Datascension 10Q 2008 Q2 Quarterly report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2008

¨ 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 ¨ No ¨

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

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨	(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 ¨ No x

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 ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

The Registrant has 21,307,361 shares outstanding, par value $.001 per share as of August 11, 2008. The Registrant has 508,500 shares of Preferred Stock Series B issued and outstanding as of August 11, 2008. The Registrant has 15,000 shares of Preferred Stock Series C issued and outstanding as of August 11 , 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	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4T.	Controls and Procedures	22

PART II.	OTHER INFORMATION	22

Item 1.	Legal Proceedings	22

Item 2.	Unregistered Sales of Equity and Use of Proceeds	22

Item 3.	Defaults upon Senior Securities	22

Item 4.	Submission of Matters to a Vote of Security Holders	22

Item 5.	Other Information	22

Item 6.	Exhibits and Reports on Form 8-K	23

Signatures		23

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-Q 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 June 30, 2008, and for all periods presented not misleading have been made. The results of operations for the period ended June 30, 2008 are not necessarily an indication of operating results to be expected for the full year ending December 31, 2008.

DATASCENSION, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

DATASCENSION, INC.

BALANCE SHEET

	UNAUDITED			AUDITED
	06/30/2008			12/31/2007
ASSETS

Current assets
Cash	$	25,672		$	46,930
Accounts receivable		2,729,667			3,071,764
Receivable due from related party		1,496,560			1,530,124
Prepaid expenses		60,877			56,666
Total current assets		4,312,776			4,705,484

Property and equipment, net of depreciation		3,077,824			3,146,788

Other assets
Website, net of amortization		3,207			3,207
Deposits		22,264			15,618
Goodwill		1,692,782			1,692,782
Total other assets		1,718,253			1,711,607

Total assets		9,108,853		$	9,563,879

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	338,378		$	316,333
Accrued expenses		481,010			491,603
Short term notes payable		30,845			35,499
Loan payable to Comerica Bank		1,741,372			1,727,688
Current portion of long term debt		123,150			3,580,816
Total current liabilities		2,714,755			6,151,939

Long term debt
Long term debt notes payable, net of current portion		3,595,409			45,977
Total long-term liabilities		3,595,409			45,977

Total liabilities		6,310,164			6,197,916

Stockholders' equity
Common stock, $0.001 par value, 200,000,000 shares authorized: 36,307,361 and 35,775,972 issued and outstanding at June 30, 2008 and December 31, 2007 respectively		36,307			35,776
Additional paid in capital		16,361,757			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		(13,947,487	)		(13,206,707	)
Total stockholders' equity		2,798,689			3,365,963

Total liabilities and stockholders' equity		9,108,853		$	9,563,879

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

DATASCENSION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

DATASCENSION, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	For the			For the			For the			For the
	3 months			3 months			6 months			6 months
	ended			ended			ended			ended
	6/30/2008			6/30/2007			6/30/2008			6/30/2007

Revenues	$	4,691,116		$	4,888,821		$	10,039,103		$	9,642,694

Cost of goods sold		4,413,487			3,605,947			8,879,642			7,900,129

Gross profit		277,629			1,282,874			1,159,461			1,742,565

Expenses:
Selling, general and administrative		670,328			570,602			1,351,176			1,115,655
Depreciation and amortization		60,419			51,617			120,878			103,122
Total expenses		730,747			622,219			1,472,054			1,218,777

Operating Income		(453,118	)		660,655			(312,593	)		523,788

Other income(expense):
Interest expense		(220,773	)		(340,998	)		(428,188	)		(514,707	)
Total other income (expense)		(220,773	)		(340,998	)		(428,188	)		(514,707	)

Net Income (loss)	$	(673,891	)	$	319,657		$	(740,781	)	$	9,081

Basic weighted average number of common shares outstanding		36,257,251			24,829,907			36,137,808			23,558,280

Diluted weighted average number of common shares outstanding		36,257,251			32,269,739			36,137,808			42,346,042

Basic net loss per share	$	(0.02	)	$	0.01		$	(0.02	)	$	0.00

Diluted net loss per share	$	(0.02	)	$	0.01		$	(0.02	)	$	0.00

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

DATASCENSION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

DATASCENSION, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	For the			For the
	6 months ended			6 months ended
	6/30/2008			6/30/2007

