Tuesday, November 25, 2008 9:47:01 AM
10-Q filed - O/S the same 56,163,708
Edit - sorry, forgot I already posted the 10-Q. Too many stocks, confused by the "e" and removal of the "e".
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number 000-52921
Dialpoint Communications Corporation
(Exact name of small business issuer as specified in its charter)
Nevada
20-4799741
(State or jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2354-B Ebenezer Road
Rock Hill, South Carolina 29732
(Address of principal executive offices)
(877)-463-7864
(Issuer's telephone number)
767 Village Manor Place, Suwanee, Georgia 30024
(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 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.
[X] Yes [ ] No
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accredited 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 [ ]
Accelerated filer [ ]
Non-accelerated filer [ ]
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
[ ] Yes [X] No
APPLICABLE ONLY TO ISSUERS INVOVLED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court.
[ ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common equity, as of November 19, 2008 - 56,163,708 shares of common stock.
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DIALPOINT COMMUNICATIONS CORPORATION
TABLE OF CONTENTS
Item 1. Financial Statements.
3
Item 2. Management's Discussion and Plan of Operation.
12
Going Concern
12
Overview
12
Revenue
13
Cost of Revenue
15
Liquidity and Capital Resources
16
Off-Balance Sheet Arrangements
19
Commitments
19
Critical Accounting Policies
19
Nature of Business
19
Use of Estimates
20
Dividends
20
Comprehensive Income
20
Cash and Cash Equivalents
20
Property and Equipment
20
Income Taxes
20
Impairment of Long-Lived Assets
20
Accounting Basis
20
Stock-based compensation.
20
Recent Accounting Pronouncements
21
Revenue Recognition
21
Item 3. Quantitative and Qualitative Disclosures About Market Risk
21
Item 4. Controls and Procedures
21
Management's Annual Report on Internal Control over Financial Reporting
21
Item 1. Legal Proceedings
22
Item 1A. Risk Factors
22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
22
Item 3. Defaults Upon Senior Securities.
22
Item 4. Submission of Matters to a Vote of Security Holders.
23
Item 5. Other Information.
23
Item 6. Exhibits.
23
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
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DIALPOINT COMMUNICATIONS CORPORATION
FINANCIAL STATEMENTS
September 30, 2008
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TABLE OF CONTENTS
Balance Sheet.………………..………..………………………………………………….1
Statement of Operations…………………….……...………………………………….…2
Statement of Stockholders’ Equity ………..……………..………… …………………....3
Statement of Cash Flows ………………………………………………..….……………4
Notes to the Financial Statements……………………………………...………………....5
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DIALPOINT COMMUNICATIONS CORPORATION
Balance Sheets
ASSETS
September 30,
December 31,
2008
2007
(unaudited)
CURRENT ASSETS
Cash
$
5,058
$
18,300
Accounts receivable
554
-
Total Current Assets
5,612
18,300
EQUIPMENT, net
180,759
113,121
TOTAL ASSETS
$
186,371
$
131,421
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
-
$
350
Current portion of notes payable
14,748
14,748
Accrued interest payable
13,914
8,424
Related party payable
3,900
3,900
Total Current Liabilities
32,562
27,422
LONG-TERM LIABILITIES
Notes payable
107,268
107,268
TOTAL LIABILITIES
139,830
134,690
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.001 par value; 75,000,000 shares
authorized; 56,163,708 and 54,399,000 shares
issued and outstanding, respectively
56,164
54,400
Additional paid-in capital
120,211
9,475
Deficit accumulated during development stage
(129,834)
(67,144)
Total Stockholders' Equity (Deficit)
46,541
(3,269)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
$
186,371
$
131,421
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Operations
(unaudited)
For the Three
For the Three
For the Nine
For the Nine
Months Ended
Months Ended
Months Ended
Months Ended
September 30,
September 30,
September 30,
September 30,
2008
2007
2008
2007
REVENUES
$
39,600
$
-
$
124,482
$
-
COST OF SALES
7,079
-
52,149
-
GROSS PROFIT
32,521
-
72,333
-
OPERATING EXPENSES
General and administrative
27,106
51
90,663
3,505
Depreciation expense
14,289
7,020
38,869
21,060
Total Operating Expenses
41,395
7,071
129,532
24,565
LOSS FROM OPERATIONS
(8,874)
(7,071)
(57,199)
(24,565)
OTHER EXPENSES
Interest expense
(1,830)
(2,108)
(5,491)
(6,323)
Total Other Expenses
(1,830)
(2,108)
(5,491)
(6,323)
NET LOSS BEFORE INCOME TAXES
(10,704)
(9,179)
(62,690)
(30,888)
INCOME TAX EXPENSE
-
-
-
-
NET LOSS
$
(10,704)
$
(9,179)
$
(62,690)
$
(30,888)
BASIC LOSS PER SHARE
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING
56,163,708
52,724,500
55,172,781
52,549,668
The accompanying notes are an integral part of these financial statements
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Stockholders’ Equity (Deficit)
(unaudited)
Deficit
Accumulated
Total
Additional
During the
Stockholders'
Common Stock
Paid-In
Development
Equity
Shares
Amount
Capital
Stage
(Deficit)
Balance, December 31, 2006
52,200,000
$
52,200
$
(34,800)
$
(17,800)
$
(400)
Common stock issued for
cash at $0.025per share
2,199,000
2,200
52,775
-
54,975
Stock offering costs paid
-
-
(8,500)
-
(8,500)
Net loss for the year ended
December 31, 2007
-
-
-
(49,344)
(49,344)
Balance, December 31, 2007
54,399,000
54,400
9,475
(67,144)
(3,269)
Contributed capital
-
-
7,500
-
7,500
Common stock issued for
assets at $0.13 per share
431,372
432
54,568
-
55,000
Common stock issued for
assets at $0.04 per share
1,333,336
1,332
48,668
-
50,000
Net loss for the nine months
ended September 30, 2008
-
-
-
(62,690)
(62,690)
Balance, September 30, 2008
56,163,708
$
56,164
$
120,211
$
(129,834)
$
46,541
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Cash Flows
(unaudited)
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
OPERATING ACTIVITIES
Net loss
$
(62,690)
$
(30,888)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation expense
38,869
21,060
Changes in operating assets and liabilities:
Changes in accounts payable
(350)
6,673
Changes in interest payable
5,490
-
Changes in accounts receivable
(554)
-
Net Cash Used in Operating Activities
(19,235)
(3,155)
INVESTING ACTIVITIES
Purchase of fixed assets
(2,000)
-
Net Cash Used in Investing Activities
(2,000)
-
FINANCING ACTIVITIES
Proceeds from sale of common stock
7,993
26,225
Proceeds from related party loans
-
3,500
Net Cash Provided by Financing Activities
7,993
29,725
NET DECREASE IN CASH
(13,242)
26,570
CASH AT BEGINNING OF PERIOD
18,300
-
CASH AT END OF PERIOD
$
5,058
$
26,570
SUPPLIMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest
$
-
$
-
Income Taxes
$
-
$
-
NON CASH FINANCING ACTIVITIES:
Equipment purchased for note payable
$
-
$
140,400
Equipment purchased for common stock
104,507
-
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Notes to the Financial Statements
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2008 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2007 audited financial statements. The results of operations for the period ended September 30, 2008 and 2007 are not necessarily indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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DIALPOINT COMMUNICATIONS CORPORATION
Notes to the Financial Statements
NOTE 3 – EQUITY TRANSACTIONS
On March 13th 2008 the Company completed a 4shares for 1 forward stock split. The accompanying financial statements reflect the forward stock split on a retroactive basis.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder, Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008. On January 18, 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of
$55,000. The assets acquired consist of computer hardware and software.
NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “ Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60 ”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “ The Hierarchy of Generally Accepted Accounting Principles ”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
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Item 2. Management's Discussion and Plan of Operation.
This section must be read in conjunction with the unaudited Financial Statements included in this report.
A.
Management’s Discussion
You should read the following discussion together with our consolidated financial statements and the related notes and other financial information included elsewhere in this report. The discussion in this report contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this report should be read as applying to all related forward-looking statements wherever they appear in this report. Our actual results could differ materially from those discussed here.
In this report, Dialpoint Communications Corporation and its subsidiaries are referred to as “we”, the “Company” or “DialPoint”.
Going Concern
The financial statements included in this report were prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company has accumulated deficit of $129,834 as of September 30, 2008. As of that date we had limited liquidity, and had not completed our efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. We do believe that at or before the start of the first quarter of 2009 we may be able to generate sufficient revenue so as to sustain operations but there can be no assurance that we are correct.
