-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Aese1tUQpAIxh+6i2f1pRfUNMpm8DEBK22SRVJL5g7eByBaxBJJ4SLIWJ6/CIStY RqqgeHJ1XTefLebfwKeaSw== 0000914190-98-000185.txt : 19980511 0000914190-98-000185.hdr.sgml : 19980511 ACCESSION NUMBER: 0000914190-98-000185 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONELINK COMMUNICATIONS INC CENTRAL INDEX KEY: 0000891389 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 411675041 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-25764 FILM NUMBER: 98613250 BUSINESS ADDRESS: STREET 1: 10340 VIKING DR STREET 2: STE 150 CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 6129969000 FORMER COMPANY: FORMER CONFORMED NAME: MARKETLINK INC DATE OF NAME CHANGE: 19950320 10QSB 1 FORM 10-QSB Securities & Exchange Commission Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-25764 OneLink Communications, Inc. (Exact name of small business issuer as specified in its charter) Minnesota 41-1675041 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 10340 Viking Drive, Suite 150 Eden Prairie, MN 55344 (Address of principal executive offices) 612-996-9000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] APPLICABLE TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 4,991,696 shares outstanding as of 4/30/98, par value $.01 per share. Transitional Small Business Disclosure Format (check one); YES [ ] NO [X] OneLink Communications, Inc. Form 10-QSB Quarter Ended March 31, 1998 Table of Contents PART I Financial Information Page No. Item 1. Financial Statements (Unaudited) Balance Sheets at December 31, 1997 and March 31, 1998 3 Statements of Operations for the three month period ended March 31, 1998 and 1997 4 Statements of Cash Flows for the three month period ended March 31, 1998 and 1997 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 PART II Other Information 9 Item 1. Legal Proceedings 9 Item 6 Exhibits and Reports on Form 8-K 9 SIGNATURES 10 Exhibit Index 11 Part 1 - Financial Information Item 1. Financial Statements OneLink Communications, Inc. Balance Sheets
March 31, 1998 December 31, (unaudited) 1997 ----------------------------------- Assets Current assets: Cash and cash equivalents $620,910 $1,074,556 Trade accounts receivable, net of allowance for doubtful accounts of $53,023 in 1997 and $13,537 in 1998 248,544 113,089 Minimum lease payments receivable 0 17,100 Computer parts and supplies, net of reserve for obsolescence of $0 in 1998 and $12,000 1997 16,132 4,032 Prepaid expenses 69,161 52,794 --------------- -------------- Total current assets 954,747 1,261,571 Property and equipment: Furniture and equipment 784,219 785,696 Equipment leased to others 276,018 273,608 --------------- -------------- 1,060,237 1,059,304 Accumulated depreciation (596,829) (508,975) --------------- -------------- 463,408 550,329 Other assets: Deposits 45,885 45,885 --------------- -------------- 45,885 45,885 --------------- -------------- Total Assets 1,464,040 1,857,785 =============== ============== Liabilities and shareholders' equity Current liabilities: Accounts payable $28,127 $74,125 Current maturities of long-term debt 26,870 33,773 Customer deposits 47,643 100,000 Deferred revenue 59,535 44,036 Other accrued liabilities 383,195 343,366 --------------- -------------- Total current liabilities 545,370 595,300 Long-term debt, net of current maturities 3,138 5,735 Shareholders' equity: Common stock, par value $.01 per share, Authorized shares-- 50,000,000; Issued and outstanding shares: 1998 and 1997--4,991,696 and 4,991,696, respectively 49,917 49,917 Additional paid-in capital 8,467,125 8,467,125 Accumulated deficit (7,601,509) (7,260,292) --------------- -------------- Total shareholders' equity 915,533 1,256,750 --------------- -------------- Total liabilities and shareholders' equity $1,464,040 $1,857,785 =============== ==============
See accompanying notes. OneLink Communications, Inc. Statements of Operations (unaudited)
Three months ended March 31, 1998 1997 ---------------------------- Revenues $518,415 $446,840 Cost of revenues 313,442 300,919 ---------------------------- Gross profit 204,973 145,921 Operating expenses: Selling 121,526 162,505 General and administrative 415,754 369,350 Research and development 0 47,728 Goodwill amortization 0 32,573 ---------------------------- Total operating expenses 537,280 612,156 ---------------------------- Operating loss (332,307) (466,235) Interest income 10,980 6,984 Interest expense (926) (3,528) Other expense (18,964) (98) ---------------------------- Net loss $(341,217) $(462,877) ============================ Net loss per share (Basic and Diluted) $(0.07) $(0.16) Weighted average number of shares outstanding (Basic and Diluted) 4,991,696 2,947,388
OneLink Communications, Inc. Statements of Cash Flows (unaudited)
Three months ended March 31, 1998 1997 -------------- --------------- Operating Activities: Net Loss $(341,217) $(462,877) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization of goodwill 88,029 99,842 Write-off of A/P 0 24,000 Net gain on sale of property and (811) 0 equipment Changes in operating assets and liabilities: Accounts receivable (135,455) (213,105) Minimum lease pmts 17,100 0 receivable Computer parts and supplies (12,100) (1,110) Prepaid expenses and deposits (16,367) 209,736 Accounts payable (45,998) (44,103) Accrued liabilities (12,528) (144,238) Deferred revenue 15,499 73,765 -------------- --------------- Net cash used in operating activities (443,848) (458,090) Investing Activities: Sale of property and equipment 2,000 -- Purchases of property and equipment (2,298) (64,476) -------------- --------------- Net cash used in investing activities (298) (64,476) Financing activities: Payments on short-term and long-term notes payable (9,500) (14,083) -------------- --------------- Net cash (used) provided by financing activities (9,500) (14,083) -------------- --------------- Decrease in cash and cash equivalents (453,646) (536,651) Cash and cash equivalents at beginning of period 1,074,556 709,253 -------------- --------------- Cash and cash equivalents at end of period $620,910 $172,602 ============== ===============