Cash flows from operating activities
Net income (loss)	$	(740,781	)	$	9,081
Adjustments to reconcile net loss to net cash provided by operating activities
Issued (canceled) for services and debt		-			23,800
Depreciation and amortization		120,878			103,121
(Increase) decrease in accounts receivable		342,097			(781,394	)
(Increase) decrease in receivable due from related party		33,564			-
(Increase) decrease in prepaid expenses		(4,211	)		(405,185	)
(Increase) decrease in deposits		(6,646	)		25,000
Increase (decrease) in accounts payable		22,045			101,964
Increase (decrease) in accrued expenses		(10,593	)		261,421
Net cash used by operating activities		(243,647	)		(662,192	)

Cash flows from investing activities
Purchase of property and equipment		(51,914	)		(29,964	)
Net cash used by investing activities		(51,914	)		(29,964	)

Cash flows from financing activities
Increase (decrease) in notes payable		87,111			400,682
Increase (decrease) in loan payable to Comerica Bank		13,684			-
Issuance of common stock		173,508			-
Net cash provided by financing activities		274,303			400,682

Net increase (decrease) in cash		(21,258	)		(291,474	)

Cash, beginning balance		46,930			592,289

Cash, ending balance	$	25,672		$	300,815

Interest paid	$	81,908		$	23,898

Taxes paid	$	800		$	-

Supplemental disclosure of non-cash transactions

Debt converted to equity	$	77,807		$	60,000

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

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.

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 (Loss) Per Share

Basic net income (loss) 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 (loss) 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.

Advertising

Advertising costs are expensed when incurred. Advertising for the year ended December 31, 2007 amounted to $9,000 and for the six months ended June 30, 2008 amounted to $ 24,838.

Research and Development

The Company expenses its research and development in the periods incurred.

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. Over 90% of the Company's customers are located either in the United States of America or Canada.

During the year ended December 31, 2007, the Company had three major clients, Ipsos-Reid (21.2%), Orbis (10.6%), and Synovate (8.3%). During the six months ended June 30, 2008, the Company had ten major clients, which accounted for (75.5%) of the company’s business.. Management believes the loss of one of these clients would affect the operations of the company in the short term.

Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. However, on February 12, 2008, the FASB issued FASB Staff Position (FSP) No. FAS 157-2, “Effective Date of FASB Statement No. 157,” (“FSP No. 157-2”), which delays the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP No. 157-2 defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within scope of FSP No. 157-2. The Company does not believe that the adoption of SFAS No. 157 will have a material impact on its condensed consolidated financial statements.

On December 12, 2007, Emerging Issues Task Force (“EITF”) No. 07-01, "Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property," ("EITF No. 07-01"), was issued. EITF No. 07-01 prescribes the accounting for collaborations. It requires certain transactions between collaborators to be recorded in the income statement on either a gross or net basis within expenses when certain characteristics exist in the collaboration relationship. EITF No. 07-01 is effective for the Company's collaborations existing after January 1, 2009. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations,” (“SFAS No. 141(R)”), which replaces FASB Statement No. 141. SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree, the goodwill acquired and the expenses incurred in connection with the acquisition. SFAS No. 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. Earlier adoption is not permitted. As a result, the Company will apply the provisions of SFAS No. 141(R) prospectively to business combinations that close on or after January 1, 2009. The Company is currently evaluating the impact, if any, the adoption of SFAS No. 141(R) may have on its condensed consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financials Statements, an Amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 clarifies the accounting for noncontrolling interests and establishes accounting and reporting standards for the noncontrolling interest in a subsidiary, including classification as a component of equity. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact that adopting SFAS No. 160 will have on its condensed consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — An Amendment of FASB Statement No. 133” (“SFAS No. 161”), which amends and expands the disclosure requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” to require qualitative disclosure about objectives and strategies in using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about the underlying credit-risk-related contingent features in derivative agreements. SFAS No. 161 is intended to improve financial reporting by requiring transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under SFAS No. 133; and how derivative instruments and related hedged items affect its financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008. The Company is currently evaluating the potential impact, if any, the adoption of SFAS No. 161 may have on its condensed consolidated 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 June 30, 2008:

Computer equipment	$	957,715
Office equipment		1,088,544
Leasehold Improvements		2,004,285
Software licenses		231,498
		4,282,042
Less accumulated depreciation and amortization		1,204,218
	$	3,077,824

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 June 30, 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.

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 June 30, 2008, the unpaid principal amount due on the remaining note to Alpha Capital Anstalt is $157,500. The note holder has extended the due date of this note to June, 2009. There is accrued and unpaid interest of $41,679.