Management anticipates that the Company might be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Overview
We provide managed IP-based communications services to our target customers of small businesses with 5 to 249 employees in second-tier or so-called second city markets. A retail market is generally considered secondary or tertiary if there are fewer than 1 million people in the metropolitan statistical area (MSA). Today many suggest that a population as little as 500,000 may constitute a second tier city. (February 2007 Property & Portfolio Research Publication). We provide these services through bundled packages of local and long distance voice services and broadband Internet services, together with additional applications and services, for an affordable fixed monthly fee under contracts with terms of 12-36 months. We are capable of proffering our services nation-wide and to customers throughout the United States including Hawaii and Alaska. We currently have customers in the following states:
1.
North Carolina
2.
South Carolina
3.
Florida
4.
Georgia
5.
Nevada
6.
Oklahoma
7.
California
We operate our business primarily out of our facilities in Rock Hill, South Carolina. We sell integrated packages of services, primarily delineated by the number of local voice lines, long distance minutes and T-1 connections provided to the customer. Each of our Service packages includes local and long distance voice services and broadband Internet access, plus additional value-added applications. Customers may also choose to add extra features or lines for additional fee(s).
Our voice services are delivered using VoIP technology, and all of such services are delivered over our secure all-IP network, which we believe affords greater service flexibility and significantly lower network costs than traditional service providers using circuit-switch technologies.. We believe our high degree of systems automation contributes to operational efficiencies and lower costs in our support functions.
We sell our services primarily through outside sales agents and internet marketing campaigns, direct mailers, print ads, etc. Our agents do not work for us directly. They are compensated by a percentage of the revenues we derive from the customers they refer to us. Sometimes these agents have business relationships with these customers and,
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in many cases; they may perform equipment installations for us at our customers’ sites. Some of our new customers are generated by referrals from existing customers and partners. We offer financial incentives to our customers and other sources for referrals.
We compete primarily against incumbent local exchange carriers and, to a lesser extent, against competitive local exchange carriers, both of which are local telephone companies. Local telephone companies do not necessarily focus on our target markets. Moreover, we believe that they concentrate on medium or large enterprises or residential customers.
Cable television providers have begun serving the small business markets with telephone service, in addition to high speed Internet access and video. To date, we have not experienced significant competition from cable television providers and do not believe that they intend to offer the breadth of services and applications that our customers purchase from us. We compete primarily based on the caliber of our customer service. We offer many of the same services to our customers that are available to large business enterprises. We strive to maintain the integrity of our network and its reliability and operational efficiencies.
We formed Dialpoint in April of 2006. We tended to corporate formation matters and corporate governance issues initially. Beginning in 2007 we focused on preparing for and planning the implementation of our business. As a consequence we did not generate significant revenue as we had not yet initiated the substantive execution of our business. We began to take on customers in the last quarter of 2007. As of the date of this filing we have in place the technological infrastructure and resources to focus on generating revenues.
We proffer our customers telecommunications services. We require significantly less capital to launch and maintain operations compared to traditional communications companies using legacy technologies. Our capital expenditures in any given geographical market correlate with our success in generating revenues in that market. As our customer base grows we expect to invest in or allocate additional capital to that market by establishing a satellite facility or customer care center in that market if necessary. We believe that such a model for growth and its effect on our prospective capital expenditures mitigates the risk of unprofitable expansion. We expect to benefit from a low fixed-cost in our budgeted capital expenditures associated with each new market we might enter, particularly in comparison to service providers employing time-division multiplexing.
Time-Division Multiplexing (TDM) is a type of digital or (rarely) analog multiplexing in which two or more signals or bit streams are transferred apparently simultaneously as sub-channels in one communication channel, but physically are taking turns on the channel. The time domain is divided into several recurrent timeslots of fixed length, one for each sub-channel. A sample, byte or data block of sub-channel 1 is transmitted during timeslot 1, sub-channel 2 during timeslot 2, etc. One TDM frame consists of one timeslot per sub-channel. After the last sub-channel the cycle starts all over again with a new frame, starting with the second sample, byte or data block from sub-channel 1, etc. This is a technique for transmitting multiple channels of separate data, voice and/or video signals simultaneously over a single communication medium, or circuit-switch technology, which is a switch that establishes a dedicated circuit for the entire duration of a call. The capital expenditures associated with the implementation of this technology would be cost-prohibitive to us at this point.
The nature of the primary components of our operating results—revenues, cost of revenue and selling, general and administrative expenses—are described below:
Revenue
Quarter Ending
Quarter Ending
Nine Months Ending
September 30, 2008
September 30, 2007
September 30, 2008
September 30, 2007
REVENUES $
39,600
$
0
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
REVENUES
$
124,482
$
-
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COST OF SALES
52,149
-
GROSS PROFIT
72,333
-
OPERATING EXPENSES
General and administrative
90,663
3,505
Depreciation expense
38,869
21,060
Total Operating Expenses
129,532
24,565
LOSS FROM OPERATIONS
(57,199)
(24,565)
OTHER EXPENSES
Interest expense
(5,491)
(6,323)
Total Other Expenses
(5,491)
(6,323)
NET LOSS BEFORE INCOME TAXES
(62,690)
(30,888)
INCOME TAX EXPENSE
-
-
NET LOSS
$
(62,690)
$
(30,888)
BASIC LOSS PER SHARE
$
(0.00)
$
(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING
55,172,781
52,549,668
During the third quarter of 2008 we generated $39,600 in revenue. For the year ended December 31, 2007 we did not generate substantive revenue.
On or about January 9, 2008 we acquired Hostigation, sole proprietorship owned and controlled by Timothy Flavin. Concurrent with that date we filed a current report on form 8-K disclosing said acquisition. We characterized the transaction as an asset purchase acquiring all of the assets of the business. With this acquisition we inherited approximately 600 customers generating monthly recurring revenue
On or about October 21, 2008, we received comments from the Securities and Exchange Commission with regards to the method in which we accounted for the Hostigation acquisition. As of the date of this report, we have not finalized this issue with the Securities an Exchange Commission.
These figures are un-audited but represent our best assessment of the results of operations for the period(s) indicated. The majority of our customers subscribe to a package, which serves customers with 4-15 local voice lines, for business enterprises with 20 or fewer employees. Smaller segments of our clientele require 16-24 local voice lines, and employ 20-50 personnel. Though we have the service capacity, we do not yet services business customers with greater than 100 employees. Our customers receive all our services over a dedicated broadband T-1 connection providing a maximum symmetric bandwidth of 1.5 Mbps (megabits per second). When necessary we can afford our customers services over two or three dedicated T-1 connections offering a maximum symmetric
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bandwidth of 3.0 Mbps or 4.5 Mbps respectively. We believe that our customers highly value the level of symmetric bandwidth offered by our services. As of September 30, 2008, approximately 99% of our customer base had Webhosting Service
We do not have sufficient data so as to formulate meaningful average monthly revenue per customer metrics for the quarter ended September 30, 2008. We are fairly certain that for the fourth quarter of 2008 we will secure reasonably consistent revenue so as to assess any trends in the data.
We believe that average monthly revenue per customer location is likely to be impacted by a number of factors, including:
1.
The distribution of customer installations during a period;
2.
The adoption by customers of applications for which incremental fees are paid;
3.
The trend toward customers executing longer term contracts at lower package prices as compared to shorter term contracts;
4.
The amount of long distance call volumes that may generate overage charges above the basic amount of minutes included in customers’ packages
5.
Additional terminating access charges; and
6.
Customer usage and purchase patterns.
We expect average monthly revenue per customer and customer location to trend to relatively stable levels in future periods. Customer revenues are generated under contracts that typically run for 12 month terms. Therefore, customer churn rates will likely impact projected future revenue streams. Deteriorating economic conditions might adversely affect our revenue growth in the near or short term. In response to deteriorating economic conditions, we hope to mitigate the risk of heightened churn and bad debt levels on a longer term basis. The steps we might take include tightening credit and collection policies and practices for customers with a higher risk profile.
Cost of Revenue
Our cost of revenue represents costs directly related to the operation of our network, including payments to the local telephone companies and other communications carriers such as long distance providers and our mobile provider, for access, interconnection and transport fees for voice and Internet traffic, customer circuit installation expenses paid to the local telephone companies, fees paid to third-party providers of certain applications such as web hosting services, collocation rents and other facility costs, telecommunications-related taxes and fees, and the cost of mobile handsets. The primary component of cost of revenue is the access fees paid to local telephone companies for the T-1 circuits we lease on a monthly basis to provide connectivity to our customers. These access circuits link our customers to our network equipment located in a collocation facility, which we lease from local telephone companies. The access fees for these circuits vary by state and are the primary reason for differences in cost of revenue across our markets.
