Pegasus Tel (PTEL) 10-Q 2008 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended		March 31, 2008
	OR
[  ]	TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from				to
	Commission file number:	0-5268
	PEGASUS TEL, INC.
	(Exact Name of  Registrant as Specified in Its Charter)
	Delaware			41-2039686
	(State of Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)
	118 Chatham Road, Syracuse, NY			13203
	(Address of Principal Executive Offices)			(Zip Code)
	(315) 476-5769
	(Registrant’s Telephone Number, Including Area Code)
	N/A
	(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 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.

[ X ] Yes      [   ] No

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

[    ] Yes      [X] No

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. There were 5,100,000 shares of common stock, par value $0.0001 per share, issued and outstanding as of November 14, 2007.

Transitional Small Business Disclosure Format (check one):                                                                                                                     [    ] Yes      [X] No

1

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets as March 31, 2008 (Unaudited) and December 31, 2007	3
	Statements of Operations For the three months ended March 31, 2008 (Unaudited) and For the three months ended March 31, 2007 (Unaudited) and For the cumulative period from February 19, 2002 (inception) to March 31, 2008 (Unaudited)	4
	Statements of Cash Flows For the three months ended March 31, 2008 (Unaudited) and For the three months ended March 31, 2007 (Unaudited) and For the cumulative period from February 19, 2002 (inception) to March 31, 2008 (Unaudited)	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis or Plan of Operation	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	21
PART II – OTHER INFORMATION		21
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Submission of Matters to a Vote of Security Holders	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURES		26

2

PART I

FINANCIAL INFORMATION

Item 1.   Financial Statements and Footnotes

PEGASUS TEL, INC.
(A Development Stage Company)
BALANCE SHEETS
	(Unaudited)
	March 31,			December 31,
	2008			2007
Assets:
Cash and Cash Equivalents	$	144		$	425
Accounts Receivable		1,941			1,911
Total Current Assets		2,085			2,336
Property and Equipment:
Payphone Equipment		12,600			12,600
Less Accumulated Depreciation		(12,600	)		(12,600	)
Net Property and Equipment		-			-
Total Assets	$	2,085		$	2,336
Liabilities:
Accounts Payable	$	30,599		$	31,409
Related Party Accounts Payable		10,897			10,897
Accrued Interest		5,152			3,441
Related Party Notes Payable		58,600			40,300
Current Liabilities		105,248			86,047
Total Liabilities		105,248			86,047
Stockholders' Equity:
Preferred Stock, Par value $0.0001,
Authorized 10,000,000 shares, Issued 0 shares at
March 31, 2008 and December 31, 2007		-			-
Common Stock, Par value $0.0001,
Authorized 100,000,000 shares; Issued 5,100,000 shares at
March 31, 2008 and December 31, 2007		510			510
Paid-In Capital		57,174			57,174
Deficit Accumulated During Development Stage		(160,847	)		(141,395	)
Total Stockholders' Equity		(103,163	)		(83,711	)
Total Liabilities and Stockholders' Equity	$	2,085		$	2,336
The accompanying notes are an integral part of these financial statements.

3

PEGASUS TEL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
							Cumulative
							Since
							February 19,
	(Unaudited)						2002
	For the Three Months Ended						Inception of
	March 31,						Development
	2008			2007			Stage
Revenues	$	1,652		$	3,481		$	55,351
Costs of Services		(955	)		(2,482	)		(55,898	)
Gross Margin		697			999			(547	)
Expenses
Accounting		-			-			38,802
Advertising		-			-			770
Bookkeeping		1,757			478			8,077
General and Administrative		264			118			9,265
Legal		16,000			-			74,790
Outside Services		-			-			21,983
Operating Expenses		18,021			596			153,687
Operating Income (Loss)		(17,324	)		403			(154,234	)
Other (Income) Expense
Interest, Net		(1,711	)		(125	)		(5,152	)
Net Income (Loss) Before Taxes		(19,035	)		278			(159,386	)
Income and Franchise Tax		(417	)		-			(1,461	)
Net Income  (Loss)	$	(19,452	)	$	278		$	(160,847	)
Loss per Share, Basic &
Diluted	$	-		$	-
Weighted Average Shares
Outstanding		5,100,000			5,100,000
The accompanying notes are an integral part of these financial statements.