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 the note due the Longview Fund LP increasing the principal amount of the note to $1,728,612.

The note holders have extended the due date of the notes to June, 2009.

As of June 30, 2008, both notes are unpaid and there is $168,511 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.

The note holders have extended the due date of the notes to June, 2009

In December, 2007 accrued interest of $40,685 was added to the note due the Longview Fund LP increasing the amount of the note at December 31, 2007 to $1,193,643. The remaining note in the amount of $571,429 is due to Alpha Capital Anstalt.

There is $168,028 of accrued interest outstanding at June 30, 2008.

In December, 2007, the Company issued a Secured Promissory Note to Alpha Capital Anstalt 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.

The interest rate on this note has increased to the 18% default rate..

At June 30, 2008, this note is unpaid and there is $23,419 of accrued interest.

OTHER NOTES

The Company had entered into long-term notes payable. These notes have been paid down to the current balances due within the next twelve months.

Note payable to a lender, monthly payments of $10,044 inclusive of 15.00% annual interest through May 2009. At June 30, 2008 the balance due was $102,634.

Note payable to a lender, monthly payments of $2,424 inclusive of 15.00% annual interest through March, 2009. At June 30, 2008 the balance due was $20,616.

Total Current portion of Notes Payable

123,150

Principal maturities are as follows:

Twelve months ended December 31, 2008	$	67,662
Twelve months ended December 31, 2009		56,488
	$	123,150

Additionally, the company has the following short term notes payable as of June 30, 2008.

Wells Fargo Bank

30,845,

NOTE 5 - STOCKHOLDERS' EQUITY

In the six months ended June 30, 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 at 12/31/2007 and 30,000 shares were issued to Bob Sandelman, a former director for services rendered as a director. In May, 2008, 80,000 shares were issued in settlement of contract entered into for professional services..

NOTE 6 - RELATED PARTY TRANSACTIONS

As of June 30, 2008, Longview Fund, L.P. owned 49.9% of the issued and outstanding common stock of the Company. Due to this stock ownership, the Company is controlled by Longview Fund, L.P. and is deemed a “controlled corporation”. As of July 30, 2008, due to the exchange of 15,000,000 shares of the Company’s Common Stock, into shares of Series C Preferred Stock, which holds two votes per share when voting alongside the Common Stock of the Company, Longview Fund controls 64.5% voting control of the Company. See Note 4 for a description of promissory notes of the Company issued to Longview Fund, L.P. and Note 9 for a further description of the Series C Preferred Stock.

Longview Fund, L.P. may take actions that conflict with the interests of other shareholders. Due to the 64.5% ownership of voting control, Longview Fund, L.P. has substantial control over the Company and has substantial power to elect directors and to generally approve all actions requiring the approval of the holders of the Company’s voting stock. See Note 4 above for a discussion of certain promissory notes due by the Company to Longview Fund, L.P.

The Company has a receivable due from Datascension, S.A. in the amount of $1,496,560, 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 six months ended June 30, 2008, the company billed approximately $770,465 to Sandelman & Associates, a company controlled by a board member, which amounted to 7.7% of 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 June 30, 2008, the amount due under the Credit Agreement was $1,741,372. The Company is in default of certain covenants under the Credit Agreement at June 30, 2008, and is in the process of seeking an alternative lender with which to refinance this credit facility.

NOTE 9 – SUBSEQUENT EVENTS

Resignation of Director and Appointment of New Directors

On July 18, 2008, Robert Sandelman resigned as a Director of Registrant.

On July 18, 2008, Registrant’s Board of Directors appointed Stanley Hirschman and Lou Persico as Directors. The appointments are effective as of August 1, 2008.

Stan Hirschman is President of CPointe Associates, Inc., a Plano, Texas executive management and retail operations consulting firm. He is an investment due diligence specialist and works regularly with public companies dealing with the difficulties of the balance between increased regulatory requirements and reasonable corporate governance. He is a director of Axion Power International and South Texas Oil and former chairman of Mustang Software, Inc. While at Mustang Software, Mr. Hirschman took a hands-on role in the planning and execution of the strategic initiative to increase shareholder value resulting in the successful acquisition of the company by Quintus Corporation.

His client list has included GameStop, Nortel, SBC Wireless (now AT&T), Dalrada Financial Corp., Oxford Media Corporation, Earthlink, Inc., Aiirmesh Communications, Bravo Foods International and Retail Highway. Prior to establishing CPointe Associates, he was Vice President Operations, Software Etc., Inc., a 396 retail store software chain, from 1989 to 1996. He also has held senior executive management positions with T.J. Maxx, Gap Stores and Banana Republic.

