U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 2007
[ ] 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.
--------------------------------------------
(Name of small business issuer in its charter)
Nevada 87-0374623
- ------------------------ --------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
145 S. State College Blvd, Suite 350, Brea, CA 92821
- ----------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
714-482-9750
---------------------------
(Issuer's telephone number)
N/A
------------------------------------------------------
(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 [ ]
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 32,624,562 shares outstanding, par value $.001 per share as
of, August 8, 2007. The Registrant has 508,500 shares of Preferred Stock
Series B issued and outstanding as of, August 8, 2007.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements......................................
Balance Sheet (unaudited).................................3
Statements of Operations (unaudited)......................4
Statements of Cash Flows (unaudited)......................5
Notes to Financial Statements.............................6
Item 2. Management's Discussion and Analysis of Plan of Operation..9
Item 3. Controls and Procedures.....................................12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.........................................13
Item 2. Unregistered Sales of Equity and Use of Proceeds..........13
Item 3. Defaults upon Senior Securities...........................13
Item 4. Submission of Matters to a Vote of Security Holders.......13
Item 5. Other Information.........................................13
Item 6. Exhibits and Reports on Form 8-K..........................13
Signatures..........................................................13
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The condensed financial statements of Datascension, Inc., ("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, 2006.
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, 2007, and for all periods presented not misleading have been made.
The results of operations for the period ended June 30, 2007 are not
necessarily an indication of operating results to be expected for the full year
ending December 31, 2007.
DATASCENSION, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN DOLLARS)
ASSETS
Unaudited Audited
--------------- -------------
6/30/2007 12/31/2006
--------------- -------------
Current Assets:
Cash 300,815 592,289
Accounts receivable 3,227,660 2,446,266
Prepaid expenses 664,811 259,626
--------------- -------------
Total current assets 4,193,286 3,298,181
--------------- -------------
Property and Equipment, net of accumulated
depreciation 3,062,773 3,135,930
Other Assets:
Website assets, net of amortization 3,207 3,207
Deposits 16,749 41,749
Goodwill 1,692,782 1,692,782
--------------- -------------
Total other assets 1,712,738 1,737,738
--------------- -------------
Total Assets 8,968,797 8,171,849
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
6/30/2007 12/31/2006
--------------- -------------
Current Liabilities:
Accounts payable 326,619 224,655
Accrued expenses 433,151 454,881
Short term notes payable 541,239 356,625
Current portion of long-term notes payable 738,280 1,169,819
--------------- -------------
Total current liabilities 2,039,289 2,205,979
--------------- -------------
Long-Term Debt
Long-term notes payable, net of current portion 1,739,053 3,835,861
Total long-term debt 1,739,053 3,835,861
--------------- -------------
Total Liabilities 3,778,341 6,041,840
--------------- -------------
Stockholders' Equity:
Common stock:
Common stock, $0.001 par value, 200,000,000
shares authorized; 32,664,562, and 23,031,547
shares issued, 32,568,729 and 22,935,714
outstanding at June 30, 2007 and December 31,
2006, respectively 32,664 166,649
Additional paid-in capital-common stock 16,191,892 13,006,542
Preferred stock Series B:
Preferred stock, $0.001 par value, 10,000,000
shares authorized; 508,500 Series B shares
issued and outstanding at June 30, 2007 and
December 31, 2006 506 506
Additional paid-in capital-preferred Series B 481,994 481,994
Treasury stock, at cost; 95,833 at June 30, 2007 (134,388) (134,388)
Accumulated deficit (11,382,213) (11,391,295)
--------------- -------------
Total stockholders' equity 5,190,455 2,130,009
--------------- -------------
Total Liabilities and Stockholders' Equity 8,968,797 8,171,849
=============== =============
The accompanying notes to the financial statements should be read in
conjunction with the above financial statements.
3
DATASCENSION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN DOLLARS)
For the For the For the For the
3 months 3 months 6 months 6 months
ended ended ended ended
6/30/2007 6/30/2006 6/30/2007 6/30/2006
----------- ----------- ----------- -----------
Revenue 4,888,821 3,443,896 9,642,694 6,609,997
Cost of Goods Sold 3,605,947 2,635,880 7,900,129 5,038,204
----------- ----------- ----------- -----------
Gross Profit 1,282,874 808,016 1,742,565 1,571,793
Expenses:
Selling, general and administrative 570,602 747,199 1,115,655 1,225,284
Stock based compensation - 694,351 - 694,351
Depreciation and amortization 51,617 59,130 103,121 108,846
----------- ----------- ----------- -----------
Total expenses 622,219 1,500,680 1,218,776 2,028,481
----------- ----------- ----------- -----------
Operating Income 660,655 (692,665) 523,788 (456,689)
Other Income (Expense):
Other expenses - (108,517) - (108,517)
Other income - 4,603 - 4,603
Interest expense (340,998) (67,413) (514,707) (150,950)
Other Income (Expense)
related to convertible - (504,106) - (224,818)
Interest income (expense)
related to convertible - (225,425) - (380,678)
----------- ----------- ----------- -----------
Total other income (340,998) (900,858) (514,707) (860,360)
----------- ----------- ----------- -----------
Net Income (loss) 319,657 (1,593,523) 9,081 (1,317,049)
=========== =========== =========== ===========
Basic weighted average number
of common shares outstanding 24,829,907 17,383,888 23,558,280 17,299,721
=========== =========== =========== ===========
Diluted weighted average number
of common shares outstanding 32,269,739 17,383,888 42,346,042 17,299,721
=========== =========== =========== ===========
Basic Net Income Per Share 0.01 (0.09) 0.00 (0.08)
=========== =========== =========== ===========
Diluted Net Income Per Share 0.01 (0.09) 0.00 (0.08)
=========== =========== =========== ===========
The accompanying notes to the financial statements should be read in
conjunction with the above financial statements.