4

PEGASUS TEL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
							Cumulative
							Since
							February 19,
	(Unaudited)						2002
	For the Three Months Ended						Inception of
	March 31,						Development
	2008			2007			Stage
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (Income) for the Period	$	(19,452	)	$	278		$	(160,847	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization		-			390			12,600
Changes in Operating Assets and Liabilities
Decrease (Increase) in Accounts Receivable		(30	)		(1,339	)		(1,941	)
Increase (Decrease) in Accounts Payable		(810	)		389			30,599
Increase (Decrease) in Related Party Payable		-			-			10,897
Increase (Decrease) in Interest Payable		1,711			124			5,152
Decrease (Increase) in Intercompany Dues		-			-			56,684
Net Cash Used in Operating Activities		(18,581	)		(158	)		(46,856	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment		-			-			(11,600	)
Net cash provided by Investing Activities		-			-			(11,600	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Related Party Notes Payable		18,300			-			58,600
Net Cash Provided by Financing Activities		18,300			-			58,600
Net (Decrease) Increase in Cash		(281	)		(158	)		144
Cash at Beginning of Period		425			205			-
Cash at End of Period	$	144		$	47		$	144
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	-		$	-		$	-
Franchise and Income Taxes	$	417		$	-		$	1,461
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Accounts Payable Satisfied through contributed capital
and property and equipment	$	-		$	56,684		$	56,684
The accompanying notes are an integral part of these financial statements.

5

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of accounting policies for Pegasus Tel, Inc. is presented to assist in understanding the Company's financial statements.  The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Interim Financial Statements

The unaudited financial statements as of March 31, 2008 and the three months then ended, reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of the operations for all three months.  Operating results for interim periods are not necessarily indicative of the results which can be expected for full years.

Nature of Operations and Going Concern

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that Pegasus Tel., Inc. (hereto referred to as the “Company”) will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.

Several conditions and events cast doubt about the Company’s ability to continue as a “going concern.”  The Company has incurred net losses of approximately $160,800 for the period from February 19, 2002 (inception) to March 31, 2008, has an accumulated deficit, has recurring losses, has minimal revenues and requires additional financing in order to finance its business activities on an ongoing basis.  The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of the Company have committed to meeting its operating expenses.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide them with the opportunity to continue as a “going concern”

These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a “going concern”.  While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful.  If the Company were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.

6

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Organization and Basis of Presentation

On February 19, 2002, Pegasus Tel, Inc., a Delaware company, was formed as a wholly owned subsidiary of American Industries.

On March 28, 2002, American Industries, Inc. and Pegasus Tel, Inc. entered into an agreement with Pegasus Communications, Inc., a New York corporation, to acquire 100% of the outstanding shares of Pegasus Communications, Inc. in exchange for 72,721,966 shares of common stock of American Industries, Inc.  Pegasus Tel, Inc. continued as the surviving corporation and Pegasus Communications, Inc. was merged out of existence.

The company is in the development stage, and has not commenced planned principal operations.  The Company has a December 31 year end.

Nature of Business

The Company is primarily in the business of providing the use of outdoor payphones, and providing telecommunication services.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Revenue Recognition

The Company derives its primary revenue from the sources described below, which includes dial-around revenues, coin collections, telephone equipment repairs, and sales. Other revenue generated by the company includes sales commissions.

7

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (continued)

Coin revenues are recorded in an equal amount to the coins collected.  Revenues on commissions and telephone equipment and sales are realized on the date when the telephone repair services are provided or the telecommunication supplies are received by the customer. Dial Around revenues are earned when a customer uses the Company’s payphone to gain access to a different long distance carrier than is already programmed into the phone. The Dial Around revenue is recognized when the billing and collection agent of the Company, APCC, calculates and compensates the Company for the use of the payphone on a quarterly basis by billing the actual party’s long distance carrier that received the calls.  The date of the Dial Around revenue recognition is determined when this compensation is collected and deposited into the Company’s bank account.

The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition."  SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions.  The Company recognizes revenue when the earnings process is complete.  That is, when the arrangements of the goods are documented, the pricing becomes final and collectibility is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of March 31, 2008 and December 31, 2007, there was no deferred revenue.

Allowance for Doubtful Accounts

The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position.  If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. As of March 31, 2008 and December 31, 2007, the Company has determined an allowance for doubtful accounts is not necessary.

8

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.  The Company had cash and cash equivalents of $144 and $425 as of March 31, 2008 and December 31, 2007, all of which was fully covered by federal depository insurance.

Accounts Receivable

Accounts Receivable consists of Dial Around revenue, Local Service revenue and Commission revenue. The Accounts Receivable as of March 31, 2008 and December 31, 2008 was $1,911 and $1,941, respectively.

