UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




---



FORM
10-Q





x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the Quarterly Period Ended March 31,
2008






OR


 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the Transition Period
      From                            to




Commission
File Number: 333-146970









PINPOINT
RECOVERY SOLUTIONS CORP.


(Exact
name of registrant as specified in its charter)




Delaware
            
            26-2214000(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)4300
      W. Cypress Street, Suite 370
              Tampa,
      Florida
            
            33607(Address
      of principal executive offices)
            
            (Zip
      Code)




(813)
879-5000


(Registrant’s
telephone number, including area code)




None


(Former
name, former address and former fiscal year, if changed since last
report)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.    Yes  x    No   ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” 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  ̈ No  x




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.





Class
            
            Outstanding
      at May 15, 2008Common
      Stock, $0.001 par value per share
            
            4,617,588
      shares









TABLE OF
CONTENTS
 Pinpoint
Recovery Solutions Corp. ∙ Form
10-Q




PART
      I-FINANCIAL INFORMATION
              
              1Item
      1. Financial Statements
              
              1CONSOLIDATED
      BALANCE SHEETS
              
              1CONSOLIDATED
      STATEMENTS OF OPERATIONS
              
              2CONSOLIDATED
      STATEMENTS OF CASH FLOWS
              
              3NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
              
              4Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
              
              8Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
              
              12Item
      4T. Controls and Procedures
              
              13PART
      II-OTHER INFORMATION
              
              14Item
      1. Legal Proceedings
              
              14Item
      1A. Risk Factors
              
              14Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              14Item
      3. Defaults Upon Senior Securities
              
              14Item
      4. Submission of Matters to a Vote of Security Holders
              
              14Item
      5. Other Information
              
              14Item
      6. Exhibits
              
              14SIGNATURES
              
              15









PART
I-FINANCIAL INFORMATION


Item
1. Financial Statements.





CONSOLIDATED
BALANCE SHEETS


Pinpoint
Recovery Solutions Corp. ∙ 10-Q





March 31,
      2008(unaudited)
              
              
              December 31,
      2007ASSETSCurrent
      assets:Cash
              
              $
              168,028
              
              
              $
              221,873Accounts
      receivable, net of allowance of $26,447
              
              
              283,773
              
              
              
              595,772Prepaid
      expenses
              
              
              63,311
              
              
              
              59,835Total
      current assets
              
              
              515,112
              
              
              
              877,480Property
      and equipment, net of accumulated depreciation of $8,271 and $5,428
      respectively
              
              
              34,074
              
              
              
              36,703Goodwill
              
              
              6,397,542
              
              
              
              6,397,542Other
      assets
              
              
              28,060
              
              
              
              30,640TOTAL
      ASSETS
              
              $
              6,974,788
              
              
              $
              7,342,365LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
              
              $
              128,138
              
              
              $
              132,266Payable
      to related party
              
              
              103,642
              
              
              
              92,490Other
      current liabilities
              
              
              11,732
              
              
              
              15,805Accrued
      interest-related party
              
              
              54,808
              
              
              
              46,423Promissory
      notes payable-related party
              
              
              1,861,096
              
              
              
              1,861,096Total
      current liabilities
              
              
              2,159,416
              
              
              
              2,148,080Commitments
      and contingenciesStockholders'
      Equity:Preferred
      stock, $.001 par value; 1,000,000 shares authorizedand
      none issued
              
              
              -
              
              
              
              -Common
      stock, $.001 par value; 15,000,000 shares authorized,4,617,588
      issued and outstanding
              
              
              4,618
              
              
              
              4,618Additional
      paid-in capital
              
              
              6,625,011
              
              
              
              6,446,335Accumulated
      deficit
              
              
              (1,814,257
              )
              
              
              (1,256,668
              )Total
      stockholders' equity
              
              
              4,815,372
              
              
              
              5,194,285TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              6,974,788
              
              
              $
              7,342,365


The
accompanying notes are an integral part of the consolidated financial
statements.




1




CONSOLIDATED
STATEMENTS OF OPERATIONS


Pinpoint
Recovery Solutions Corp. ∙ 10-Q


(Unaudited)


Three
      Months Ended March 31,
              
              2008
              
              
              2007Revenues
              
              $
              247,507
              
              
              $
              -Costs
      and Expenses:Direct
      costs
              
              
              32,176
              
              
              
              -Payroll
      and related costs
              
              
              283,625
              
              
              
              -Consulting
      fees
              
              
              190,415
              
              
              
              1,250Professional
      fees
              
              
              55,057
              
              
              
              130,353Interest
      expense-related party
              
              
              40,223
              
              
              
              -General
      and administrative
              
              
              203,600
              
              
              
              1,133Total
      costs and expenses
              
              
              805,096
              
              
              
              132,736Net
      loss
              
              $
              (557,589
              )
              
              $
              (132,736
              )Basic
      and diluted loss per common share
              
              $
              (0.12
              )
              
              $
              (0.08
              )Weighted
      average number of common sharesBasic
      and fully diluted
              
              
              4,617,588
              
              
              
              1,573,000


The
accompanying notes are an integral part of the consolidated financial
statements.