As a result of the TRRO (See page 22) we are required to lease circuits under special access, or retail, rates in locations that are deemed to offer competitive facilities as outlined in the FCC’s regulations and interpreted by the state regulatory agencies. For additional discussion, see “Results of Operations—Revenue and Cost of Revenue.”
Where permitted by regulation, we lease our access circuits on a wholesale basis as UNE loops or extended enhanced loops as provided for under the FCC’s Telecommunications Elemental Long Run Incremental Cost rate structure. We employ UNE loops when the customer’s T-1 circuit is located where it can be connected to a local telephone company’s central office where we have a collocation, and we use extended enhanced links when we do not have a central office collocation available to serve a customer’s T-1 circuit. Historically, approximately half of our circuits are provisioned using a combination of UNE and Special Access loops and half using extended enhanced links, although the impact of the TRRO has reduced our usage of the T-1 transport portion of extended enhanced links and resulted in the conversion of a majority of the previously installed T-1 transports to DS-3 transports. Our monthly expenses are significantly less when using UNE loops rather than extended enhanced links, but UNE loops require us to incur the capital expenditures of central office collocation equipment. Both UNE loops and extended enhanced loops offer significant cost advantages over special access-based circuits. We install central office collocation equipment in those central offices having the densest concentration of small businesses. We usually launch operations in a new market with several collocations and add additional collocation facilities over time as we confirm the most advantageous locations in which to deploy the equipment. We believe our discipline of leasing these T-1 access circuits on a wholesale basis rather than on the basis of special access rates from the local telephone companies is an important component of our operating cost structure.
We receive service credits from various local telephone companies to adjust for prior errors in billing, including the effect of price decreases retroactively applied upon the adoption of new rates as mandated by regulatory bodies.
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These service credits are often the result of negotiated resolutions of bill disputes that we conduct with our vendors. We also receive payments from the local telephone companies in the form of performance penalties that are assessed by state regulatory commissions based on the local telephone companies’ performance in the delivery of circuits and other services that we use in our network. Because of the many factors, as noted, that impact the amount and timing of service credits and performance penalties, estimating the ultimate outcome of these situations is uncertain. Accordingly, we recognize service credits and performance penalties as offsets to cost of revenue when the ultimate resolution and amount are known. These items do not follow any predictable trends and often result in variances when comparing the amounts received over multiple periods.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include salaries and ancillary costs for human resources and other expenses related to marketing, technical support, IT, invoicing, regulatory compliance, administrative, collections services, legal and accounting functions. Our selling, general and administrative expenses include both fixed and variable costs. Fixed selling expenses include salaries and lease expenses. Variable selling costs consist primarily of commissions and marketing compensatory arrangements. Fixed general and administrative costs include the cost of staffing certain corporate managerial functions such as IT, marketing, administrative, invoicing, engineering, and related costs, such as lease expenses, legal and accounting fees and recruiting costs. Variable general and administrative costs include the cost of provisioning and customer activation staff, which grows with the level of installation of new customers, and the cost of customer care and technical support staff, which grows with the level of total customers on our network. As we expand into new markets, certain fixed costs are likely to increase; however, these increases are intermittent and not proportional with the growth of customers.
Interest Income . For the quarter ended September 30, 2008 we had no substantive interest income.
Interest Expense. Interest expense relates primarily to the financing arrangement we have in place for our soft switches.
From Inception
From Inception
For the
For the
on April 20,
on April 20,
Quarter Ended
Year Ended
2006 Through
2006 Through
September 30,
December 31,
December 31,
December 31,
2008
2007
2006
2007
Interest expense
(1,830)
(8,424)
-
(8,424)
Liquidity and Capital Resources
Overview . We commenced operations in late 2007. Prior to that, we funded our operations primarily through a contribution of capital by a founder. We have yet to record positive cash flow from operating activities. During the fiscal year ended December 31, 2006, the Company issued 13,050,000 shares of its common stock for cash valued at $17,400. The shares were issued at $0.003 per share. During the fiscal year ended December 31, 2007, the Company issued 2,199,100 shares of its common stock for cash $54,975. The shares were issued at $0.025 per share.
On March 13th 2008 the Company completed a 4shares for 1 forward stock split. The accompanying financial statements reflect the forward stock split on a retroactive basis.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder,
- 16 -
--------------------------------------------------------------------------------
Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008.
On January 18 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of $55,000. The assets acquired consist of computer hardware and software.
DIALPOINT COMMUNICATIONS CORPORATION
Statement of Stockholders’ Equity
(unaudited)
Deficit
Accumulated
Total
Additional
During the
Stockholders'
Common Stock
Paid-In
Development
Equity
Shares
Amount
Capital
Stage
(Deficit)
Balance, December 31, 2006
52,200,000
$
52,200
$
(34,800)
$
(17,800)
$
(400)
Common stock issued for
cash at $0.025per share
2,199,000
2,200
52,775
-
54,975
Stock offering costs paid
-
-
(8,500)
-
(8,500)
Net loss for the year ended
December 31, 2007
-
-
-
(49,344)
(49,344)
Balance, December 31, 2007
54,399,000
54,400
9,475
(67,144)
(3,269)
Contributed capital
-
-
7,500
-
7,500
Common stock issued for
assets at $0.13 per share
431,372
432
54,568
-
55,000
Common stock issued for
assets at $0.04 per share
1,333,336
1,332
48,668
-
50,000
Net loss for the nine months
ended September 30, 2008
-
-
-
(62,690)
(62,690)
Balance, September 30, 2008
56,163,708
$
56,164
$
120,211
$
(129,834)
$
46,541
The accompanying notes are an integral part of these financial statements.
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--------------------------------------------------------------------------------
For the nine month period ended September 30 2008 the company had revenues of 124,482 compared to zero during the same period 2007 .The company had cost of sales of $52,149 compared to zero in 2007. The company had a net loss $62,690 for the 9 months ended September 30 2008 compared to $30,888 for the same period of 2007. The increase was due to an increase in general and administrative expenses.
.
Cash Flows From Investing Activities. Our principal cash investments are historically for purchases of equipment and for purchases of marketable securities. Cash purchases of equipment primarily include network capital expenditures such as integrated access devices, T-1 aggregation routers, trunking gateway routers, soft-switches, other network routers, associated growth expenditures related to these items, diagnostic and test equipment, certain collocation and data center build-out expenditures and equipment installation costs and non-network capital expenditures, such as the cost of software licenses and implementation costs associated with our operational support systems as well as our financial and administrative systems, servers and other equipment needed to support our software packages, personal computers, internal communications equipment, furniture and fixtures and leasehold improvements to our office space.
Our capital expenditures result from growth in customers in existing and future prospective markets, network additions needed to support our entry into new markets, and enhancements and development costs related to our operational support systems in order to offer additional applications and services to our customers. We expect that future capital expenditures will continue to be concentrated in these areas. We believe that capital efficiency is a key advantage of the IP-based network technology that we employ. We may periodically invest excess cash balances in the marketable securities of highly-rated commercial paper and money market funds though at present no substantive activity of this nature has transpired.
Cash Flows From Financing Activities. Cash flows provided from financing activities was negligible for the quarter ending September 30, 2008. We believe that cash on hand plus cash generated from operating activities will be sufficient to fund capital expenditures, operating expenses and other cash requirements associated with our present market expansion plan. Our business plan assumes that cash flow from operating activities of our mature markets will offset the negative cash flow from operating activities and cash flow from financing activities with respect to the additional markets we plan to launch. This offset is lilely to begin in the fourth quarter of 2008. We intend to adhere to our policy of fully funding all future market expansions in advance and do not anticipate entering markets without having more than sufficient cash on hand or borrowing capacity to cover projected cash needs.
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
OPERATING ACTIVITIES
Net loss
$
(62,690)
$
(30,888)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation expense
38,869
21,060
Changes in operating assets and liabilities:
Changes in accounts payable
(350)
6,673
Changes in interest payable
5,490
-
Changes in accounts receivable
(554)
-
Net Cash Used in Operating Activities
(19,235)
(3,155)
INVESTING ACTIVITIES
Purchase of fixed assets
(2,000)
-
Net Cash Used in Investing Activities
(2,000)
-
- 18 -
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from sale of common stock
7,993
26,225
Proceeds from related party loans
-
3,500
Net Cash Provided by Financing Activities
7,993
29,725
NET DECREASE IN CASH
(13,242)
26,570
CASH AT BEGINNING OF PERIOD
18,300
-
CASH AT END OF PERIOD
$
5,058
$
26,570
SUPPLIMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest
$
-
$
-
Income Taxes
$
-
$
-
NON CASH FINANCING ACTIVITIES:
Equipment purchased for note payable
$
-
$
140,400
Equipment purchased for common stock
104,507
-
The accompanying notes are an integral part of these financial statements.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material On December 26, 2006, the Company purchased certain telecommunication equipment for a note payable of $140,400. $10,000 is due on September 30, 2007. The balance is due in 5 equal annual payments of $30,956. The note is secured by the equipment and accrues interest at 6% per annum.