Fixed Assets

Fixed assets are stated at cost. Depreciation expense for the three months ended March 31, 2008 and 2007 were $0 and $390, respectively. As of March 31, 2008 the Payphone Equipment has been fully depreciated.  Depreciation and amortization are computed using the straight-line and accelerated methods over the estimated economic useful lives of the related assets as follows:

Asset	Rate
Payphone Equipment	5 years

Upon sale or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the determination of income or loss. Expenditures for maintenance and repairs are charged to expense as incurred.  Major overhauls and betterments are capitalized and depreciated over their estimated economic useful lives.

Maintenance and repairs are charged to operations; betterments are capitalized.  The cost of property sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, and any resulting gain or loss is credited or charged to income.

9

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Loss per Share

Basic loss per share has been computed by dividing the loss for the period applicable to the common stockholders’ by the weighted average number of common shares outstanding during the period.  There were no common equivalent shares outstanding during the periods ended March 31, 2008 and March 31, 2007.

Financial Instruments

The Company’s financial assets and liabilities consist of cash, accounts receivable, property and equipment, and accounts payable. Except as otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values due to the sort-term maturities of these instruments.

Income Taxes

The Company accounts for income taxes under the provisions of SFAS No.109, “Accounting for Income Taxes.”  SFAS No.109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities.

10

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reclassification

Certain reclassifications have been made in the 2007 financial statements to conform to the March 31, 2008 presentation.

Recent Accounting Standards

In February 2007, the FASB issued SFAS no, 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”).  SFAS 159 provides companies with an option to report selected financials assets and liabilities at fair value.  The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently.  Generally accepted accounting principles have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings.  The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting.  SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities.  SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFA No. 107, “Disclosures about Fair Value of Financial Instruments.”SFAS 159 is effective for the Company as of the beginning of fiscal year 2008.  The adoption of this pronouncement is not expected to have an impact on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued SPAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as minority interests). SFAS 160 also requires that a retained noncontrolling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Upon adoption of SFAS 160, the Company would be required to report any noncontrolling interests as a separate component of stockholders’ deficit. The Company would also be required to present any net income attributable to the stockholders of the Company separately in its condensed consolidated statement of operations. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other

11

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (Continued)

 requirements of SFAS 160 shall be applied prospectively. SFAS 160 would have an impact on the presentation and disclosure of the noncontrolling interests of any non-wholly owned business acquired in the future.

In December 2007, the Financial Accounting Standards Board ( “FASB”) issued Statement of Financials Accounting Standards (“SFAS”) No. 141R, “Business Combinations” (“SFAS 141R”), which replaces SPAS No. 141 “Business Combinations”. SFAS 141R establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including noncontrolling interest, contingent consideration, and certain acquired contingencies. SFAS 141R also requires acquisition-related transaction expenses and restructuring cost be expensed as incurred rather than capitalized a component of the business combination. SFAS 141R will be applicable prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. SFAS 141R would have an impact on accounting for any business acquired after the effective date of this pronouncement.

In March 2008, the FASB issued No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.  (“SFAS 161").  SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting.  This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption.  Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

12

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 2 - INCOME TAXES

As of December 31, 2007, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $132,437 that may be offset against future taxable income through 2025.  Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs.  Therefore, the amount available to offset future taxable income may be limited.  No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry-forwards will expire unused.  Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

	2007			2006
Net Operating Losses	$	45,029		$	22,600
Valuation Allowance	$	(45,029	)	$	(22,600	)
	$	- -		$______ -_

The provision for income taxes differ from the amount computed using the federal US statutory income tax rate as follows:

	2007			2006
Provision (Benefit) at US Statutory Rate	$	22,342		$	5,600
Other Adjustments	$	87		$	-
Increase (Decrease)_in Valuation Allowance	$	(22,429	)	$	(5,600	)
	$	-		$	-

The Company evaluates its valuation allowance requirements based on projected future operations.  When circumstances change and causes a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.

13

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 3- DEVELOPMENT STAGE COMPANY

The Company has not begun principal operations and as is common with a development stage company, the Company will have recurring losses during its development stage.  The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.

NOTE 4 – UNCERTAIN TAX POSITIONS

Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of FIN 48 did not have a material impact on the company’s financial position and results of operations. At January 1, 2007, the company had no liability for unrecognized tax benefits and no accrual for the payment of related interest.

Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest expense related to unrecognized tax benefits during 2007.  In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities.

With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2004. The following describes the open tax years, by major tax jurisdiction, as of January 1, 2007:

United States (a) 2004– Present

(a) Includes federal as well as state or similar local jurisdictions, as applicable.

14

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 5 - COMMITMENTS

As of March 31, 2008, all activities of the Company have been conducted by corporate officers from either their homes or business offices.  Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities.