2




CONSOLIDATED
STATEMENTS OF CASH FLOWS


Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q


(Unaudited)


Three
      Months Ended March 31,
              
              2008
              
              
              2007CASH
      FLOWS - OPERATING ACTIVITIESNet
      loss
              
              $
              (557,589
              )
              
              $
              (132,736
              )Adjustments
      to reconcile net loss to cash used inoperating
      activities:Non
      cash stock compensation expense
              
              
              178,000
              
              
              
              -Depreciation
      expense
              
              
              2,843
              
              
              
              -Amortization
      of imputed interest on payable to related party
              
              
              676
              
              
              
              -Changes
      in assets and liabilities:
              
              
              
              
              
              
              -Accounts
      receivable
              
              
              311,999
              
              
              
              -Prepaid
      expenses
              
              
              (3,476
              )
              
              
              (3,750
              )Accounts
      payable
              
              
              (4,127
              )
              
              
              82,053Other
      accrued expenses
              
              
              (4,073
              )
              
              
              -Accrued
      interest-related party
              
              
              8,385
              
              
              
              -Net
      cash used in operating activities
              
              
              (67,362
              )
              
              
              (54,433
              )CASH
      FLOWS - INVESTING ACTIVITIESCapital
      expenditures
              
              
              (214
              )
              
              
              -Other
      long-term assets
              
              
              2,580
              
              
              
              -Net
      cash provided by investing activities
              
              
              2,366
              
              
              
              -CASH
      FLOWS - FINANCING ACTIVITIESDeferred
      offering costs
              
              
              -
              
              
              
              (34,125
              )Loans
      from related party
              
              
              11,151
              
              
              
              -Proceeds
      from issuance of common stock to thethe
      Company's founder
              
              
              -
              
              
              
              12,000Additional
      capital contributed by founder
              
              
              -
              
              
              
              87,925Net
      cash provided by financing activities
              
              
              11,151
              
              
              
              65,800Net
      increase in cash
              
              
              (53,845
              )
              
              
              11,367Cash
      - beginning of period
              
              
              221,873
              
              
              
              -Cash
      - end of period
              
              $
              168,028
              
              
              $
              11,367Supplemental
      Disclosures of Cash Flow Information:Cash
      paid for interest
              
              $
              31,838
              
              
              $
              -Cash
      paid for income taxes
              
              
              -
              
              
              
              -


The
accompanying notes are an integral part of the consolidated financial
statements.




3




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q


(Unaudited)




1Basis of
Presentation and
Consolidation and Recent Accounting Pronouncements
 Basis
of Presentation
 In the
opinion of management, the accompanying consolidated balance sheets and related
consolidated interim statements of operations, and cash flows include all
adjustments, consisting only of normal recurring items, necessary for their fair
presentation in conformity with accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. Examples include: allowances for doubtful
accounts, estimates of lives and recoverable value of property, the valuation of
goodwill, and assumptions used to calculate stock based compensation. Actual
results and outcomes may differ from management’s estimates and
assumptions.
 
 Interim
results are not necessarily indicative of results for a full year. The
information included in this Form 10-Q should be read in conjunction with
information included in the Pinpoint Recovery Solutions Corp. 2007 Form
10-K.
 
 Basis
of Consolidation
 The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, S.A.L.T. Payroll Consultants, Inc.,
(“SALT”), a Florida corporation. All intercompany transactions and balances have
been eliminated upon consolidation. SALT was acquired on June 26, 2007 and as
such, the statement of operations and cash flows for the three months ended
March 31, 2007 does not include the accounts of SALT. See Note 7 for pro forma
information regarding the operations of SALT for the three months ended March
31, 2007.
 
 Recently
Adopted Accounting Standards
 We
adopted the Financial Accounting Standards Board’s (FASB) Statement of Financial
Accounting Standard (SFAS) No. 157, Fair Value Measurement on
January 1, 2008. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosure of fair value measurements. SFAS 157
applies under other accounting pronouncements that require or permit fair value
measurements and accordingly, does not require any new fair value measurements.
SFAS No. 157 clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis for
considering such assumptions, SFAS No. 157 established a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as
follows:
 
 ·
              Level
      1. Observable inputs such as quoted prices in active
    markets;
 ·
              Level
      2. Inputs, other than the quoted prices in active markets, that are
      observable either directly or indirectly;
and
 ·
              Level
      3. Unobservable inputs in which there is little or no market data, which
      require the reporting entity to develop its own
    assumptions.
 
