<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission File Number 01-14271
FIRSTLINK COMMUNICATIONS, INC.
-------------------------------------
(Exact name of Registrant as specified in its charter)
Oregon 93-1197477
- ------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
190 SW Harrison Street, Portland, Oregon 97201
-------------------------------------------------
(Address of principal executive offices Zip Code)
Registrant's telephone number, including area code: (503) 306-4444
Not Applicable
---------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 preceding 12 months (or for such shorter periods 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 [ ]
As of November 12, 1999, the Registrant had 3,706,979 shares of its no par
value Common Stock outstanding.
<PAGE>
<PAGE>
INDEX
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of September 30,
1999 (unaudited) and December 31, 1998 3
Condensed Statements of Operations for the Three and
Nine Months Ended September 30, 1999 and 1998 (unaudited) 4
Condensed Statements of Cash Flows for the
Nine Months Ended September 30, 1999 and 1998 (unaudited) 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Forward-Looking Statements 7
General 7
Overview 7
Three Months Ended September 30, 1999 Compared to
Three Months Ended September 30, 1998 7
Nine Months Ended September 30, 1999 Compared to
Nine Months Ended September 30, 1998 8
Liquidity and Capital Resources 9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATONS, INC.
CONDENSED BALANCE SHEETS
September 30, 1999 (unaudited) and December 31, 1998
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,942,239 $ 1,617,582
Investments securities - 3,284,495
Accounts receivable, net of allowance
for doubtful accounts of $47,381 and
$25,240 at September 30, 1999 and
December 31, 1998, respectively 216,709 87,131
Receivable from affiliates 37,543 -
Other receivables 7,289 55,872
Prepaid and other current assets 62,980 35,953
------------- ------------
Total current assets 3,266,760 5,081,033
Property and equipment, NET 1,648,797 1,173,668
Other assets 222,184 9,078
------------- ------------
Total assets $ 5,137,741 $ 6,263,779
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 193,897 $ 206,916
Payable to affiliate 33,896 -
Accrued liabilities 165,789 169,105
Current portion of capital lease
obligations 69,249 62,051
------------- ------------
Total current liabilities 462,831 438,072
------------- ------------
LONG-TERM DEBT:
Capital lease obligations 124,574 177,279
------------- ------------
Total long-term debt 124,574 177,279
------------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, no par value;
1,000,000 shares authorized,
no shares issued or outstanding - -
Common stock, no par value;
20,000,000 shares authorized,
3,706,979 and 3,593,550 shares
issued and outstanding at
September 30, 1999 and December 31,
1998, respectively 8,538,796 8,458,495
Retained deficit (3,988,460) (2,810,067)
------------- ------------
Total stockholders' equity 4,550,336 5,648,428
------------- ------------
Total liabilities and stockholders'
equity $ 5,137,741 $ 6,263,779
============= ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended
September 30, 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
1999 1998 1999 1998
-------------------- ----------------------
<S> <C> <C> <C> <C>
Revenue $347,914 $326,409 $1,024,329 $925,893
----------- --------- ---------- ----------
Expenses
Operating 273,201 240,792 811,276 705,287
Selling, general and
administrative 419,908 453,846 1,247,721 1,132,824
Depreciation and
amortization 73,811 27,914 188,264 71,652
----------- --------- ---------- ----------
Total expenses 766,920 722,552 2,247,261 1,909,763
----------- --------- ---------- ----------
Operating loss (419,006) (396,143)(1,222,932) (983,870)
----------- --------- ---------- ----------
Other (INCOME) expense:
Interest, net (19,210) (40,451) (74,933) 8,958
Other 24,410 (166) 30,394 110,556
----------- --------- ---------- ----------
5,200 (40,617) (44,539) 119,514
----------- --------- ---------- ----------
Net loss $(424,206) $(355,526)$(1,178,393)$(1,103,384)
=========== ========= ========== ==========
PER SHARE AMOUNTS:
Basic and diluted loss
per common share $(.12) $(.11) $(.33) $(.46)
=========== ========= ========== ==========
Basic and diluted
weighted average
common shares 3,663,587 3,166,466 3,621,074 2,421,372