NOTE 6 - COMMON STOCK TRANSACTIONS

On December 31, 2003, the Company issued 1,000 shares of common stock in exchange for cash valued at $1,000.

On September 21, 2006, the Company filed an Amended Certificate of Incorporation and the par value of the common stock was changed to $ .0001 per share.  This change is retro-active and therefore changes the 1,000 share of common stock issued on December 31, 2003 to the par value of $ .0001 per share.

On May 15, 2007, the Company filed an Amended Certificate of Incorporation and there was forward stock split 5,100 to 1.  This change is retro-active and therefore changes the 1,000 shares of common stock issued on December 31, 2003 to 5,100,000 shares of common stock.  The par value remains at $ .0001 per share.

NOTE 7-CONTRIBUTED CAPITAL

As of September 9, 2006, Dolce Ventures Inc., the parent company of Pegasus Tel, Inc., had a receivable outstanding with the Company in the amount of $56,684. As of December 31, 2007 Dolce Ventures Inc. forgave this balance and the Company recorded a contributed capital in the amount of $56,684.

NOTE 8 – INTERCOMPANY TRANSACTIONS

As Pegasus Tel, Inc. is the subsidiary of Dolce Ventures Inc., all transactions between the companies were considered Intercompany Dues.  These transactions included investments and contributions to Pegasus Tel, Inc. from Dolce Ventures Inc. to cover outside expenses and liabilities to maintain the corporation since inception of the Company.  During 2006 Dolce forgave this payable in the amount of $56,684

15

PEGASUS TEL, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 9 – RELATED PARTY ACCOUNTS PAYABLE

During 2006, an Officer of the Company, Joseph Passalaqua, has advanced the company $10,673. This is an accounts payable. As of March 31, 2008 and December 31, 2007 the Company owes $10,673.

During 2006, an Officer of the Company, Carl Worboys, has advanced the Company $224. This is an accounts payable. As of March 31, 2008 and December 31, 2007 the Company owes $ 224.

NOTE 10 – RELATED PARTY NOTES PAYABLE

During 2007, an Officer of the Company, Joseph Passalaqua, advanced the company $ 5,000. The note is accruing 10% simple interest per annum and is payable in full upon demand.  As of March 31, 2008 and December 31, 2007, the company owes $5,000 related to this note and has accrued $125 and $25 in simple interest respectfully.

During 2006, 2007, and 2008 an Officer of the Company, Mary Passalaqua, has advanced the Company $53,600.  The notes are accruing 10% and 15% simple interest per annum and are payable in full upon demand. As of March 31, 2008 and December 31, 2007, the Company owed $53,600 and $35,300 related to these notes and had accrued $4,907 and $3,321 in simple interest, respectively.

16

Item 2.  Management’s Discussion and Analysis or Plan of Operation

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Overview

Pegasus Tel, Inc., a Delaware corporation, or Pegasus, was incorporated under the laws of the State of Delaware on February 19, 2002 to enter into the telecommunication business.   Our company is a wholly-owned subsidiary of Sino Gas International Holdings, Inc., a Utah corporation, or Sino Gas.

As reported by Sino Gas in its Annual Report on Form 10-KSB, Sino Gas plans to spin off Pegasus to its stockholders as of August 30, 2006, or the Record Date. As described below, the business purposes and geographical focus of Sino Gas and Pegasus are disparate in nature, with Sino Gas engaged in the development of natural gas distribution systems in People’s Republic of China, or the PRC or China, and Pegasus owning and operating a total of 15 payphones in New York State as of March 31, 2008.  Due to these reasons, Sino Gas believes it is in its stockholders’ best interests to spin-off Pegasus.

On May 16, 2007, Sino Gas filed a Definitive Information Statement on Schedule 14C with the SEC in connection with our spin-off from Sino Gas and commenced mailing the Definitive Information Statement to its stockholders. In connection with our Form 10-SB discussed below, we received comments from the SEC regarding the Definitive Information Statement and we and Sino Gas are currently preparing an amendment to the Information Statement.  Upon filing an amended Definitive Information Statement on 14C, Sino Gas will effectuate the spin-off no earlier than 20 days from the commencement date of mailing the Information Statement and Annual Report on Form 10-KSB to its stockholders of record as of the Record Date.

In connection with our spin-off from Sino Gas, on May 7, 2007, we filed a Registration Statement on Form 10-SB (File No.: 0-52628), or the Registration Statement, with the SEC to register the Pegasus common stock under Section 12(g) of the Exchange Act.  The Registration Statement went effective on July 6, 2007 through the operation of law 60 days after its initial filing.  Upon the effectiveness of the Registration Statement, we became subject to the reporting requirements of the Exchange Act, and accordingly, we are required to file periodic and other reports and other required information with the SEC.