 The
following table presents assets that are measure and recognized at fair value on
a non-recurring basis:
 
 TotalGainsDescription
                
                Level 1
                
                
                Level 2
                
                
                Level 3
                
                
                (Losses)Goodwill
                
                $
                -
                
                
                $
                -
                
                
                $
                6,397,542
                
                
                $
                -
 
 The
FASB’s SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities, including an
Amendment of SFAS 115 became effective for us on January 1, 2008. SFAS
159 establishes a fair value option that permits entities to choose to measure
eligible financial instruments and certain other items at fair value at
specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value options have been elected in earnings
at each subsequent reporting date. For the three months ended March 31, 2008,
there were no applicable items on which the fair value option was elected. SFAS
159 may impact our financial statements in the future.
  4
  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 (Unaudited)
 
 Recent
Accounting Standards Not Yet Adopted
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combination, which
replaces SFAS No. 141. The statement retains the purchase method of accounting
for acquisitions, but requires a number of changes, including changes in the way
assets and liabilities are recognized in the purchase accounting. It also
changes the recognition of assets acquired and liabilities assumed arising from
contingencies, requires the capitalization of in-process research and
development at fair value, and requires the expensing of acquisition-related
costs as incurred. SFAS No. 141R is effective for us beginning January 1, 2009
and will apply prospectively to business combinations completed on or after that
date.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”).
SFAS 160requires: (i) the
ownership interests in subsidiaries held by parties other than the parent be
clearly identified, labeled, and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity; (ii)
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest be clearlyidentified and presented on the face of
the consolidated statement of income; (iii) changes in a parent’s ownership
interest while the parent retains its controlling financial interest in its
subsidiary be accounted for consistently; (iv) when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary and any gain or loss on the deconsolidation be initially measured at
fair value; and (v), entities provide sufficient disclosures that clearly
identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners.SFAS 160 is effective for us as of January
1, 2009 and will apply prospectively, except for the presentation and disclosure
requirements, which will apply retrospectively. SFAS 160 is not expected to have
a material impact on our financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities, an amendment of FASB Statement No. 133”(“SFAS No. 161”). SFAS
No. 161 changes the disclosure requirements for derivative instruments and
hedging activities. Entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows. SFAS No. 161 is effective for us beginning January 1, 2009 and is not
expected to have a material impact on our financial statements.
 
 2Basic and
Diluted Loss Per Share
 Basic and
diluted per share results for the three months ended March 31, 2008 and 2007
were computed based on the loss allocated to the common stock for the respective
periods. The weighted average number of shares of common stock outstanding
during the periods was used in the calculation of basic loss per share. On
September 14, 2007, our board of directors approved a 10% stock dividend to all
holders of record as of September 12, 2007. In determining the weighted-average
shares outstanding for the three months ended March 31, 2007, the shares
issuable pursuant to the stock dividend and the founders’ shares were considered
outstanding as of the beginning of such period.
 
 In
accordance with SFAS 128, “Earnings Per Share,” the weighted average number of
shares of common stock used in the calculation of diluted per share amounts is
adjusted for the dilutive effects of potential common shares including the
assumed exercise of warrants to purchase common stock based on the treasury
stock method only if an entity records earnings from continuing operations, as
such adjustments would otherwise be anti-dilutive to earnings per share from
continuing operations.
 
 During
three months ended March 31, 2008, warrants to purchase 977,444 shares of common
stock were anti-dilutive and the average number of common shares used in the
calculation of basic and diluted loss per share is identical. Such potential
common shares may dilute earnings per share in the future. There were no
potential common shares outstanding for the three months ended March 31,
2007.
  5
  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 (Unaudited)
 3Intangible
Assets and Goodwill
 On June
26, 2007, we acquired SALT. In determining the value attributed to the shares
issued for the SALT acquisition, we were assisted by an independent third party
who has expertise in the valuation of companies. The total consideration paid
was $6,605,922 of which $6,397,542 was in excess of the fair value of the net
assets acquired. The financial statements assume that all of the excess of the
purchase price over the net tangible assets was allocated to Goodwill in
accordance with SFAS No. 141 “Business Combinations” and SFAS No. 142 “Goodwill
and Other Intangible Assets” and accordingly, no amortization expense was
included in the statement of operations.
 
 Under the
provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” intangible
assets are tested for impairment on an annual basis and between annual tests if
an event occurs or circumstances change in a way to indicate a potential decline
in the fair value of the reporting unit. In assessing the recoverability of the
goodwill, we must make assumptions regarding estimated future cash flows and
other factors to determine the fair value of the respective assets. This
impairment test requires the determination of the fair value of the intangible
asset. If the fair value of the intangible asset is less than its carrying
value, an impairment loss will be recognized in an amount equal to the
difference. If these estimates or their related assumptions change in the
future, the Company may be required to record impairment charges for these
assets. We re-evaluated the carrying value of the goodwill with the assistance
of the valuation expert as of December 31, 2007 and no impairment loss was
recognized.
 
