10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 26, 2010

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 000-28562

VERILINK CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

94-2857548

(State of incorporation)

(I.R.S. Employer

Identification No.)

501 S. Johnstone Ave., Suite 501

Bartlesville, OK 74003

(Address of principal executive offices, including zip code)

(918) 336-1773

(Registrant's telephone number, including area code)

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 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 þ   No o

Indicate by check mark whether the registrant is a large accelerated filer, 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. (Check one):

Large accelerated filer o

Accelerated filer

Non-accelerated filer o

Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes þ  No o

The number of shares outstanding of the issuer's common stock as of April 28, 2010 26,104,100 shares.

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERILINK CORPORATION

(An Exploration Stage Company)

BALANCE SHEETS

(unaudited)

	March 26, 2010	June 26, 2009
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities:
Current Liabilities
Account Payables	$             3, 966	$       966
Advances from related party	37,089	29,848
Total Liabilities	41,055	30,814
Stockholders' deficit:
Preferred Stock, $0.01 par value, 1,000,000 shares authorized; no shares issued and outstanding	-	-
Common Stock, $0.01 par value; 40,000,000 shares authorized; 26,104,100 shares issued and outstanding	261,041	261,041
Additional paid-in capital	90,797,923	90,797,923
Accumulated other comprehensive loss	(63,201)	(63,201)
Deficit accumulated during the exploration stage	(12,376)	(2,135)
Accumulated deficit	(91,024,442)	(91,024,442
Total stockholders' deficit	(41,055)	(30,814)
Total liabilities and stockholders’ deficit	$                    -	$                -

The accompanying notes are an integral part of these unaudited financial statements.

3

VERILINK CORPORATION

(An Exploration Stage Company)

STATEMENTS OF EXPENSES

(unaudited)

	Three Months Ended						Three Months Ended				Inception February 13, 2009 to
Expenses:		March 26, 2010		March 27, 2009		March 26, 2010			March 27, 2009			March 26, 2010
General and Administrative Expenses	$	1,900	$	923	$	10,241		$	7,166	$		12,376
Net loss		(1,900)		(923		(10,241)			(7,166)			(12,376)
	$		$		)
Net loss per common share – basic and diluted	$	(0.00)	$	(0.00)	$	0.00		$	(0.00)	$		n/a
Weighted average  common shares outstanding – basic and diluted		26,104,100		26,104,100		26,104,100			26,104,100			n/a

The accompanying notes are an integral part of these unaudited financial statements.

4

VERILINK CORPORATION

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(unaudited)

Cash flows from operating Activities:	Nine Months March 26, 2010	Ended March 27, 2010	Inception February 13, 2009 to March 26, 2010
Net loss	$     (10,241)	$     (8,089)	$ (12,376)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in assets and liabilities:
Accounts payable	3,000	(18,265)	3,000
Net cash used in operating activities	(7,241)	(26,354)	(9,376)
Cash flows from financing activities
Advances from related party	7,241	26,354	9,376
Net cash provided by financing activities	7,241	26,354	9,376
Net change in cash and cash equivalents	-	-	-
Cash and cash equivalents at beginning of period	-	-	-
Cash and cash equivalents at end of period	$            -	$            -	$            -

The accompanying notes are an integral part of these unaudited financial statements.

5

VERILINK CORPORATION

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

(unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited interim financial statements of Verilink Corporation, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Verilink's Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for the year ended June 27, 2008 as reported in the Form 10-K have been omitted.

Note 2 -

Going Concern

The accompanying financial statements have been prepared on a going concern basis which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business and do not reflect adjustments that might result if we were not to continue as a going concern. The company does not have any operations and is which raise substantial doubt about Verlink’s ability to continue as a going concern.

Note 3 – Related Party Transactions

As of March 26, 2010, the Company has a related party accounts payable of $37,089 due to IACE Investments Two Inc, an 80% shareholder, for operating expenses paid on the Company’s behalf.