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No trading market:

No public market currently exists for our common stock. We intend to secure and request that a broker-dealer / market maker submit an application to FINRA (formerly the NASD) in order to make a market for our shares and for the shares to be quoted on the OTC Bulletin Board. Stocks traded on the OTC are usually thinly traded, highly volatile, and not followed by analysis. Investors in our stock may experience a loss or liquidity problem with their share holdings.

Dividend Policy:

We currently anticipate that no cash dividends will be paid on our common stock in the foreseeable future.  Our Board periodically will reevaluate this dividend policy taking into account our operating results, capital needs, and the terms of our existing financing arrangements and other factors.

Services and Products

We own, operate and manage privately owned public payphones in the County of Delaware, State of New York. As of May 7, 2007, we owned, operating and managed 15 payphones.  We may pay site owners a commission based on a flat monthly rate or on a percentage of sales. Some of the businesses include, but are not limited to, retail stores, convenience stores, bars, restaurants, gas stations, colleges and hospitals. In the alternative, our agreement with business owners may be to provide the telecommunications services without the payment of any commissions.

The local telephone switch controls the traditional payphone technology. The local switch does not provide any services in the payphone that can benefit the owner of the phone. As we purchase phones from other companies, we upgrade them with "smart card" payphone technology which we license from Quortech. The upgrade is a circuit board with improved technology. The “smart card” technology allows us to determine on a preset time basis the operational status of the payphone. It also tells us when the coins in the phone have to be collected, the number and types of calls that have been made from each phone, as well as other helpful information that helps us provide better service to our payphone using public. This upgrade of the phones reduces the number and frequency of service visits due to outages and other payphone-related problems and, in turn, reduces the maintenance costs. Other companies manufacture the components of the payphones for the industry including Universal Communications and TCI, which provides hand sets, key pads, totalizers, and relays.

Basis of Presentation

The following discussion and analysis is based on our unaudited financial statements for the three months ended March 31, 2008 and 2007. In the opinion of management, the financial statements presented herein reflect all adjustments (consisting only of normal recurring adjustments) necessary for fair presentation. Interim results are not necessary indicative of results to be expected for the entire year.

We prepare our financial statements in accordance with generally accepted accounting principles, or GAAP, which require that management make estimates and assumptions that affect reported amounts. Actual results could differ from these estimates.

Certain of the statements contained below are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

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Three months ended March 31, 2008 compared to the three months ended March 31, 2007

Results of Operations

Our total revenue decreased by $1,829, or approximately 53%, from $3,481 for the three months ended March 31, 2007 to $1,652 for the three months ended March 31, 2008.  The decrease is primarily due to a lower amount of commission revenue received on “dial-around” calls and a decline in the amount coin collected due to lower payphone use.

Our coin call revenues decreased by $863, or approximately 67%, from $1,295 for the three months ended March 31, 2007 to $432 for three months ended March 31, 2008.  The decrease is primarily due to a decline in payphone use which generated lower coin collected in the first quarter of 2008.

Our non-coin call revenue, or commission income, which is comprised primarily of “dial-around” revenue and operator service revenue increased by $966, or approximately 44%, from  $2,186 for the three months ended March 31, 2007 to $1,220 for the three months ended March 31, 2008.  The decrease is primarily due to a lower amount of commission revenue received on “dial-around” calls. The decline was not unique to a particular carrier but an overall decline in the number of paid calls.  The FCC requires the sellers of long distance toll free services to pay the payphone owner $0.494 cents per “dial-around” call. These funds are remitted quarterly through a service provided by the American Public Communication Council (APCC).

Costs of Services                                

Our overall cost of services decreased by $1,527 or approximately 62%, from $2,482 for the three months ended March 31, 2007 to $955 for the three months ended March 31, 2008. Cost of services is made up of commission expense, telecommunication costs, and depreciation expense.  Commissions decreased by $611 for the three months ended March 31, 2008 due to a lower number of calls.  The telecommunication costs decreased by $526 due to a lower demand in telecommunication services and products when compared to the same period in 2007. Depreciation decreased by $ 390 for the three months ended March 31, 2008 when compared to the same period in 2007.  As of the last quarter of 2007, the payphone equipment has been fully depreciated.  We own telephone equipment which provides a service for a number of years. The term of service is commonly referred to as the "useful life" of the asset. Because an asset such as telephone equipment or motor vehicle is expected to provide service for many years, it is recorded as an asset, rather than an expense, in the year acquired. A portion of the cost of the long-lived asset is reported as an expense each year over its useful life and the amount of the expense in each year is determined in a rational and systematic manner.

