UNITED STATESSECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, DC 20549FORM 10-Q[X] Quarterly report
under Section 13 or 15(d) of the Securities exchange Act of 1934For the
quarterly period ended September 30, 2008[ ] Transition report under
Section 13 or 15(d) of the Exchange ActFor the transition period from
___________ to ___________.Commission File Number:0-51202CORDIA
CORPORATION-----------------------------------------------------------------------(Exact
Name of Registrant as Specified in Its Charter)Nevada
                                11-2917728-------------------------------
      ------------------------------------(State
or Other Jurisdiction of       (I.R.S. Employer
Identification No.) Incorporation
or Organization) 13275 W. Colonial Drive, Winter Garden,
Florida
34787----------------------------------------------------------------------(Address
of Principal Executive
Offices)866-999-9999---------------------------(Registrant's
Telephone Number, Including Area Code) Indicate by check mark whether the
registrant (1) 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, a non-accelerated
filer, or a smaller reporting company.  See 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
[   ]   No [ X ] APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS  Check whether the registrant filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes [   ] No [   ] APPLICABLE ONLY TO CORPORATE
ISSUERS As of November 14, 2008, there were 6,943,932 shares
of the issuer's common stock outstanding.           CORDIA
CORPORATIONFORM 10-QTABLE OF
CONTENTS PagePart
I
Financial
InformationItem
1.
Financial
StatementsCondensed
Consolidated Balance Sheets  September 30, 2008 (unaudited) and December
31, 2007
1Condensed
Consolidated Statements of Operations  nine and three months ended
September 30, 2008 and 2007 (unaudited)
2Condensed
Consolidated Statements of Cash Flows  nine months ended September 30,
2008 and 2007 (unaudited)
3Notes to
Condensed Consolidated Financial Statements (unaudited)
4Item
2.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
14Item
3.
Quantitative and
Qualitative Disclosure About Market Risk
24Item
4.
Controls and
Procedures
24Part
II
Other
InformationItem
1.
Legal
Proceedings
25Item
1A
Risk
Factors
25Item
2.
Unregistered
Sale of Equity Securities and Use of Proceeds
25Item
3.
Defaults Upon
Senior Securities
25Item
4.
Submission of
Matters to a Vote of Security Holders
25Item
5
Other
Information
25Item
6.
Exhibits
25Signatures
26


PART
IFINANCIAL INFORMATION ITEM 1.
 FINANCIAL STATEMENTS.   CORDIA
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS September 30,

December 31,2008

2007ASSETS
(unaudited)Current
AssetsCash
and cash equivalents
$               784,045

$            999,039Cash
 restricted
142,040

173,848Accounts
receivable, less allowance for doubtful accounts of$1,445,249
(2008) and $2,002,823(2007)
4,301,472

2,178,984Inventory
732,654

-Prepaid
expenses
1,756,826

1,427,093Accrued
usage receivable
227,411

314,215TOTAL
CURRENT ASSETS
7,944,448

5,093,179Property and
equipment, at costOffice
and computer equipment
2,439,452

2,006,879Computer
software
1,873,972

2,059,386Leasehold
improvements
401,112

561,5054,714,536

4,627,770Less:
 Accumulated depreciation/amortization
2,595,586

2,237,604NET
PROPERTY AND EQUIPMENT
2,118,950

2,390,166Other
AssetsGoodwill
4,614,294

3,398,972Security
deposits and other assets
1,779,357

861,791Investment
in unconsolidated affiliates
340,263

336,541TOTAL
OTHER ASSETS
6,733,914

4,597,304TOTAL
ASSETS
$          16,797,312

$       12,080,649LIABILITIES AND STOCKHOLDERS' (DEFICIT)Current
LiabilitiesCapital
lease obligations, current portion
$                 13,726

$              12,953Notes
payable, current portion
1,572,802

557,062Accounts
payable
7,828,039

4,018,814Accrued
expenses
1,256,650

939,769Billed
taxes payable
9,614,262

8,029,921Deferred
revenue
1,445,829

1,315,900TOTAL
CURRENT LIABILITIES
21,731,308

14,874,419Noncurrent
LiabilitiesDeferred
rent
92,671

82,378Deferred
income tax liability
-

2,004Notes
payable, net of current portion
866,517

1,058,804Capital
lease obligation, net of current portion
14,928

25,221TOTAL
NONCURRENT LIABILITIES
974,116

1,168,407MINORITY
INTEREST IN SUBSIDIARIES
1,300

-COMMITMENT
AND CONTINGENCIESStockholders'
(Deficit)Common
stock, $0.001 par value; 100,000,000 shares authorized, 7,566,574 (2008)
and 6,916,574 (2007) shares issued
7,567

6,917Additional
paid-in capital
7,191,706

6,707,581Comprehensive
income (loss)
14,597

(48,121)Accumulated
deficit
(12,782,513)

(10,307,761)(5,568,643)

(3,641,384)Less: Treasury
stock at cost, 622,642 (2008) and 589,186 (2007) common shares
(340,769)

(320,793)TOTAL
STOCKHOLDERS  (DEFICIT)
(5,909,412)

(3,962,177)TOTAL
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
$          16,797,312

$       12,080,649  See notes
to condensed consolidated financial statements.   -1-





CORDIA
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)  Nine Months Ended

Three Months EndedSeptember 30,

September 30,2008

2007

2008

2007RevenuesWireline
services

$
   34,933,278

$
   31,094,084

$
    11,883,815

$
    11,528,987Prepaid
services

14,295,269

-

11,005,375

-VoIP
services

1,974,979

602,454

732,258

275,037Business
process outsourcing services

13,500

382,894

4,500

129,68551,217,026

32,079,432

23,625,948

11,933,709Cost of
RevenuesWireline
services

20,303,590

16,880,843

6,924,148

6,379,892Prepaid
services

13,742,795

-

10,581,637

-VoIP
services

1,637,098

573,474

575,530

190,49635,683,483

17,454,317

18,081,315

6,570,388Gross
Profit

15,533,543

14,625,115

5,544,633

5,363,321Operating
ExpensesSales
and marketing

3,542,963

2,962,642

1,162,620

836,169Bad
debts

2,648,089

2,687,514

978,956

1,113,398General
and administrative

9,420,248

9,508,942

3,169,774

3,219,438Impairment
of goodwill

-

284,117

-

-Depreciation
and amortization

1,266,498

803,470

444,799

291,87216,877,798

16,246,685

5,756,149

5,460,877Operating
Loss

(1,344,255)

(1,621,570)

(211,516)

(97,556)Other Income
(expenses)Other
(expense)

(977,372)

(388,125)

(446,545)

(208,372)Interest
income

4,810

32,445

440

2,925Interest
(expense)

(146,960)

(2,690)

(87,268)

(835)(1,119,522)

(358,370)

(533,373)

(206,282)(Loss) Before
Income Taxes and Minority Interest

(2,463,777)

(1,979,940)

(744,889)

(303,838)Income
Tax Provision

10,975

-

9,365

-Loss Before
Minority Interest

(2,474,752)

(1,979,940)

(754,254)

(303,838)Minority
interest in loss of subsidiary

-

2,745

-

-Net Loss

$
   (2,474,752)

$
    (1,977,195)

$
     (754,254)

$
      (303,838)Basic and
Diluted (Loss) per share

$
            (0.38)

$
             (0.35)

$
           (0.11)

$
            (0.05)Basic and
Diluted Weighted Average Common Shares Outstanding

6,577,121

5,664,305

6,943,932

5,611,473   See notes to condensed consolidated
financial statements.     -2-





CORDIA
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED) For
 the Nine Months EndedSeptember 30,2008

2007Cash Flows From
Operating ActivitiesNet
loss from continuing operations
$
     (2,474,752)

$
    (1,977,195)Adjustments
to reconcile net loss to net cashprovided
 by operationsCompensatory
stock expense
186,762

202,462Bad
debts
2,648,089

2,687,514Depreciation
and amortization expense
1,266,498

803,470Impairment
of goodwill
-

284,117Equity
in loss of affiliate
103,208

-Deferred
income taxes
(2,004)

-Deferred
revenue
129,929

(124,214)Minority
interest
-

(2,745)(Increase)
decrease in assets, net of acquisition:Restricted
cash
31,808

830,912Accounts
receivable
(4,770,577)

(1,399,779)Inventory
(325,492)

-Prepaid
expenses and other current assets
(278,680)

(327,828)Accrued
usage receivable
86,804

(132,771)Security
deposits
(113,032)
113,032)

(62,009)Increase
(decrease) in liabilities:Accounts
payable
3,814,370

(188,145)Accrued
expenses
255,529

(46,738)Billed
taxes payable
1,584,341

2,234,671Deferred
rent
10,293

14,117NET
CASH PROVIDED BY OPERATING ACTIVITIES
2,153,094

2,795,839Cash Flows from
Investing ActivitiesCapitalized
software costs
(400,181)

(528,581)Leasehold
improvements
-

(173,652)Purchase
of property and equipment
(280,064)