Note 4 - Subsequent Event

The Company has evaluated subsequent events through April ___, 2010, which is the date the financial statements were issued. There are no significant subsequent events.

6

Item 2.

Management’s Discussion and Analysis

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE LITIGATION REFORM ACT OF 1995. Statements contained in this filing that are not based on historical fact, including without limitation statements containing the words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar words, constitute "forward-looking statements". These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions in which Verilink Corporation ("we", "Verilink" or “Company”) operates; technology ch anges; the competition we face; changes in our business strategy or development plans; existing governmental regulations and changes in, or our failure to comply with, governmental regulations; liability and other claims asserted against us; and other factors referenced in our filings with the Securities and Exchange Commission.

Description of Business.

Verilink Corporation is an exploration stage company that is engaged in the acquisition, exploration and development of mineral properties.   As of the date of this filing, we have not generated any revenues after emerging from Bankruptcy.  Due to depressed market conditions associated with the cost of acquiring oil and gas properties, the Company’s management elected to become an exploration stage company to acquire certain options on oil and gas leases at far more favorable terms than in the State of Colorado. As reported by the Company on Form 8K filed on February 10 2009, the Company entered into an Agreement with Osage Land to acquire certain oil and gas leases in Phillips County, State of Colorado.  Management is currently negotiating with several entities to determine if a joint venture or similar agreement is feasible to develop the leases. Verilink intends to conduct geophysical operations on approximately three (3) square miles of the lea ses covered under the Agreement.  This is commonly referred to as seismic testing and will be used to determine the location of any Niobrara gas structures.  If gas structures are determined to be present, Management for Verilink intends to evaluate their suitability with various professionals to determine if drilling is warranted.

Verilink Corporation was incorporated on October 26, 1986 in the state of Delaware.  We and our former subsidiary, Larscom Incorporated, a Delaware corporation, filed  Voluntary Petitions for Relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Alabama (the “Court”), Case numbers 06-50866 and 06-80567 (the “Case” or “Cases”)..The Bankruptcy Court issued an Order Confirming the Second Amended Joint Plan of Reorganization on December 6, 2006.

Pursuant to the Plan, on June 27, 2008, the Company implemented a 1/2581 reverse stock split; issued 25,000,000 restricted shares of common stock to IACE Investments Two, Inc.; issued 1,000,000 shares of common stock and 5,000,000 warrants to Venture Funds I, Inc.; issued 75,000 shares of common stock to the Bankruptcy Trustee; issued 100 shares of common stock to each class 7 unsecured creditor; and  replaced all former directors and officer with James Ditanna.

On June 27, 2008, the Company’s symbol changed from “VERLQ” to “VERL” to reflect the emergence from Bankruptcy.

Verilink, as of the date of this report, is an exploration stage company that has not generated any revenue since emerging from Bankruptcy. Management recognizes the possibility that, if additional funds are not raised, Verilink’s assets could have to be liquidated or otherwise reduced.  

In January 2009, the Company began to negotiate with several oil and natural gas companies to acquire mineral interest to further explore and develop. On February 10, 2009, as reported on form 8K on February 10, 2009, Verilink entered into an Option Agreement (the “Agreement”) with Osage Land Company (“Osage Land”) to acquire 90% of the oil and gas leases covering approximately 3,912 acres of oil and gas leases located primarily in Phillips County, State of Colorado. The leases being acquired reserves a 1/8^th  royalty to the mineral interest holders and 6.25% overriding royalty interest to Osage Land.  Verilink intends to conduct geophysical operations on at least two (2) square miles of the leases covered under the Agreement with Osage Land. As of the date of this filing, the Company has been unable to secure funding necessary to conduct any operations related to seismic testing. The Company is currently negotiating with energy exp loration companies to determine if a joint venture or agreement is feasible to further develop the leases located in Colorado.  