Operation and Administrative Expenses

Operating expenses increased by $17,425, or approximately 2,924%, from $596 for the three months ended March 31, 2007 to $18,021 for three months ended March 31, 2008.  Professional fees increased by $17,279 in three months ended March 31, 2008 when compared with the same period in 2007. These are fees we pay to accountants and attorneys throughout the quarter for performing various tasks. Office expense, which primarily makes up the General and Administrative expenses, increased by $146 for the three months ended March 31, 2008 when compared to the same period ending 2007.

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Liquidity and Capital Resources

Our primary source of liquidity has been from borrowing funds from certain executive officers and principal stockholders related to executive officers. As of March 31, 2008, we had $144 in cash and cash equivalents and an accumulated deficit of $160,847.  As of December 31, 2007, we had $425 cash and cash equivalents on hand, and accumulated deficit of $141,395.  Our net loss for the three months ended March 31, 2008 was $ 19,452 and our net gain for the three months ended March 31, 2007 was $278.   Our accounts receivable for the three months ended March 31, 2008 and December 31, 2007 was $1,941 and $1,911 respectfully.

As of March 31, 2008, we have a related party accounts payable to Joseph Passalaqua in the amount of $ 10,673 and a note payable of 5,000 that is 10% simple interest bearing per annum. The company also has notes payable to Mary Passalaqua in the amount of $ 53,600 that range between 10% and 15% simple interest bearing per annum and a related party accounts payable to Carl Worboys in the amount of $ 224.  All notes are payable upon demand. Although we believe that our current cash from borrowings will be insufficient to fund our operations and to satisfy our long-term liquidity needs for the next twelve months, we intend to raise additional capital from future borrowings and financings.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market and Competition

Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the fact that the area in which we do business is highly competitive and constantly evolving. We face competition from the larger and more established companies -- from companies that develop new technology, as well as the many smaller companies throughout the country. The last several years have shown a marked increase in the use of cellular phones and toll free services which cut into our potential payphone customer base. Companies that have greater resources, including but not limited to, a larger sales force, more money, larger manufacturing capabilities and greater ability to expand their markets also cut into our potential payphone customers. Many of our competitors have longer operating histories, significantly greater financial strength, nationwide advertising coverage and other resources that we do not have. Our competitors might introduce a less expensive or more improved payphone. These, as well as other factors can have a negative impact on our income.

The competition from cellular phones is a very serious threat that can result in substantially less revenue per payphone. We have attempted to address this issue by avoiding locations that service business travelers. For many years, these locations were the most lucrative, but now they are the locations most impacted by the cellular user.

The large former Bell companies who provide local service dominate the industry. These companies have greater financial ability than us, and provide the greatest competitive challenge. However, we compete with these companies by paying a commission to the site owner. The commission is an enticement for the site owner to use our phone on its site. We believe we are able to provide a higher quality customer service because the phones alert us to any technical difficulties, and we can service them promptly. The ability to immediately know that a problem exists with a payphone is very important because down time for a phone means lost revenue for us.

Industry Trends

Technological, regulatory and market changes have provided telephone companies with opportunities and challenges. These changes have allowed service providers to broaden the scope of their own competitive offerings. Current and potential competitors for network services include other telephone companies, cable companies, wireless service providers, foreign telecommunications providers, satellite providers, electric utilities, Internet service providers, providers of VoIP services, and other companies that offer network services using a variety of technologies. Many of these companies have a strong market presence, brand recognition and existing customer relationships, all of which contribute to intensifying competition.

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We are unable to predict definitively the impact that the ongoing changes in the telecommunications industry will ultimately have on our business, results of operations or financial condition. The financial impact will depend on several factors, including the timing, extent and success of competition in our markets, the timing and outcome of various regulatory proceedings and any appeals, and the timing, extent and success of our pursuit of new opportunities

Item 4.  Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-QSB, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

(b) Changes in Internal Controls over Financial Reporting. There were no changes in our internal controls over financial reporting during the fiscal quarter covered by this Form 10-QSB 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.

The Company is not a party to or the subject of any pending legal proceeding or any contemplated proceeding of a governmental authority.

Item 1A.  Risk Factors

In addition to the other information in this report, the following risks should be considered carefully in evaluating our business and prospects:

We are a development stage company and have history of losses since our inception.  If we cannot reverse our losses, we will have to discontinue operations.

