Datascension (DSEN) 10-Q 2008 Q1 Quarterly report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

o  QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ___________ to ___________

Commission file number: 000-29087

Datascension, Inc. 

(Exact name of registrant as specified in its charter)

Nevada	87-0374623
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

407 W Imperial Hwy, Suite 314, Brea, CA	92821
(Address of principal executive offices)	(Zip Code)

888-996-9238 

(Issuer's telephone number)

(Former name, former address and former fiscal year,

if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	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 o No o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDING 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 Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

The Registrant has 36,227,361shares outstanding, par value $.001 per share as of May 12, 2008. The Registrant has 508,500 shares of Preferred Stock Series B issued and outstanding as of May 12, 2008.

TABLE OF CONTENTS

		Page No.
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Balance Sheet (unaudited)	4
	Statements of Operations (unaudited)	5
	Statements of Cash Flows (unaudited)	6
	Notes to Financial Statements	7
Item 2.	Management's Discussion and Analysis of Plan of Operation	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4T.	Controls and Procedures	17
PART II.	OTHER INFORMATION	17
Item 1.	Legal Proceedings	17
Item 2.	Unregistered Sales of Equity and Use of Proceeds	17
Item 3.	Defaults upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	18
Item 6.	Exhibits and Reports on Form 8-K	18
Signatures		18

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

The condensed financial statements of Datascension, Inc., a Nevada corporation ("DSEN") included herein have been prepared in accordance with the instructions to quarterly reports on Form 10-QSB pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote data necessary for fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in DSEN's Annual Report on Form 10-KSB for the year ended December 31, 2007.

In the opinion of management, all adjustments necessary in order to make the financial position, results of operations and changes in financial position at March 31, 2008, and for all periods presented not misleading have been made. The results of operations for the period ended March 31, 2008 are not necessarily an indication of operating results to be expected for the full year ending December 31, 2008.

3

DATASCENSION, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

DATASCENSION, INC.

CONSOLIDATED BALANCE SHEET

	03/31/2008			12/31/2007
	UNAUDITED			AUDITED
ASSETS
Current assets
Cash	$	13,437		$	46,930
Accounts receivable		2,919,383			3,071,764
Receivable due from related party		1,294,683			1,530,124
Prepaid expenses		92,286			56,666
Total current assets		4,319,789			4,705,484
Property and equipment, net of depreciation		3,100,142			3,146,788
Other assets
Website, net of amortization		3,207			3,207
Deposits		34,214			15,618
Goodwill		1,692,782			1,692,782
Total other assets		1,730,203			1,711,607
Total assets	$	9,150,134		$	9,563,879
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	112,705		$	316,333
Accrued expenses		399,757			491,603
Short term notes payable		34,276			35,499
Loan payable to Comerica Bank		1,483,940			1,727,688
Current portion of long term debt		868,586			3,580,816
Total current liabilities		2,899,264			6,151,939
Long term debt
Long term debt notes payable, net of current portion		2,802,290			45,977
Total long-term liabilities		2,802,290			45,977
Total liabilities		5,701,554			6,197,916
Stockholders' equity
Common stock, $0.001 par value, 200,000,000 shares authorized: 23,252,976 and 23,031,547 issued and outstanding at March 31, 2008 and December 31, 2007 respectively		36,227			35,776
Additional paid in capital		16,337,837			16,188,782
Series B Preferred stock		506			506
Additional paid in capital preferred Series B		481,994			481,994
Less: Treasury stock (95,833 shares), at cost		(134,388	)		(134,388	)
Accumulated deficit		(13,273,596	)		(13,206,707	)
Total stockholders' equity		3,448,580			3,365,963
Total liabilities and stockholders' equity	$	9,150,134		$	9,563,879

The accompanying notes to the financial statements should be read in conjunction with the above financial statements.

4

DATASCENSION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

DATASCENSION, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

	Unaudited			Unaudited
	For the			For the
	3 months ended			3 months ended
	3/31/2008			3/31/2007
Revenues	$	5,347,987		$	4,753,872
Cost of goods sold		4,466,155			4,294,182
Gross profit		881,832			459,690
Expenses:
Selling, general and administrative		680,848			545,053
Depreciation and amortization		60,459			51,504
Total expenses		741,307			596,557
Operating Income		140,525			(136,867	)
Other income(expense):
Interest expense		(207,415	)		(173,709	)
Total other income (expense)		(207,415	)		(173,709	)
Net Income (loss)	$	(66,890	)	$	(310,576	)
Basic weighted average number of common shares outstanding		36,018,365			23,130,357
Diluted weighted average number of common shares outstanding		36,018,365			23,130,357
Basic net loss per share	$	(0.00	)	$	(0.01	)
Diluted net loss per share	$	(0.00	)	$	(0.01	)

The accompanying notes to the financial statements should be read in conjunction with the above financial statements.