Future maturities of the note payable are as follows:
2008
$ 14,748
2009
24,520
2010
25,992
2011
27,551
2012
29,205
Total
$ 122,016
Commitments
Critical Accounting Policies
Nature of Business
Dialpoint Communications Corporation (“DCC” or the “Company”) was incorporated in the state of Nevada, and is a developmental stage company that is engaged in the business of the development of technology related to the broadcast of voice communications over the Internet (Internet Telephone) and the servicing of web-based information transmission needs of end users.
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Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.
Comprehensive Income
The Company has no component of other comprehensive income. Accordingly, net income equals comprehensive income for first quarter of 2008.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the useful lives of the related assets. Expenditures for maintenance and repairs are charged to expense as incurred.
Income Taxes
The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a December 31 fiscal year-end.
Stock-based compensation.
As of September 30, 2008, the Company has not issued any share-based payments to its employees.
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Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for us beginning January 1, 2008. The Company is currently assessing the potential impact that adoption of SFAS No. 157 would have on the financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 gives the irrevocable option to carry many financial assets and liabilities at fair values, with changes in fair value recognized in earnings. SFAS No. 159 is effective beginning January 1, 2008, although early adoption is permitted. The Company is currently assessing the potential impact that adoption of SFAS No. 159 will have on the financial statements.
The FASB has revised SFAS No. 141. This revised statement establishes uniform treatment for all acquisitions. It defines the acquiring company. The statement further requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, measured at their fair market values as of that date. It requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the non-controlling interest in the acquired, at the full amounts of their fair values. This changes the way that minority interest is recorded and modified as a parent’s interest in a subsidiary changes over time. This statement also makes corresponding significant amendments to other standards that related to business combinations, namely, 109, 142 and various EITF’s. This statement 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. The Company believes the implementation of this standard will have no effect on our financial statements.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
All of our financial instruments that are sensitive to market risk are entered into for purposes other than trading. Our primary market risk exposure is related to what nominal investments we may make in marketable securities. To the extent that we might engage in such activity, we would place our marketable securities investments in instruments that meet high credit quality standards as specified in our investment policy guidelines. At December 31, 2007, we had no funds so allocated and, accordingly, had no financial instruments sensitive to market risk for fluctuations in interest rates.
Item 4. Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are sufficiently effective.
Management's Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as September 30, 2008 based on the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of September 30, 2008. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Our independent registered public accounting firm, Moore & Associates, Chartered, has audited and reported on our consolidated financial statements but has not reviewed or audited the effectiveness of our internal control(s) over financial reporting .
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in legal proceedings arising in the ordinary course of our business such as collections actions for non-payment when or if our customers fail to pay us accordingly. But as of September 30, 2008 and as of the date of this filing, there is no litigation pending that could have a material adverse effect on our results of operations and financial condition.
Item 1A. Risk Factors
There are no material changes from risk factors as previously disclosed in the registrant's Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Furnish the information required by Item 701 of Regulation S-K (17 CFR 229.701) as to all equity securities of the registrant sold by the registrant during the period covered by the report that were not registered under the Securities Act. If the Item 701 information previously has been included in a Current Report on Form 8-K (17 CFR 249.308), however, it need not be furnished.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder, Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008.
On January 18 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of $55,000. The assets acquired consist of computer hardware and software.
Item 3. Defaults Upon Senior Securities.
There have not been any material default(s) in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not otherwise cured within 30 days, with respect to any of our indebtedness or Hostigation exceeding 5 percent of our total assets.
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Item 4. Submission of Matters to a Vote of Security Holders.
No matters have been submitted to a vote of security holders during the period covered by this report, through the solicitation of proxies or otherwise.
Item 5. Other Information.
(a) The registrant must disclose under this item any information required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q, but not reported, whether or not otherwise required by this Form 10-Q.
If disclosure of such information is made under this item, it need not be repeated in a report on Form 8-K which would otherwise be required to be filed with respect to such information or in a subsequent report on Form 10-Q; and
Furnish the information required by Item 407(c)(3) of Regulation S-K (§229.407 of this chapter).
On January 17, 2008, Dialpoint Communications Corporation (the "Company") entered into an Asset Purchase Agreement (the "Agreement") with Brian’s Computer Center ("Brian’s") to purchase substantially all of the assets of Brian’s Computer Center. The Agreement contains customary representations, warranties and covenants. The assets to be acquired upon closing of the transaction, anticipated to occur in January, 2008, principally consist of computer hardware and software, internet domain names, repair facilities, contract rights and goodwill. As part of the transaction, at closing Brian’s and its principal shareholder, Gualberto Falcon, will enter into non-competition agreements The Company intends to use the Hostigation assets for purposes of developing the company’s Distribution and Service business’.
In consideration for the Brian’s assets, at closing the Company will issue 107,843 shares of its common stock equal to $55,000 divided by the last closing price of a share of the Company's common stock on January 17, 2008 (107,843 shares).
Item 6. Exhibits.
(a)
Exhibits required by Item 601 of Regulation S-B
Exhibit Number
Name and/or Identification of Exhibit
3.
Articles of Incorporation & By-Laws
- 23 -
--------------------------------------------------------------------------------
(a)
Articles of Incorporation of Dialpoint Communications Corporation filed on April 6, 2006, incorporated by reference to the Registration Statement on Form SB-2, as amended, filed with the SEC on June 27, 2007.
(b)
Bylaws of Dialpoint Communications Corporation adopted on April 27, 2006, incorporated by reference to the Registration Statement on Form SB-2, as amended, filed with the SEC on June 27, 2007.
(c)
Certificate of Articles of Incorporation of Dialpoint Communications Corporation, incorporated by reference from the Form SB-2, as amended, filed with the SEC on June 27, 2007.
31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dialpoint Communications Corporation
(Registrant)
Signature
Title
Date
/s/ Ann DiSilvestre
Principal Executive Officer
November 19, 2008
Ann DiSilvestre
/s/ Eileen Casey
Principal Financial Officer
November 19, 2008
Eileen Casey
/s/ Eileen Casey
Principal Accounting Officer
November 19, 2008
Eileen Casey
- 25 -
EXHIBIT 31.1
CERTIFICATION
SARBANES-OXLEY ACT OF 2002
I, Ann DiSilvestre as Chief Executive Officer, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Dialpoint Communications 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 small business issuer as of, and for, the periods presented in this report;
4.
The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our 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
(c)
disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control financial reporting;
5.
The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function):
(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 small business issuer'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 small business issuer's internal control over financial reporting.
Date:
November 19, 2008
By:
/s/ Ann DiSilvestre
Ann DiSilvestre , Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
Certification of Chief Financial Officer
I, Eileen Casey as Chief Financial Officer (CFO), certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Dialpoint Communications 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 small business issuer as of, and for, the periods presented in this report;
4.
The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our 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
(c)
disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control financial reporting;
5.
The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function):
(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 small business issuer'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 small business issuer's internal control over financial reporting.
Date:
November 19, 2008
By: /s/ Eileen Casey
Eileen Casey, Chief Financial Officer (CFO)
EXHIBIT 32.1
EXHIBIT 99
Certification Pursuant to Title 18, United States Code, Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of Dialpoint Communications Corporation ("Dialpoint") on Form 10-Q for the quarter ended September 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ann DiSilvestre, Chief Executive Officer of Dialpoint, and I, Eileen Casey, Principal Financial Officer of Dialpoint, certify, pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 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; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Dialpoint.
Date: November 19, 2008
/s/ Ann DiSilvestre
Ann DiSilvestre
Chief Executive Officer
Date: November 19, 2008
/s/ Eileen Casey
Eileen Casey
Principal Financial Officer
Edit - sorry, forgot I already posted the 10-Q. Too many stocks, confused by the "e" and removal of the "e".
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number 000-52921
Dialpoint Communications Corporation
(Exact name of small business issuer as specified in its charter)
Nevada
20-4799741
(State or jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2354-B Ebenezer Road
Rock Hill, South Carolina 29732
(Address of principal executive offices)
(877)-463-7864
(Issuer's telephone number)
767 Village Manor Place, Suwanee, Georgia 30024
(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 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.