(595,294)Investment
in unconsolidated affiliate
(106,930)

-Acquisition
of TSI operations, net of cash acquired
(797,164)

-Purchase
of customer list
(224,375)

-Acquisition
of Canal West minority interest
-

(25,000)Acquisition
of Midwest, net of cash acquired
-

(342,207)NET
CASH USED BY INVESTING ACTIVITIES
(1,808,714)

(1,664,734)Cash Flows From
Financing ActivitiesPrincipal
payments on capital leases
(9,521)

(8,906)Payments
of notes payable
(500,036)

-Purchase
of treasury stock
(19,976)

(15,725)NET
CASH USED BY FINANCING ACTIVITIES
(529,533)

(24,631)Effect
of exchange rate changes on cash
(29,841)

7,263Increase
(decrease) in cash and cash equivalents
(214,994)

1,113,737Cash and cash
equivalents, beginning
999,039

370,832Cash and cash
equivalents, ending
$
          784,045

$
       1,484,569Supplemental
Disclosures of Cash Flow InformationCash paid
during the period for:Interest
$         146,960

$
              2,690Income
Tax
$
                      -

$
                 880Supplemental
disclosure of non-cash investing and financing activities:Stock and stock
options issued for acquisition
$
          284,014

$
         240,000Notes issued in
for acquisition
$
       1,326,403

$
      1,750,000 See notes
to condensed consolidated financial statements   -3-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 1: Basis of Presentation/Going Concern  Our interim unaudited condensed
consolidated financial statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and
disclosures required by accounting principles generally accepted in the United
States of America. Therefore, these financial statements should be read in
conjunction with the financial statements and related footnotes included in our
Annual Report on Form 10-K and Amendment No. 1 on Form 10-K/A for the year ended
December 31, 2007. These financial statements reflect all adjustments that are,
in the opinion of management, necessary to fairly state the results for the
interim periods reported. The results of operations for the three and nine-month
periods ended September 30, 2008, are not necessarily indicative of the results
to be expected for the full year. The interim condensed consolidated
financial statements include the accounts of Cordia Corporation (Cordia) and
the accounts of our wholly owned subsidiaries Cordia Communications Corp.
(CCC), My Tel Co, Inc (MTC), and its subsidiaries, Cordia International
Corp. (CIC), and its subsidiaries, and CordiaIP Corp. (80% owned) (CordiaIP)
and its subsidiaries as of September 30, 2008, and December 31, 2007, and for
the three and nine months ended September 30, 2008, and September 30, 2007.
 Cordia and its subsidiaries are collectively referred to herein as the
Company. All material intercompany balances and transactions have been
eliminated.  Certain amounts as previously reported have
been reclassified to conform with the current period presentation.  Going Concern  These condensed consolidated financial
statements have been prepared assuming that the Company will continue as a going
concern.  The Company has incurred a net loss of approximately $2,475,000
for the nine month period ended September 30, 2008 and also has a negative
working capital of approximately $13,787,000 and a deficiency in stockholders
equity of approximately $5,909,000 as of September 30, 2008. These conditions
raise substantial doubt about the Companys ability to continue as a going
concern.  Management believes that the Company will be able to generate
sufficient cash flows from operations to meet its obligations as they come due
during 2008.  In its efforts to strengthen its financial position the
Company may also have to raise cash from additional sources such as short-term
funding, to cover short-term cash deficiencies that may arise.  New Significant Accounting
Policies  Prepaid services revenue is recognized when
there is persuasive evidence of an arrangement, delivery has occurred, the sales
price is determinable, and collectability is reasonably assured. Inventory,
which consists of prepaid calling cards, is valued at the lower of cost or
market value.  Note 2: (Loss) Per Share  (Loss) per common share is calculated under
the provisions of the Statement of Financial Accounting Standards (SFAS) SFAS
No. 128, Earnings per Share. SFAS No. 128 requires the Company to report both
basic earnings per share, which is based on the weighted-average number of
common shares outstanding, and diluted earnings per share, which is based on the
weighted-average number of common shares outstanding plus all potential dilutive
common shares outstanding. Diluted loss per share for 2008 and 2007 is the same
as basic loss per share as the effect of the common stock purchase options and
warrants outstanding, on such calculation, would have been anti-dilutive.  Weighted average number of shares
outstanding was 6,577,121 and 5,664,305, for basic and diluted loss per share,
for the nine months ended September 30, 2008 and 2007 respectively, and
6,943,932 and 5,611,473, for the three months ended September 30, 2008 and 2007,
respectively.   Potentially dilutive weighted average shares that were
excluded in the calculation of diluted earnings per share, as their impact would
be anti-dilutive, aggregated 895,508 and 1,151,488 for the nine months ended and
845,625 and 1,188,125 for the three months ended September 30, 2008 and 2007,
respectively.


-4-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 3: Recent Accounting Pronouncements
Affecting the Company  Statement of Financial Accounting
Standard No. 162, The Hierarchy of Generally Accepted Accounting Principles
(SFAS No. 162)  In May 2008, the Financial Accounting
Standards Board (FASB) issued FASB Statement No. 162, The Hierarchy of
Generally Accepted Accounting Principles.  The new standard is intended
to improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing financial
statements that are presented in conformity with U.S. generally accepted
accounting principles (GAAP) for nongovernmental entities.  Prior to the
issuance of SFAS 162, GAAP hierarchy was defined in the American Institute of
Certified Public Accountants (AICPA) Statement on Auditing Standards (SAS)
No. 69, The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles.  SFAS 162 is effective 60 days following the SECs
approval of the Public Company Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles.  The Company is currently evaluating the impact adoption of
SFAS 162 may have on the financial statements if any.  Statement of Financial Accounting
Standard No. 161, Disclosures about Derivative Instruments and Hedging
Activities (SFAS No. 161)  In March 2008, FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging Activities.
 The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entitys financial
position, financial performance, and cash flows.  It is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged.  The Company is
currently evaluating the impact of adopting SFAS No. 161 on its financial
statements.  Statement of Financial Accounting Standard No. 141
Revised (SFAS No. 141(R)): Business Combinations  In December 2007, the FASB issued SFAS
No. 141 (revised 2007), Business Combinations, 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 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
adoption of this statement is not currently expected to have a material effect
on the Companys consolidated financial position, results of operations or cash
flows.  Statement of Financial Standard No. 160 (SFAS No.
160) Noncontrolling interest in Consolidated Financial Statements  an
amendment of ARB 51  In December 2007, the FASB issued SFAS No.
160, Noncontrolling Interests in Consolidated Financial Statements-an
Amendment of ARB No. 51.   SFAS 160 establishes accounting and
reporting standards pertaining to ownership interests in subsidiaries held by
parties other than the parent, the amount of net income attributable to the
parent and to the noncontrolling interest, changes in a parents ownership
interest, and the valuation of any retained noncontrolling equity investment
when a subsidiary is deconsolidated.  This statement also establishes
disclosure requirements that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling
owners.  SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008.  The adoption of SFAS 160 is not currently expected
to have a material effect on the Companys consolidated financial position,
results of operations, or cash flows.


-5-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited  Note 3: Recent Accounting Pronouncements
Affecting the Company (contd)  Statement of Financial Accounting Standard
No. 157, Fair Value Measurements (SFAS No. 157) 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. This statement 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. SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007, and all interim
periods within those fiscal years. In February 2008, the FASB released FASB
Staff Position (FSP FAS 157-2 Effective Date of FASB Statement
No. 157) which delays the effective date of SFAS No. 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), to fiscal years beginning after November 15, 2008 and
interim periods within those fiscal years. The implementation of SFAS
No. 157 for financial assets and liabilities, effective January 1,
2008, did not have an impact on the Companys financial position and results of
operations.  The Company is currently evaluating the impact of adoption of
this statement on its non-financial assets and liabilities in the first quarter
of fiscal 2009.  Note 4: Restricted Cash  As a result of expanding our wireline
service offerings into additional states covered by our commercial services
agreement with Qwest Communications International, Inc. (Qwest) CCC obtained a
Letter of Credit (LOC) for the benefit of Qwest in the amount of approximately
$142,000.  The LOC is secured by funds, which we deposited into a
restricted money market account.  The LOC, originally effective for a term
of one (1) year with an expiration date of June 25, 2008, was renewed for an
additional one (1) year period.   In addition, Northstar Telecom, Inc.
, a subsidiary, (NST) had at December 31, 2007, a $30,000 LOC with Verizon
Communications, Inc., raising our amount of restricted cash at December 31,
2007, to approximately $174,000, which included interest of $1,000.  Note 5: Acquisition  TSI Prepaid, LLC  On June 5, 2008, the Companys subsidiary
Cordia Prepaid Corp. (CPC) completed an asset purchase agreement with TSI
Prepaid, LLC (TSI). The assets included, among other items, inventory, fixed
assets, billing systems and management information systems, including underlying
source code, all rights and title under all contracts and agreements, customer
lists, vendor lists and any and all assets necessary to carry out the business
of TSI Prepaid, LLC.  The purchase was limited to assets, and CPC did not
agree to assume, pay, perform, or discharge any existing or later incurred
liabilities of TSI. CPC is the newly formed wholly-owned subsidiary of Cordias
majority (80% following completion of this transaction) owned subsidiary
CordiaIP.  The Company entered into an employment
agreement with the president of TSI, which included the issuance of restricted
stock and stock options (see Note 10).