5

DATASCENSION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

DATASCENSION, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

	Unaudited			Unaudited
	For the			For the
	3 months ended			3 months ended
	3/31/2008			3/31/2007
Cash flows from operating activities
Net loss	$	(66,890	)	$	(310,576	)
Adjustments to reconcile net loss to net cash provided by operating activities Issued (canceled) for services and debt		-			23,800
Depreciation and amortization		60,459			51,504
(Increase) decrease in accounts receivable		152,381			(24,515	)
(Increase) decrease in receivable due from related party		235,441			-
(Increase) decrease in prepaid expenses		(35,620	)		(166,468	)
(Increase) decrease in deposits		(18,597	)		-
Increase (decrease) in accounts payable		(203,628	)		56,930
Increase (decrease) in accrued expenses		(91,846	)		(24,872	)
Net cash provided (used) by operating activities		31,700			(394,197	)
Cash flows from investing activities
Purchase of property and equipment		(13,813	)		8,955
Net cash provided (used) by investing activities		(13,813	)		8,955
Cash flows from financing activities
Increase (decrease) in notes payable		42,860			150,682
Increase (decrease) in loan payable to Comerica Bank		(243,748	)
Issuance of common stock		149,508
Net cash provided (used) by financing activities		(51,380	)		150,682
Net increase (decrease) in cash		(33,493	)		(234,560	)
Cash, beginning balance		46,930			592,289
Cash, ending balance	$	13,437		$	357,729
Interest paid	$	40,263		$	12,994
Taxes paid	$	800		$	-
Supplemental disclosure of non-cash transactions
Debt converted to equity	$	77,807		$	60,000

See accompanying notes

The accompanying notes to the financial statements should be read in conjunction with the above financial statements.

6

DATASCENSION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - HISTORY AND ORGANIZATION OF THE COMPANY

Datascension, Inc. (formerly known as Nutek, Inc.) was incorporated in August 1991 under the laws of the State of Nevada as Nutek, Inc. (the "Company") and is engaged in the market research industry.

Datascension International, Inc. and related assets were purchased on September 27, 2001 for $2,200,000 using company shares at fair market value. Datascension International, Inc. is a data solutions company representing a unique expertise in the collecting, storage, processing, and interpretation of data. During 2002, Datascension International, Inc. expanded operations into Costa Rica.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The Company's policy is to prepare the financial statements on the accrual basis of accounting. The fiscal year end is December 31.

In the opinion of management, all adjustments necessary in order to make the financial position, results of operations and changes in financial position at December 31, 2007, and for all periods presented not misleading have been made.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with maturities of three months or less when purchased.

Investments and Marketable Securities

The Company has adopted FASB No. 115. Equity securities are classified as available for sale and reported at fair value.

Investments are recorded at the lower of cost or market. Any reductions in market value below cost are shown as unrealized losses in the consolidated statement of operations.

Consolidation Policy

The accompanying consolidated financial statements include the accounts of Datascension, Inc. and Datascension International, Inc. All significant inter- company balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions which affect the reported amounts of assets and liabilities as of the date of the financial statements and revenues and expenses for the period reported. Actual results may differ from these estimates.

7

Comprehensive Income

Statements of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130), requires that total comprehensive income be reported in the financial statements. The Company does not have any items considered to be other comprehensive income for the year ended December 31, 2007.

Fixed Assets

Fixed assets are stated at cost. Expenditures that materially increase the life of the assets are capitalized. Ordinary maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized at that time.

Depreciation is computed primarily on the straight-line method for financial statement purposes over the following estimated useful lives:

Computer equipment	5 years
Furniture and fixtures	7 years
Office equipment	5 years

All assets are booked at historical purchase price and there is no variance between book value and the purchase price.