[X] Yes [ ] No
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accredited 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 [ ]
Accelerated filer [ ]
Non-accelerated filer [ ]
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
[ ] Yes [X] No
APPLICABLE ONLY TO ISSUERS INVOVLED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court.
[ ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common equity, as of November 19, 2008 - 56,163,708 shares of common stock.
- 1 -
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DIALPOINT COMMUNICATIONS CORPORATION
TABLE OF CONTENTS
Item 1. Financial Statements.
3
Item 2. Management's Discussion and Plan of Operation.
12
Going Concern
12
Overview
12
Revenue
13
Cost of Revenue
15
Liquidity and Capital Resources
16
Off-Balance Sheet Arrangements
19
Commitments
19
Critical Accounting Policies
19
Nature of Business
19
Use of Estimates
20
Dividends
20
Comprehensive Income
20
Cash and Cash Equivalents
20
Property and Equipment
20
Income Taxes
20
Impairment of Long-Lived Assets
20
Accounting Basis
20
Stock-based compensation.
20
Recent Accounting Pronouncements
21
Revenue Recognition
21
Item 3. Quantitative and Qualitative Disclosures About Market Risk
21
Item 4. Controls and Procedures
21
Management's Annual Report on Internal Control over Financial Reporting
21
Item 1. Legal Proceedings
22
Item 1A. Risk Factors
22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
22
Item 3. Defaults Upon Senior Securities.
22
Item 4. Submission of Matters to a Vote of Security Holders.
23
Item 5. Other Information.
23
Item 6. Exhibits.
23
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
- 3 -
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DIALPOINT COMMUNICATIONS CORPORATION
FINANCIAL STATEMENTS
September 30, 2008
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TABLE OF CONTENTS
Balance Sheet.………………..………..………………………………………………….1
Statement of Operations…………………….……...………………………………….…2
Statement of Stockholders’ Equity ………..……………..………… …………………....3
Statement of Cash Flows ………………………………………………..….……………4
Notes to the Financial Statements……………………………………...………………....5
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DIALPOINT COMMUNICATIONS CORPORATION
Balance Sheets
ASSETS
September 30,
December 31,
2008
2007
(unaudited)
CURRENT ASSETS
Cash
$
5,058
$
18,300
Accounts receivable
554
-
Total Current Assets
5,612
18,300
EQUIPMENT, net
180,759
113,121
TOTAL ASSETS
$
186,371
$
131,421
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
-
$
350
Current portion of notes payable
14,748
14,748
Accrued interest payable
13,914
8,424
Related party payable
3,900
3,900
Total Current Liabilities
32,562
27,422
LONG-TERM LIABILITIES
Notes payable
107,268
107,268
TOTAL LIABILITIES
139,830
134,690
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.001 par value; 75,000,000 shares
authorized; 56,163,708 and 54,399,000 shares
issued and outstanding, respectively
56,164
54,400
Additional paid-in capital
120,211
9,475
Deficit accumulated during development stage
(129,834)
(67,144)
Total Stockholders' Equity (Deficit)
46,541
(3,269)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
$
186,371
$
131,421
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Operations
(unaudited)
For the Three
For the Three
For the Nine
For the Nine
Months Ended
Months Ended
Months Ended
Months Ended
September 30,
September 30,
September 30,
September 30,
2008
2007
2008
2007
REVENUES
$
39,600
$
-
$
124,482
$
-
COST OF SALES
7,079
-
52,149
-
GROSS PROFIT
32,521
-
72,333
-
OPERATING EXPENSES
General and administrative
27,106
51
90,663
3,505
Depreciation expense
14,289
7,020
38,869
21,060
Total Operating Expenses
41,395
7,071
129,532
24,565
LOSS FROM OPERATIONS
(8,874)
(7,071)
(57,199)
(24,565)
OTHER EXPENSES
Interest expense
(1,830)
(2,108)
(5,491)
(6,323)
Total Other Expenses
(1,830)
(2,108)
(5,491)
(6,323)
NET LOSS BEFORE INCOME TAXES
(10,704)
(9,179)
(62,690)
(30,888)
INCOME TAX EXPENSE
-
-
-
-
NET LOSS
$
(10,704)
$
(9,179)
$
(62,690)
$
(30,888)
BASIC LOSS PER SHARE
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING
56,163,708
52,724,500
55,172,781
52,549,668
The accompanying notes are an integral part of these financial statements
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Stockholders’ Equity (Deficit)
(unaudited)
Deficit
Accumulated
Total
Additional
During the
Stockholders'
Common Stock
Paid-In
Development
Equity
Shares
Amount
Capital
Stage
(Deficit)
Balance, December 31, 2006
52,200,000
$
52,200
$
(34,800)
$
(17,800)
$
(400)
Common stock issued for
cash at $0.025per share
2,199,000
2,200
52,775
-
54,975
Stock offering costs paid
-
-
(8,500)
-
(8,500)
Net loss for the year ended
December 31, 2007
-
-
-
(49,344)
(49,344)
Balance, December 31, 2007
54,399,000
54,400
9,475
(67,144)
(3,269)
Contributed capital
-
-
7,500
-
7,500
Common stock issued for
assets at $0.13 per share
431,372
432
54,568
-
55,000
Common stock issued for
assets at $0.04 per share
1,333,336
1,332
48,668
-
50,000
Net loss for the nine months
ended September 30, 2008
-
-
-
(62,690)
(62,690)
Balance, September 30, 2008
56,163,708
$
56,164
$
120,211
$
(129,834)
$
46,541
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Statement of Cash Flows
(unaudited)
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
OPERATING ACTIVITIES
Net loss
$
(62,690)
$
(30,888)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation expense
38,869
21,060
Changes in operating assets and liabilities:
Changes in accounts payable
(350)
6,673
Changes in interest payable
5,490
-
Changes in accounts receivable
(554)
-
Net Cash Used in Operating Activities
(19,235)
(3,155)
INVESTING ACTIVITIES
Purchase of fixed assets
(2,000)
-
Net Cash Used in Investing Activities
(2,000)
-
FINANCING ACTIVITIES
Proceeds from sale of common stock
7,993
26,225
Proceeds from related party loans
-
3,500
Net Cash Provided by Financing Activities
7,993
29,725
NET DECREASE IN CASH
(13,242)
26,570
CASH AT BEGINNING OF PERIOD
18,300
-
CASH AT END OF PERIOD
$
5,058
$
26,570
SUPPLIMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest
$
-
$
-
Income Taxes
$
-
$
-
NON CASH FINANCING ACTIVITIES:
Equipment purchased for note payable
$
-
$
140,400
Equipment purchased for common stock
104,507
-
The accompanying notes are an integral part of these financial statements.
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DIALPOINT COMMUNICATIONS CORPORATION
Notes to the Financial Statements
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2008 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2007 audited financial statements. The results of operations for the period ended September 30, 2008 and 2007 are not necessarily indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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DIALPOINT COMMUNICATIONS CORPORATION
Notes to the Financial Statements
NOTE 3 – EQUITY TRANSACTIONS
On March 13th 2008 the Company completed a 4shares for 1 forward stock split. The accompanying financial statements reflect the forward stock split on a retroactive basis.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder, Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008. On January 18, 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of
$55,000. The assets acquired consist of computer hardware and software.
NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “ Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60 ”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “ The Hierarchy of Generally Accepted Accounting Principles ”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
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Item 2. Management's Discussion and Plan of Operation.
This section must be read in conjunction with the unaudited Financial Statements included in this report.
A.
Management’s Discussion
You should read the following discussion together with our consolidated financial statements and the related notes and other financial information included elsewhere in this report. The discussion in this report contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this report should be read as applying to all related forward-looking statements wherever they appear in this report. Our actual results could differ materially from those discussed here.
In this report, Dialpoint Communications Corporation and its subsidiaries are referred to as “we”, the “Company” or “DialPoint”.
Going Concern
The financial statements included in this report were prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company has accumulated deficit of $129,834 as of September 30, 2008. As of that date we had limited liquidity, and had not completed our efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. We do believe that at or before the start of the first quarter of 2009 we may be able to generate sufficient revenue so as to sustain operations but there can be no assurance that we are correct.