As of March 31, 2008, we had $144 in cash and cash equivalents and an accumulated deficit of $160,847.  As of December 31, 2007, we had $425 cash and cash equivalents on hand, and accumulated deficit of $141,395.  Our net loss for the three months ended March 31, 2008 was $19,452, causing our auditors to express their doubt as to our ability to continue as a going concern. We anticipate incurring losses in the near future.  We do not have an established source of revenue sufficient to cover our operating costs. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means. If we are unable to reverse our losses, we will have to discontinue operations.

Our history of losses is expected to continue and will need to obtain additional capital financing in the future.

We have a history of losses and expect to generate losses until such a time when we can become profitable in the collection of payphone service fees. As of March 31, 2008, we have a related party accounts payable to Joseph Passalaqua in the amount of $ 10,673 and a note payable of 5,000 that is 10% simple interest bearing per annum. The company also has notes payable to Mary Passalaqua in the amount of $ 53,600 that range between 10% and 15% simple interest bearing per annum and a related party accounts payable to Carl Worboys in the amount of $ 224.  All notes are payable upon demand. Although we believe that our current cash from borrowings will be insufficient to fund our operations and to satisfy our long-term liquidity needs for the next twelve months, we intend to raise additional capital from future borrowings and financings.

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We believe that our cash from borrowings will be insufficient to fund our operations and to satisfy our long-term liquidity needs for the next twelve months.  We will required to seek additional financing in the future to respond to increased expenses or shortfalls in anticipated revenues, respond to competitive pressures or  take advantage of unanticipated acquisition opportunities. We cannot be certain we will be able to find such additional financing on reasonable terms, or at all. If we are unable to obtain additional financing when needed, we could be required to modify our business plan in accordance with the extent of available financing.

Our future financings could substantially dilute our stockholders or restrict our flexibility.

We will need additional funding which may not be available when needed. If we are able to raise additional funds and by issuing equity securities, you may experience significant dilution of your ownership interest and holders of these securities may have rights senior to those of the holders of our common stock. If we obtain additional financing by issuing debt securities, the terms of these securities could restrict or prevent us from paying dividends and could limit our flexibility in making business decisions. In this case, the value of your investment could be reduced.

Our non-coin revenue is primarily attributable to “dial-around” commissions. If the FCC reduces or repeals the “dial-around” commission, our revenues could be materially adversely affected.

Our services are subject to the jurisdiction of the Federal Communications Commission (FCC) with respect to interstate telecommunications services and other matters for which the FCC has jurisdiction under the Communications Act of 1934, as amended.

Payphone users can circumvent the usual payment method and avoid inserting a coin by using an access code or 800 number provided by a long distance carrier. These “dial-around” numbers, while convenient for users, leave payphone service providers uncompensated for the call made. The Federal Communications Commission, as instructed by Congress in the Telecommunications Act of 1996, created regulations to ensure that payphone service providers receive compensation for these “dial-around” calls. 

The FCC requires the sellers of long distance toll free services to pay the payphone owner $0.494 cents per call. These funds are remitted quarterly through a service provided by the American Public Communication Council “APCC.”

If the FCC regulation requiring sellers of long distance toll free services to pay payphone owners $0.494 per call is reduced or repealed, it could have a negative effect upon our revenue stream. We have no control over what rules and regulations the state and federal regulatory agencies require us to follow now or in the future. It is possible for future regulations to be so financially demanding that they cause us to go out of business.

We are highly dependent on our two executive officers, Carl E. Worboys and John F. Passalaqua. The loss of either of them would have a material adverse affect on our business and prospects.

We currently have only two executive officers, Carl E. Worboys and John F. Passalaqua. Carl E. Worboys serves as our President and Director, and John. F. Passalaqua serves as our Chief Financial Officer, Secretary and Director. The loss of either executive officer could have a material adverse effect on our business and prospects.

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We need additional employees. If we cannot attract, retain, motivate and integrate additional skilled personnel, our ability to compete will be impaired.

Other than John F. Passalaqua, our Chief Financial Officer, Secretary and Director, and Carl E. Worboys, our President and Director, works for us on part-time and an as-needed basis, we have no other employees.  Our success depends in large part on our ability to attract, retain and motivate highly qualified management and technical personnel. We face intense competition for qualified personnel. The industry in which we compete has a high level of employee mobility and aggressive recruiting of skilled personnel. If we are unable to continue to employ our key personnel or to attract and retain qualified personnel in the future, our ability to successfully execute our business plan will be jeopardized and our growth will be inhibited.

We will depend on outside manufacturing sources and suppliers.