Revenue Recognition

We recognize revenues when survey data is completed in accordance with the terms of our agreements. Research products are delivered within a short period, generally ranging from a few days to approximately eight weeks. We do not believe that there are realistic alternatives to our revenue recognition policy given the short period of service delivery and the requirement to deliver completed surveys to our customers. We do not believe there is significant risk of recognizing revenue prematurely since our contracts are standardized, the earnings process is short and no single project accounts for a significant portion of our revenue.

Intangible Assets

The Company has adopted SFAS No. 142, "Goodwill and Other Intangible Assets", which requires that goodwill and other indefinite lived intangible assets are no longer amortized, but reviewed annually, or sooner if deemed necessary, for impairment. Intangible assets with finite lives are amortized over the useful life. Under guidance from SFAS No. 142, management has determined that the assets in the subsidiaries determined to be discontinued operations should be impaired. The respective assets have been written down. See Note 13 Discontinued Operations.

Net Income Per Share

Basic net income per share is computed using the weighted average number of shares of common stock outstanding for the period end. The net income (loss) for the period end is divided by the weighted average number of shares outstanding for that period to arrive a net income per share.

Diluted net income per share reflects the potential dilution that could occur if the securities or other contracts to issue common stock were exercised or converted into common stock.

Compensated Absences

The Company has made no accrual for vacation or sick pay because the

Company does not provide for these benefits.

8

Advertising

Advertising costs are expensed when incurred. Advertising for the year ended December 31, 2007 amounted to $9,000.

Research and Development

The Company does not perform any research and development in the ordinary course of its business. If it does perform research and development activities in the future, it will expense such activities..

Concentrations of Credit Risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counter parties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below.

The Company operates in one segment, the market research industry. Approximately 90 % of the Company's customers are located within the United States of America.

During the year ended December 31, 2007, the Company had three major clients, Ipsos-Reid (21.2%), Orbis (10.6%), and Synovate (8.3%). Management believes the loss of one of these key clients may materially affect the operations of the company in the short term. The same three clients continued as the three major clients in the first quarter of 2008; however, there have been preliminary discussions with Orbis which may lead to a realignment or termination of that relationship in either June 2008 or thereafter.

Recently Issued Accounting Pronouncements

FASB Interpretation 46R "Consolidation of Variable Interest Entities", as revised (FIN 46R), requires that variable interest entities created before December 31, 2003 be consolidated during the first interim period beginning after December 15, 2003. Management does not believe this pronouncement will have a material effect on the financial statements of the company.

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that we recognize in our financial statements the benefit of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 become effective as of the beginning of our 2008 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. We are currently evaluating the impact that FIN 48 will have on our financial statements.

In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements" (FAS 157), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of FAS 157 become effective as of the beginning of our 2009 fiscal year. We do not expect the adoption of SFAS No. 157 to have a material impact on its consolidated financial position, results of operations or cash flows.

In September 2006, the FASB issued Statement No. 158, "Employer's Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" (FAS 158). FAS 158 requires that employers recognize the funded status of their defined benefit pension and other postretirement plans on the balance sheet and recognize as a component of other comprehensive income, net of tax, the plan-related gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost. We do not feel the implementation of this will effect our financial statements.

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108), which addresses how to quantify the effect of financial statement errors. The provisions of SAB 108 becAme effective as of the end of our 2007 fiscal year. We do not expect the adoption of SAB 108 to have a significant impact on our financial statements.

9

In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The provisions of FAS 159 become effective as of the beginning of our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will have on our financial statements.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements.

Stock Based Compensation

The Company applies SFAS 123R in accounting for stock options issued to employees. For stock options and warrants issued to non-employees, the Company applies SFAS No. 123, Accounting for Stock-Based Compensation, which requires the recognition of compensation cost based upon the fair value of stock options at the grant date using the Black-Scholes option pricing model.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment are made up of the following as of March 31, 2008:

Computer equipment	$	936,703
Office equipment		1,072,913
Leasehold improvements		2,004,285
Licenses		230,000
Accumulated depreciation		(1,143,759	)
	$	3,100,142

NOTE 4 - NOTES PAYABLE

Since November 2004, the company had entered into several different convertible debt agreements, the most recent being December 12, 2006. In past funding arrangements, the specific terms of the funding arrangements contained certain covenants and liquidated damages which were deemed to make the notes be debt be considered non-conventional. Such treatment required a valuation of all derivative items of the notes, which created a liability on the balance sheets, coupled with a liability for the value of any warrants that were outstanding at the balance sheet date. The December 2006 note settled all prior interest, liquidated damages and other perceived "negative" items that were tainting the debt. The latter note also served to amend and limit the liabilities, so as to satisfy the EITF 00-27 requirements and end the requirement of the company to have the derivative accounting treatment. Below is a summary of the major terms of the notes outstanding as of March 31, 2008.