Management anticipates that the Company might be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Overview
We provide managed IP-based communications services to our target customers of small businesses with 5 to 249 employees in second-tier or so-called second city markets. A retail market is generally considered secondary or tertiary if there are fewer than 1 million people in the metropolitan statistical area (MSA). Today many suggest that a population as little as 500,000 may constitute a second tier city. (February 2007 Property & Portfolio Research Publication). We provide these services through bundled packages of local and long distance voice services and broadband Internet services, together with additional applications and services, for an affordable fixed monthly fee under contracts with terms of 12-36 months. We are capable of proffering our services nation-wide and to customers throughout the United States including Hawaii and Alaska. We currently have customers in the following states:
1.
North Carolina
2.
South Carolina
3.
Florida
4.
Georgia
5.
Nevada
6.
Oklahoma
7.
California
We operate our business primarily out of our facilities in Rock Hill, South Carolina. We sell integrated packages of services, primarily delineated by the number of local voice lines, long distance minutes and T-1 connections provided to the customer. Each of our Service packages includes local and long distance voice services and broadband Internet access, plus additional value-added applications. Customers may also choose to add extra features or lines for additional fee(s).
Our voice services are delivered using VoIP technology, and all of such services are delivered over our secure all-IP network, which we believe affords greater service flexibility and significantly lower network costs than traditional service providers using circuit-switch technologies.. We believe our high degree of systems automation contributes to operational efficiencies and lower costs in our support functions.
We sell our services primarily through outside sales agents and internet marketing campaigns, direct mailers, print ads, etc. Our agents do not work for us directly. They are compensated by a percentage of the revenues we derive from the customers they refer to us. Sometimes these agents have business relationships with these customers and,
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in many cases; they may perform equipment installations for us at our customers’ sites. Some of our new customers are generated by referrals from existing customers and partners. We offer financial incentives to our customers and other sources for referrals.
We compete primarily against incumbent local exchange carriers and, to a lesser extent, against competitive local exchange carriers, both of which are local telephone companies. Local telephone companies do not necessarily focus on our target markets. Moreover, we believe that they concentrate on medium or large enterprises or residential customers.
Cable television providers have begun serving the small business markets with telephone service, in addition to high speed Internet access and video. To date, we have not experienced significant competition from cable television providers and do not believe that they intend to offer the breadth of services and applications that our customers purchase from us. We compete primarily based on the caliber of our customer service. We offer many of the same services to our customers that are available to large business enterprises. We strive to maintain the integrity of our network and its reliability and operational efficiencies.
We formed Dialpoint in April of 2006. We tended to corporate formation matters and corporate governance issues initially. Beginning in 2007 we focused on preparing for and planning the implementation of our business. As a consequence we did not generate significant revenue as we had not yet initiated the substantive execution of our business. We began to take on customers in the last quarter of 2007. As of the date of this filing we have in place the technological infrastructure and resources to focus on generating revenues.
We proffer our customers telecommunications services. We require significantly less capital to launch and maintain operations compared to traditional communications companies using legacy technologies. Our capital expenditures in any given geographical market correlate with our success in generating revenues in that market. As our customer base grows we expect to invest in or allocate additional capital to that market by establishing a satellite facility or customer care center in that market if necessary. We believe that such a model for growth and its effect on our prospective capital expenditures mitigates the risk of unprofitable expansion. We expect to benefit from a low fixed-cost in our budgeted capital expenditures associated with each new market we might enter, particularly in comparison to service providers employing time-division multiplexing.
Time-Division Multiplexing (TDM) is a type of digital or (rarely) analog multiplexing in which two or more signals or bit streams are transferred apparently simultaneously as sub-channels in one communication channel, but physically are taking turns on the channel. The time domain is divided into several recurrent timeslots of fixed length, one for each sub-channel. A sample, byte or data block of sub-channel 1 is transmitted during timeslot 1, sub-channel 2 during timeslot 2, etc. One TDM frame consists of one timeslot per sub-channel. After the last sub-channel the cycle starts all over again with a new frame, starting with the second sample, byte or data block from sub-channel 1, etc. This is a technique for transmitting multiple channels of separate data, voice and/or video signals simultaneously over a single communication medium, or circuit-switch technology, which is a switch that establishes a dedicated circuit for the entire duration of a call. The capital expenditures associated with the implementation of this technology would be cost-prohibitive to us at this point.
The nature of the primary components of our operating results—revenues, cost of revenue and selling, general and administrative expenses—are described below:
Revenue
Quarter Ending
Quarter Ending
Nine Months Ending
September 30, 2008
September 30, 2007
September 30, 2008
September 30, 2007
REVENUES $
39,600
$
0
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
REVENUES
$
124,482
$
-
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COST OF SALES
52,149
-
GROSS PROFIT
72,333
-
OPERATING EXPENSES
General and administrative
90,663
3,505
Depreciation expense
38,869
21,060
Total Operating Expenses
129,532
24,565
LOSS FROM OPERATIONS
(57,199)
(24,565)
OTHER EXPENSES
Interest expense
(5,491)
(6,323)
Total Other Expenses
(5,491)
(6,323)
NET LOSS BEFORE INCOME TAXES
(62,690)
(30,888)
INCOME TAX EXPENSE
-
-
NET LOSS
$
(62,690)
$
(30,888)
BASIC LOSS PER SHARE
$
(0.00)
$
(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING
55,172,781
52,549,668
During the third quarter of 2008 we generated $39,600 in revenue. For the year ended December 31, 2007 we did not generate substantive revenue.
On or about January 9, 2008 we acquired Hostigation, sole proprietorship owned and controlled by Timothy Flavin. Concurrent with that date we filed a current report on form 8-K disclosing said acquisition. We characterized the transaction as an asset purchase acquiring all of the assets of the business. With this acquisition we inherited approximately 600 customers generating monthly recurring revenue
On or about October 21, 2008, we received comments from the Securities and Exchange Commission with regards to the method in which we accounted for the Hostigation acquisition. As of the date of this report, we have not finalized this issue with the Securities an Exchange Commission.
These figures are un-audited but represent our best assessment of the results of operations for the period(s) indicated. The majority of our customers subscribe to a package, which serves customers with 4-15 local voice lines, for business enterprises with 20 or fewer employees. Smaller segments of our clientele require 16-24 local voice lines, and employ 20-50 personnel. Though we have the service capacity, we do not yet services business customers with greater than 100 employees. Our customers receive all our services over a dedicated broadband T-1 connection providing a maximum symmetric bandwidth of 1.5 Mbps (megabits per second). When necessary we can afford our customers services over two or three dedicated T-1 connections offering a maximum symmetric
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bandwidth of 3.0 Mbps or 4.5 Mbps respectively. We believe that our customers highly value the level of symmetric bandwidth offered by our services. As of September 30, 2008, approximately 99% of our customer base had Webhosting Service
We do not have sufficient data so as to formulate meaningful average monthly revenue per customer metrics for the quarter ended September 30, 2008. We are fairly certain that for the fourth quarter of 2008 we will secure reasonably consistent revenue so as to assess any trends in the data.
We believe that average monthly revenue per customer location is likely to be impacted by a number of factors, including:
1.
The distribution of customer installations during a period;
2.
The adoption by customers of applications for which incremental fees are paid;
3.
The trend toward customers executing longer term contracts at lower package prices as compared to shorter term contracts;
4.
The amount of long distance call volumes that may generate overage charges above the basic amount of minutes included in customers’ packages
5.
Additional terminating access charges; and
6.
Customer usage and purchase patterns.
We expect average monthly revenue per customer and customer location to trend to relatively stable levels in future periods. Customer revenues are generated under contracts that typically run for 12 month terms. Therefore, customer churn rates will likely impact projected future revenue streams. Deteriorating economic conditions might adversely affect our revenue growth in the near or short term. In response to deteriorating economic conditions, we hope to mitigate the risk of heightened churn and bad debt levels on a longer term basis. The steps we might take include tightening credit and collection policies and practices for customers with a higher risk profile.
Cost of Revenue
Our cost of revenue represents costs directly related to the operation of our network, including payments to the local telephone companies and other communications carriers such as long distance providers and our mobile provider, for access, interconnection and transport fees for voice and Internet traffic, customer circuit installation expenses paid to the local telephone companies, fees paid to third-party providers of certain applications such as web hosting services, collocation rents and other facility costs, telecommunications-related taxes and fees, and the cost of mobile handsets. The primary component of cost of revenue is the access fees paid to local telephone companies for the T-1 circuits we lease on a monthly basis to provide connectivity to our customers. These access circuits link our customers to our network equipment located in a collocation facility, which we lease from local telephone companies. The access fees for these circuits vary by state and are the primary reason for differences in cost of revenue across our markets.
As a result of the TRRO (See page 22) we are required to lease circuits under special access, or retail, rates in locations that are deemed to offer competitive facilities as outlined in the FCC’s regulations and interpreted by the state regulatory agencies. For additional discussion, see “Results of Operations—Revenue and Cost of Revenue.”