-6-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited    Note 5: Acquisition
(continued)  The following table
summarizes the estimated fair values of assets acquired and liabilities assumed
at the date of acquisition:  Purchase
Price:Notes Payable
(see Note 15)

$
          1,323,000Cash
payment

250,000Notes
forgiven

405,000500,000 Shares
of Restricted Common Stock

235,000Option for
200,000 Restricted Shares of Common Stock

49,000Minority
interest in CordiaIP (20%)

1,000Total Purchase
Price

2,263,000Expenses related
to the acquisition

143,000Total
Investment

$
          2,406,000Inventory

$
             408,000Intangible
Assets

864,000Fixed
Assets

54,000Reserve for
Contingencies

(100,000)Goodwill

1,180,000Total
Investment

$
          2,406,000  Midwest Marketing Group, Inc.  On August 15, 2007, the Company, through
its subsidiary MTC, completed the purchase of Midwest Marketing Group, Inc.
(Midwest), a Nebraska corporation. MTC purchased all of the outstanding common
stock of Midwest resulting in the acquisition of both Midwest and its
wholly-owned subsidiary NST, a Nebraska corporation that operates as a
competitive local exchange carrier primarily in the Qwest territory.  The following unaudited pro forma
information of the Company for the nine months ended September 30, 2008 and the
nine and three months ended September 30, 2007 gives effect to the Midwest and
TSI acquisitions assuming they occurred as of January 1, 2007.   2008

2007Nine Months

Nine Months
Three MonthsRevenues
$
 68,401,000

$
      71,733,000
$
    23,760,000Net loss
(2,516,000)

(2,650,000)
(239,000)Net loss per share:Basic
$
         (0.37)

$
              (0.41)
$
            (0.04)Diluted
$
         (0.37)

$
              (0.41)
$
            (0.04)  The pro forma information presented above
is for illustrative purposes only and is not indicative of results that may have
been achieved if the acquisition had occurred as of the beginning of the
Companys 2007 fiscal year or of future operating performance.


-7-








CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 6:  Impairment of
Goodwill  The Company accounts for its goodwill in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets, which
requires the company to test goodwill for impairment annually or whenever events
or changes in circumstances indicate that the carrying value of an asset may not
be recoverable. Goodwill acquired in the purchase of Midwest and TSI will be
reviewed for possible impairment at least annually. During the quarter ended
March 31, 2007, the Company determined that the carrying amount of the goodwill
associated with the purchase of Triamis Group Limited (Triamis) exceeded its
fair value, which was estimated based on the present value of expected future
cash inflows.  Accordingly, a goodwill impairment loss of $284,000 was
recognized. Management does not believe that there is any impairment at
September 30, 2008.  Note 7: Foreign Currency Transactions  The Company has operations in Brazil, Hong
Kong and the Philippines, where the functional currency is the local currency.
For these foreign operations, the assets and liabilities have been translated
into US dollars using period-end exchange rates in effect as of the balance
sheet date and revenue and expenses have been translated using average daily
exchange rates for the period. The resulting cumulative translation adjustment
of approximately $15,000 is included in comprehensive (loss) as a separate
component of stockholders equity in the condensed consolidated balance
sheet.  Note 8: Intangible Assets  Intangible assets, primarily comprised of
customer lists, are included in security deposits and other assets on our
condensed consolidated balance sheet. At September 30, 2008 and December 31,
2007, our intangible assets are as follows:  Gross Carrying Amount

Accumulated Amortization

Net
Carrying AmountSeptember 30, 2008
$
     1,696,000

$
           308,000

$
       1,388,000December 31, 2007
$
        713,000

$
           156,000

$
          557,000  The intangible assets increased $864,000 as
a result of the transaction with TSI and $224,000 related to the acquisition of
wireline retail customer lists during the first three quarters of 2008. The
aggregate intangible amortization expense was $257,000 and $113,000 for the nine
and three months ended September 30, 2008 and $11,000 and $0 for the prior year
periods, respectively. In addition, in 2008 the Company retired $105,000 of
fully amortized intangible assets, impacting both the gross carrying amount and
accumulated amortization by this amount.  Note 9: Receivable Financing  The Company sells its trade accounts
receivable on a pre-approved, non-recourse basis pursuant to a factoring
agreement. The accounts are sold at the invoice amount subject to a factor
commission of 1.25% and other miscellaneous fees. Trade accounts receivable not
sold remain in the Company's custody and control and the Company maintains all
credit risk on those accounts.  The purchase commitment under this
agreement was increased by $500,000 to an aggregate $5,500,000 on July 18, 2008.
 As a result of the increase, the Company shall pay to an additional
commitment fee equal to $13,000 payable in three installments.


-8-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 9: Receivable Financing
(Contd)  As of September 30, 2008, approximately
$912,000 of the Companys trade accounts receivable were non-recourse
receivables due from the factor.  Summarized below are the components of
the Companys trade accounts receivable: Trade accounts
receivable


$
4,834,000Due from factor


912,000Less: allowance
for bad debts


(1,445,000)Net accounts
receivable


$
4,301,000  During the three and nine months ended
September 30, 2008, the Company received $7,181,000 and $19,118,000,
respectively, under this agreement.  Note 10: Employee Stock
Compensation  Stock based compensation cost is measured
at the grant date, based on the fair value of the award, and is recognized over
the requisite employee service period.  Stock based compensation of
approximately $187,000 and $80,000 and $202,000 and $57,000 was recognized in
the nine and three months ended September 30, 2008, and 2007, respectively. This
amount was included in general and administrative expense.  No deferred tax
benefit has been recognized for share based compensation arrangements.  On April 1, 2008, the Board of Directors
voted unanimously to grant incentive stock options to its directors and various
key employees to purchase an aggregate 560,500 shares of the Companys common
stock pursuant to the Amendment to the 2001 Equity Incentive Plan. The options
were granted with an exercise price of $0.52 per share, said exercise price
being equal to 100% of the fair market value of the Common Stock on April 1,
2008.  On June 2, 2008, the Board of Directors
voted unanimously to grant 150,000 restricted shares of the Company common stock
and incentive stock options to purchase 100,000 shares of the Companys common
stock to the President of Cordia Prepaid Corp. The options were granted as
partial compensation pursuant to the Companys Amendment to the 2001 Equity
Incentive Plan with an exercise price of $0.56 per share, said exercise price
being equal to 100% of the fair market value on the grant date.  In
addition, options to purchase 200,000 restrictive shares were granted for as
part of the TSI acquisition, see Note 5.  The options granted on April 1, 2008 and
June 2, 2008, shall vest and become exercisable with 50% of the shares granted
vesting and exercisable upon the first anniversary of the grant date, and 25%
vesting and exercisable on the second and third anniversaries of the grant date.
 The options shall terminate on the fifth anniversary of the grant date or
immediately upon the grantees resignation or termination from his/her service
to the Company. The assumptions used to calculate the fair value of options
issued using the Black-Scholes option pricing model are: dividend yield 0%;
expected volatility 92%; risk free interest rates 2.5%; and expected holding
period, three years.  As of September 30, 2008 the total
unrecognized compensation cost of $269,000 related to non-vested awards is
expected to be recognized over a weighted-average period of approximately 1.9
years.  The following table summarizes our stock
option activity: Weighted-AverageStock Options
Exercise PriceOutstanding,
beginning of year
1,795,500
$1.20Exercised
-Granted
860,500
$0.53Cancelled/Forfeited
(903,000)
$0.71Options
outstanding, September 30, 2008
1,753,000
$1.13


-9-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 10: Employee Stock Compensation
(Contd)  The weighted-average remaining contractual
term was approximately 3.1 years for stock options outstanding as of September
30, 2008.    Note 11: Purchase of Treasury Stock  On May 30, 2007, the Board of Directors of
Cordia unanimously authorized Cordias management to spend an aggregate of
$500,000, until such time that the authorized amount is exhausted, to
re-purchase Cordias common and preferred stock so long as the market price did
not exceed $1 per share and when market conditions favorable for that purpose
prevail.  Note 12: Commitments  Employee Benefit Plan  The Company has a 401(k) plan covering all
eligible employees.  Commencing in 2007, the Company implemented a
fully-vested safe harbor matching contribution to all eligible participants.
 Under the safe harbor matching contribution, the Company matches 100% of
employee deferrals up to 3% of compensation, plus 50% of cash deferrals in
excess of 3% of compensation not to exceed 5% of compensation.  For the
nine months ended September 30, 2008 and 2007, the Companys contributions
totaled $76,000 and $47,000, respectively. For the three months ended September
30, 2008 and 2007, the Companys contributions totaled $22,000, and $18,000.  Network Commitments  The Company has minimum line commitments
with a wireline network provider through 2012.  Under these commitments the
aggregate minimum commitment is approximately $3,000,000 in 2008 increasing to
approximately $4,000,000 per annum in 2012.  Tax Contingencies  The Company complies with the provisions of
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  An
Interpretation of FASB Statement No. 109 (FIN No. 48).  There have
been no material changes in the total unrecognized tax benefits, interest or
penalties attributable to uncertain tax positions during the third quarter
2008.