Upon the entering into of the December 2006 transaction, the company removed all of the prior derivative liability portions of the convertible debt, as all clauses had been removed from the debts and agreements. This resulted in an expense to remove the debt discounts that were previously being accreted, as well as the financing costs being accreted over the remaining term. Concurrently, there was an income item reports for a corresponding write off of the liabilities associated with derivatives and the warrant liabilities on the books.

10

NOTES PAYABLE - $1,875,000, NOVEMBER 2004

In November 2004, the Company issued $1,875,000 in principal amount of Notes to third parties. As part of the financing transaction, the Company issued warrants to purchase 3,125,000 shares of common stock at a per share purchase price of $0.30 per share.

The Notes accrue interest at a rate of prime + 3% per annum. The Notes are due and payable in November 2007. The convertible note and warrant documents were filed in an 8-K by the Company on November 23, 2004. The Note was entered into pursuant to the terms of a subscription agreement between the Company and the Holder, which was also included in the 8-K filed on November 23, 2004. The $1,875,000 in proceeds from the financing transaction were originally allocated to the debt features and to the warrants based upon their fair values. After the latter allocations, there was $170,061 of remaining value to be allocated to the Note on the financial statements. The debt discount was being accreted using the effective interest method over the term of the note.

In 2007, 6,559,919 shares were issued to settle $2,055,065 of principal and interest on the convertible notes. An additional 2,841,667 shares were issued to satisfy outstanding warrants.

As of March 31, 2007, the unpaid note principal amount due is $157,500, and there is accrued and unpaid interest of $ 36,182.

NOTES PAYABLE - $2,274,288, JUNE 2006

In June 2006, the Company issued two notes to third parties. One note had a principal amount of $1,702,859 and the other note had a principal amount of $571,429. As part of the financing transaction, the Company issued warrants to purchase 4,865,311 shares of common stock at a per share purchase price of $0.40 per share.

The Notes accrue interest at a rate of 6% per annum. Interest is to be paid quarterly. Should the interest payment be in default then the interest rate increases to 10%. The Notes are due and payable in June 2008. After a thorough review of the terms of the note and respective covenants, the company has determined the more conservative method of including the entire debt as a current liability on the balance sheet. The convertible note and warrant documents were filed in an 8-K by the Company on June 16, 2006. The Note was entered into pursuant to the terms of a subscription agreement between the Company and the Holder, which was also included in the 8-K filed on June 16, 2006. The $1,702,859 in proceeds from the financing transaction were allocated to the debt features and to the warrants based upon their fair values. After the latter allocations, there was $318,796 of remaining value to be allocated to the Note on the financial statements. The debt discount was being accreted using the effective interest method over the term of the note.

In December, 2007, accrued interest of $25,753 was added to one of the notes increasing the principal amount of the note to $1,728,612.

As of March 31, 2008, both notes are unpaid and there is $128,406 of accrued interest.

NOTES PAYABLE - $2,065,458, DECEMBER 2006

In December 2006, the Company issued $2,065,458 in principal amount of Notes to third parties. As part of the financing transaction, the Company issued warrants to purchase 1,280,000 warrants were issued to the note holders of the December 2006 notes with a 5 year term and a $0.45 exercise price. In 2007, the note holder converted some debt and interest into shares of stock along with the exercise of the warrants which were attached to the note.

The Notes accrue interest at a rate 14% per annum. The Notes are due and payable in December 2008. The note and warrant documents were filed in an 8-K by the Company on December 18, 2006. This note is not convertible into common stock of the company. Upon issuance, the company allocated $1,867,328 to the debt and $198,130 to the warrants based on the relative fair values of each. The value of the warrants was determined using a 56% volatility, five year terms, and a $0.45 exercise price. The debt discount of $198,130 will be amortized over the two year term of the notes.

11

In December, 2007 accrued interest of $40,685 was added to the note increasing the amount of the note at December 31, 2007 to $1,193,643.

There is $126,365 of accrued interest outstanding at March 31, 2008.

In December, 2007, the Company issued a Secured Promissory Note in the amount of $103,665 at an interest rate of 14% per annum. This note was for interest and penalties that had accrued previously.