Where permitted by regulation, we lease our access circuits on a wholesale basis as UNE loops or extended enhanced loops as provided for under the FCC’s Telecommunications Elemental Long Run Incremental Cost rate structure. We employ UNE loops when the customer’s T-1 circuit is located where it can be connected to a local telephone company’s central office where we have a collocation, and we use extended enhanced links when we do not have a central office collocation available to serve a customer’s T-1 circuit. Historically, approximately half of our circuits are provisioned using a combination of UNE and Special Access loops and half using extended enhanced links, although the impact of the TRRO has reduced our usage of the T-1 transport portion of extended enhanced links and resulted in the conversion of a majority of the previously installed T-1 transports to DS-3 transports. Our monthly expenses are significantly less when using UNE loops rather than extended enhanced links, but UNE loops require us to incur the capital expenditures of central office collocation equipment. Both UNE loops and extended enhanced loops offer significant cost advantages over special access-based circuits. We install central office collocation equipment in those central offices having the densest concentration of small businesses. We usually launch operations in a new market with several collocations and add additional collocation facilities over time as we confirm the most advantageous locations in which to deploy the equipment. We believe our discipline of leasing these T-1 access circuits on a wholesale basis rather than on the basis of special access rates from the local telephone companies is an important component of our operating cost structure.
We receive service credits from various local telephone companies to adjust for prior errors in billing, including the effect of price decreases retroactively applied upon the adoption of new rates as mandated by regulatory bodies.
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These service credits are often the result of negotiated resolutions of bill disputes that we conduct with our vendors. We also receive payments from the local telephone companies in the form of performance penalties that are assessed by state regulatory commissions based on the local telephone companies’ performance in the delivery of circuits and other services that we use in our network. Because of the many factors, as noted, that impact the amount and timing of service credits and performance penalties, estimating the ultimate outcome of these situations is uncertain. Accordingly, we recognize service credits and performance penalties as offsets to cost of revenue when the ultimate resolution and amount are known. These items do not follow any predictable trends and often result in variances when comparing the amounts received over multiple periods.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include salaries and ancillary costs for human resources and other expenses related to marketing, technical support, IT, invoicing, regulatory compliance, administrative, collections services, legal and accounting functions. Our selling, general and administrative expenses include both fixed and variable costs. Fixed selling expenses include salaries and lease expenses. Variable selling costs consist primarily of commissions and marketing compensatory arrangements. Fixed general and administrative costs include the cost of staffing certain corporate managerial functions such as IT, marketing, administrative, invoicing, engineering, and related costs, such as lease expenses, legal and accounting fees and recruiting costs. Variable general and administrative costs include the cost of provisioning and customer activation staff, which grows with the level of installation of new customers, and the cost of customer care and technical support staff, which grows with the level of total customers on our network. As we expand into new markets, certain fixed costs are likely to increase; however, these increases are intermittent and not proportional with the growth of customers.
Interest Income . For the quarter ended September 30, 2008 we had no substantive interest income.
Interest Expense. Interest expense relates primarily to the financing arrangement we have in place for our soft switches.
From Inception
From Inception
For the
For the
on April 20,
on April 20,
Quarter Ended
Year Ended
2006 Through
2006 Through
September 30,
December 31,
December 31,
December 31,
2008
2007
2006
2007
Interest expense
(1,830)
(8,424)
-
(8,424)
Liquidity and Capital Resources
Overview . We commenced operations in late 2007. Prior to that, we funded our operations primarily through a contribution of capital by a founder. We have yet to record positive cash flow from operating activities. During the fiscal year ended December 31, 2006, the Company issued 13,050,000 shares of its common stock for cash valued at $17,400. The shares were issued at $0.003 per share. During the fiscal year ended December 31, 2007, the Company issued 2,199,100 shares of its common stock for cash $54,975. The shares were issued at $0.025 per share.
On March 13th 2008 the Company completed a 4shares for 1 forward stock split. The accompanying financial statements reflect the forward stock split on a retroactive basis.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder,
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Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008.
On January 18 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of $55,000. The assets acquired consist of computer hardware and software.
DIALPOINT COMMUNICATIONS CORPORATION
Statement of Stockholders’ Equity
(unaudited)
Deficit
Accumulated
Total
Additional
During the
Stockholders'
Common Stock
Paid-In
Development
Equity
Shares
Amount
Capital
Stage
(Deficit)
Balance, December 31, 2006
52,200,000
$
52,200
$
(34,800)
$
(17,800)
$
(400)
Common stock issued for
cash at $0.025per share
2,199,000
2,200
52,775
-
54,975
Stock offering costs paid
-
-
(8,500)
-
(8,500)
Net loss for the year ended
December 31, 2007
-
-
-
(49,344)
(49,344)
Balance, December 31, 2007
54,399,000
54,400
9,475
(67,144)
(3,269)
Contributed capital
-
-
7,500
-
7,500
Common stock issued for
assets at $0.13 per share
431,372
432
54,568
-
55,000
Common stock issued for
assets at $0.04 per share
1,333,336
1,332
48,668
-
50,000
Net loss for the nine months
ended September 30, 2008
-
-
-
(62,690)
(62,690)
Balance, September 30, 2008
56,163,708
$
56,164
$
120,211
$
(129,834)
$
46,541
The accompanying notes are an integral part of these financial statements.
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For the nine month period ended September 30 2008 the company had revenues of 124,482 compared to zero during the same period 2007 .The company had cost of sales of $52,149 compared to zero in 2007. The company had a net loss $62,690 for the 9 months ended September 30 2008 compared to $30,888 for the same period of 2007. The increase was due to an increase in general and administrative expenses.
.
Cash Flows From Investing Activities. Our principal cash investments are historically for purchases of equipment and for purchases of marketable securities. Cash purchases of equipment primarily include network capital expenditures such as integrated access devices, T-1 aggregation routers, trunking gateway routers, soft-switches, other network routers, associated growth expenditures related to these items, diagnostic and test equipment, certain collocation and data center build-out expenditures and equipment installation costs and non-network capital expenditures, such as the cost of software licenses and implementation costs associated with our operational support systems as well as our financial and administrative systems, servers and other equipment needed to support our software packages, personal computers, internal communications equipment, furniture and fixtures and leasehold improvements to our office space.
Our capital expenditures result from growth in customers in existing and future prospective markets, network additions needed to support our entry into new markets, and enhancements and development costs related to our operational support systems in order to offer additional applications and services to our customers. We expect that future capital expenditures will continue to be concentrated in these areas. We believe that capital efficiency is a key advantage of the IP-based network technology that we employ. We may periodically invest excess cash balances in the marketable securities of highly-rated commercial paper and money market funds though at present no substantive activity of this nature has transpired.
Cash Flows From Financing Activities. Cash flows provided from financing activities was negligible for the quarter ending September 30, 2008. We believe that cash on hand plus cash generated from operating activities will be sufficient to fund capital expenditures, operating expenses and other cash requirements associated with our present market expansion plan. Our business plan assumes that cash flow from operating activities of our mature markets will offset the negative cash flow from operating activities and cash flow from financing activities with respect to the additional markets we plan to launch. This offset is lilely to begin in the fourth quarter of 2008. We intend to adhere to our policy of fully funding all future market expansions in advance and do not anticipate entering markets without having more than sufficient cash on hand or borrowing capacity to cover projected cash needs.
For the Nine
For the Nine
Months Ended
Months Ended
September 30,
September 30,
2008
2007
OPERATING ACTIVITIES
Net loss
$
(62,690)
$
(30,888)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation expense
38,869
21,060
Changes in operating assets and liabilities:
Changes in accounts payable
(350)
6,673
Changes in interest payable
5,490
-
Changes in accounts receivable
(554)
-
Net Cash Used in Operating Activities
(19,235)
(3,155)
INVESTING ACTIVITIES
Purchase of fixed assets
(2,000)
-
Net Cash Used in Investing Activities
(2,000)
-
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FINANCING ACTIVITIES
Proceeds from sale of common stock
7,993
26,225
Proceeds from related party loans
-
3,500
Net Cash Provided by Financing Activities
7,993
29,725
NET DECREASE IN CASH
(13,242)
26,570
CASH AT BEGINNING OF PERIOD
18,300
-
CASH AT END OF PERIOD
$
5,058
$
26,570
SUPPLIMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest
$
-
$
-
Income Taxes
$
-
$
-
NON CASH FINANCING ACTIVITIES:
Equipment purchased for note payable
$
-
$
140,400
Equipment purchased for common stock
104,507
-
The accompanying notes are an integral part of these financial statements.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material On December 26, 2006, the Company purchased certain telecommunication equipment for a note payable of $140,400. $10,000 is due on September 30, 2007. The balance is due in 5 equal annual payments of $30,956. The note is secured by the equipment and accrues interest at 6% per annum.