4
DATASCENSION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN DOLLARS)
Unaudited Unaudited
For the 6 months For the 6 months
ended ended
Cash Flows From Operating Activities: 6/30/2007 6/30/2006
---------------- ----------------
Net income 9,081 (1,317,049)
Adjustments to reconcile net income to net
cash provided by operating activities:
Issued (canceled) for services and debt 23,800 748,962
Write off of century innovations - 108,469
Noncash expenses associated with convertible debt - 1,430,054
Change in warrant liability - 165,241
Change in derivative liability - (444,527)
Depreciation and amortization 103,121 108,846
Increase in construction of progress - (252,800)
(Increase) Decrease in accounts receivable (781,394) (255,025)
Change in prepaid expenses (405,185) (207,878)
Increase in deposits 25,000 (21,500)
Decrease in accounts payable 101,964 96,143
Decrease in accrued interest and expenses 261,421 6,467
---------------- ----------------
Net cash used by operating activities (662,192) 165,403
Cash Flows From Investing Activities:
Purchase of property and equipment (29,964) (234,701)
---------------- ----------------
Net cash used by investing activities (29,964) (234,701)
Cash Flows From Financing Activities:
Increase (decrease) in notes payable 400,682 (223,076)
Increase (Decrease) in related party payable - (7,000)
Increase (Decrease) in convertible debt / notes payables - 1,648,412
Issuance of common stock - 30,000
---------------- ----------------
Net cash provided by financing activities 400,682 1,448,336
---------------- ----------------
Net Increase in Cash (291,474) 1,379,038
Balance, Beginning 592,289 275,287
================ ================
Balance, Ending 300,814 1,654,325
================ ================
Interest Paid 23,898 23,289
================ ================
Taxes Paid - -
================ ================
Supplemental disclosure of non-cash transactions
Debt converted to equity 3,027,565
The accompanying notes to the financial statements should be read in
conjunction with the above financial statements.
5
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
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 prematurely since our
contracts are standardized, the earnings process is 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 Companys 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
June 30, 2007, and for all periods presented not misleading have been made. The
results of operations for the period ended June 30, 2007 are not necessarily an
indication of operating results to be expected for the full year ending
December 31, 2007.
6
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 has not yet
determined the impact of the adoption of SFAS No. 159 on our financial
statements and footnote disclosures.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are made up of the following as of June 30, 2007:
Equipment and machinery $ 732,261
Office equipment 1,072,871
Leasehold improvements 1,989,980
Licenses 230,000
Accumulated depreciation (962,381)
----------
$3,062,773
NOTE 4 - NOTES PAYABLE
During the 6 months ended June 30, 2007, 171,429 shares of common stock were
issued to settle $60,000 of the outstanding notes payable from the November
2004 financing.
During the same period, 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, with the settlement of $912,500 of
debt.
The total notes outstanding as of June 30, 2007 are $3,105,817, plus accrued
interest of $99,708. As of June 30, 2007, there still remains $478,192 of debt
discount which is being accreted over the term of the notes.
On March 17, 2007, the company issued a note payable for $50,000 at 15% per
year. This note is due by March 17, 2009. 10,000 shares of common stock, valued
at $4,800, were issued to the lender in connection with this note payable.
On May 25, 2007, the company issued a note payable for $250,000 at 1.5% per
month. This note is due by August 30, 2007.
NOTE 5 - STOCKHOLDERS' EQUITY
The company issued shares of common stock for services during the 6 months
ended June 30, 2007.
50,000 shares were issued to a consultant as compensation, valued at $19,000.
10,000 shares were issued to a lender in connection with a loan made, these
shares were valued at $0.48, the date of the note, or $4,800.
171,429 shares of common stock were issued to settle $60,000 of debt.
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, with the settlement of $912,500 of debt.
There were no other issuances of stock or options other than those mentioned
above.