Mr. Hirschman is a member of the National Association of Corporate Directors and the KPMG Audit Committee Institute and is a graduate of the Harvard Business School Audit Committees in the New Era of Governance symposium. He is active in community affairs and serves on the Advisory Board of the Salvation Army Adult Rehabilitation Centers.

Lou Persico, MBA, CPA has over 25 years of financial and operational experience in private and public corporations. Persico began his career in public accounting and subsequently, he was employed by a series of “Fortune 100 Companies” beginning with American Cyanamid/Wyeth Pharmaceuticals where he held the roles of controller and finance director for almost 10 years operating at overseas locations in Madrid, Spain, San Juan, Puerto Rico and Rio de Janeiro, Brazil.

Persico continued his tenure with other “Blue Chip” companies in a natural succession of increasingly responsible senior financial positions at The PerkinElmer Co., Pearle Vision, Technicolor, Sara Lee, Cambridge Technology Partners and Arthur D. Little as CFO. However, for the past 7 years Persico’s focus has been with venture-backed start-up companies as CFO (the lead investor being Insight Venture Partners, a $3 billion private equity firm). At a large public enterprise, Cambridge Technology Partners (CATP), Persico was instrumental in building out the global infrastructure of the company from $200M to nearly $700M in worldwide revenue.

Persico earned at Pace University, New York City, a combined BBA/MBA with a concentration in finance and accounting. He has graduated from the Executive Programs at the Harvard Business School and Columbia Business School, and he is multilingual (Spanish and Portuguese). Persico is an avid health and fitness enthusiast and is a certified fitness trainer.

Messrs. Hirschman and Persico shall be compensated for service as nonmanagement directors as follows:

One Thousand Dollars ($1,000) per month;

One Thousand Dollars ($1,000) per day for attendance at Board meetings and other meetings in Costa Rica; and

One Hundred Thousand (100,000) options to purchase Common Stock of the Registrant, with a per share strike price equal to the market price on the date of grant, with twenty five thousand (25,000) options to vest on each of the 90^th, 180^th, 270^th and 360^th day after the grant date.

Series C Preferred Stock

On July 25, 2008, the Registrant filed a Certificate of Designation with the Secretary of State of the State of Nevada authorizing a series of preferred stock, under its articles of incorporation, known as “Series C Preferred Stock”. This Certificate of Designation was approved by the Registrant’s Board of Directors. The Certificate of Designation sets forth the following terms for the Series C Preferred Stock:

Authorized Shares:	1,000

Per Share Stated Value:	$15,000

Liquidation Preference:	Per share Stated Value

Conversion Price into Common Stock:	$.30 per share, as adjusted from time to time as set forth in the Certificate of Designation

Voting Rights:	The Series C Preferred Shares shall vote along with the Common Stock on an as converted basis and shall have two votes per share

On July 25, 2008, the Registrant entered into an agreement with Longview Fund, pursuant to which the Longview Fund exchanged 15,000,000 shares of its Common Stock for receipt of 1,000 shares of its Series C Preferred Stock.

Extension of Maturity Dates of Certain Notes

On or about August 12, 2008, Longview Fund, L.P. extended the maturity date of its promissory notes due from the Company and issued in June 2006 and December 2006 to January 15, 2010, and Alpha Capital Anstalt extended the maturity date of its promissory notes due from the Company and issued in November 2004, June 2006 and December 2006 to January 15, 2010. A further discussion of these notes is set forth in Note 4 above.

Events of Default Under Credit Agreement

On July 29, 2008, the Issuer received a letter from Comerica Bank, its senior secured lender, regarding covenant non-compliance for the period ending June 30, 2008. According to the letter, which references the August 30, 2007 Credit Agreement between the Issuer and Comerica Bank, Comerica Bank put the Issuer on notice that it has acknowledged that certain Defaults or Events of Default occurred as of June 30, 2008.

The letter concludes to state that at the time thereof the Bank was not taking action to enforce its rights, but that decision would not in any way be construed as a waiver of the Bank’s rights and remedies and was not an agreement to forbear from exercising its rights and remedies. Among rights and remedies available to Comerica Bank are acceleration of all amounts due under the Credit Agreement by Issuer to the Bank and foreclosure on the collateral securing the Loan, which is secured by a senior secured lien on all of the Issuer’s and its subsidiary’s assets.