=========== ========= ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30, 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,178,393) $(1,103,384)
Adjustments to reconcile net loss to
net cash used in operating activities -
Noncash charge for debt conversion to
equity - 105,000
Noncash charge for stock grants 34,400 -
Depreciation and amortization 215,321 93,449
Provision for losses on accounts
receivable 92,948 30,292
Changes in assets and liabilities -
Accounts receivable (222,526) (47,026)
Prepaid and other current assets (15,987) (12,921)
Accounts payable and accrued
liabilities 17,561 25,314
Other current liabilities - (126,188)
------------- ------------
Net cash used in operating
activities (1,056,676) (1,035,464)
------------- ------------
Cash flows from investing activities:
Capital expenditures (663,394) (169,865)
Capitalized merger costs (216,761) -
Maturities of investment securities 3,284,495 -
U.S. Online Communications note
receivable (500,000) -
Repayment of U.S. Online Communications
note receivable 500,000 -
Equipment deposits - (137,934)
------------- ------------
Net cash provided by (used in)
investing activities 2,404,340 (307,799)
------------- ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock - 6,855,710
Principal payments under capital leases (45,507) (35,662)
Proceeds from the exercise of stock
options and warrants 22,500 -
Net cash provided by (used in)
financing activities (23,007) 6,820,048
------------- ------------
Net increase in cash and cash
equivalents 1,324,657 5,476,785
Cash and cash equivalents, beginning of
period 1,617,582 389,415
------------- ------------
Cash and cash equivalents, end of period $ 2,942,239 $ 5,866,200
============= ============
Supplemental DISCLOSURE OF cash flow
information:
Cash paid for interest $ 43,277 $ 61,452
Cash paid for income taxes - -
Assets acquired under capital leases - 81,640
Conversion of Promissory Notes to equity - 199,552
Other 27,056 33,781
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
(1) Unaudited Condensed Financial Statements
The financial statements included herein have been prepared by FirstLink
Communications, Inc. (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures included herein are adequate to make the information presented not
misleading. A description of the Company's accounting policies and other
financial information is included in the audited financial statements as filed
with the Securities and Exchange Commission in the Company's Annual Report on
Form 10-KSB.
The financial statements and related notes as of September 30, 1999, and
for the three and nine months ended September 30, 1999 and 1998 are unaudited
but, in the opinion of management, include all adjustments, consisting only of
normal recurring adjustments, which are necessary for a fair presentation of
the financial condition, results of operations and cash flows of the Company.
The operating results for the three and nine months ended September 30, 1999
are not necessarily indicative of the results that may be expected for the
year ended December 31, 1999.
(2) Merger Agreement
In July 1999, the Company signed a definitive merger agreement with USOL
Holdings, Inc. ("USOL"), to merge USOL into FirstLink. USOL has acquired
certain assets and liabilities of U.S. Online Communications, Inc. ("US
Online"), an Austin, Texas based provider of integrated telecommunication
services to residents of apartments and condominiums passing approximately
15,000 cable and 7,200 telephone units, and certain assets from GMAC
Commercial Mortgage Corporation ("GMACCM") operated as a product line known as
"GMAC Resident's Advantage." GMAC Resident's Advantage provided ancillary
services to residents of multi-dwelling units ("MDUs") under exclusive
marketing agreements with property owners.
Upon receiving shareholder approval at a special meeting of shareholders
which has been scheduled on December 15, 1999, the Company will merge with
USOL in a stock-for-stock transaction in which the Company will issue $37
million of Company preferred stock (convertible at $2.00 per share) and
3,175,000 shares of the Company's common stock of which 2,000,000 shares are
subject to a three-year $3,674,000 note. Further, the Company will issue
shareholders of USOL 2,084,000 warrants to purchase common stock (1,500,000 at
$5.50 per share, 86,000 at $4.00 per share, 86,000 at $6.00 per share, and
412,000 at $2.00 per share).