See accompanying notes. OneLink Communications, Inc. Notes to Financial Statements March 31, 1998 (Unaudited) Note. 1. Summary of Significant Accounting Policies. Interim Financial Information The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. Operating results for the three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. The accompanying financial statements and related notes should be read in conjunction with the audited financial statements of the Company, and notes thereto, for the fiscal year ended December 31, 1997, included in the Company's Form 10-KSB for the year ended December 31, 1997 and the Company's 1997 Annual Report to Shareholders. The financial information furnished reflects, in the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of the interim periods presented. Reclassifications Certain prior year items have been reclassified to conform with the 1998 presentation. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following table sets forth certain Statement of Operations data as a percentage of revenues. First First Quarter 1998 Quarter 1997 ----------------- ------------------ Revenues 100.0% 100.0% Cost of revenues 60.5 67.3 Gross profit 39.5 32.7 Operating expense: Selling 23.4 36.4 General & administrative 80.2 82.7 Research & development 0.0 10.7 Goodwill amortization 0.0 7.3 Total other income (expense) (1.7) .8 Net loss (65.8)% (103.6)% Revenues The Company's revenues of $518,415 increased $71,575 or 16% for the three months ended March 31, 1998 compared to $446,840 for the three months ended March 31, 1997. The increase in revenue was attributed to the Company's new line of business TeleSmartTM Data Services and its mapping services. In 1998, the Company recognized approximately $210,000 in revenue from its TeleSmartTM business line and an increase in revenue of approximately $30,000 in mapping services. These revenues were offset by a decrease of $156,000 in sales of access cards compared to the same period in 1997. The Company discontinued its access card operation in September, 1997 because it could not generate reasonable cash flow or profits in the foreseeable future, and did not fit the new strategic direction of the Company. As a result, the Company did not have comparable revenues from sales of access cards for the three months ended March 31, 1998. Revenues for the three months ended March 31, 1998, excluding the access card revenue in 1997 increased $227,798 or 78%. Cost of Revenues The Company's cost of revenues of $313,442 increased $12,523 or 4% for the three months ended March 31, 1998 compared to $300,919 for the three months ended March 31, 1997. Cost of revenues excluding the access card cost of revenues increased $135,879 or 77%. This increase in cost of revenues was related to the development and operation of TeleSmartTM Data Services. The Company's gross margin of 39.5% increased 6.8 percentage points for the three months ended March 31, 1998 compared to 32.7% for the three months ended March 31, 1997. The increase in the gross margin is due to the change in business mix and higher margins in the Company's mapping services and TeleSmartTM business line. Selling The Company's selling expenses of $121,526 decreased $40,979 or 25% for the three months ended March 31, 1998 compared to $162,505 for the three months ended March 31, 1997. This decrease was largely due to a reduction of sales staff resulting from management's adoption of a lower sales cost model and the realignment of the Company around its TeleSmartTM business. General and Administrative The Company's general and administrative expenses of $415,754 increased $46,404 or 13% for the three months ended March 31, 1998 compared to $369,350 for the three months ended March 31, 1997. The increase in general and administrative expenses are primarily related to the transfer of approximately $34,000 of personnel costs to general and administrative from research and development. Research and Development The Company incurred no research and development expenses for the three months ended March 31, 1998 compared to $47,728 for the three months ended March 31, 1997. In 1998, the Company elected a revised business model that does not require investment into research and development projects to grow the business. Goodwill The Company had no goodwill amortization for the three months ended March 31, 1998 compared to $32,573 for the three months ended March 31, 1997. In 1997, the Company amortized goodwill related to the Company's acquisition of its access card business, Provident Worldwide Communications. In September 1997, the remaining goodwill related to Provident was written-off. The asset of goodwill was determined to have been impaired because of the losses related to Provident and its inability to generate future operating income without substantial sales volume increase. Other Income and Expense Interest income of $10,980 increased $3,996 or 57% for the three months ended March 31, 1998 compared $6,984 for the three months ended March 31, 1997. The increase is a result of the increase in cash and cash equivalents held by the Company during the three-month period ended March 31, 1998. Cash and cash equivalents on March 31, 1998 were $620,910 compared to $172,602 on March 31, 1997. The increase in cash and cash equivalents is a result of the receipt by the Company of the proceeds of a private placement of its stock, commenced in September of 1997, that raised $2,000,000. The Company had other expenses of $18,964 for the three months ended March 31, 1998 compared to $98 for three months ended March 31, 1997. In the first quarter of 1998, the Company negotiated an out of court settlement of $20,000 for a lawsuit that began in 1996. Net Loss The Company