The primary term of the leases is for a five (5) year period from 2007 to 2012.  Osage Land is to receive $80 per net mineral acre which was originally due on or before the 10^th day of July 2009 but has now been extended to March 31, 2010, and will also receive a 10% carried working interest on the first well in each prospect or particular tract of land.  Osage Land will also receive the option to participate with a 10% working interest on each additional well within a prospect.  The option to exchange common shares for the payment obligation called for under the Agreement remains open and subject to further negotiation with Osage Land.  The Agreement contains customary representations, warnings, covenants and default conditions.  Subject to certain conditions and exceptions, the Agreement may be terminated prior to completion in the event that (a) the parties to the Agreement mutually consent to the termination, (b) a closing under the Agreement has not occurred prior to the close of business on July 10, 2009 as extended to March 31, 2010, (c) there is a failure to perform certain covenants, (d) there is a material breach, or (e) there exists certain title and/or environmental defects, as applicable.

PLAN OF OPERATIONS

During the nine months ended March 26, 2010, the Company is continuing negotiations with a private natural resources exploration company regarding a potential joint venture or acquisition.

IACE Investments Two Inc, an 80% shareholder, advanced the Company $7,241 during the nine months ended March 26, 2010, for professional and administration expenses.

LIQUIDITY AND CAPITAL RESOURCES

Verilink had no cash during the quarter and the nine months ended March 26, 2010.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report, being March 26, 2010.   This evaluation was carried out under the supervision and with the participation of our company’s sole officer and director.

As part of such evaluation, management considered the matters discussed below relating to internal control over financial reporting.  Based on this evaluation, our Company's Sole Director/President and Principal Accounting Officer have concluded that our Company's disclosure controls and procedures were not effective as of March 26, 2010, due to lack of employees to segregate duties related to preparing the financial reports.  Management is attempting to correct this weakness by merging with a suitable candidate.  Management with the assistance of its Securities Counsel will closely monitor all future filings to ensure that the company filings are made on a timely manner.

Based upon that evaluation, our president and sole officer concluded that our company’s disclosure controls and procedures are not effective.  

There were no changes in our internal control over financial reporting during the period ended March 26, 2010 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

7

PART II. OTHER INFORMATION

Item 1

Legal Proceedings

Verilink is not currently a party to any legal proceeding.

Item 1A

Risk Factors

There have been no material changes in our risk factors since June 26, 2009. See risk factors at June 26, 2009, within our Form 10-K.

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3

Defaults Upon Senior Securities

None

Item 4

Submission of Matters to a Vote of Securities Holders

None

Item 5

Other Information

None

Item 6

Exhibits

Exhibit Number

Description of Exhibit

31

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934

32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* * * * *

8

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.

VERILINK CORPORATION

Date: April 28, 2010

By:

/s/ James Ditanna

James Ditanna

Sole Director/President

(Principal Financial and Accounting Officer)

9

EX-31

EXHIBIT 31

I, James Ditanna, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Verilink Corporation.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the smaller reporting company as of, and for, the periods presented in this report;

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the smaller reporting company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the smaller reporting company, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;

(c)

Evaluated the effectiveness of the smaller reporting company’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the smaller reporting company’s internal control over financial reporting that occurred during the smaller reporting company’s most recent fiscal quarter (the smaller reporting company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the smaller reporting company’s internal control over financial reporting; and

5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the smaller reporting company’s auditors and the audit committee of the smaller reporting company’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the smaller reporting company’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the smaller reporting company’s internal control over financial reporting.

Date:  April 28, 2010

/s/   James Ditanna

James Ditanna, President, Chief Executive

Officer, Chief Financial Officer (Principal

Executive Officer, Principal Financial and

Accounting Officer), Sole Director

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Verilink Corporation, a Delaware corporation (the “Company”) on Form 10-Q for the period ending March 26, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), James Ditanna, hereby, certifies to the best of his knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to James Ditanna, and will be retained by Verilink Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

/s/   James Ditanna

James Ditanna, President, Chief Executive

Officer, Chief Financial Officer (Principal

Executive Officer), Sole Director

Date:  April 28, 2010