-10-








CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 13: Business Segment and Geographic
Information  The Company is a global telecommunications
firm generating revenue from the provision of telecommunications services
domestically and internationally to business, residential, and wholesale
customers providing both local and long distance services. The Company operates
in the wireline and VoIP markets, on a prepaid and postpaid basis and also
offers country specific international prepaid calling card services. Although
the Companys business is primarily conducted in the United States, operations
are also carried out overseas through our foreign subsidiaries in the
Philippines, Hong Kong, Brazil and India.  Information about the Companys
operations by geographic area is as follows:  Nine Months Ended September 30,

Three Months
Ended September 30,2008

2007

2008

2007RevenuesUnited
States

$
 50,090,000

$
 31,902,000

$
 23,217,000

$
  11,833,000Foreign

1,127,000

177,000

409,000

101,000$
 51,217,000

$
 32,079,000

$
 23,626,000

$
  11,934,000  September 30,
2008

December 31, 2007Long-lived
assetsUnited
States

$
    7,894,000

$
             5,999,000Foreign

959,000

988,000$
   8,853,000

$
             6,987,000Total
assetsUnited
States


$
   15,355,000

$
           10,559,000Foreign

1,442,000

1,522,000$
   16,797,000

$
           12,081,000


-11-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 13: Business Segment and Geographic Information
(continued)  Segment Information:  Nine Months Ended September 30,

Three Months Ended September 30,2008

2007

2008

2007RevenuesWireline
$
   34,933,000

$
   31,094,000

$
   11,884,000

$
   11,529,000Prepaid
Services
14,295,000

-

11,005,000

-VoIP
1,975,000

602,000

732,000

275,000Other
14,000

383,000

5,000

130,000$
   51,217,000

$
   32,079,000

$
   23,626,000

$
   11,934,000Operating
Income (Loss)Wireline
2,160,000

1,615,000

1,141,000

1,011,000Prepaid
Services
(41,000)

-

27,000

-VoIP
(1,572,000)

(1,870,000)

(768,000)

(558,000)547,000

(255,000)

400,000

453,000Corporate
Overhead
(1,891,000)

(1,367,000)

(612,000)

(551,000)(1,344,000)

(1,622,000)

(212,000)

(98,000)Other Income
and (Expense)
(1,120,000)

(358,000)

(533,000)

(206,000)Pre-tax
Loss
(2,464,000)

(1,980,000)

(745,000)

(304,000)Tax
Expense
11,000

-

9,000

-Minority
interest
-

(3,000)

-

-Net Loss
$
   (2,475,000)

$
   (1,977,000)

$
     (754,000)

$
      (304,000)  Assets: September 30,

December 31,2008

2007Wireline


$    9,384,000

$   10,446,000Prepaid Services


5,562,000

-VoIP


1,584,000

1,284,000Other


267,000

351,000Total


$    16,797,000

$
  12,081,000  Note 14: Other Income and (Expense)  Other income and (expense) consist of the following:  Nine Months Ended September 30,

Three Months Ended September 30,2008

2007

2008

2007Equity in
Loss

$
 (101,000)

$
               -

$
  (31,000)

$
               -Exchange Rate
Differences

(177,000)

-

(144,000)

-Factor Financing
Fees

(506,000)

(48,000)

(178,000)

(48,000)Late Fee
Charges

(188,000)

(340,000)

(85,000)

(160,000)Other,
net

(5,000)

-

(9,000)

-$
 (977,000)

$
 (388,000)

$
(447,000)

$
(208,000)


-12-


CORDIA CORPORATION AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS Period
Ended September 30, 2008 Unaudited   Note 15: Debt  In connection with the TSI acquisition, the
Company issued a non interest bearing note in the face amount of $1,595,000. The
note was recorded at its present value of $1,323,000 and is to be paid in 16
monthly payments, with payments commencing July 2008. The payments consist of
twelve installments of $50,000, followed by three installments of $250,000 and a
final installment of $245,000.  Note 16: Legal Proceedings  On July 27, 2008, Cordia Corporation,
VOzsIP, Corp. and CordiaIP Corp. were served by Plaintiff, Rates Technology,
Inc. the holder of two (2) separate US Patents, for patent infringement.
  The lawsuit was filed against the Company in the Southern District
of New York on June 26, 2008.  On September 24, 2008, the lawsuit was
settled and on October 1, 2008 the parties filed a Stipulation of Dismissal with
Prejudice.   Note 17: Subsequent Events  Resale Agreement with IP Converge in the Philippines  On October 24, 2008, subsequent to the
balance sheet date, the Company entered into a reseller agreement with
IP-Converge.   IP-Converge an Asia Pacific data center and
telecommunications company has operations in the Philippines, Singapore, and
Hong Kong.  This agreement will allow the Company to sell voice and data
services in the Philippines utilizing the underlying license of IP Converge.
 In addition, having this agreement in place will allow the Company to
request its own license from the National Telecommunications Commission in the
Philippines.