7
NOTE 6 - RELATED PARTY TRANSACTIONS
During the 6 months ended June 30, 2007, the company billed approximately
$770,744 to Sandelman & Associates, a company controlled by a board member,
which amounted to 8% of our total revenue for the period.
NOTE 7 - FOREIGN OPERATIONS
The company currently operates out of the United States, Costa Rica and the
Dominican Republic. The future plans of the company are to expand its presence
in Costa Rica and ultimately close its operations in the Dominican Republic.
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. All of the Company's
workforce work outside of the United States. Senior management does maintain
residence in the United States. Currently most clients are US based companies
with the exception of one company located in Canada. Any resulting foreign
exchange fluctuations do not affect the payment of employees, contract
labor or off shore operations.
8
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
prematurely since our contracts are standardized, the earnings process is short
and no single project accounts for a significant portion of our revenue.
9
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.
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, 2007, and for all periods presented not misleading have been made. The
results of operations for the period ended June 30, 2007 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 has not yet
determined the impact of the adoption of SFAS No. 159 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, 2007 compared to the six months
ended June 30, 2006.
For the six-months, ended June 30, 2007, DSEN has generated $9,642,694 in
revenues compared to $6,609,997 in revenues for the six-months ended June 30,
2006, for an increase of $3,032,697. 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 six-months ended June 30, 2007 was $7,900,129
compared to $5,038,204 for the six-months ended June 30, 2006 or an increase of
$2,861,925. 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 $1,115,655 for the six-
months ended June 30, 2007 from $1,225,284 for the six-months ended June 30,
2006, a net decrease of $109,629. The decrease is due to largely to a
consolidation of operations in Central America and reduction in operating
costs.
There was no stock based compensation for the six months ended June 30, 2007
and $694,351 in stock based compensation for the six months ended June 30,
2006.
Depreciation expense for the six-months ended June 30, 2007 was $103,121
compared to $108,846 for the six-months ended June 30, 2006, a minimal decrease
of $5,725. The decrease resulted from no purchases or minimal purchase of
additional assets in the last twelve months.
Interest expense for the six months ended June 30, 2007 was $514,707 compared
to $150,950 for the six-months ended June 30, 2006 an increase of $363,757.
This increase relates to the debt funding increase in the last twelve months.
Datascension generated net income of $9,081 for the six-months ended June 30,
2007, versus net loss of $1,317,049 for the same period in 2006. The increase
in net income of $1,326,130 is primarily a result of increased revenue and lack
of stock based compensation in the first six months of 2007. For the six-
months ended June 30, 2007, DSEN increased its working capital position by a
net amount of $1,061,795 from $1,092,202 as of December 31, 2006 to $2,153,997
as of June 30, 2007. This is mainly due to an increase in accounts receivable
of $781,394 and an increase in prepaid expenses of $405,185.
10
Significant Subsequent Events occurring after June 30, 2007: None.
Capital Resources and Liquidity
On June 30, 2007 DSEN had total assets of $8,968,797 compared to $7,540,620 on
June 30, 2006, an increase of $1,428,177. The reason for the increase in
assets is a result of the increase in accounts receivable and prepaid expenses.
DSEN had a total stockholders' equity of $5,190,455 on June 30, 2007 compared
to $ 78,238 on June 30, 2006, an increase in equity of $5,112,217, which is in
part due to the marked increase of assets over the past 12 months and
conversion of indebtedness into common stock, which drove marked increases in
paid in capital.
All assets are booked at historical purchase price and there is no variance
between book value and the purchase price.
On June 30, 2007 DSEN had Property and Equipment of $3,062,773 compared to
$1,064,027 on June 30, 2006, or an increase of $1,998,746 which is a result of
the Completion of the new facility in Costa Rica at the end of 2006.
As discussed above DSEN intends to meet its financial needs for operations
through the collection of accounts receivable and servicing of current
contracts.
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 fourth quarter of 2006,
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.
11
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.
Item 3. Controls and Procedures.
(a) Our Chief Executive Officer (CEO) and Principal Financial Officer
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this report. Based
upon the evaluation, concluded that the disclosure controls and procedures are
effective in ensuring all required information relating to DSEN is included in
this quarterly report.
We also maintain a system of internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f)) designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
(b) Changes in internal controls. During our most recent fiscal
quarter, there have been no changes in our internal control over financial
reporting that occurred that have materially affected or are reasonably likely
to materially affect our internal control over financial reporting.
12
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 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 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.
Reports on Form 8-K
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Datascension, Inc.
/s/ D. Scott Kincer
----------------------
D. Scott Kincer
President, Chairman and Director
(Principal Executive Officer)
/s/ D. Scott Kincer
-------------------
D. Scott Kincer
(Principal Financial Officer)
Date: August 10, 2007
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
/s/ D. Scott Kincer
----------------------
D. Scott Kincer
President, Chairman and Director
(Principal Executive Officer)
/s/ D. Scott Kincer
-------------------
D. Scott Kincer
(Principal Financial Officer)
Date: August 10, 2007
13