UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 1, 2006
DATASCENSION INC.
(Exact name of Registrant as specified in charter)
Nevada 0-29087 87-0374623
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification)
145 State College Blvd, Suite 350 Brea, CA 92821
(Address of principal executive offices) (Zip code)
Registrant's Address and Telephone number, including area code: 714-482-9750
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
On February 1, 2006, Datascension, Inc. (the "Company") determined that
it would restate its consolidated financial statements for the fiscal year
ended December 31, 2004, and interim financial data for the nine months ended
September 30, 2005, (the "Restatement") included in its 2004 Annual Report on
Form 10-KSB and Quarterly Report on Form 10-QSB due to an accounting error. The
decision to restate the consolidated financial statements for the fiscal year
ended December 31, 2004, and for the nine months ended September 30, 2005, was
made by the Company's Board of Directors. Management concluded that the
Company's consolidated financial statements for the fiscal year ended December,
2004 and for the nine months ended September 30, 2005, should no longer be
relied upon due to this error.
The Restatement reflects the Company's identification of an error related
to the accounting treatment of the convertible debt agreements entered into in
November 2004. This error was identified during the completion of the
Registration Statement on Form SB-2. The Restatement information has been
included in the Form SB-2 and the company will be filing the December 31,
2004 10KSB, the March 31, 2005 10QSB, the June 30, 2005 10QSB, and the
September 30, 2005 10QSB to reflect the adjustments.
The restatement items are as follows. For December 31, 2004:
The loss after discontinued operations for 2004 was originally $4,791,105,
while the 2004 restated loss after discontinued operations is reported
as $6,052,366, an increase of $1,261,261. This is due to an increase
in other expenses related to the convertible debt of $2,489,116, as well
as an increase in the interest expense related to the convertible debt of
$52,300, coupled with a decrease in the beneficial conversion feature debt
discount expense of $1,203,646, a decrease in the loss from discontinued
operations of $63,638, and a decrease in interest expense of $12,871.
On the 2004 balance sheet, the restatement resulted in the removal of
$2,077,604 of debt discount from the other asset section, an increase in repaid
expenses of $5,879. The convertible debt in the liability section of the
company's financial statements decreased from $1,893,750 to $241,111, while
there was an increase in the derivative liability from $0 to $2,408,178, as
well as an increase in the warrant liability from $0 to $1,785,877 and a
decrease in additional paid in capital of $3,300,000.
The basic loss per share increased from the previously reported $0.19 per share
to $0.28 per share for the year ended December 31, 2004, while the diluted loss
per share increased from the previously reported $0.18 per share to $0.26 per
share.
For the nine months ended September 30, 2005:
The net income for the nine months September 30, 2005, was
originally $1,095,730, while the nine months September 30, 2005 restated
income is reported as $1,732,336, an increase of $636,606. This is due to
an increase in other income related to the convertible debt of $564,944,
as well as a decrease in the interest expense related to the convertible debt
of $47,545, and a decrease in interest expense of $24,117.
On the September 30, 2005 balance sheet, the restatement resulted from an
increase in prepaid expenses of $18,238. The convertible debt in the liability
section of the company's financial statements increased from $931,970 to
$1,067,761, and while there was an increase in the derivative liability from
$735,921 to $888,509.
The basic income per share increased from the previously reported $0.06 per
share to $0.10 per share for the nine months ended September 30, 2005, while
the diluted income per share increased from the previously reported $0.04 per
share to $0.06 per share.
The Company's management has discussed the matters disclosed in this current
report on Form 8-K with Larry O'Donnell, C.P.A., Ltd, the Company's independent
registered public accounting firm.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following are filed as exhibits to this report:
Exhibit No. Description
99.1 Financial Statement Information
SIGNATURES:
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
February 1, 2006
Datascension Inc.
By: /s/ Scott Kincer
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Scott Kincer, President/CEO