-13-


ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Certain statements in this Report
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such a difference include,
among others, uncertainties relating to general economic and business
conditions; industry trends; changes in demand for our products and services;
uncertainties relating to customer plans and commitments and the timing of
orders received from customers; announcements or changes in our pricing policies
or that of our competitors; unanticipated delays in the development, market
acceptance or installation of our products and services; changes in government
regulations; availability of management and other key personnel; availability,
terms and deployment of capital; relationships with third-party equipment
suppliers; and worldwide political stability and economic growth. The words
"believe," "expect," "anticipate," "intend," "plan," and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
the statement was made.  Critical Accounting Policies and
Estimates  The preparation of financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the amounts reported in the unaudited interim Condensed
Consolidated Financial Statements and accompanying notes.  Management bases
its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. Actual results could
differ from these estimates under different assumptions or
conditions.  The Company believes there have been no significant
changes during the three and nine month periods ended September 30,
2008, to the items disclosed as significant accounting policies in
management's Notes to Consolidated Financial Statements in the Company's Annual
Report on Form 10-K and Amendment No. 1 to Annual Report on Form 10-K/A for the
year ended December 31, 2007. The Company filed a 10-K/A after identifying
errors related to certain intercompany transactions and the recognition of
expense during the fourth quarter of 2007.   Overview  We are a global telecommunications firm
generating our revenue from the provision of domestic and international
telecommunications services to business, residential, and wholesale customers.
We provide both local and long distance services utilizing traditional wireline
and VoIP technologies on both a prepaid and postpaid basis.  Historically,
our traditional bundled wireline service offerings have represented the majority
of our revenue, followed by revenue derived from our VoIP service offerings and
business process outsourced services.   We believe that our revenue
patterns will change going forward, and that although our wireline revenue will
remain strong, we will see an increase in revenues related to prepaid service
offerings that will surpass wireline revenues by the end of fiscal 2009.  Our traditional wireline service offerings
include local exchange, local access, domestic and international long distance
telephone services, and a full suite of local features and calling plans, and
are provided to small business and residential consumers in various states
throughout the country.  Historically we focused primarily on the Qwest and
Verizon territories; however we recently launched service in new territories
under a commercial agreement in place with another non-incumbent local exchange
carrier in an effort to expand our footprint, keep costs low, and reduce our
reliance on the incumbent carriers.  We believe our wireline revenue will
remain strong with our expansion into new territories, reduced acquisition and
G&A costs as a result of the launch of our call center in the Philippines,
and the strong sales resulting from our 2007 acquisition of Midwest Marketing
and Northstar Telecom, a telemarketing firm and competitive local exchange
carrier.  During the second quarter of 2008, we
formed Cordia Prepaid Corp. (CPC) for the purpose of acquiring prepaid assets
from TSI Prepaid, LLC (TSI).  This acquisition has allowed us to
diversify our position in the telecommunications marketplace by introducing
prepaid international phone cards to our service portfolio, as well as
additional products such as prepaid wireline, prepaid wireless, and prepaid VoIP
services.  As a result of the acquisition and the introduction of these new
products, we expect to see an increase in our prepaid revenues and report future
profits related to these service offerings.  -14-     We believe that providing prepaid phone
cards, as well as serving as one of the underlying network service providers for
these cards, will comprise approximately 50% of the Companys overall revenues
during the next twelve months.  Utilizing our own network not only allows
us to control costs but also allows us to control quality while at the same time
increasing revenue for both our VoIP and prepaid service offerings.  We
recently launched our first international prepaid calling card targeting Mexico
and anticipate additional roll-outs of country specific cards in the future.
 These calling cards are available in nearly 7,000 locations nationwide.
Further, our entrance into prepaid services will also contribute to the
expansion of the sales and distribution channels of our wireline and VoIP
services by promoting these services in our retail outlets, the first of which
is scheduled to open in the fourth quarter of 2008.  Our VoIP service offerings include a flat
rate plan starting as low as $14.95 per month, combined with a full suite of
enhanced features which make our service an attractive value proposition to
existing and potential customers. Customers also have the option of choosing
their desired area code with this service, being able to choose from more than
forty (40) countries and hundreds of cities worldwide for their telephone number
regardless of their physical location  making any long distance or
international call local. As a complement to our mainstream VoIP service
offering, we also provide a fully integrated Spanish language VoIP service.  Our service portfolio also includes our
MagellanÒ service which is supported by
our internally developed VoIP network. MagellanÒ customers get their own personal
international telephone number or extension that is routed through our IP
platform to the customers landline or mobile phone allowing customers to be
reached anywhere in the world at local rates.  We believe this service
offering will be attractive to executives traveling abroad and ex-patriates who
need to stay in touch with their colleagues, friends and family.  We use
this product internally to keep in touch with our offices and employees located
abroad and/or on field assignment.   As a result, we are constantly
testing the integrity of the service and making improvements on functionality
based on our experience with the service.  We also offer an extensive outsourced
service product line, which includes as its primary offering outsourced billing
on a wholesale basis to telecommunications service providers. Our wholesale
customers have access to our secure Internet enabled software systems in which
user-friendly web client front-ends called WorkspacesÒ serve as an interface for integration with
our software systems. The full suite of services available is described in its
entirety in the Business Process Outsourcing (BPO) Service below.  Wireline Services  We offer small business and residential
consumers wireline service by leasing a portion of the network owned by other,
larger telecommunications carriers, namely Verizon and Qwest.  These
leasing arrangements are controlled by multi-state, multi-year interconnection
and commercial services agreements that allow us to offer telecommunications
services to consumers without incurring the capital expenditures associated with
building our own network.   We also have a commercial services
agreement with McLeodUSA, Inc. (McLeod), which has allowed for the expansion
of our geographic footprint while broadening our underlying service provider
portfolio.  We offer local exchange, domestic and
international long distance telephone services, and a full suite of local
features and calling plans to small business and residential consumers in
approximately twenty (20) states in the contiguous United States.
 Subsequent to the balance sheet date, we launched sales and provisioning
pursuant to our relationship with McLeod, by offering services to customers in
Illinois, Indiana, Michigan, Ohio, and Texas. We are also licensed to provide
local and/or long distance telecommunications services, but are not actively
marketing or providing services, in Connecticut, Florida, Georgia, Kansas,
Kentucky, Louisiana, Missouri, North Carolina, and Oklahoma.  An
application for authorization to operate as a local and long distance
telecommunications carrier is pending in Arizona.  -15-    Prepaid Services  As a complement to our wireline services,
we launched prepaid calling services through CPC. In the second quarter of 2008,
CPC completed an asset purchase with TSI Prepaid, LLC, (TSI) a distributor of
prepaid telecommunications services. The purchase included all assets necessary
to carry out the business of TSI such as inventory, fixed assets, billing
systems and management information systems, agreements, customer lists and
vendor lists. In a separate transaction, Cordia entered into an investment
agreement to acquire a minority interest, up to 17%, in Wholetel, Inc., a
startup company that operates a turnkey products and services delivery system
for retailers and consumers.  The acquisition diversifies our position in
the telecommunications marketplace by introducing wireline, wireless and VoIP
services on a prepaid basis as well as international phone cards to our service
portfolio. The Company believes the purchase will boost overall revenue
impacting both its wireline and VoIP revenues.  Our products have been
marketed primarily through telemarketing, however through the addition of a
retail distribution network that reaches approximately 7,000 locations we now
have the opportunity to greatly expand our sales and distribution channels
reaching a much larger audience.  Since the asset purchase, Cordias prepaid
services offerings have fast become the Companys second highest generator of
revenue, behind only our traditional wireline services.   With the
introduction of our first international calling card as well as other prepaid
telecommunications services we anticipate that prepaid services will become our
greatest source of revenue by the end of fiscal 2009. We believe that the
positive effects of this offering will also improve our VoIP revenues, as most
of our prepaid services utilize our own IP network.  We further expect to
begin providing network services to the calling card industry by utilizing our
existing worldwide network and established relationships with partners around
the world.  VoIP Services  We launched the commercial roll-out of our
VoIP service offering, a voice over broadband solution enabling delivery of
voice services over any broadband Internet Protocol (IP) connection through
our majority-owned subsidiary CordiaIP Corp. (CordiaIP) in January 2006.
 We believe VoIP is the logical extension of our traditional wireline
telecommunications service offerings and have invested in the architecture and
construction of our own proprietary VoIP network, including our own network
software and operating support systems.  We offer a wide range of service plans,
including a flat rate plan starting as low as $14.95 per month. Along with a
full suite of enhanced features, our service is an attractive value proposition
to existing and potential customers. We strive to be the worlds local phone
company® and give our customers the option of choosing their desired area code,
offering telephone numbers from more than forty (40) countries and hundreds of
cities worldwide. This will allow consumers to make international calls at local
rates, a feature not available with traditional wireline service.  We also
recognize that a large percentage of the United States population speaks Spanish
as a primary language. To accommodate these users we launched VozsIP, a fully
integrated Spanish language VoIP service. This service, which is identical in
quality and functionality to its English counterpart, was designed to be a
purely Spanish language experience and includes all Spanish user interfaces,
voice prompts, invoices, customer service and targeted country calling plans.
 While the target market for our VoIP service is small business and
consumers, we also offer our service on both a wholesale and resale basis.  International Services  We
have focused on creating a niche in the international VoIP marketplace as the
worlds local phone company® by providing value added services worldwide and
creating partnerships and/or acquiring international VoIP providers on a global
scale. In 2005, we formed Cordia International Corp. (CIC) to serve as a
holding and management company for our overseas assets, which include our
foreign based subsidiaries and affiliates in Brazil, Hong Kong, India, and the
Philippines. We have made significant investments in our international services
and have not yet reached a point of profitability relative to these efforts. To
date we have incurred losses in executing our plan, and these investments have
detracted from the true value of our wireline business, which on a stand alone
basis would report a profit that is not apparent when reporting on a
consolidated basis.  In spite of our current costs and losses, we believe
that our international services, which had revenue growth of approximately 300%
for the nine months ended September 30, 2008, as compared to the same period in
2007, have long term value and we will continue our efforts to develop these
businesses so that they may become self-sustaining.  -16-     We laid the foundation for the commercial
launch of our VoIP product in Brazil by test marketing, through in house
telemarketing, resold VoIP services of another licensed Brazilian entity.
  Our efforts were well received by the Brazilian marketplace and on
June 25, 2008, the Agéncia Nacional de Telecomunicações (ANATEL), the
Brazilian equivalent to the Federal Communication Commission (FCC), issued our
Brazilian subsidiary a Serviçe Comunicação Multimídia (SCM) license. The
license allows the Company to offer VoIP and value added services, including its
Magellan® service line, internationally and domestically throughout Brazil,
targeting residential and small to mid-size business customers. Issuance of the
license has allowed us to move forward with the commercial launch of our VoIP
product in Brazil utilizing our own network, rather than reselling the services
of another carrier, giving us the ability to ensure the quality of the services
delivered to our customers while reducing expenses.  In addition to our
telemarketing efforts we anticipate rolling out an agent sales program designed
to facilitate our rapid entry into this newly emerging industry, giving the
Company the opportunity to play a central role in the deployment of IP based
communications networks in Brazil.  In addition, during the first quarter of
2008, though our Indian joint venture, Cordia LT Communication Private Limited,
we launched VoIP service offerings on a nationwide basis throughout India
pursuant to the license granted by the Ministry of Communications.  This
license also allows us to operate as an Internet Service Provider in India,
although to date we are only providing VoIP to our customers.  In Hong Kong, we have the authority to
offer telecommunications services under a Public Non-Exclusive
Telecommunications Services (PNETS) License.  We recently opted not to
renew our previously issued Services-Based Operator (SBO) license with the
Office of Telecommunications Authority (OFTA), which covers VoIP services.
While OFTA requires SBO holders to interconnect with the incumbent carriers in
Hong Kong the regulatory authority does not impose the same requirement on the
incumbent carriers. Therefore, due to the lack of regulatory guidance on
interconnection and the incumbent carriers unwillingness to interconnect we
believed it was in the best interest of the company not to renew this license.
We still believe that Hong Kong serves as the gateway to Asia and represents the
opportunity to serve the more than 40% of the worlds internet and broadband
subscribers located in that region, and will renew our efforts in the
future.  In the Philippines, we launched our
offshore call center during 2007. The center provides the Company with various
services including outbound telemarketing, customer service, welcome calls, and
collections. The launch of this location has allowed us to provide better
service to our customers at a reduced cost to the company.   During
2008, we further expanded this location by increasing personnel to take over
functions that were previously conducted in our US offices thus reducing our
operating expenses. In addition, capitalizing on the recent growth of outsourced
call center locations in the country, we are expanding our service portfolio so
we can target these call centers, and other enterprise business customers,
offering products, which utilize our worldwide network.  In addition to our overseas holdings we
continue to foster bilateral relationships with international VoIP carriers.
 We recently entered into a reseller agreement with IP Converge, an Asia
Pacific data center and telecommunications company with operations and
facilities in the Philippines, Singapore and Hong Kong.  This agreement
provides us with license coverage allowing us to fully deploy managed data and
VoIP services to business and residential customers in the Philippines.  In
addition to the license agreement we also have network interconnection with
Bayan Telecommunications, Inc. (Bayan), the second largest Philippine landline
provider. This will allow unlimited calling from Cordias international network
to Bayans wireline and wireless customers sold by Cordia. Our goal in seeking
out these global partnerships is to gain low cost access to their networks,
allowing us to deliver high quality, low cost global communications services to
our domestic and international customers.  To date, our VoIP network includes
international Direct Inward Dial (DID) telephone numbers from more than forty
(40) countries; network points of presence in Hong Kong, India, Brazil and the
United States; and peering agreements with approximately ten (10) carriers. We
believe that by blending our marketing capabilities, proprietary billing and
operation support systems (OSS), IP communications technology and
international bilateral agreements we can take advantage of the large disparity
between wholesale costs in some markets and retail rates in other markets to
create a competitive advantage in the international communications market.
 We believe that by offering a wide range of international numbers
integrated with broadband, wireline, wireless and VoIP services bundled from our
network and those of our peering partners we can create bundled service
offerings that present an attractive value proposition to our customers.  -17-    Business Process Outsourcing Service (BPO
Services)  We offer an extensive outsourced service
product line, which includes as its primary offering outsourced billing on a
wholesale basis to telecommunications service providers.  Our wholesale
customers have access to our secure Internet enabled software systems in which
user-friendly web client front-ends called Workspaces® serve as an interface for
integration with our software systems.  The services available to
wholesalers through our Workspaces® are the same services utilized internally
for the provision of our own traditional wireline and VoIP services to our
customers.  As such, we are continuously updating and improving these
processes to ensure optimal functionality.  We believe our outsourced
solutions are an attractive offering because it is not a pre-packaged all or
nothing product; the wholesale customer has the power to assess their
organization and then adopt and utilize only the functions they believe will
increase their own profitability.  Our goal is to tailor our services to
our clients needs and create a mutually beneficial and profitable relationship.
 We believe this is achieved by offering process driven software whereby
client required modifications to our systems are made at the server level and
then instantly passed onto the clients end users, promoting our commitment to
the continuous development and improvement of our Workspaces®. We bill these
services on a predominantly per line basis and have experienced a decrease in
BPO Services revenues as a result of the decreased line count experienced by our
wholesale customers operations.  Accordingly, revenue derived from our BPO
Services has become a less material part of our total revenue.  Plan of Operation  For the last several years we have focused
on both the global and domestic expansion of our telecommunications products.
 Historically, our wireline products have met with success and on a
standalone basis would be profitable.  However, as our wireline services
have been the main source of revenue for us, we have utilized these resources to
facilitate the architecture and construction of our global VoIP network both
domestically and abroad.   Our current goal is to reach profitability
for the Company as a whole; at present, our revenues are now diversified in
three specific areas consisting of Wireline, VoIP, and Prepaid Services, each of
which should become profitable on a stand alone basis contributing to the
overall profitability of the company.  We intend to reach profitability by
expanding our physical reach as well as our service portfolio, by reducing our
costs, and by driving our existing international operations to profitability.  We will continue to focus on our wireline
service offerings and expect our revenues to remain steady going forward.
 We recently expanded our territory taking advantage of our most recently
acquired commercial agreement by launching services in five (5) new states
during this reporting period.   It is our intention to begin launching
our wireline services in additional gross margin favorable states throughout the
remainder of 2008 and beyond.  Our expansion plans also include the
introduction of prepaid wireline, prepaid wireless and prepaid VoIP services to
our product line.  In addition, we have just launched our first
international prepaid calling card which targets Mexico and plan to
roll-additional country specific cards going forward.  We expect to
continue utilizing the distributor network in place at the time we acquired the
prepaid assets of TSI as well as expanding this network internationally
utilizing Cordias established global relationships. In addition, we will expand
the sales and distribution channels of our existing wireline and VoIP products
from traditional telemarketing with the addition of 7,000 plus retail
distributors that are in place though the purchase of the TSI assets.  We
believe this will have a positive effect on our revenue growth throughout the
remainder of 2008 and into the future.  Further, we believe that the
revenues generated by our prepaid services will eventually exceed that of our
wireline revenues providing an additional sustainable stream of revenue to help
shoulder the financial burden our wireline business currently has to support all
of our operations.  Prepaid services will also positively impact our IP
services as we plan on using our own underlying network to support our
offerings.  We realize that achieving profitability
does not rest solely upon increased revenues and new service offerings and that
we will need to take steps to reduce our costs.  Our biggest reduction has
resulted from the launch of our call center in Cebu, Philippines.
   The decision to open the call center was made after
successfully transitioning a portion of our sales and marketing efforts
offshore, reducing our customer acquisition costs during the latter half of
2006.  We have saved approximately 50% on our costs associated with
acquiring new customers and believe that having our own domestic based
telemarketing firm and our own overseas call center will also contribute to the
increased growth of our wireline, VoIP, and Magellan customer base.  We
anticipate nearly 90% of future telemarketing sales will be handled between our
Midwest call center and our call center in Cebu, Philippines and that these
sales, coupled with lower acquisition costs and improved operating efficiency,
will have a positive effect on our 2008 results of operations. During 2008, we
further expanded this location by increasing personnel to take over functions
that were previously conducted in the United States.  By utilizing our Cebu
center to perform a majority of customer service, welcome calls, and credit and
collections for the company we have seen signification cost reductions.  -18-     Finally, we will focus our efforts on
driving our existing international businesses to profitability.  During the
first six months of 2008, we launched our VoIP services in Brazil and India.
 Further we also have a presence in Hong Kong and the Philippines and our
goal is for these entities to become self sustaining on revenues derived from
VoIP service offerings in each of these countries.  To date, our service
offerings have been well received in each of these markets and we are now
building strong relationships with the larger carriers in each of these
countries such as Embratel in Brazil and Bayan Telecommunications, Inc. and IP
Converge in the Philippines to ensure a quality network.    To
date we are only providing VoIP service, but our long-term objective in these
countries is to deploy our own next generation wireless IP network utilizing
WiMAX technology capable of providing mobile voice, data and value added
services.   While it is our intention to reach these goals prior to
entering into any new regions we will not dismiss lucrative opportunities if
presented to us and if they will help us achieve profitability.  Results of Operations  The following table compares our operating
revenue for the nine and three month periods ended September 30, 2008 and
2007:  Operating Revenues  Nine
 Months Ended September 30,