Additionally, the Company will assume USOL's $35 million senior credit
facility and any borrowings thereunder at the time the transaction closes.
The merger agreement superseded the letter of intent the Company had
previously signed with Peregrine Capital, Inc. ("Peregrine").
(3) The ResidentClub
USOL has formed a subsidiary, TheResidentClub.com (the "ResidentClub"),
an Internet-based business that will provide a range of move-in and lifestyle
enhancement services to the MDU marketplace. The ResidentClub will utilize the
exclusive marketing contracts acquired from GMACCM, representing approximately
500,000 units, to develop its business. The ResidentClub plans on augmenting
the current Resident's Advantage product line by offering a range of new
products and services.
(4) Affiliate Receivable and Payable
In connection with the definitive merger agreement with USOL, the Company
and USOL have commenced the process of integrating operations. Pursuant to
that process, certain functions such as billing and customer service for the
Company's customers are being performed by USOL on behalf of the Company.
Conversely, the Company's chief financial officer is also serving as the chief
financial officer of USOL and the Company's president has been performing
certain functions on behalf of USOL as well. It is anticipated that as
consummation of the merger approaches, additional operational and
administrative functions will also become integrated.
Both the Company and USOL have been accounting for the time and out-of-
pocket expenses incurred on behalf of the other party. The Company has
classified such intercompany charges as "receivable from affiliates" and
"payable to affiliate" on the accompanying unaudited balance sheet.
(5) loss Per Common Share
Basic and diluted loss per common share is calculated by dividing the net
loss by the weighted average number of shares outstanding. The calculation of
basic and diluted loss per common share does not assume conversion, exercise
or contingent issuance of securities that would have an anti-dilutive effect
on earnings per share.
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Statements
The statements contained in this Form 10-QSB ("Quarterly Report") of the
Company which are not historical in nature are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements in this Item 2.,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, regarding intent, belief or current expectations of the Company or
its officers with respect to the development or acquisition of new business.
Such forward-looking statements involve certain risks and uncertainties
that could cause actual results to differ materially from anticipated results.
These risks and uncertainties include regulatory developments, the ability of
the Company to acquire or build passings on economical terms and conditions,
the risk of insufficient cable and phone penetrations, the ability of the
Company to effectively manage growth, general and local market conditions
including the presence of competing companies, as well as other factors as may
be identified from time to time in the Company's filings with the Securities
and Exchange Commission or in the Company's press releases.
General
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Condensed
Financial Statements and the Notes thereto of the Company included elsewhere
in this Quarterly Report.
Overview
The Company provides integrated telecommunications and entertainment
services to residents of multi-family apartment and condominium complexes.
Services consist of local and long-distance telephone, cable television and
high-speed internet access, in a single package on a single invoice for the
resident. The Company's first property went online in September 1994. As of
September 30, 1999, the Company passed 3,300 phone and 3,300 cable units in 14
properties, all in Portland, Oregon. The Company had 2,090 cable and 1,582
telephone subscribers, respectively.
Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998
The Company reported a net loss of $424,206 for the three months ended
September 30, 1999 compared to a net loss of $355,526 for the same period of
the prior year. The increase in net loss is primarily attributable to
increased operating and depreciation expenses, as well as a reduction in other
income partially offset by lower selling, general, and administrative expenses
during 1999 compared to 1998.
Revenue increased $21,505 or 7% for the three months ended September 30,
1999 compared to the same period of the prior year. The increase in revenue is
due to the Company having 6,600 operational passings in 1999 compared to 5,200
in the prior year. The increase in revenue is not proportional to the increase
in passings due to 560 of the 1999 passings being in the lease-up phase (i.e.,
not fully occupied), as well as certain billing problems associated with the
Company's billing integration with USOL which the Company believes will be
remedied for November billing.