At March 31, 2008, this note is unpaid and there is $18,767 of accrued interest.

The Company has entered into agreements for long-term notes payable. Long-term notes payable consists of the following at March 31, 2008:

Note payable to a lender, monthly payments of $10,044 inclusive of 15.00% annual interest through May 2009. At March 31, 2008 the balance due was $128,276.

Note payable to a lender, monthly payments of $2,424 inclusive of 15.00% annual interest through March, 2009. At March 31, 2008 the balance due was $26,860.

Total Notes Payable	$	155,136
Less current portion		(139,658	)
Long-Term portion of Notes Payable	$	15,478

 Principal maturities are as follows:

Twelve months ended December 31, 2008	$	112,212
Twelve months ended December 31, 2009		42,924
	$	155,136

Additionally, the company has the following short term notes payable as of March 31, 2008.

Wells Fargo Bank $ 34,276

NOTE 5 - STOCKHOLDERS' EQUITY

[list stock issuances in the first quarter]

In the quarter ended March 31, 2008, 221,389 shares were issued to the Longview Fund, LP for past due interest, 200,000 shares were issued for services rendered that had been accrued expenses at 12/31/2007 and 30,000 shares were issued to Bob Sandelman, a director.

NOTE 6 - RELATED PARTY TRANSACTIONS

Other than as set forth in Note 4 above, the following constitute the only related party transactions.

12

The Company has a receivable due from Datascension, S.A. in the amount of $1,530,124, which is prepayment for various operating expenses. Datascension S.A. is controlled by Scott Kincer but will be merged into Datascension, Inc. during 2008. The reason for the delay in merger until 2008 was to avoid a potential tax liability of 30% to Datascension, Inc. had the companies merged during 2007, when Datascension, S.A. had anticipated a possible profit from operations (which did not materialize), which could have triggered the tax liability to Datascension, Inc. in Costa Rica.

During the three months ended March 31, 2008, the company billed approximately $281,750 to Sandelman & Associates, a company controlled by a board member, which amounted to 5.27% of our total revenue for the period.

NOTE 7 - FOREIGN OPERATIONS

The company currently operates out of Costa Rica. Management does not feel there is a currency risk or need to assess a foreign currency translation adjustment or other comprehensive income item as income and expense items are negotiated in the US dollar. The Company maintains their accountings records in U.S. dollars and all payments are made in US dollars. All debts and assets on the books of the company are valued based on US dollars and are not translated from a foreign currency amount. The Company currently coordinates all foreign operations, and supervision activities using part time employees, consultants and contract labor. Approximately 99% of the company's workforce is outside of the United States. Currently approximately 90% of the company's clients are US based companies. Any resulting foreign exchange fluctuations do not affect the payment of employees, contract labor or off shore operations.

NOTE 8 – CREDIT AGREEMENT

On September 6, 2007, Datascension, Inc. (the “Company”), as borrower, entered into a Credit Agreement with Comerica Bank, as lender (dated as of August 30, 2007), which provides for a revolving credit facility of up to $2,000,000. The Credit Agreement provides for a one year term, and outstanding balances bear interest at the rate equal to the prime rate (as determined by Comerica Bank from time to time) plus two percent (2%). Under the Credit Agreement, the Company may borrow funds from Comerica Bank from time to time in an amount equal to 85% of eligible receivables (as set forth in the Credit Agreement), and all advances under the Credit Agreement are secured by a first lien against all of the assets of Datascension, Inc. and its subsidiary, Datascension, Inc. (a California corporation), as well as a pledge of the stock of the subsidiary. As of March 31, 2008, the amount due under the Credit Agreement was $1,483,940. The Company is in violation of certain covenants under the Credit Agreement at March 31, 2008, but are working with the Bank to resolve these issues.

NOTE 9 – SUBSEQUENT EVENTS

On May 12, 2008, Alpha Capital Anstalt agreed to extend the maturity date of its three promissory notes with the Company to June 30, 2009. See NOTE 4 for a discussion of the Company’s promissory notes with Alpha Capital.

13

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following is a discussion of certain factors affecting DSEN's results of operations, liquidity and capital resources. You should read the following discussion and analysis in conjunction with the Registrant's condensed consolidated financial statements and related notes that are included herein under Item 1 above.