Three Months
Ended September 30,2008

2007

2008

2007Wireline
services

$
     34,933,000

$
        31,094,000

$
       11,884,000

$
    11,529,000Prepaid
services

14,295,000

-

11,005,000

-VoIP
services

1,975,000

602,000

732,000

275,000Business Process Outsourced Services

14,000

383,000

5,000

130,000$
     51,217,000

$
        32,079,000

$
      23,626,000

$
     11,934,000  Total operating revenues for the nine and
three month periods ended September 30, 2008, increased by approximately
$19,138,000 and $11,692,000, respectively, to approximately $51,217,000 and
$23,626,000, respectively, as compared to approximately $32,079,000 and
$11,934,000, respectively, reported in same periods ended September 30,
2007.  Our primary source of revenue is through
our wireline services and is earned primarily through the provisioning of
services to business, residential and wholesale customers for basic telephone
service, including local and long distance service, as well as ancillary
services such as voice mail and call waiting and to a lesser extent from Carrier
Access Billing (CABS) billing.  For the nine and three month periods
ended September 30, 2008, our wireline services revenue increased by
approximately $3,839,000 (12.3%) and $355,000 (3.1%) to approximately
$34,933,000 and $11,884,000, respectively from approximately $31,094,000 and
$11,529,000 reported in the same periods last year. This increase is
attributable to a 29% and 30%, respectively, increase in lines, which is
primarily due to the acquisition of NST in August 2007 offset, in part, by lower
average rates.  The Company generated prepaid services
revenues of approximately $14,295,000 from June 5, 2008 to September 30, 2008,
and $11,005,000 for the three months ended September 30, 2008.  We
anticipate an increase in prepaid revenue, surpassing that of our wireline
revenue by the end of fiscal year 2009.  -19-     For the nine and three month periods ended
September 30, 2008, our VoIP services revenue increased by approximately
$1,373,000 (228%) and $457,000 (166%) respectively, to approximately $1,975,000
and $732,000, as compared to the same period ended 2007.  Included in the
nine month period ended September 30, 2008 were equipment sales of approximately
$196,000.  Approximately $950,000 and $309,000, respectively, of the
increase in VoIP revenue was related to our international services.  These
increases were primarily due to increased volume in the Companys Brazilian
operations.  For the nine and three month periods ended
September 30, 2008, billing services revenue, consisting primarily of income
earned through our outsourcing of billing services, data, and website technology
to wholesale telecommunications providers, decreased by approximately $369,000
and $125,000 to approximately $14,000 and $5,000, as compared to approximately
$383,000 and $130,000 reported in the same periods in 2007.  This change
occurred as a result of our wholesale customers decreased line counts.  We
expect this revenue source to be insignificant over the next couple of quarters
due to decreasing line counts experienced by our BPO customers.  COST OF REVENUES  The following table compares our cost of revenues for the
nine and three month periods ended September 30, 2008 and 2007:  Nine Months Ended September 30,