 The
following table details the allocation of the purchase price paid for
SALT:
 
 Accounts
      receivable
                
                $
                195,899Prepaid
      expenses
                
                
                4,523Property and
      equipment
                
                
                32,706Goodwill
                
                
                6,397,542Accounts
      payable
                
                
                (24,748
                )Net loss
                
                $
                6,605,922
 
 4Concentrations of Credit Risk and Major Clients
 Financial
instruments that potentially subject us to significant concentrations of credit
risk include cash and accounts receivable. As of March 31, 2008, all of our cash
is placed with high credit quality financial institutions. The amount on deposit
in any one institution may occasionally exceed federally insured limits of
$100,000 and be subject to credit risk. We believe this risk is minimal. As of
March 31, 2008 we had $61,078 of cash in excess of federally insured
limits.
 
 The
following table sets forth the amount and percentage of revenue from those
customers which accounted for at least 10% of revenues for the three months
ended March 31, 2008.
 
 For the three months ended March
      31, 2008Customer A
                
                $
                66,793
                
                
                
                27
                %Customer B
                
                
                61,197
                
                
                
                25
                %Customer C
                
                
                26,408
                
                
                
                11
                %
 
 The
following table sets forth the amount and percentage of accounts receivable from
customers which accounted for at least 10% of total accounts
receivable.
 
 As of March 31,
      2008Customer A
                
                $
                66,793
                
                
                
                22
                %Customer B
                
                
                31,151
                
                
                
                10
                %Customer D
                
                
                108,734
                
                
                
                35
                %Customer E
                
                
                35,301
                
                
                
                11
                %
  6
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 (Unaudited)
 We do not
require collateral to support accounts receivable or financial instruments
subject to credit risk.
 
 5Transactions
with Related Parties
 Payable
to Related Party
 In
November and December of 2007, we were advanced $99,061 and in January 2008 we
were advanced $10,000 from our founder. Such advances are not interest bearing
and are expected to be repaid under unspecified terms. The advances from the
founder are recorded net of imputed interest. Assuming an incremental borrowing
rate of 7.25% and a one year repayment term, total imputed interest on the
advances was $7,672 of which $426 was amortized to interest expense in November
and December of 2007 and $1,827 was amortized to interest expense for the three
months ended March 31, 2008.
 
 Promissory
Notes Payable-Related Party
 In
connection with the June 26, 2007 acquisition of SALT, we issued our $1,881,550
promissory note payable to NeuCap, Inc. (“NeuCap”). NeuCap is owned by Kevin
Cappock, our chief executive officer, and Robert Neuman, our vice-president. The
promissory note bears interest at the prime rate as set by Bank of America from
time to time, which was 5.25% as of March 31, 2008. The promissory note may be
prepaid any time without penalty and all outstanding principal and interest was
originally due six months from the date of issuance. On January 10, 2008, the
note was amended whereby NeuCap agreed to extend the maturity date of the note
to March 31, 2008 for which we Paid NeuCap an additional $20,000.
 
 On April
11, 2008, the note was again amended extending the maturity date to March 31,
2009 providing for accrued interest to be added to the outstanding principal and
adjusting the interest to 7.25% per annum after March 31, 2008. In addition, we
agreed to make cash payments for both interest and principal when our month-end
checking account balance exceeds $225,000; provided, however, that any such
payment shall be limited to the amount that, immediately after effecting such
payment, would reduce our checking account balance to not less than
$200,000.
 
 During
the three months ended March 31, 2008, interest expense relating to the
promissory note was $38,305 and $54,808 was accrued and unpaid as of March 31,
2008.
 
 6Issuance of
Shares for Advisory Services
 In March
2008, an individual agreed to provide advisory services to us and in connection
therewith, our founder transferred 100,000 shares of Common Stock he owned to
such individual. For the three months ended March 31, 2008 we recorded $178,000
using a per share price of $1.78 as determined by an independent valuation
expert as a contribution of capital for the value of the shares and an
equivalent amount to stock-based compensation expense.
 
 7Pro Forma
Financial Information
 As a
result of the June 26, 2007 acquisition of SALT our on-going principal business
is providing tax recovery services to businesses that may be eligible to receive
refunds relating to federal and state payroll taxes. The following pro forma
information gives effect to the acquisition and related financings as if they
occurred as of the beginning of the three months ended March 31, 2007 and have
been prepared by management based upon the historical financial statements of
Pinpoint Recovery Solutions Corp. and NeuCap. This pro forma information may not
be indicative of what would have occurred if the proposed acquisition and
financings had actually occurred on the indicated dates and they should not be
relied upon as an indication of future results of operations.
  7
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 (Unaudited)
  The
following table presents unaudited pro forma combined statement of operations
information for the three months ended March 31, 2007 as if the transaction
occurred at the beginning of such period.
 