Overview

Datascension Inc, ("DSEN") through its sole subsidiary Datascension International, Inc, is engaged in data gathering and conducting outsourced market research. Its expertise is in the collection, storage, and processing of data. Datascension International's management team has over 30 years of experience in working with clients to gather the information they need to make changes or advancements to their operations. Datascension International services a variety of industries and customers (including the hospitality, entertainment, and automotive sectors) with emphasis and commitment to customer service, quality assurance and on-time project management.

Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.

We believe the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Foreign Currency

DSEN maintains its accounting records in U.S. dollars and all payments are made in US dollars. Any resulting foreign exchange fluctuations do not affect the payment of employees, contract labor or off shore operations.

Revenue Recognition.

We recognize revenues as the survey data is collected for the client in accordance with the terms of our agreements. Research products are delivered within a short period, generally ranging from a few days to approximately eight weeks. An appropriate deferral is made for direct costs related to contracts in process, and no revenue is recognized until delivery of the data has taken place. Billings rendered in advance of services being performed, as well as customer deposits received in advance, are recorded as a current liability included in deferred revenue. We are required to estimate contract losses, if any, and provide for such losses in the period they are determined and estimable. We do not believe that there are realistic alternatives to our revenue recognition policy given the short period of service delivery and the requirement to deliver completed surveys to our customers. We do not believe there is significant risk of recognizing revenue short and no single project accounts for a significant portion of our revenue.

Basis of Accounting

The Company's policy is to prepare the financial statements on the accrual basis of accounting. The Company's year end is December 31.

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In the opinion of management, all adjustments necessary in order to make the financial position, results of operations and changes in financial position at March 31, 2008, and for all periods presented not misleading have been made. The results of operations for the period ended March 31, 2008 are not necessarily an indication of operating results to be expected for the full year ending December 31, 2007.

Recently issued accounting standards

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities." This Statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not believe the adoption of SFAS No. 159 will have an impact upon on our financial statements and footnote disclosures.

DSEN's website address is http://www.datascension.com.

Results of Operations

Analysis of the three months ended March 31, 2008 compared to the three months ended March 31, 2007.

For the three-months, ended March 31, 2008, DSEN has generated $5,347,987 in revenues compared to $4,753,872 in revenues for the three-months ended March 31, 2007, for an increase of $594,115. The increase in revenue is a result of an increase in new clients, along with an increase in number of hours billed and hourly billing rates.

Cost of goods sold for the three-months ended March 31, 2008 was $4,466,155 compared to $4,294,182 for the three-months ended March 31, 2007 or an increase of $171,973. This increase was a result of the increased clients and service contracts completed, as well as the increase in operating costs associated with the new facility in Costa Rica and costs associated with technology implementation at the new facility.

Total general and administrative expenses decreased to $680,848 for the three-months ended March 31, 2008 from $545,053 for the three-months ended March 31, 2007, a net increase of $135,795. The increase is due to increase in operating costs, as well as increase in employees to handle increased business.

Depreciation expense for the three-months ended March 31, 2008 was $60,459 compared to $51,504 for the three-months ended March 31, 2007, an increase of $8,955.

Interest expense for the three months ended March 31, 2008 was $207,415 compared to $173,709 for the three-months ended March 31, 2007 an increase of $33,706. This increase relates to the debt funding increase in the last twelve months.

Datascension generated net loss of $66,890 for the three-months ended March 31, 2008, versus $310,576 for the same period in 2007. The decrease in net loss of $243,686 is primarily a result of an increase of almost $600,000 in gross revenues. For the three-months ended March 31, 2008, DSEN increased its working capital by a net amount of $2,866,980 from $(1,446,455) as of December 31, 2007 to $1,420,525 as of March 31, 2008. This is mainly due to a decrease in the current portion of long term debt of almost $2.5 million, which was caused by the extension of the maturity date of certain promissory notes due to Longview Fund, L.P. to June 30, 2009, so such indebtedness has been reclassified as long term indebtedness.

Significant Subsequent Events occurring after March 31, 2008: None.

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Capital Resources and Liquidity

On March 31, 2008 DSEN had total assets of $9,150,134 compared to $8,027,306 on March 31, 2007, an increase of $1,122,828. The reason for the increase in assets is a result of the increase in accounts receivable and existence of a related party receivable. DSEN had a total stockholders' equity of $3,448,580 on March 31, 2008 compared to $995,131 on March 31, 2007, an increase in equity of $2,453,449, which is in part due to the conversion of convertible debt into common stock in June, 2007.