Three Months
Ended September 30,2008

2007

2008

2007Wireline
Services

$
20,303,000

$
16,881,000

$
 6,924,000

$
 6,380,000Prepaid
Services

13,743,000

-

10,582,000

-VoIP
Services

1,637,000

573,000

575,000

190,000$
35,683,000

$
17,454,000

$18,081,000

$
 6,570,000  Wireline Services  Cost of revenue from wireline services
consists of resale and wholesale line charges and represents our network access
fees paid in order to provide local and long distance telephone service to our
customers. These expenses vary in direct correlation to the size of our
telecommunications customer base. We have experienced an increase of
approximately $3,422,000 (20%) and $544,000 (9%) for the nine and three months
ended September 30, 2008, respectively, as compared to the same periods in 2007.
The majority of this increase is due to the increase in our line count and
higher wholesale line charges for the nine month period.  Prepaid Services  Cost of revenue from prepaid services from
June 5, 2008, the date we commenced services to September 30, 2008, was
$13,743,000. The cost of prepaid services for the most recent three month period
was $10,582,000.  VoIP Services  Cost of revenue for VoIP services increased
$1,064,000 (186%) and $385,000 (203%) for the nine and three month periods ended
September 30, 2008, respectively, as compared to the same periods in 2007.
Approximately, $626,000 and $201,000, respectively of these increases were
related to international operations, including $115,000 related to the sale of
equipment in the nine month period.  The remaining international increases
are primarily due to the Brazilian operations.  Gross Profit Margin  For the nine and three month periods ended
September 30, 2008, we experienced a decrease of our gross profit margin to 30%
and 23%, respectively, from approximately 46% and 45% reported for the same
periods in 2007. The decrease is due, in part, to prepaid services with gross
margins of 3.86%. The gross margin decrease for wireline services is due to
lower average rates and an increase of wholesale line charges. Gross margin for
VoIP services decreased to 17.1 % and 21.4% for the nine and three month periods
ended September 30, 2008. VoIP services have disproportionately higher expenses
associated with the ongoing roll out of the service.  In addition, BPO
revenue decreased with no reduction in expenses.  -20-    OPERATING EXPENSES  The following tables compare our operating
expenses for the nine and three month periods ended September 30, 2008 and
2007:  Nine Months Ended
Nine Months EndedSeptember 30, 2008
September 30, 2007Corporate




CorporateTotal
Overhead
Prepaid
Wireline
VoIP
Total
Overhead
Wireline
VoIPSales and
Marketing
$
 3,543,000
$
             -
$27,000
$
3,008,000
$
 508,000
$2,963,000
$
           -
$
2,621,000
$
  342,000Bad Debts
2,648,000
-
-
2,520,000
128,000
2,688,000
-
2,626,000
62,000General and
Administrative
9,420,000
1,891,000
504,000
5,160,000
1,865,000
9,509,000
1,365,000
6,602,000
1,542,000Impairment of
Goodwill
-
-
-
-
-
284,000
-
-
284,000Depreciation and
Amortization
1,266,000
-
62,000
1,057,000
147,000
803,000
1,000
725,000
77,000$16,877,000
$1,891,000
$593,000
$11,745,000
$2,648,000
$16,247,000
$1,366,000
$12,574,000
$2,307,000   Three Months Ended

Three Months EndedSeptember 30, 2008

September 30, 2007Corporate




CorporateTotal
Overhead
Prepaid
Wireline
VoIP
Total
Overhead
Wireline
VoIPSales and
Marketing
$1,163,000
$
           -
$
 5,000
$
 969,000
$189,000
$
    836,000
$
            -
$
 676,000
$
 160,000Bad Debts
979,000
-
-
922,000
57,000
1,113,000
-
1,091,000
22,000General and
Administrative
3,170,000
592,000
345,000
1,552,000
681,000
3,219,000
546,000
2,033,000
640,000Impairment of
Goodwill
-
-
-
-
-
-
-
-
-Depreciation and
Amortization
445,000
-
47,000
353,000
45,000
292,000
-
266,000
26,000$5,757,000
$
592,000
$397,000
$3,796,000
$972,000
$ 5,460,000
$
 546,000
$4,066,000
$
 848,000  Consolidated operating expenses increased
by approximately $630,000 (3%) for the nine month period and increased $297,000
(5%) for the three month period ended September 30, 2008, as compared to
approximately $16,247,000 and $5,460,000, respectively, reported during the
comparable periods in 2007.  Approximately $256,000 of the increase is
related to our VoIP and international operations and $600,000 is related to our
new prepaid operations. These increases were offset by the decrease of
approximately $219,000 in our wireline and corporate operations for the nine
months ended September 30, 2008.  Sales and Marketing    For the nine and three months ended
September 30, 2008, sales and marketing expenses increased by approximately
$580,000 and $327,000, respectively, to approximately $3,543,000 and $1,163,000,
respectively, as compared to approximately $2,963,000 and $836,000,
respectively, reported in the prior year. These increases are primarily due to
the growth of our wireline customer base and marketing expenses to promote our
international VoIP product.  Bad Debts  For the nine months ended September 30,
2008, our bad debt expense decreased by approximately $40,000 to approximately
$2,648,000 compared to the prior year and decreased by approximately $134,000
for the three month period, from approximately $1,113,000 reported in the prior
year to approximately $979,000 for the three months ended September 30, 2008. We
expect that our increased efforts and close monitoring of our receivables will
enable us to effectively manage our bad debt exposure throughout the remainder
of 2008.  -21-    General and Administrative  General and administrative (G&A)
expenses include, but are not limited to salaries, rent, office expenses,
insurance, commissions, telephone, bank and credit card processing fees, license
expense and registration fees. G&A expenses decreased by approximately
$89,000 and $50,000, respectively, for the nine and three month periods ended
September 30, 2008, as compared to the same periods in 2007.  This was due
primarily to an increase in costs associated with both our domestic and
international VoIP initiatives. For the nine month period approximately $238,000
is an increase relating to our VoIP and international operations, $504,000 is
related to our prepaid operations and a decrease of $831,000 is related to our
wireline and corporate operations. We believe that G&A expense will increase
throughout 2008, as compared to 2007, due to the expansion of our international
operations, the inclusion of Midwest and NST for the full year, and CPCs launch
of prepaid services.  Impairment of Goodwill  At March 31, 2007, the Company evaluated
the goodwill associated with the purchase of Triamis and deemed the carrying
value of the goodwill to be impaired. In accordance with FASB 142 the Company
wrote down the goodwill with an impairment charge of $284,000.  For the
periods ended September 30, 2008, the Company deemed that no impairment charge
was needed.  Depreciation and Amortization  Depreciation and amortization expense
increased approximately $463,000 and $153,000, respectively, for the nine and
three month periods ended September 30, 2008, as compared to the same periods in
2007.  This increase was due to the amortization of the customer lists
associated with the acquisition of Midwest and NST, as well as the customer list
amortization associated with our new prepaid subsidiary, additions of
depreciable office equipment and labor costs associated with our rollout of
VoIP, which was capitalized and depreciated in accordance with Statement of
Position (SOP) 98-1.   Depreciation and amortization associated with
Midwest, NST and CPC totaled approximately $245,000 and $108,000 for the nine
and three month periods, respectively.  Depreciation on equipment and capitalized
software costs are calculated using the straight line method and declining
balance method over a three (3) year period. Amortization of leasehold
improvements and other assets is computed using the straight-line method over
the lesser of the estimated useful lives of the asset or the remaining lease
term.  Liquidity and Capital Resources  At September 30, 2008, we had cash and cash
equivalents, including restricted cash, of approximately $926,000, a decrease of
approximately $247,000 from amounts reported at December 31, 2007, and negative
working capital of approximately $13,787,000, as compared to negative working
capital of approximately $9,781,000 reported at December 31, 2007.  The
decrease in working capital is primarily related to the increase in accounts
payable and billed taxes payable, purchase of customer lists and payment on
notes payable.  Net cash provided by operating activities
for the nine month period ended September 30, 2008, aggregated approximately
$2,153,000, a decrease of approximately $643,000, from approximately $2,796,000
provided during the same period in 2007.  The principal source of net cash
for the nine month period ended September 30, 2008 was an increase in accounts
payable and billed taxes payable aggregating $5,398,000, the net loss from
operations (net of non cash expenses of compensatory stock, bad debts and
depreciation and amortization) of $1,721,000. This was offset, in part, by
increases in accounts receivable of $4,771,000. The principal source of cash for
the nine-month period ended September 30, 2007, was primarily the increase in
billed taxes payable and bad debts expense aggregating approximately $4,922,000
offset, in part, by an increase in accounts receivable, of approximately
$1,400,000 and net loss for the period amounting to $1,977,000.  Net cash used by investing activities for
the nine month period ended September 30, 2008, aggregated approximately
$1,809,000 compared to net cash used of approximately $1,665,000 during the same
period in 2007. For the nine months ended September 30, 2008, net cash used by
investing activities consisted primarily of the acquisition of TSI operations of
approximately $797,000, expenditures for internally developed software for our
VoIP platform of approximately $400,000 ($529,000 in 2007), the purchase of
customer lists of approximately $224,000, purchase of property plant and
equipment of $280,000 ($595,000 in 2007) and investment in unconsolidated
affiliates of $107,000.  -22-     For the period ending September 30, 2008,
net cash used by financing activities was approximately $530,000 as compared to
approximately $25,000 for the 2007 period. Financing expenditures consisted
primarily of payments of notes payable amounting to $500,000.  Long-term debt (including interest) and
operating lease obligations as of September 30, 2008, mature as follows:  Less than