As we purchase phones from other companies, we upgrade them with "smart card" payphone technology. The upgrade is a circuit board with improved technology. The “smart card” technology allows us to determine on a preset time basis the operational status of the payphone. We are given a license to use the “smart card” technology from Quortech, the founder and manufacturer of “smart card” technology.  The technology informs us when the coins in the phone have to be collected, the number and types of calls that have been made from each phone, as well as other helpful information that helps us provide better service to our payphone using public. This upgrade of the phones reduces the number and frequency of service visits due to outages and other payphone-related problems and, in turn, reduces the maintenance costs.  Other companies manufacture the components of the payphones for the industry including Universal Communications and TCI, which provides handsets, key pads, totalizers, and relays.

We will have limited control over the actual production process. Moreover, difficulties encountered by any one of our third party manufacturers which result in product defects, delayed or reduced product shipments, cost overruns or our inability to fill orders on a timely basis, could have an adverse impact on our business. Even a short-term disruption in our relationship with third party manufacturers or suppliers could have a material adverse effect on our operations. We do not intend to maintain an inventory of sufficient size to protect ourselves for any significant period of time against supply interruptions, particularly if we are required to obtain alternative sources of supply.

We may be unable to adequately protect our proprietary rights or may be sued by third parties for infringement of their proprietary rights.

The telecommunications industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of trade secret, copyright or patent infringement. We may inadvertently infringe a patent of which we are unaware. In addition, because patent applications can take many years to issue, there may be a patent application now pending of which we are unaware that will cause us to be infringing when it is issued in the future. If we make any acquisitions, we could have similar problems in those industries. Although we are not currently involved in any intellectual property litigation, we may be a party to litigation in the future to protect our intellectual property or as a result of our alleged infringement of another's intellectual property, forcing us to do one or more of the following:

· Cease selling, incorporating or using products or services that incorporate the challenged intellectual property;

· Obtain from the holder of the infringed intellectual property right a license to sell or use the relevant technology, which license may not be available on reasonable terms; or

· Redesign those products or services that incorporate such technology.

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A successful claim of infringement against us, and our failure to license the same or similar technology, could adversely affect our business, asset value or stock value. Infringement claims, with or without merit, would be expensive to litigate or settle, and would divert management resources.

Our employees may be bound by confidentiality and other nondisclosure agreements regarding the trade secrets of their former employers. As a result, our employees or we could be subject to allegations of trade secret violations and other similar violations if claims are made that they breached these agreements.

If we engage in acquisitions, we may experience significant costs and difficulty assimilating the operations or personnel of the acquired companies, which could threaten our future growth.

If we make any acquisitions, we could have difficulty assimilating the operations, technologies and products acquired or integrating or retaining personnel of acquired companies. In addition, acquisitions may involve entering markets in which we have no or limited direct prior experience. The occurrence of any one or more of these factors could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition, pursuing acquisition opportunities could divert our management's attention from our ongoing business operations and result in decreased operating performance. Moreover, our profitability may suffer because of acquisition-related costs or amortization of acquired goodwill and other intangible assets. Furthermore, we may have to incur debt or issue equity securities in future acquisitions. The issuance of equity securities would dilute our existing stockholders.

Because our officers and directors are indemnified against certain losses, we may be exposed to costs associated with litigation.

If our directors or officers become exposed to liabilities invoking the indemnification provisions, we could be exposed to additional unreimbursable costs, including legal fees. Our articles of incorporation and bylaws provide that our directors and officers will not be liable to us or to any shareholder and will be indemnified and held harmless for any consequences of any act or omission by the directors and officers unless the act or omission constitutes gross negligence or willful misconduct. Extended or protracted litigation could have a material adverse effect on our cash flow.

Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds.

We have not issued or sold any unregistered securities within the past three years.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Submission of Matters to a Vote of Security Holders.

None.

Item 5.  Other Information.

None.

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Item 6.  Exhibits.

Exhibit No.	Description
31.1	Certification by Carl E. Worboys, the Principal Executive Officer of Pegasus Tel, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification by John Passalaqua, the Principal Accounting and Financial Officer of Pegasus Tel, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certification of Carl E. Worboys, the Principal Executive Officer of Pegasus Tel, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of John Passalaqua, the Principal Accounting and Financial Officer of Pegasus Tel, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PEGASUS TEL, INC.
Dated: May 9, 2008	By:	/s/ JOHN PASSALAQUA
		John Passalaqua Chief Financial Officer (Principal Accounting and Financial Officer)

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EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification by Carl E. Worboys, the Principal Executive Officer of Pegasus Tel, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification by John Passalaqua, the Principal Accounting and Financial Officer of Pegasus Tel, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certification of Carl E. Worboys, the Principal Executive Officer of Pegasus Tel, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of John Passalaqua, the Principal Accounting and Financial Officer of Pegasus Tel, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002