Operating expense increased $32,409 or 13% for the three months ended
September 30, 1999 compared to the same period of the prior year. The increase
in operating expense between periods is due to the increase in operational
passings. Operating expense was 79% of revenue for the three-month period in
1999 compared to 74% in the same period of the prior year.
Selling, general and administrative expense decreased $33,938 or 7% for
the three months ended September 30, 1999 compared to the same period of the
prior year. The decrease in selling, general and administrative expense was
the net result of decreased payroll costs partially offset by increased public
relations and bad debt expenses. Selling, general and administrative expense
was 121% of revenue for the three months ended September 30, 1999 compared to
139% for the same period of the prior year.
Depreciation and amortization expense increased $45,897 or 164% for the
three months ended September 30, 1999 compared to the same period of the prior
year. The increase in depreciation and amortization expense resulted from
increased plant and equipment balances between years. Depreciation and
amortization expense was 21% of revenue for the three months ended September
30, 1999 compared to 9% for the same period of the prior year.
The Company had other expense of $5,200 during the three months ended
September 30, 1999 compared to other income of $40,617 during the same period
of the prior year. This was the result of a one-time commission paid to a real
estate broker in connection with subleasing certain excess office space, which
exceeded the Company's interest income during the 1999 period. Further, the
Company generated greater interest income during 1998 compared to 1999 as it
had higher cash and investment balances.
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September
30, 1998
The Company reported a net loss of $1,178,343 for the nine months ended
September 30, 1999 compared to a net loss of $1,103,384 for the same period of
the prior year. The increase in net loss between periods was the net result of
increased operating, selling, general and administrative, and depreciation and
amortization expense partially offset by increased other income.
Revenue increased $98,436 or 11% for the nine months ended September 30,
1999 compared to the same period of the prior year. The increase in revenue is
due to the Company having more operational passings during 1999 compared to
1998.
Operating expense increased $105,989 or 15% for the nine months ended
September 30, 1999 compared to the same period of the prior year. The increase
in operating expense between periods is due to the increase in operational
passings. Operating expense was 79% of revenue for the nine months ended
September 30, 1999 compared to 76% for the same period of the prior year.
Selling, general and administrative expense increased $114,897 or 10% for
the nine months ended September 30, 1999 compared to the same period of the
prior year. The increase between periods is primarily due to increased rent
and insurance costs associated with the Company's planned move (the space has
been recently subleased) and new public status, respectively.
Depreciation and amortization expense increased $116,612 or 163% for the
nine months ended September 30, 1999 compared to the same period of the prior
year. The increase in depreciation and amortization expense resulted from
increased plant and equipment balances between years. Depreciation and
amortization expense was 18% of revenue for the nine months ended September
30, 1999 compared to 8% for the same period of the prior year.
Other income was $44,539 for the nine months ended September 30, 1999
compared to other expense of $119,514. The increase in other income between
years was due to the increased cash and investment balances in 1999 (the
result of the Company's initial public offering in July 1998), as well as a
one-time noncash charge in 1998 for an induced debt conversion to equity.
Liquidity and Capital Resources
At September 30, 1999, the Company had $2,942,239 of cash, cash
equivalents and investment securities compared to $4,902,077 at December 31,
1999. Net cash of $1,056,676 was used in operating activities for the nine
months ended September 30, 1999, which approximated the Company's net loss for
the period.
Net cash of $2,404,340 was provided by investing activities, which was
the result of $3,284,495 being provided by maturing investment securities
offset by $663,394 of capital expenditures and $216,761 of capitalized costs
related to the merger with USOL. The capital expenditures were primarily for
replacing certain of the Company's switches as part of an overall network
upgrade to its Portland telephony facilities.
