10-Q 1 qai10q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ----------------- FORM 10Q ----------------- (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2008 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to ___________ Commission file number: 000-50162 QLINKS AMERICA, INC. ------------------------------------------------------- (Exact name of registrant as specified in its charter) Colorado 90-0138998 -------- ---------- (State of Incorporation) (IRS Employer ID Number) P.O. Box 631837 Highlands Ranch, CO 80163 ----------------------------------------------- (Address of principal executive offices) 303-328-3290 -------------------------- (Registrant's Telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 the filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X] Accelerated filer [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X] Indicate the number of share outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of May 12, 2008, there were 18,781,680 shares of the registrant's common stock issued and outstanding.

PART I ITEM 1. FINANCIAL STATEMENTS

F-1

The accompanying notes are an integral part of these financial statements. F-2

F-3

F-4 QLINKS AMERICA, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies Organization Organization. Qlinks America, Inc. ("Company", "Qlinks") was incorporated on February 18, 2003 in the State of Colorado. Qlinks America has been a development-stage company with plans to deliver technology-based, loyalty and advertising solutions within existing Communities of Interest ("COI") to increase revenues and profits for consumer packaged goods (CPG) retailers, distributors, and manufacturers. In late 2007, the Company could not acquire sufficient capital to sustain its current plans. In addition, the Company's current debt obligations could not be fully serviced. Most of the Company's large debt obligations were due at the end of December 2007. As a result, the Company initiated discussions with large debt holders to alleviate that debt through a transfer of certain business assets to these debt holders. On February 1, 2008, the operations of the Company were suspended. At this time, management of the Company is focusing its efforts on securing financing to pay outstanding debts and supporting future business activities and the development of its business plan. The Company plans to seek a business acquisition or combination. The Company will need to fund the deficits in operating capital through debt or private placements of its common stock, which is its sole source of liquidity. Basis of Presentation Development Stage. The Company has not earned any significant revenues from its limited operations. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth is Statement of Financial Accounting Standard No. 7 ("SFAS No. 7"). Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation, stockholders' equity (deficit) and cash flows disclose activity since the date of the Company's inception. Interim Presentation. In the opinion of the management of the Company, the accompanying unaudited consolidated financial statements include all normal adjustments considered necessary to present fairly the financial position and operating results of the Company for the periods presented. The financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007. It is management's opinion that when the interim financial statements are read in conjunction with the December 31, 2007 Annual Report on Form 10-KSB, the disclosures are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results for a full year or any future period. Significant Accounting Policies Use of Estimates. The preparation of financial statements in conformity with GAAP 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, as well as the reported amounts of revenue and expenses during the reporting period. Significant estimates have been made by management with respect to allowance for doubtful accounts, income tax valuation allowance, fair values of long-lived assets, valuation of intangible assets and goodwill, and fair value of stock-based compensation amounts. Actual results could significantly differ from these estimates. Cash and Cash Equivalents. The Company maintains the majority of its cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $100,000 per commercial bank. As of March 31, 2008, the Company had zero amounts in excess of the FDIC insured limits. For purposes of the statement of cash flows, the Company considers all cash and highly liquid investments with initial maturities of three months or less to be cash equivalents. F-5 Revenue recognition Advertising sales from the Company's websites are generally purchased with a pre-paid contract for a specified number of months. Revenue from pre-paid advertising sales is recorded as a liability on the balance sheet at the time of purchase/payment and revenues are subsequently recognized ratably over the life of the advertising contract as the advertising is provided. Advertising sales from the Company's electronic advertising kiosks is recognized at the end of each month for which advertising was provided. Ecommerce revenue is recognized at the point-of-sale as the payment is collected immediately (via credit card) and there are no further obligations of the Company. Consulting revenue is recognized upon the performance of services. Cost of revenue generally represents the merchant fees (credit card processing) related to Ecommerce transactions and supplies and materials related to our electronic advertising kiosks. Net Loss per Share. Net loss per share is calculated in accordance with the SFAS No. 128, "Earnings per Share". SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB No. 15). Net loss per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as, if funds obtained thereby were used to purchase common stock at the average market price during the period. Fair value of financial instruments. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2008 and December 31, 2007. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable and notes payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Other Comprehensive Income (Loss). The Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods. Stock-based compensation. Beginning January 1, 2006, the Company adopted the provisions of and accounts for stock-based compensation in accordance with the Statement of Financial Accounting Standards ("SFAS") No. 123 - revised 2004 ("SFAS 123R"), Share-Based Payment. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation provisions of SFAS 123R apply to new grants and to grants that were outstanding as of the effective date and are subsequently modified. All options granted and outstanding during the periods presented are fully-vested. The Company did not grant any options during the three months ended March 31, 2008. Recent Accounting Pronouncements In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 will be effective for us for our fiscal year beginning on January 1, 2008. We are currently assessing the impact the adoption of SFAS No. 157 may have on our financial statements. F-6 In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations, or SFAS No. 141R. SFAS No. 141R will change the accounting for business combinations. Under SFAS No. 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141R will change the accounting treatment and disclosure for certain specific items in a business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations we engage in will be recorded and disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time. We are still assessing the impact of this pronouncement. In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No. 160". SFAS No. 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. We believe that SFAS 160 should not have a material impact on our financial position or results of operations. In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115. This statement will be effective for us for our fiscal year beginning on January 1, 2008, and will permit entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. The possible adoption of this statement is not expected to have a material effect on our financial statements. In March 2008, the FASB issued SFAS No. 161 Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 requires additional disclosure related to derivatives instruments and hedging activities. The provisions of SFAS No. 161 are effective as of January 1, 2008 and the Company is currently evaluating the impact of adoption. 2. Going Concern In the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company's ability to continue as a going concern. The Company's interim financial statements for the three months ended March 31, 2008 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported net income of $ 254,676 for the three months ended March 31, 2008, and an accumulated deficit of $3,199,865 as of March 31, 2008. At March 31, 2008, the Company's total current liabilities exceed total current assets by $613,975. The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. 3. Goodwill During the three months ended March 31, 2008, the Company performed a review of the value of its goodwill which had a carry amount of $600,000. Upon the completion of an impairment review of goodwill, the Company decided to write down goodwill by $600,000. This adjustment resulted primarily from the lack of revenue generated by the Company, the continued cash flow challenges faced by the Company and the Company's suspension of its operations. After the impairment of $600,000, the Company's goodwill, at March 31, 2008, had a value of $0. F-7 4. Debt The Company's debt consists of the following at March 31, 2008:

During the three months ended March 31, 2008, the Company transferred property, equipment, technology and licenses with a net value of $274,246 to note holders holding notes totaling a $1,142,550 as payment on the notes. The holders of the notes released the Company from any further obligations under the notes. As a result, the Company recorded a gain of $942,780 on the settlement of the debt. 5. Stockholders' Deficit Common Stock. During the three months ended March 31, 2008, the Company did not issue any shares of its common stock. Stock Option Plan In January 2007 our stockholders approved the "Key Personnel Stock Option Plan" (the "Plan"). Initially, 2,000,000 shares were reserved for issuance under the Plan. Options issued under the Option Plan are at the discretion of the Board of Directors, including the vesting provisions of each stock option granted. Options are granted with an exercise price equal to the market price of our common stock on the date of grant and generally vest over four years. F-8 The fair value of each option grant is estimated on the date of grant using the Black-Scholes model. The Black-Scholes model uses four assumptions to calculate the fair value of each option grant. The expected term of share options granted is derived using the simplified method prescribed by the SEC Staff Accounting Bulletin 107, "Share-Based Payment." The risk-free interest rate is based upon the rate currently available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the stock options. The expected volatility is based upon historical volatility of our common stock over a period equal to the expected term of the stock options. The expected dividend yield is zero and is based upon historical and anticipated payment of dividends. During the three months ended March 31, 2008, the Company did not issue any options under its stock option plan. During the three months ended March 31, 2007, pursuant to the terms of the Plan we granted options to purchase shares of the common voting stock of the corporation to six individuals on January 8, 2007. The options provide for the purchase of 775,000 shares of common voting stock at an exercise price of $0.50 per share. The options are exercisable in increments as they vest to each optionee. The options are exercisable for a period of five years from the date of the vesting of each increment. The following is a summary of stock option activity under the Plan for the three months ended March 31, 2008:

As of March 31, 2008, there was approximately $28,163 of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted average period of two years. F-9 Stock Options and Warrants (does not include options issued under the Company's "Key Personnel Stock Option Plan") During the three months ended March 31, 2008, an option for 250,000 shares of common stock expired. At March 31, 2007, the Company does not have any options outstanding outside of its Key Personnel Stock Option Plan. During