 Three Months Ended March 31,
      2007Revenues
                
                $
                351,448Costs and
      Expenses:Direct
costs
                
                
                49,203Payroll and related
      costs
                
                
                130,138Consulting
    fees
                
                
                1,250Professional
      fees
                
                
                130,353Interest expense-related
      party
                
                
                38,807General and
      administrative
                
                
                96,946Total costs and
      expenses
                
                
                446,697Net loss
                
                $
                (95,249
                )
 
 8Subsequent
Events
 In
connection with the acquisition of SALT on June 26, 2007, we issued our
$1,881,550 promissory note payable to NeuCap, which is owned by our chief
executive officer and our vice-president. The promissory note bears interest at
the prime rate as set by Bank of America from time to time, which was 5.25% as
of March 31, 2008. The promissory note may be prepaid any time without penalty
and all outstanding principal and interest was originally due six months from
the date of issuance. On January 10, 2008, the terms of the note were amended
whereby NeuCap agreed to extend the maturity date of the note from December 26,
2007 to March 31, 2008 for which we paid NeuCap an additional
$20,000.
 
 On April
11, 2008, the note payable to NeuCap was again amended extending the maturity
date to March 31, 2009 providing for accrued interest to be added to the
outstanding principal and adjusting the interest to 7.25% per annum after March
31, 2008. In addition, we agreed to make cash payments for both interest and
principal when our month-end checking account balance exceeds $225,000;
provided, however, that any such payment shall be limited to the amount that,
immediately after effecting such payment, would reduce our checking account
balance to not less than $200,000.
 
 On April
23, 2008 Gordon Sjodin resigned from his position as director of the Company.
Mr. Sjodin had no disagreement with the policies or management of the
Company.
 
 Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
 
 Special Note
About Forward Looking Statements
 Certain
statements in Management’s Discussion and Analysis (“MD&A”), other than
purely historical information, including estimates, projections, statements
relating to our business plans, objectives, and expected operating results, and
the assumptions upon which those statements are based, are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements generally are
identified by the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,”
“will be,” “will continue,” “will likely result,” and similar expressions
identify forward-looking statements, but are not the exclusive means of
identifying such statements and their absence does not mean that a statement is
not forward-looking. Forward-looking statements are based on current
expectations and assumptions that are subject to risks and uncertainties, which
may cause actual results to differ materially from the forward-looking
statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
  8
 Management’s
Discussion And Analysis
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 Overview
 The
following MD&A is intended to help the reader understand the results of
operations and financial condition of Pinpoint Recovery Solutions Corp. MD&A
is provided as a supplement to, and should be read in conjunction with, our
financial statements and the accompanying notes to the financial
statements.
 
 From
December 4, 2006, our date of inception, until June 25, 2007, we were a
development stage enterprise, devoting substantially all of our efforts to
capital raising activities for, and planning to integrate and manage, the
acquisition of an appropriate business. On June 26, 2007 we acquired
SALT.
 
 Subsequent
to the acquisition of SALT, our principal business focus has been to develop
additional control procedures, implement a new enterprise software company wide,
and establish an internal marketing division to continue growing the business of
SALT. We formed a new wholly owned subsidiary called “S.A.L.T. Payroll
Consultants, Inc.,” the name under which the acquired business is operated;
however, we remain the owner of the assets acquired and liabilities assumed in
the SALT acquisition.
 
 Results of
Operations
 The
following table summarizes selected unaudited financial information for the
three months ended March 31, 2008 compared to the three months ended March 31,
2007. The unaudited financial information presented for the three months ended
March 31, 2007 was derived by combining SALT, the predecessor company, unaudited
historical results for the three months ended March 31, 2007, with Pinpoint’s
historical results for the three months ended March 31, 2007.
 
 Three Months Ended March
      31,
                  
                  2008
                  
                  
                  2007Revenues
                  
                  $
                  247,507
                  
                  
                  $
                  351,448Direct
costs
                  
                  
                  32,176
                  
                  
                  
                  49,203Payroll and related
      costs
                  
                  
                  283,625
                  
                  
                  
                  130,138General and
      administrative
                  
                  
                  160,800
                  
                  
                  
                  96,946(Loss) income before interest
      expense, noncash stock-based compensation and other
      acquisition costs
                  
                  
                  (229,094
                  )
                  
                  
                  75,161Interest
      expense
                  
                  
                  40,223
                  
                  
                  
                  -Noncash stock-based
      compensation
                  
                  
                  178,000
                  
                  
                  
                  -Other acquisition
      costs
                  
                  
                  110,272
                  
                  
                  
                  131,603Net loss
                  
                  
                  (557,589
                  )
                  
                  
                  (56,442
                  )
 
 Our
revenues for the first quarter of 2008 decreased by $103,941, or 30%, from the
comparable first quarter of 2007. We generally do not earn our fees and
therefore recognize the associated revenue on an engagement until our client
receives a tax refund check or a credit from the applicable taxing authorities
related to the work we performed. As a result our revenues may vary from period
to period as a result of expected refunds being held up in administrative
hearings. Additionally, management has spent time spent completing the
infrastructure necessary to accomplish our strategic growth goals and building
our client engagement list. For the first quarter of 2008, revenues from three
customers account for 27%, 25% and 11% of total revenues,
respectively.
 