Net cash of $23,007 was used in financing activities, which consisted of
$45,507 of principal payments under capital leases offset by $22,500 in
proceeds from the exercise of stock options and warrants.
As more fully described elsewhere in this Form 10-QSB, FirstLink has
signed a merger agreement with USOL (collectively the "Combined Company").
USOL has recently completed a financing transaction in which it received $37
million in gross cash proceeds through a preferred stock sale and has received
a senior debt commitment of $35 million from a bank. The Combined Company
anticipates pursuing two separate business: (1) to continue providing cable
television, local and long-distance telephony and internet services to
residents of MDUs (the "Telecommunications Business") and (2) to develop an
electronic commerce-based business ("TheResidentClub.com") that will target
residents of MDUs utilizing the assets acquired by USOL from GMACCM.
Management believes that the funding received by USOL will be sufficient
to fund the operations and capital requirements of the Combined Company for at
least the next 12 months. However, an integral part of the Combined Company's
business plan is to grow the Telecommunications Business through acquisitions.
Should the Combined Company find acquisition opportunities that are either
larger in magnitude or in number than its plan anticipates, then additional
funding may be required sooner than planned.
USOL's senior debt commitment limits the amount of proceeds from the
preferred stock sale and senior debt commitment that the Combined Company can
use to fund TheResidentClub.com to $1 million. USOL is seeking to increase
that limit to $3 million. However, TheResidentClub.com will require additional
funding to pursue its business plan. TheResidentClub.com is currently looking
at various alternatives for funding its business plan including, but not
limited to, private equity investments. The amount of funding required to
execute TheResidentClub.com business plan is still being determined, but
management expects it to range from $15 million to $25 million over the next
18 to 24 months. Any delays in raising the required funding will delay
executing TheResidentClub.com business plan. Because of the funding limitation
set forth in the senior debt commitment, management does not expect
TheResidentClub.com to have an immediately significant impact on the
liquidity, capital resources, or results of operations of the Combined
Company.
FirstLink has agreements with certain cable operations to purchase bulk
cable signals at FirstLink's properties. As of September 30, 1999, FirstLink's
commitment was $32,759 per month for such services.
The Company has entered into salary continuation agreements with its
President, CFO, and another key employee (the "Salary Agreements"). Under the
terms of the Salary Agreements, which are substantially similar, the Company
would pay each of these individuals one year's salary as severance if it
involuntarily terminates them, as defined in the Salary Agreements.
Additionally, if it involuntarily terminates them, all stock options they own
which have vested would not have to be exercised until one year after the
shares underlying the options have been registered. If the option plans have
not been registered by January 30, 2000, then these individuals would have
cashless exercise rights, as defined in the Salary Agreements. As defined by
the Salary Agreements, the merger with USOL would result in the involuntary
termination of these employees unless the Combined Company reaches an
agreement with the employees to continue their employment. While the Company's
CFO has tentatively reached such an agreement, the President and the other
employee are discussing continuing their employment with the Combined Company
and no agreements have been reached. If no agreement is reached, the Company
would pay the President and the other employee lump sums of $150,000 and
$60,000, respectively, pay for their medical insurance for a year, and provide
them other benefits. Additionally, in order to retain other key employees
during the transition period, the Company has entered into sticking bonus
arrangements with these employees. Upon consummation of the merger with USOL,
these employees will receive approximately $50,000 in aggregate. There were no
material commitments for capital expenditures at September 30, 1999.
FirstLink has net operating loss carryforwards which are available to
offset future financial reporting and taxable income. Net operating loss
carryforwards for tax purposes totaled approximately $2,500,000 at December
31, 1998 and expire in 2011 through 2018.
A provision of the Internal Revenue Code requires the utilization of net
operating losses be limited when there is a change of more than 50% in
ownership of a company. Such a change occurred in 1996, 1997 and 1998. If
FirstLink's agreement with USOL is approved by FirstLink's shareholders,
FirstLink will have incurred another ownership change under Code Section 382.