All assets are booked at historical purchase price and there is no variance between book value and the purchase price.

On March 31, 2008 DSEN had Property and Equipment of $3,100,142 compared to $3,075,471 on March 31, 2007, or an increase of $24,671 which is a result of relative parity in property and equipment at each of the periods.

DSEN's capital resources are comprised primarily of private investors, who are either existing contacts of the Registrant's management or who come to the attention of the Registrant through brokers, financial institutions and other intermediaries. The Registrant’s access to capital is always dependent upon general financial market conditions. The Registrant's capital resources are not anticipated to change materially in 2007.

DSEN has financed operations through the collections of accounts receivable, servicing of existing contracts and the sale of common stock and through financing from financial institutions. In order to sustain operations in the near term, it is anticipated that DSEN has sufficient working capital due to revenues received and fundraising activities in the second quarter of 2007, although it may need to raise additional capital to expand operations. If it is unable to raise this capital, it may be unable to continue to increase operations.

DSEN's future capital requirements will depend on numerous factors, including the profitability of our research projects and our ability to control costs. We believe that our current assets will be sufficient to meet our operating expenses and capital expenditures. However, we cannot predict when and if any additional capital contributions may be needed and we may need to seek one or more substantial new investors. New investors could cause substantial dilution to existing stockholders.

There can be no assurances that DSEN will be successful in raising additional capital via debt or equity funding, or that any such transactions, if consummated, will be on terms favorable to DSEN. In the event that additional capital is not obtained from other sources, it may become necessary to alter development plans or otherwise abandon certain ventures.

If DSEN needs to raise additional funds in order to fund expansion, develop new or enhanced services or products, respond to competitive pressures or acquire complementary products, businesses or technologies, any additional funds raised through the issuance of equity or convertible debt securities, the percentage ownership of the stockholders of DSEN will be reduced, stockholders may experience additional dilution and such securities may have rights, preferences or privileges senior to those of DSEN's Common Stock. DSEN does not currently have any contractual restrictions on its ability to incur debt and, accordingly, DSEN could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain covenants, which would restrict DSEN's operations.

Off-Balance Sheet Arrangements.

DSEN currently does not have any off-balance sheet arrangements.

Forward-Looking Information

This quarterly report contains forward-looking statements. The forward- looking statements include all statements that are not statements of historical fact. The forward-looking statements are often identifiable by their use of words such as "may," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue," "Plans" or the negative or other variations of those or comparable terms. Our actual results could differ materially from the anticipated results described in the forward-looking statements. Factors that could affect our results include, but are not limited to, those discussed in Item 2, "Management's Discussion and Analysis or Plan of Operation" and included elsewhere in this report. DSEN makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk for changes in interest rates relates primarily to the market-driven increase or decrease in interest rates, and the impact of those changes on the Company’s ability to realize a return on invested or available funds. We ensure the safety and preservation of our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by investing in short term high-credit investment grade securities and/or commercial checking and savings accounts.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report on Form 10-Q, management performed, with the participation of our Chief Executive Officer and Chief Accounting Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the report we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management including our Chief Executive Officer and our Chief Accounting Officer, to allow timely decisions regarding required disclosures. Our Chief Executive Officer and our Chief Accounting Officer concluded that, as of March 31, 2008, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

DSEN is not a party to any pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against DSEN. To the knowledge of management, no director, executive officer or affiliate of DSEN, any owner of record or beneficially of more than 5% of DSEN's common stock is a party adverse to DSEN or has a material interest adverse to DSEN in any proceeding.

Item 2. Unregistered Sales of Equity Security and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

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Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

Exhibits

(a) Exhibit 31. Certifications required by Rule 13a-14(a) or Rule 15d- 14(a)

31.1 and 32.2 Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.ss.1850 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(b) Exhibit 32. Certifications required by Rule 13a-14(b) or Rule 15d- 14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

32.1 and 32.2 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.ss.1850 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(c) Reports on Form 8-K

Current Report on Form 8-K, filed on January 23, 2008

SIGNATURES

In accordance with the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Datascension, Inc.

/s/ D. Scott Kincer

D. Scott Kincer

President, Chairman and Director

(Principal Executive Officer)

/s/ David P. Lieberman

David P. Lieberman

(Principal Financial Officer)

Date: May 13, 2008

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