 Direct
costs and expenses generally vary with our revenues. Direct costs as a percent
of our revenues were 13% and 14%, respectively, for the first quarter of 2008
and 2007.
 
 Payroll
and related costs increased $153,487 when comparing the first quarter of 2008
and 2007. Such increase is primarily the impact of the addition of new employees
to build the infrastructure for strategic growth goals and public
reporting.
 
 General
and administrative expenses increased $63,854 when comparing the first quarter
of 2008 and 2007. The general and administrative costs for the three months of
2008 include the costs associated with Pinpoint as well as costs associated with
providing a benefits program to employees which was not provided by the
predecessor company and costs related to preparing material for administrative
hearings related to refund challenges.
  9
  Management’s
Discussion And Analysis
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 Interest
expense for the first quarter of 2008 is related to the $1,881,550 promissory
note payable to NeuCap, Inc issued in connection with the acquisition of SALT.
The note was not outstanding during the first quarter of 2007 and as such there
is no comparable interest expense.
 
 During
the first quarter of 2008 we incurred approximately $288,000 of professional and
consulting fees related to consultants and advisors who are assisting us with
the implementation of the SALT acquisition as well as seeking and researching
other potential acquisition candidates. Included in such costs is approximately
$178,000 related to the value of stock issued to certain of such advisors and
consultants. During the first quarter of 2007 we incurred professional fees
related to the acquisition of approximately $132,000.
 
 Financial
Condition
 At March
31, 2008, we had working capital of $216,792 and at December 31, 2007, we had
working capital of $590,496 excluding the promissory note issued in connection
with the acquisition of SALT. The terms of the promissory note were amended in
April 2008 extending the repayment date to March 31, 2009. We plan to repay the
promissory note with funds generated from operations. We believe we will have
sufficient cash generated from operations and borrowing capacity to fund our
capital and operational needs for at least the next twelve months. However,
because a significant part of our growth strategy includes growth by
acquisition, we must continue to successfully target, acquire and integrate
profitable acquisition candidates, and manage related transactional fees and
expenses.
 
 Our
source of working capital for the first quarters of 2008 and 2007 was advances
from our founder. In November and December of 2007, we were advanced $99,061 and
in January 2008 $10,000 from our founder. Such advances are not interest bearing
and are expected to be repaid under unspecified terms. The advances from the
founder are recorded net of imputed interest. Assuming an incremental borrowing
rate of 7.25% and a one year repayment term, total imputed interest on the
advances was $7,672 of which $426 was amortized to interest expense in November
and December of 2007 and $1,827 was amortized to interest expense for the three
months ended March 31, 2008.
 
 We used
working capital in the first quarter of 2008 and 2007 to fund our operating
losses. In addition, during the first quarter of 2007 we used working capital to
pay for offering and acquisition costs.
 
 Significant
components of working capital at both March 31, 2008 and December 31, 2007
consist of cash and accounts receivable. As of March 31, 2008, all of our cash
is placed with high credit quality financial institutions. The amount on deposit
in any one institution may occasionally exceed federally insured limits of
$100,000 and be subject to credit risk. We believe this risk is minimal. As of
March 31, 2008 we had $61,078 of cash in excess of federally insured limits. As
of March 31, 2008, receivables from four customers represented 35%, 22%, 11% and
10% of total accounts receivable, respectively.
 
 Our
significant working capital commitment, other than to fund operations during
periods of losses, is the promissory note we issued in connection with the June
2007 acquisition of SALT. We issued the promissory note for $1.9 million having
an original maturity date of December 26, 2007. We prepaid approximately $20,000
of the principal on such note in July, 2007 together with approximately $9,000
of accrued interest. In January 2008, the holder of the note agreed to extend
the maturity date to March 31, 2008, in exchange for a payment by us of $20,000
and in April 2008, the note was again amended extending the maturity date to
March 31, 2009 providing for accrued interest to be added to the outstanding
principal and adjusting the interest to 7.25% per annum after March 31, 2008. In
addition, we agreed to make cash payments for both interest and principal when
our month-end checking account balance exceeds $225,000; provided, however, that
any such payment shall be limited to the amount that, immediately after
effecting such payment, would reduce our checking account balance to not less
than $200,000.
  10
 Management’s
Discussion And Analysis
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 Recently
Adopted Accounting Standards
 We
adopted the Financial Accounting Standards Board’s (FASB) Statement of Financial
Accounting Standard (SFAS) No. 157, Fair Value Measurement on
January 1, 2008. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosure of fair value measurements. SFAS 157
applies under other accounting pronouncements that require or permit fair value
measurements and accordingly, does not require any new fair value measurements.
SFAS No. 157 clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis for
considering such assumptions, SFAS No. 157 established a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as
follows:
 