More ThanObligations

Total

1
year

2-3
years

4-5
years

5
yearsNotes
Payable

$
  2,722,000

$
 1,839,000

$
  883,000

$
            -

$
            -Telephone
Capital Lease

31,000

16,000

15,000

-

-Rental
(Office)

1,878,000

571,000

904,000

403,000

-TOTAL
OBLIGATIONS

$
  4,631,000

$
 2,426,000

$1,802,000

$
 403,000

$
            -  At September 30, 2008, our balance sheet
showed $142,000 in restricted cash in the form of a LOC for the benefit of Qwest
secured by funds deposited into a restricted money market account. The LOC was
originally effective for a term of one (1) year, however Qwest renewed it for an
additional one (1) year period. The LOC was due to expanding our wireline
service offerings into additional states covered by our commercial services
agreement with Qwest. Additionally, at the December 31, 2007 date we had an LOC
of $30,000 for NST. This was acquired in the Midwest Acquisition in August of
2007 and was obtained for the benefit of Verizon, and is included in the
December 31, 2007 balance sheet. The remaining amount represents interest on the
LOCs.  The Company has incurred losses and also
has a negative working capital and a deficiency in stockholders' equity as of
September 30, 2008 and December 31, 2007. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. Management,
however, believes that the Company will be able to generate sufficient cash
flows from operations to meet its obligations as they come due during the next
twelve month period.  The Company recognized the need for
additional working capital to strengthen its financial position, maintain
growth, payment of tax obligations and continue to carry out its plans for its
international expansion of VoIP and related value added services and entered
into the Factoring and Security Agreement (Factoring Agreement) with Thermo
Credit, LLC (Thermo), a Colorado limited liability company, in September 2007.
In July 2008, the parties entered into an amendment to the Factoring Agreement
increasing the commitment amount by Five Hundred Thousand dollars ($500,000) to
an aggregate Five Million Five Hundred Thousand dollars ($5,500,000).  Management believes that with the increase
in sales from NST, the entry into the prepaid market, and the cost savings
generated from our lower customer acquisition costs, the Company will generate
sufficient cash flows from operations to meet its obligations as they come due
during the next twelve month period.   We do, however, recognize the
limiting effect that our liquidity has on our growth rate and management may
seek additional sources of capital in the future, including but not limited to a
private placement of the Companys common stock, to neutralize this limitation
in the future.  The Company recognizes the financial strain
the losses of its VoIP and international initiatives have put on the rest of the
business and the manner in which it detracts from the overall value of the
Company.  We still, however, believe that our VoIP and international
initiatives have the potential for long term shareholder value as we have seen
revenue growth associated with these services increase by approximately 166%
this quarter as compared to the same period last year.   Further, we
believe that the current market price of our common stock is not an accurate
reflection of its true value and that it may take a significant amount of time
for these benefits to be realized.  -23-     Off Balance Sheet
Arrangements  We have not entered into any transactions
with unconsolidated entities whereby we have financial guarantees, or other
contingent arrangements that exposes us to material continuing risks, contingent
liabilities or any other obligations that provide financing, liquidity, market
risk or credit risk support to the Company.   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.  We earn a majority of our revenue in U.S.
dollars where our primary operating activities are located.  We also
maintain offices and operate in Brazil, Hong Kong, and the Philippines. This
creates an exposure to loss if any of those currencies appreciate against the
dollar.  We believe however, than any risk due to currency rate exchange
fluctuations are immaterial as our operations overseas do not represent a
majority of our business.   ITEM 4.  CONTROLS AND PROCEDURES. (a) Disclosure controls and procedures
are to ensure that information required to be disclosed in our reports that we
file or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Commissions rules and forms.
In addition, the evaluation is to ensure that information required to be
disclosed in the reports we file or submit under the Exchange Act is accumulated
and communicated to the Companys management, including Companys principal
executive and principal financial officer to allow timely decisions regarding
required disclosure and that our internal controls are effective to provide
reasonable assurances that our financial condition, results of operations and
cash flows are fairly presented in all material respects. Based on that
evaluation of the Companys disclosure controls and procedures as of the end of
the period covered by this report, the Companys management, including its Chief
Executive Officer and Chief Financial Officer, concluded that the Companys
disclosure controls and procedures were not effective as of September 30, 2008
because it has not yet been concluded that the material weaknesses in the
Companys internal control over financial reporting reported as of December 31,
2007 in the Companys Form 10-K/A have been remediated.  Subsequent to December 31, 2007, the
Company has implemented, or plans to implement, certain measures to remediate
the identified material weaknesses and to enhance the Companys internal control
over its quarterly and year-end financial reporting processes. As of the date of
the filing of this Quarterly Report on Form 10-Q, the Company has implemented
the following measures:  · Increased the size, expertise and
training of the finance and accounting staff to include adequate resources for
ensuring GAAP is properly applied.  · Enhanced the accounting policies and
procedures to provide adequate, sufficient, and useful guidance.   · Increased the level of
interdepartmental communication in a way that will foster information sharing
between our finance staff and operational personnel.  The Company anticipates that these
remediation actions represent ongoing improvement measures.  Furthermore, while the Company has taken
steps to remediate the material weaknesses, these steps may not be adequate to
fully remediate those weaknesses, and additional measures may be required. The
Company believes that the identified weaknesses will be fully remediated by its
year ended December 31, 2008. -24-     PART II OTHER INFORMATION  ITEM 1.  LEGAL PROCEEDINGS  On July 27, 2008, Cordia Corporation,
VOzsIP, Corp. and CordiaIP Corp. were served by Plaintiff, Rates Technology,
Inc. the holder of two (2) separate US Patents, for patent infringement.
 The lawsuit was filed against the Company in the Southern District of New
York on June 26, 2008.  On September 24, 2008, the lawsuit was settled and
on October 1, 2008 the parties filed a Stipulation of Dismissal with Prejudice.  The Company is not currently a party to any
additional legal proceedings that we believe will have a material adverse effect
on our financial condition or results of operations.  ITEM 1A. RISK FACTORS  The have been no changes in the Companys
Risk Factors as disclosed in its Form 10-K for the period ended December 31,
2007, and its Form 10-Q for the period ended June 30, 2008.   ITEM 2.  UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS  We have no unregistered sales of equity
securities and use of proceeds to report.   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES  We have no defaults upon senior securities to
report.   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS  No matters were submitted to a vote of our security
holders.   ITEM 5.  OTHER INFORMATION  We have no additional information to report that would
require disclosure in a report on Form 8-K during the period ended September 30,
2008 for which we did not file a Form 8-K report.   ITEM 6.  EXHIBITS  (a) Exhibits. The following
exhibits are filed herewith. 31.1
Certification of
Cordia Corporation's Principal Executive Officer, Joel Dupré,pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
Certification of
Cordia Corporation's Principal Financial Officer, Gandolfo Verra,pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certificate of
Cordia Corporation's Principal Executive Officer, Joel Dupré,pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
Certification of
Cordia Corporation's Principal Financial Officer, Gandolfo Verra,pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.         -25-      SIGNATURES In accordance
Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.  CORDIA
CORPORATIONDate: November 14, 2008 By: /s/
Joel
Dupré                                                                                                               
Joel
Dupré                                                                                                              
Chief Executive OfficerDate: November 14, 2008 By: /s/
Gandolfo
Verra Gandolfo
Verra Chief Financial Officer           -26-