These ownership changes would limit the utilization of any net operating
losses incurred prior to the change in ownership date.
The difference between expected tax benefit, computed by applying the
federal statutory rate of 34% to loss before taxes, and the actual tax benefit
of $0 is primarily due to the increase in the valuation allowance for deferred
taxes.
Year 2000 Readiness
The "Year 2000" issue is a general term used to describe the various
problems that may result from the improper processing of dates and date-
sensitive calculations by computers and other machinery as the Year 2000 is
approached and reached. These problems arise from hardware and software unable
to distinguish dates in the "2000's" from dates in the "1900's" and from other
sources such as the use of special codes and conventions in software that make
use of a date field. FirstLink recognizes the need to ensure its operations
will not be adversely affected by Year 2000 hardware and software failures.
FirstLink has performed a comprehensive review of its information and
support systems to determine whether such systems will properly function in
the Year 2000 and thereafter. Systems reviewed principally include FirstLink's
switches and network operations systems, billing and financial systems, and
FirstLink's internal communications systems. Although FirstLink relies
primarily on systems developed with current technology that were designed to
be Year 2000 compliant, FirstLink has had to replace, upgrade or reprogram
certain systems or equipment. FirstLink's due diligence also included an
evaluation of vendor-provided technology and the implementation of new
policies to require vendors to confirm that they have disclosed and will
correct any Year 2000 compliance issues.
The costs associated with resolving Year 2000 issues have been expensed
as incurred and, in the aggregate, have not had a material impact on
FirstLink's financial condition or results of operations. However, certain
telephony network upgrades previously described above have resolved Year 2000
deficiencies, and were capitalized as part of the overall system improvements.
While FirstLink believes that its software applications will be Year 2000
compliant, there can be no assurance until the Year 2000 occurs that all
systems will then function adequately. As discussed above, management of
FirstLink does not expect the Year 2000 problem to be material to its
business, financial condition or results of operations. During the months
prior to the century change, however, FirstLink will continue to monitor and
evaluate any new versions of software and information systems provided by
third parties and any new infrastructure systems that it may acquire, to
determine whether they are Year 2000 compliant. Despite its current
assessment, FirstLink may not identify and correct all significant Year 2000
problems on a timely basis. If the representations made by its various vendors
regarding Year 2000 compliance are inaccurate, additional Year 2000 compliance
efforts may involve significant time and expense and unresolved problems could
harm FirstLink's business. FirstLink currently has no contingency plans to
address the risk.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company is subject to litigation incidental to its
business. The Company is not presently a party to any litigation.
Item 2. Changes in Securities
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
Form 8-K dated July 21, 1999.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the 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.
FIRSTLINK COMMUNICATIONS, INC.
Dated: November 12, 1999 By: /s/ A. Roger Pease
---------------------------------
A. Roger Pease
President, Chief Executive Officer
and Director
Dated: November 12, 1999 By: /s/ Jeffrey S. Sperber
---------------------------------
Jeffrey S. Sperber
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANY'S FORM 10-QSB FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1999
<CASH> 2,942,239
<SECURITIES> 0
<RECEIVABLES> 308,922
<ALLOWANCES> (47,381)
<INVENTORY> 0
<CURRENT-ASSETS> 3,266,760
<PP&E> 2,048,044
<DEPRECIATION> (399,247)
<TOTAL-ASSETS> 5,137,741
<CURRENT-LIABILITIES> 462,831
<BONDS> 0
0
0
<COMMON> 8,538,796
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,137,741
<SALES> 1,024,329
<TOTAL-REVENUES> 1,024,329
<CGS> 0
<TOTAL-COSTS> 2,247,261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 92,948
<INTEREST-EXPENSE> 70,332
<INCOME-PRETAX> (1,178,393)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,178,393)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,178,393)
<EPS-BASIC> (.33)
<EPS-DILUTED> (.33)
</TABLE>