 ·
              Level
      1. Observable inputs such as quoted prices in active
    markets;
 ·
              Level
      2. Inputs, other than the quoted prices in active markets, that are
      observable either directly or indirectly;
and
 ·
              Level
      3. Unobservable inputs in which there is little or no market data, which
      require the reporting entity to develop its own
    assumptions.
  The
following table presents assets that are measure and recognized at fair value on
a non-recurring basis:
 
 TotalGainsDescription
                
                Level 1
                
                
                Level 2
                
                
                Level 3
                
                
                (Losses)Goodwill
                
                $
                -
                
                
                $
                -
                
                
                $
                6,397,542
                
                
                $
                -
  The
FASB’s SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities, including an
Amendment of SFAS 115 became effective for us on January 1, 2008. SFAS
159 establishes a fair value option that permits entities to choose to measure
eligible financial instruments and certain other items at fair value at
specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value options have been elected in earnings
at each subsequent reporting date. For the three months ended March 31, 2008,
there were no applicable items on which the fair value option was elected. SFAS
159 may impact our financial statements in the future.
 
 Recent
Accounting Standards Not Yet Adopted
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combination, which
replaces SFAS No. 141. The statement retains the purchase method of accounting
for acquisitions, but requires a number of changes, including changes in the way
assets and liabilities are recognized in the purchase accounting. It also
changes the recognition of assets acquired and liabilities assumed arising from
contingencies, requires the capitalization of in-process research and
development at fair value, and requires the expensing of acquisition-related
costs as incurred. SFAS No. 141R is effective for us beginning January 1, 2009
and will apply prospectively to business combinations completed on or after that
date.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”).
SFAS 160requires: (i) the
ownership interests in subsidiaries held by parties other than the parent be
clearly identified, labeled, and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity; (ii)
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest be clearlyidentified and presented on the face of
the consolidated statement of income; (iii) changes in a parent’s ownership
interest while the parent retains its controlling financial interest in its
subsidiary be accounted for consistently; (iv) when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary and any gain or loss on the deconsolidation be initially measured at
fair value; and (v), entities provide sufficient disclosures that clearly
identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners.SFAS 160 is effective for us as of January
1, 2009 and will apply prospectively, except for the presentation and disclosure
requirements, which will apply retrospectively. SFAS 160 is not expected to have
a material impact on our financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities, an amendment of FASB Statement No. 133”(“SFAS No. 161”). SFAS
No. 161 changes the disclosure requirements for derivative instruments and
hedging activities. Entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows. SFAS No. 161 is effective for us beginning January 1, 2009 and is not
expected to have a material impact on our financial statements.
  11
 Management’s
Discussion And Analysis
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 Application
of Critical Accounting Policies
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires us to make assumptions,
estimates and judgments that affect the amounts reported in the financial
statements, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We consider our critical accounting policies to be
those that require the more significant judgments and estimates in the
preparation of our financial statements, including the following: allowances for
doubtful accounts, estimates of lives and recoverable value of property, the
valuation of goodwill, and assumptions used to calculate stock-based
compensation. We rely on historical experience and on other assumptions believed
to be reasonable under the circumstances in making its judgment and
estimates.
 
 Allowance
for Doubtful Accounts
 Our
accounts receivable are reported at their net collectible amounts. We record
allowance against any accounts receivable as to which we believe collection may
be in doubt. The allowance for uncollectible accounts at March 31, 2008 and
December 31, 2007 was $26,448.
 
 Intangible
Assets & Goodwill
 On June
26, 2007, we acquired SALT. In determining the value attributed to the shares
issued for the SALT acquisition, we were assisted by an independent third party
who has expertise in the valuation of companies. The total consideration paid
was $6,397,542 in excess of the fair value of the net assets acquired. The
financial statements assume that all of the excess of the purchase price over
the net tangible assets was allocated to Goodwill in accordance with SFAS No.
141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible
Assets” and accordingly, no amortization expense was included in the statement
of operations.
 
 Under the
provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” intangible
assets are tested for impairment on an annual basis and between annual tests if
an event occurs or circumstances change in a way to indicate a potential decline
in the fair value of the reporting unit. In assessing the recoverability of the
goodwill, we must make assumptions regarding estimated future cash flows and
other factors to determine the fair value of the respective assets. This
impairment test requires the determination of the fair value of the intangible
asset. If the fair value of the intangible asset is less than its carrying
value, an impairment loss will be recognized in an amount equal to the
difference. If these estimates or their related assumptions change in the
future, the Company may be required to record impairment charges for these
assets. We re-evaluated the carrying value of the goodwill with the assistance
of the valuation expert as of December 31, 2007 and no impairment loss was
recognized.
 
 Stock
Options and Similar Equity Instruments
 We are
required to recognize expense of options or similar equity instruments issued to
employees using the fair-value-based method of accounting for stock-based
payments in compliance with SFAS No. 123(R), “Share-Based Payment”. SFAS No.
123(R) covers a wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans. Application of this
pronouncement requires significant judgment regarding the assumptions used in
the selected option pricing model, including stock price volatility and employee
exercise behavior. Most of these inputs are either highly dependent on the
current economic environment at the date of grant or forward-looking over the
expected term of the award. On March 16, 2007, the Company authorized its 2007
Stock Option Plan. As of March 31, 2008, we have not issued any options pursuant
to the plan.
 