Future maturities of the note payable are as follows:
2008
$ 14,748
2009
24,520
2010
25,992
2011
27,551
2012
29,205
Total
$ 122,016
Commitments
Critical Accounting Policies
Nature of Business
Dialpoint Communications Corporation (“DCC” or the “Company”) was incorporated in the state of Nevada, and is a developmental stage company that is engaged in the business of the development of technology related to the broadcast of voice communications over the Internet (Internet Telephone) and the servicing of web-based information transmission needs of end users.
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Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.
Comprehensive Income
The Company has no component of other comprehensive income. Accordingly, net income equals comprehensive income for first quarter of 2008.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the useful lives of the related assets. Expenditures for maintenance and repairs are charged to expense as incurred.
Income Taxes
The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a December 31 fiscal year-end.
Stock-based compensation.
As of September 30, 2008, the Company has not issued any share-based payments to its employees.
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Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for us beginning January 1, 2008. The Company is currently assessing the potential impact that adoption of SFAS No. 157 would have on the financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 gives the irrevocable option to carry many financial assets and liabilities at fair values, with changes in fair value recognized in earnings. SFAS No. 159 is effective beginning January 1, 2008, although early adoption is permitted. The Company is currently assessing the potential impact that adoption of SFAS No. 159 will have on the financial statements.
The FASB has revised SFAS No. 141. This revised statement establishes uniform treatment for all acquisitions. It defines the acquiring company. The statement further requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, measured at their fair market values as of that date. It requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the non-controlling interest in the acquired, at the full amounts of their fair values. This changes the way that minority interest is recorded and modified as a parent’s interest in a subsidiary changes over time. This statement also makes corresponding significant amendments to other standards that related to business combinations, namely, 109, 142 and various EITF’s. This statement 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. The Company believes the implementation of this standard will have no effect on our financial statements.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
All of our financial instruments that are sensitive to market risk are entered into for purposes other than trading. Our primary market risk exposure is related to what nominal investments we may make in marketable securities. To the extent that we might engage in such activity, we would place our marketable securities investments in instruments that meet high credit quality standards as specified in our investment policy guidelines. At December 31, 2007, we had no funds so allocated and, accordingly, had no financial instruments sensitive to market risk for fluctuations in interest rates.
Item 4. Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are sufficiently effective.
Management's Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as September 30, 2008 based on the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of September 30, 2008. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Our independent registered public accounting firm, Moore & Associates, Chartered, has audited and reported on our consolidated financial statements but has not reviewed or audited the effectiveness of our internal control(s) over financial reporting .
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in legal proceedings arising in the ordinary course of our business such as collections actions for non-payment when or if our customers fail to pay us accordingly. But as of September 30, 2008 and as of the date of this filing, there is no litigation pending that could have a material adverse effect on our results of operations and financial condition.
Item 1A. Risk Factors
There are no material changes from risk factors as previously disclosed in the registrant's Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Furnish the information required by Item 701 of Regulation S-K (17 CFR 229.701) as to all equity securities of the registrant sold by the registrant during the period covered by the report that were not registered under the Securities Act. If the Item 701 information previously has been included in a Current Report on Form 8-K (17 CFR 249.308), however, it need not be furnished.
On January 3, 2008, the Company entered into an Asset Purchase Agreement with Mr. Timothy Flavin ("Hostigation") to purchase substantially all of the assets of Hostigation.Com. The assets acquired consist of computer hardware and software. As part of the transaction, at closing Hostigation and its principal shareholder, Timothy Flavin, entered into non-competition agreements The Company is using the Hostigation assets for purposes of developing the Company’s Collocation and Web Hosting business’.
In consideration for the Hostigation assets, at closing the Company issued 1,333,336 shares of its common stock equal to $50,000 divided by the opening price of a share of the Company's common stock on January 3, 2008.
On January 18 2008 the Company acquired the assets of Brian’s Computer Service for 431,372 shares of its Restricted Common Stock for a value of $55,000. The assets acquired consist of computer hardware and software.
Item 3. Defaults Upon Senior Securities.
There have not been any material default(s) in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not otherwise cured within 30 days, with respect to any of our indebtedness or Hostigation exceeding 5 percent of our total assets.
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Item 4. Submission of Matters to a Vote of Security Holders.
No matters have been submitted to a vote of security holders during the period covered by this report, through the solicitation of proxies or otherwise.
Item 5. Other Information.
(a) The registrant must disclose under this item any information required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q, but not reported, whether or not otherwise required by this Form 10-Q.
If disclosure of such information is made under this item, it need not be repeated in a report on Form 8-K which would otherwise be required to be filed with respect to such information or in a subsequent report on Form 10-Q; and
Furnish the information required by Item 407(c)(3) of Regulation S-K (§229.407 of this chapter).
On January 17, 2008, Dialpoint Communications Corporation (the "Company") entered into an Asset Purchase Agreement (the "Agreement") with Brian’s Computer Center ("Brian’s") to purchase substantially all of the assets of Brian’s Computer Center. The Agreement contains customary representations, warranties and covenants. The assets to be acquired upon closing of the transaction, anticipated to occur in January, 2008, principally consist of computer hardware and software, internet domain names, repair facilities, contract rights and goodwill. As part of the transaction, at closing Brian’s and its principal shareholder, Gualberto Falcon, will enter into non-competition agreements The Company intends to use the Hostigation assets for purposes of developing the company’s Distribution and Service business’.
In consideration for the Brian’s assets, at closing the Company will issue 107,843 shares of its common stock equal to $55,000 divided by the last closing price of a share of the Company's common stock on January 17, 2008 (107,843 shares).
Item 6. Exhibits.
(a)
Exhibits required by Item 601 of Regulation S-B
Exhibit Number
Name and/or Identification of Exhibit
3.
Articles of Incorporation & By-Laws
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--------------------------------------------------------------------------------
(a)
Articles of Incorporation of Dialpoint Communications Corporation filed on April 6, 2006, incorporated by reference to the Registration Statement on Form SB-2, as amended, filed with the SEC on June 27, 2007.
(b)
Bylaws of Dialpoint Communications Corporation adopted on April 27, 2006, incorporated by reference to the Registration Statement on Form SB-2, as amended, filed with the SEC on June 27, 2007.
(c)
Certificate of Articles of Incorporation of Dialpoint Communications Corporation, incorporated by reference from the Form SB-2, as amended, filed with the SEC on June 27, 2007.
31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dialpoint Communications Corporation
(Registrant)
Signature
Title
Date
/s/ Ann DiSilvestre
Principal Executive Officer
November 19, 2008
Ann DiSilvestre
/s/ Eileen Casey
Principal Financial Officer
November 19, 2008
Eileen Casey
/s/ Eileen Casey
Principal Accounting Officer
November 19, 2008
Eileen Casey
- 25 -
EXHIBIT 31.1
CERTIFICATION
SARBANES-OXLEY ACT OF 2002
I, Ann DiSilvestre as Chief Executive Officer, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Dialpoint Communications 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 small business issuer as of, and for, the periods presented in this report;
4.
The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our 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
(c)
disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control financial reporting;
5.
The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function):
(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 small business issuer'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 small business issuer's internal control over financial reporting.
Date:
November 19, 2008
By:
/s/ Ann DiSilvestre
Ann DiSilvestre , Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
Certification of Chief Financial Officer
I, Eileen Casey as Chief Financial Officer (CFO), certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Dialpoint Communications 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 small business issuer as of, and for, the periods presented in this report;
4.
The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our 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
(c)
disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control financial reporting;
5.
The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function):
(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 small business issuer'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 small business issuer's internal control over financial reporting.
Date:
November 19, 2008
By: /s/ Eileen Casey
Eileen Casey, Chief Financial Officer (CFO)
EXHIBIT 32.1
EXHIBIT 99
Certification Pursuant to Title 18, United States Code, Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of Dialpoint Communications Corporation ("Dialpoint") on Form 10-Q for the quarter ended September 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ann DiSilvestre, Chief Executive Officer of Dialpoint, and I, Eileen Casey, Principal Financial Officer of Dialpoint, certify, pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 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; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Dialpoint.
Date: November 19, 2008
/s/ Ann DiSilvestre
Ann DiSilvestre
Chief Executive Officer
Date: November 19, 2008
/s/ Eileen Casey
Eileen Casey
Principal Financial Officer
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