6. Related party transactions During the three months ended March 31, 2008, Mr. Mulford, the Chief Executive Officer and President of the Company, loaned the Company funds totaling $5,000, as described in Note 4. During the three months ended March 31, 2008, the Company accrued $12,500 of unpaid compensation owed to Mr. Mulford, the Chief Executive Officer and President of the Company. During the three months ended March 31, 2008, Mr. Mulford, the Chief Executive Officer and President of the Company, forgave debt totaling $40,460 owed to him by the Company. F-10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements. The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2007, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 2 to the unaudited quarterly financial statements. EXECUTIVE SUMMARY In late 2007 and early 2008, the Company could not acquire sufficient capital to sustain its operations with net losses. In addition, the Company's current debt obligations could not be fully serviced. Most of the Company's large debt obligations were due at the end of December 2007. As a result, the Company initiated discussions with large debt holders to alleviate that debt and certain collateral was repossessed by secured creditors. On February 1, 2008, as result of not being able to service our existing debt load while continuing to execute our business plan, we suspended our operations in the advertising solution business. During the three months ended March 31, 2008, we transferred property, equipment technology and licenses with a net value of $274,246 to promissory note holders holding notes totaling $1,142,550, as payment on the notes. The holder of the notes, released the Company from any further obligations under the notes Prior to the suspension of our operations in February 2008, our operations consisted of attempting to deliver electronic kiosk internet and other media based targeted advertising solutions for our clients through the usage of multi-channel venues. We focused our efforts, on behalf of our clients, on Communities of Interest (COI), which are those areas where the consumer lives and shops. We offered solutions through such channels as, print, internet, indoor and outdoor digital signage, cell phone, e-mail and text messaging. We focused our efforts on marketing to consumer packaged goods (CPG) retailers, distributors, and manufacturers. At this time, management of the Company is focusing its efforts on securing financing to pay outstanding debts and evaluating future business activities in the media arena and the restart of its business plan. The Company will need to fund the deficits in operating capital through debt or private placements of its common stock, which is its sole source of liquidity. 1 There can be no assurance that this series of events can be successfully completed, that any such business will be identified or that any stockholder will realize any return on their shares after such a transaction has been completed. In particular there is no assurance that any such business will be located or that any stockholder will realize any return on their shares after such a transaction. Any merger or acquisition completed by us can be expected to have a significant dilutive effect on the percentage of shares held by our current stockholders. We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008 COMPARED TO MARCH 31, 2008 Revenue During the three months ended March 31, 2008 and 2007, we did not recognize any revenues from our continuing operations. Costs of Revenue During the three months ended March 31, 2008, we incurred costs of revenues of $2,045 as compared to cost of revenues of $7,806 during the three months ended March 31, 2007. The decrease is a result of our cessation of operations, as discussed above. Operating Expenses During the three months ended March 31, 2008, we incurred operating expenses of $62,342 compared to operating expenses of $405,585 during the three months ended March 31, 2007. The decrease of $343,243 is a result of the cessation of operations in February 2008. Operational expenses during the three months ended March 31, 2008, consisted primarily of $31,184 in compensation and benefits and $17,017 in depreciation and amortization expense. Other Income (Expense) During the three months ended March 31, 2008, we relinquished security in the form of property, equipment, technology and licenses with a net value of $274,246 to secured promissory note holders holding notes totaling a $1,142,550, as settlement on the notes. The holders of the notes released the Company from any further obligations under the notes. As a result, we recorded a gain of $942,780 on the settlement of the debt. Interest expense for the three months ended March 31, 2008 decreased by $30,963 to $23,717 compared to $54,680 for the three months ended March 31, 2007. The decrease is as a result of the cancellation of our notes payable as discussed above. During the three months ended March 31, 2008, we performed a review of the value of goodwill which had a carry amount of $600,000. Upon the completion of an impairment review of goodwill, we decided to write down goodwill by $600,000. This adjustment resulted primarily from the lack of revenue generated by the Company, the continued cash flow challenges faced by the Company and the Company's suspension of its operations. After the impairment of $600,000, our goodwill, at March 31, 2008, had a value of $0. 2 Net Loss During the three months ended March 31, 2008, we recognized a net income of $254,676 compared to a net loss of $270,545 for the three months ended March 31, 2007 the change of $525,221 was a result of the $343,241 decrease in operating expenses, the $942,780 gain on the settlement of debt offset by the $568,277 increase in other expenses. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2008, we had total assets of $474 consisting solely of cash on hand. At March 31, 2008, we had total liabilities, all current, of $614,449 for a working capital deficit of approximately $613,985 Net cash used by operating activities for the three months ended March 31, 2008 and 2007, respectively, was $11,984 and $458,714. During the three months ended March 31, 2008, net income of $254,676 was adjusted for non cash items consisting of $4,864 in depreciation expense, $600,000 impairment of goodwill, $17,247 in non-cash interest expense, $12,153 in amortization expense and $942,780 gain on the settlement of debt. During the three months ended March 31, 2007, net losses of $270,544 was adjusted for non-cash items consisting of $198,286 net income from discontinued operations, $14,799 in depreciation expenses, $26,413 in non-cash interest expense, and $47,230 in amortization expenses. During the three months ended March 31, 2008, the Company did not have or was provided funds from investing activities. During the three months ended March 31, 2007, the Company used $2,083 in investing activities. During the three months ended March 31, 2008, the Company was provided $3,791 from financing activities. During the three months ended March 31, 2007, the Company received $370,876 from its financing activities. During the three months ended March 31, 2008, Mr. Mulford, the Chief Executive Officer and President of the Company, loaned the Company funds totaling $5,000, the 12% promissory notes have due dates ranging from April 1, 2008 through June 28, 2008. During the three months ended March 31, 2008, the Company transferred property, equipment, technology and licenses with a net value of $274,246 to promissory note holders holding notes totaling a $1,142,550, as payment on the notes. The holders of the notes released the Company from any further obligations under the notes. As a result, the Company recorded a gain of $942,780 on the settlement of the debt. Consequently, we are now dependent on raising additional equity and/or debt to fund any negotiated settlements with our outstanding creditors and meet our future operating expenses. There is no assurance that we will be able to raise the necessary equity and, or, debt that we will need to be able to negotiate acceptable settlements with our outstanding creditors or fund our ongoing operating expenses. 3 In our financial statements for the fiscal year ended December 31, 2007, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Our financial statements for the fiscal three months ended March 31, 2008, have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. At March 31, 2008, we had a working capital deficit of approximately $613,985 and reported an accumulated deficit of $3,199,865. RECENT ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 will be effective for us for our fiscal year beginning on January 1, 2008. We are currently assessing the impact the adoption of SFAS No. 157 may have on our financial statements. In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115. This statement will be effective for us for our fiscal year beginning on January 1, 2008, and will permit entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. The possible adoption of this statement is not expected to have a material effect on our financial statements. In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations, or SFAS No. 141R. SFAS No. 141R will change the accounting for business combinations. Under SFAS No. 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141R will change the accounting treatment and disclosure for certain specific items in a business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations we engage in will be recorded and disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time. We are still assessing the impact of this pronouncement. In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No. 160". SFAS No. 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. We believe that SFAS 160 should not have a material impact on our financial position or results of operations. In March 2008, the FASB issued SFAS No. 161 Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 requires additional disclosure related to derivatives instruments and hedging activities. The provisions of SFAS No. 161 are effective as of January 1, 2008 and the Company is currently evaluating the impact of adoption. 4 ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable ITEM 4. CONTROLS AND PROCEDURES Disclosures Controls and Procedures We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), James Mulford, our Chief Executive Officer and Principal Financial Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, Mr. Mulford has concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below. ITEM 4T. CONTROLS AND PROCEDURES Management's Quarterly Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation (iii)provide reasonable assurance regarding prevention or timely detection of unauthorized Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the quarter ended March 31, 2008. We believe that internal control over financial reporting is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations. 5 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report. There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NONE. ITEM 2. CHANGES IN SECURITIES NONE. ITEM 3. DEFAULTS UPON SENIOR SECURITIES NONE. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE. ITEM 5. OTHER INFORMATION NONE. ITEM 6. EXHIBITS Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K. Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Exhibit 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act 6 SIGNATURES Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. QLINKS AMERICA, INC. (Registrant) Dated: May 19, 2008 By: /s/James O. Mulford ------------------------ James O. Mulford, President & Chief Accounting Officer

QLINKS AMERICA, INC. 10-Q