursuant to an asset purchase agreement containingcustomary and standard terms and provisions and approved by our board ofdirectors; and recommended that our shareholders approve the asset sale.

 

The Company has called and noticed a special meetingof the shareholders to be held on November 22, 2002 in order to approve thesale of substantially all of the Company’s assets to CallVision.  Shareholders holding a majority of theCompany’s outstanding voting shares have already agreed in writing to approvethe asset sale pursuant to voting agreements they have entered into withCallVision.  Pursuant to the votingagreements, these shareholders have agreed not to transfer or grant votingrights related to any of their shares of capital stock of OneLink.  The shareholders have further agreed to votetheir shares in favor of the asset sale at the special meeting.  In the event that the shareholders do notappear in person to so vote their shares, they have provided CallVision withirrevocable proxy appointments granting authority to CallVision to vote theirshares in favor of the asset sale on their behalf.  In addition, the shareholders have agreed not to solicit orencourage third parties to make competing acquisition proposals for shares ofOneLink stock or OneLink assets, or to enter into negotiations with OneLink forthe purpose of making any such competing acquisition proposals.  Accordingly, the Company expects to receivethe shareholders’ approving vote for the asset sale at the special meeting, andfurther expects to close the sale prior to December 31, 2002.

 

Subject to regulatoryconsiderations, OneLink’s common stock will continue to be quoted on theover-the-counter bulletin board on the “pink sheets” after the asset sale, andthe Company will make reasonable efforts to continue filing disclosure reportswith the SEC required by the Securities and Exchange Act of 1934, as amended,in order to locate a private company seeking to become public through a mergerwith a public shell.  In this regard,the Company currently estimates that it will maintain approximately $15,000 forthis purpose after the closing of the asset sale, and that it can likelymaintain OneLink’s public reporting status for three fiscal quarters after theconsummation of the asset sale.

 

**CriticalAccounting Estimates**

 

Our criticalaccounting policies are those (i) having the most impact to the reporting ofour financial condition and results, and (ii) requiring significant judgmentsand estimates.  Our critical accountingpolicies include those related to property and equipment and long-term prepaidexpense.  At June 30, 2002, the Companywas deemed to have sold substantially all of its assets to CallVision andaccordingly recorded, for the nine months ended September 30, 2002, animpairment loss of approximately $336,000, determined by using the fair marketvalue of the assets sold pursuant to the Asset Purchase Agreement withCallVision.

 

**RecentlyIssued Accounting Pronouncements**

In October 2002, the Financial Accounting Standards Board (FASB) issuedStatement of Financial Accounting Standards (SFAS) No. 147, “Acquisitions ofCertain Financial Institutions.”  SFASNo. 147 is effective October 1, 2002. The Company believes the adoption of SFAS No. 147 will not have amaterial effect on the Company’s financial position or results of operations.

 

 

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***Forward Looking Statements***

 

This Form 10-QSBcontains certain forward-looking statements within the meaning of Section 27Aof the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended.  Allstatements included herein regarding activities, events or developments that weexpect, believe or anticipate will or may occur in the future, including suchthings as future capital expenditures (including the amount and naturethereof), business strategy and measures to implement strategy, competitivestrengths, goals, expansion and other such matters are forward-lookingstatements.

 

Actual events maydiffer materially from those anticipated in the forward-lookingstatements.  Important factors that maycause such a difference include the exhaustion of our working capital and ourinability to continue preparing and filing SEC disclosure reports and identifyor consummate a merger with a privately held company, the fact that we nolonger have possession of our operating assets, that we are highly dependent onthe services of a certain corporate officer, and that our assets may becomeless marketable in the event the asset sale is not consummated or there aresignificant changes in technology.  Foradditional information regarding these and other factors, see our Annual Reporton Form 10-KSB for the year ended December 31, 2001 and other recent filingswith the SEC.

 

**Item3.  Controls and Procedures**

 

Within 90 days prior tothe filing of this quarterly report, the Company’s Chief Executive Officer andits Chief Financial Officer evaluated the Company’s disclosure controls andprocedures as required pursuant to Rule 13a-14 under the Securities andExchange Act of 1934, as amended.  Basedon this evaluation, the Chief Executive Officer and its Chief Financial Officerdetermined that such controls and procedures were effective.  There were no significant changes ininternal controls that could significantly affect the disclosure controls andprocedures since the date of the evaluation.

 

**PARTII  Other Information**

 

**Item6.  Exhibits and Reports on Form 8-K**

 

(a)        Exhibits

 

99.1         Certification under Section 906

 

(b)       Reports on Form 8-K

 

                None

 

 

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**SIGNATURE**

 

Pursuant to theregistration requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

 
|                           |   | ONELINK, INC.                                             |
|--------------------------------|--------|-----------------------------------------------------------|
|                           |   |                                                      |
|                           |   |                                                      |
|                           |   |                                                      |
| Date:   November 19, 2002 | By:    | /s/  Paul F.  Lidsky                                 |
|                           | Title: | Chief Executive Officer and principal accounting  officer |

 

 

 

 

237972.2

 

 

 

 

 

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**CERTIFICATION**

 

 

I, Paul F. Lidsky, theChief Executive Officer and principal financial officer of OneLink, Inc.,certify that:

 

1.        I have reviewed this quarterly report onForm 10-QSB of OneLink, Inc.;

 

2.        Based on my knowledge, this quarterlyreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3.        Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4.          I amresponsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and wehave:

 

a)              Designed such disclosure controls andprocedures to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this quarterly reportis being prepared;

 

b)             Evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this quarterly report (the “Evaluation Date”); and

 

c)              Presented in this quarterly report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5.          Ihave disclosed, based on my most recent evaluation, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent function):

 

a)              All significant deficiencies in the designor operation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b)             Any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6.          Ihave indicated in this quarterly report whether or not there were significantchanges in internal controls or in other factors that could significantlyaffect internal controls subsequent to the date of our most recent evaluation,including any corrective actions with regard to significant deficiencies andmaterial weaknesses.

 

Date:  November 19, 2002

 

 

| By:    |   | /s/ Paul F. Lidsky                                       |
|--------|--------|----------------------------------------------------------|
| Name:  |   | Paul F. Lidsky                                           |
| Title: |   | Chief Executive Officer and principal financial  officer |
|   |   |                                                     |

 

 

 

 

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