incurred a net loss of $341,217 for the three months ended March 31, 1998 compared to a net loss of $462,877 for the three months ended March 31, 1997, a decrease of $121,660 or 26%. The decline in the Company's net loss was attributed to increased revenues and gross profit resulting from sales of the Company's TeleSmartTM Data Services products and management's decision to streamline the Company's operations resulting in a decline in operating expenses. Liquidity and Capital Resources The Company had cash of $620,910 and working capital of $409,377 as of March 31, 1998. Cash used in operating activities during the three-month period ended March 31, 1998 was $443,848. Management believes working capital will be sufficient to support the Company's operating capital needs for the remainder of the current fiscal year, assuming the Company is able to generate sufficient revenues and control expenses during the remainder of fiscal year 1998. The Company reviewed its strategy and various lines of business during fiscal year 1997 to determine the best course of action to stem ongoing losses and generate increased revenues in fiscal year 1998. As a result of the review, the Company exited and scaled back its operations in lines of business such as the access card business and its interactive voice response business that could not contribute a profitable cash flow and elected to focus on providing its enhanced management reporting services to the telecommunication industry through its TeleSmartTM Data Services. This service combines raw telecommunications data with geographic information service technology to produce enhanced caller reporting for business analysis and marketing purposes. Management believes it is first to market with this type of enhanced service and is focusing the Company's efforts on capitalizing on this opportunity. In November 1997, the Company signed a three-year agreement with US WEST to provide enhanced management reports to US WEST's customers through the Company's TeleSmartTM offering. US WEST is planning to introduce this product to its customers in the third quarter of 1998. The Company is aggressively marketing its TeleSmartTM Services to other Regional Bell Operating Companies, Independent Telephone Operating Companies, new Local Access Carriers, existing InterExchange Carriers and the Teleservices Industry. Management's projections with respect to the Company's ability to meet its working capital requirements in fiscal year 1998 are based upon: (i) generating sales that exceed the Company's fiscal 1997 sales; and (ii) avoiding any significant increase in expenses. Furthermore, delays in US West's product launch or delays in securing additional customers for the Company's TeleSmartTM offerings could have a material effect on the Company's projections and ability to continue its business. Although the Company believes it can increase its revenues and improve its cash flow, there are no assurances that it will be successful in doing so. Should the Company seek additional financing, there is no assurance that additional capital will be available to the Company on acceptable terms if at all. In order to obtain additional capital, the Company may issue equity securities at a price that would result in dilution to existing shareholders. Forward Looking Statements This Form 10-QSB contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934. All statements included herein that address activities, events or developments that OneLink expects, believes or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, expansion and other such matters are forward-looking statements. Actual events may differ materially from those anticipated in the forward-looking statements. Important factors that may cause such a difference include general economic conditions, changes in interest rates, increased competition in the Company's market area, acceptance by telecommunications customers and increased regulation of the telecommunications industry. PART II Other Information Item 1. Legal Proceedings On March 8, 1996, Don Lomax, a former employee of the Company, filed suit against the Company alleging breach of an unsigned employment contract. Mr. Lomax sought specific performance of the terms of the contract. The Company denied Mr. Lomax's claim and counterclaimed for breach of a non-compete agreement. On March 18, 1998 this suit was settled outside of court with the Company agreeing to pay Mr. Lomax $20,000. Items 2. through 5. Not Applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11. Computation of Earnings Per Common Share 27. Financial Data Schedule (b) Reports on Form 8-K None OneLink Communications, Inc. SIGNATURES Pursuant to the registration requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ONELINK COMMUNICATIONS, INC. (Registrant) Date: May 7, 1998 BY: /s/ Paul F. Lidsky President and Chief Executive Officer BY: /s/ Michael J. Ryan Chief Financial Officer Exhibit Index OneLink Communications, Inc. Form 10-QSB Exhibit Number Description 11 Computation of Earnings Per Common Share 27 Financial Data Schedule (filed only in electronic format) EX-11 2 COMPUTATION OF EARNINGS OneLink Communications Inc. Exhibit 11 Computation of Earnings Per Common Share Net income (loss) per common share is calculated based on the net income and net loss for the respective period and the weighted average number of common shares outstanding during the period. Common Stock equivalents (options and warrants) and not dilutive and anti-dilutive for the respective three month periods ended March 31, 1998 and 1997. EX-27 3 ARTICLE 5 FDS FOR 1ST QUARTER
5 1 U.S. Dollars 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 620,910 0 262,081 (13,537) 16,132 954,747 1,060,237 (596,829) 1,464,040 545,370 0 0 0 49,917 865,616 1,464,040 518,415 518,415 313,442 313,442 537,280 0 (926) (341,217) 0 (341,217) 0 0 0 (341,217) (.07) (.07)
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