 Item
3. Quantitative and Qualitative Disclosures About Market Risk.
 Not
applicable.
  12
  Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 Item
4T. Controls and Procedures.
 Disclosure
Controls and Procedures
 Our
management is responsible for establishing and maintaining disclosure controls
and procedures that are designed to ensure that information required to be
disclosed in our reports under the Securities Exchange Act of 1934 (the
“Exchange Act”) is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission (the “SEC”), and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure based closely on the definition of “disclosure controls and
procedures” in Rule 15d-15(e) under the Exchange Act. In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
 
 At the
end of the period covered by this Quarterly Report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based upon the foregoing, our Chief Executive Officer and Chief
Financial Officer concluded that, as of March 31, 2008, the disclosure controls
and procedures of our Company were not effective to ensure that the information
required to be disclosed in our Exchange Act reports was recorded, processed,
summarized and reported on a timely basis.
 
 Our
evaluation and resulting ineffectiveness is due to the following material
weaknesses identified by our external auditor during the audit of the
transitional nine month period ended December 31, 2007.
 
 ·
              Our
      current closing procedures and top side journal entries were not
      appropriately posted or reconciled with our financial statement upon our
      initial closing period of the nine months ended December 31,
      2007.
 
 ·
              We
      are working to provide an appropriate reconciliation and consolidation
      process for financial reporting purposes as a result of our
      acquisition.
 
 ·
              We
      did not identify certain financial statement disclosures and provide the
      appropriate presentation of this transition report without the involvement
      of our external auditor and others.
 
 Management's
Report on Internal Control over Financial Reporting
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Our internal control
over financial reporting includes those policies and procedures that are
intended to:
 
 1.           Pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets;
 
 2.           Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors;
and
 
 3.           Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of our assets that could have a material effect
on our financial statements.
 
 Because
of inherent limitations, internal control over financial reporting may not
prevent or detect all misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
  13
 Pinpoint
Recovery Solutions Corp. ∙ Form 10-Q
 In 2007,
we acquired SALT, and our subsequent operation of SALT’s business currently
comprises our only operations. In connection with such acquisition, we adopted
the system of financial controls and procedures of SALT as our own.
Subsequently, we filed a registration statement under the Securities Act of
1933, as amended; as the result of that registration statement’s effectiveness
on February 8, 2008, we became a reporting company. Although SALT was not a
public reporting company, we believe that the experience and skills of SALT
management (whom we retained as our Chief Executive Officer and President, and
our Chief Operating Officer and Executive Vice President) and our other
accounting personnel, in light of the scope and nature of the operations of the
SALT business, provide us with procedures and internal controls over financial
reporting that are effective. We believe that our controls and procedures ensure
that information required to be disclosed in our periodic filings under the
Exchange Act is accumulated and communicated to our management to allow timely
decisions regarding required disclosure, and that all transactions are recorded,
accumulated and processed to permit the preparation of financial statements in
accordance with generally accepted accounting principles on a timely basis to
allow compliance with our reporting obligations under the Exchange Act. In
making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission in Internal
Control-Integrated Framework.
 
 The
foregoing report shall not be deemed to be filed for purposes of Section 18 of
the Exchange Act or otherwise subject to the liabilities of that
section.
 
 This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.
 
 Changes
in Internal Control Over Financial Reporting
 There
were no changes in internal controls over financial reporting that occurred
during the quarter ended March 31, 2008, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 PART
II-OTHER INFORMATION
 Item
1. Legal Proceedings.
 We, our
subsidiaries and our property are not a party to any pending legal
proceeding.
 
 Item
1A. Risk Factors.
 Not
applicable.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
 There
were no unregistered sales of equity securities during the quarter ended March
31, 2008.
 
 Item
3. Defaults Upon Senior Securities.
 None.
 
 Item
4. Submission of Matters to a Vote of Security Holders.
 We did
not submit any matter to a vote of our stockholders during the quarter ended
March 31, 2008.
 
 Item
5. Other Information.
 None.
 
 Item
6. Exhibits.
 31.1
              
              Certifications
      of Chief Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
              
              Certifications
      of Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
              
              Certification
      of Chief Executive Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 200232.2
              
              Certification
      of Chief Financial Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
  14
  SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized. In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
   PINPOINT
      RECOVERY SOLUTIONS CORP.Date
                SignatureMay
      15, 2008
                By:
                /S/ KEVIN CAPPOCKKevin
      Cappock, Chief Executive Officer(principal
      executive officer) and Director
 May
      15, 2008
                By:
                /S/ JON D. LESLIEJon
      D. Leslie, Chief Financial Officer(principal
      financial and accounting officer)
  15