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.

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 six months ended June 30, 2008 compared to the six months ended June 30, 2007.

For the six-months, ended June 30, 2008, DSEN has generated $10,039,103 in revenues compared to $9,642,694 in revenues for the six-months ended June 30, 2007, for an increase of $396,409. The increase in revenue is a result of an increase in new clients, along with an increase in hours billed and hourly billing rates.

Cost of goods sold for the six-months ended June 30, 2008 was $8,879,642 compared to $7,900,129 for the six-months ended June 30, 2007 or an increase of $979,513. This increase was due to an increase in hourly personnel , telephone costs and other costs related to outsourcing work to other companies due to the increase in business..

Total general and administrative expenses increased to $1,351,176 for the six-months ended June 30, 2008 from $1,115,655 for the six-months ended June 30, 2007, or an increase of $235,521. The increase is partially due to the hiring of a fulltime CFO and a salesperson to market inbound services. Both employees started January 1, 2008. The hiring of these two individuals along with additional marketing to clients in the US has increased all expenses related to travel between the US and Costa Rica.

Depreciation expense for the six-months ended June 30, 2008 was $120,878 compared to $103,122 for the six-months ended June 30, 2007, or an increase of $17,756.

Interest expense for the six months ended June 30, 2008 was $428,188 compared to $515,707 for the six-months ended June 30, 2007 a decrease of $86,519. This decrease is due to the conversion of debt held by Longview Fund LP into stock in June, 2007.

Datascension generated a net loss of $740,781 for the six-months ended June 30, 2008, versus a net profit of 9,081 for the same period in 2007. The difference of $749,862 is primarily a result of the increase of $979,513 in cost of goods sold. For the six-months ended June 30, 2008, DSEN increased its working capital by a net amount of $3,044,476 from $(1,446,455) as of December 31, 2007 to $1,598,021 as of June 30, 2008. This is mainly due to a decrease in the current portion of long term debt of approximately $1.0 million.

Significant Subsequent Events occurring after June 30, 2008:

Resignation of Director and Appointment of New Directors

On July 18, 2008, Robert Sandelman resigned as a Director of Registrant.

On July 18, 2008, Registrant’s Board of Directors appointed Stanley Hirschman and Lou Persico as Directors. The appointments are effective as of August 1, 2008.

Messrs. Hirschman and Persico shall be compensated for service as nonmanagement directors as follows:

One Thousand Dollars ($1,000) per month;

One Thousand Dollars ($1,000) per day for attendance at Board meetings and other meetings in Costa Rica; and

Series C Preferred Stock

Authorized Shares:	1,000

Per Share Stated Value:	$15,000

Liquidation Preference:	Per share Stated Value

Conversion Price into Common Stock:	$.30 per share, as adjusted from time to time as set forth in the Certificate of Designation

Voting Rights:	The Series C Preferred Shares shall vote along with the Common Stock on an as converted basis and shall have two votes per share

Extension of Maturity Dates of Certain Notes

Events of Default Under Credit Agreement

Capital Resources and Liquidity

On June 30, 2008 DSEN had total assets of $9,108,853 compared to $8,928,290 on June 30, 2007, an increase of $180,563. The reason for the increase in assets is a result of decrease in accounts receivable and increase in the related party receivable. DSEN had a total stockholders' equity of $2,798,689 on June 30, 2008 compared to $4,282,354 on June 30, 2007, a decrease in equity of $1,483,665, which is due to the losses generated in the past year..

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

On June 30, 2008 DSEN had Property and Equipment of $3,077,824 compared to $3,062,773 on June 30, 2007, or an increase of $15,051, net of depreciation for the six months. The increase is due to the opening of a new call center in Limon, Costa Rica in March, 2008.

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 2008.

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 will need to raise additional capital to expand operations. DSEN will also need to raise immediate capital to refinance its credit facility with Comerica Bank, which matures on August 30, 2008. If it is unable to raise this capital, it may be unable to continue operations, if Comerica exercises its remedies against collateral which consists of a first lien on DSEN’s assets.

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 could incur significant amounts of indebtedness to finance its operations, and 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.

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 June 30, 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.

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 Chief 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.

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

(d) Other Exhibits

Exhibit 3.12 Certificate of Designation for the Series C Preferred Stock

Exhibit 10.47 Letter Agreement with Longview Fund, L.P.

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: August 13, 2008

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	7th grade Avg

Datascension (DSEN) Inactive 10-Q2008 Q2 Quarterly report

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