U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





(Mark
One)





x ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
fiscal year ended December 31, 2008





 ̈ TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
transition period from ___________ to ___________





Commission
file number: 000-29087





DATASCENSION,
INC.


(Name of
registrant in its charter)





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





532
      PIMA CANYON COURT
            
            89144LAS VEGAS, NEVADA
            
            (Zip
      Code)





702-233-6785


(Registrant's
telephone number)





Securities
registered under Section 12(b) of the Exchange Act: None





Securities
registered under Section 12(g) of the Exchange Act:





Common Stock, par value
$.001


(Title of
class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  ̈  No x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


Yes  ̈  No x





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




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K contained in this form, and no disclosure will be contained, to
the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  x









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  ̈
              Smaller
      Reporting Company x




Indicate
by check mark whether the registrant is a shel1 company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈No x





State
registrant’s revenues for its most recent fiscal
year.  $18,056,808





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)





The
aggregate market value of voting common equity held by non-affiliates as of
April 9, 2009 was approximately $1,674,532.  The number of
shares outstanding of the registrant’s Common Stock, as of April 9, 2009, was
21,307,261 shares.





Documents
Incorporated by Reference


None.









TABLE OF
CONTENTS





Page
                        No.PART
      IItem
      1. Description of Business
                      
                      1Item
      1A.  Risk Factors
                      
                      4Item
      2. Description of Properties
                      
                      13Item
      3. Legal Proceedings
                      
                      13Item
      4. Submission of Matters to a Vote of Security Holders
                      
                      13PART
      IIItem
      5. Market for Registrant’s Common Equity, Related Stockholder
      Matters
                      
                      13Item
      7. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                      
                      15Item
      8. Financial Statements and Supplementary Data
                      
                      20Item
      9. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
                      
                      21Item
      9A(T). Controls and Procedures
                      
                      21Item
      9B. Other Information
                      
                      21PART
      IIIItem
      10. Directors, Executive Officers and Corporate Governance
                      
                      22Item
      11. Executive Compensation
                      
                      26Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters
                      
                      28Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
                      
                      30Item
      14. Principal Accounting Fees and Services
                      
                      32PART
      IVItem
      15. Exhibits, Financial Statement Schedules
                      
                      33Signatures
                      
                      36









PART
I





Forward-Looking
Statements





This
annual 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 1A, “Risk
Factors” and Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operation" and included elsewhere in this
report.





ITEM 1.
DESCRIPTION OF BUSINESS.





(a)
Entity History





Datascension,
Inc. (“DSEN”, “Datascension” or the “Company”) (formerly known as
Nutek)  was incorporated under the laws of the State of Nevada, on
August 23, 1991, under the name Swiss Technique, Inc. The original Articles of
Incorporation of DSEN authorized the issuance of fifty million (50,000,000)
shares of common stock with a par value of $0.001. On August 23, 1991, pursuant
to Section 78.486, Nevada Revised Statutes as amended, DSEN filed with the
Nevada Secretary of State Articles of Merger, whereby DSEN merged with Sun
Investments, Inc., a Utah corporation. On or about April 10, 1992, DSEN filed
Articles of Amendment to the Articles of Incorporation with the Secretary of
State of Nevada, authorizing five million (5,000,000) shares of Preferred Stock
, par value of $0.001 per share, with such rights, preferences and designations
and to be issued in such series as determined by the Board of Directors of DSEN.
DSEN  on or about March 3, 1995 changed its name from Swiss Technique,
Inc., to Nutek, Inc. pursuant to a Certificate of Amendment to its Articles of
Incorporation filed with the Secretary of State of Nevada .





Pursuant
to an amendment to its Articles of Incorporation, duly filed in Nevada, the
Company changed its name to Datascension, Inc. in January 2004.





The
Company currently has no operational subsidiary as Datascension International,
Inc. was merged into the Company during 2008. DSEN had four other subsidiaries
which were disposed of as follows:, the non operating entities, Kristi & Co,
Inc and SRC International, Inc were discontinued and written down as of December
31, 2004. Century Innovations, Inc and Nutek Oil, Inc were spun off also as of
December 31, 2004, as separate operating entities which are managed and operated
by independent management.





Nutek Oil
was disposed of by issuing a dividend of the shares held by the parent company
to the shareholders of the parent company. The stock dividend was distributed to
owners of the Company's common stock as of the record date in a ratio of one
share of dividend stock in the subsidiary for every 500 shares of common stock
owned in Datascension, Inc.




Century
Innovations was disposed of by issuing a dividend of the shares held by the
parent company to the shareholders of the parent company. The stock dividend was
distributed to owners of the Company's common stock as of the record date in a
ratio of one share of dividend stock in the subsidiary for every 300 shares of
common stock owned in Datascension, Inc.




1




DSEN
previously distributed a portion of its ownership to Datascension shareholders.
The Company has additionally distributed all but 10% of its ownership in Century
to Century as Treasury Stock on the books of Century. It will remain as Treasury
Stock on the books of Century until the effectiveness of a Form 10 registration
to be filed by Century for the shares. Within sixty (60) days of the Form 10's
effectiveness, Century will work with the Company to distribute the shares to
the then current Datascension shareholders.





DSEN's
mailing address is: 532 Pima Canyon Court, Las Vegas, Nevada 89144,
702-233-6785. The Company website can be found at
www.datascension.com.





(b)
Business of Issuer





On July
2, 2001, the DSEN acquired 100% of the issued and outstanding stock of
Datascension International. DSEN is a data gathering and research company. Its
expertise is in the collection, storage, processing and interpretation of data.
DSEN’s management team has significant experience in working with clients to
gather the information they need to make changes or advancements to their
operations. DSEN 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.





1)
Principal Products, Services and Principal Markets.





Services





Telephone
Interviewing (CATI or Paper)


Currently,
Datascension's CATI telephone facility employs approximately 1200 part- and
full-time telephone interviewers, many of whom are bilingual in Spanish and
English. Datascension and other leading research agencies have found that
streamlining their systems with integrated CATI and automatic dialing
capabilities have resulted in quicker turnaround, lower costs and increased
field capacity for phone research projects.





Internet
Data Collection





Datascension
has a full-time programming staff experienced in designing various types of web
surveys, web panels, and data collection sites.




Database
Engineering





Datascension
has the expertise to create databases from very small to complex fully
relational databases. Its database software allows the end-user to connect to
Datascension’s system via the Internet and run reports and pull data with
relatively no training.





Data
Storage





Datascension
employs large disk storage hardware for short and long-term document and file
archive and retrieval.





Document
Processing





Datascension
has developed an expertise in data value ensuring the greatest care in document
processing services including clerical handling of documents, coding, data
entry, scanning and storage.




2





Data
Reporting & Mining





Datascension
staff can program banners using the latest version of Quantum (SPSS) tabulation
software. They have extensive experience of handling most types of data
including ASCII, flat file, CSV, XML and many other formats.





In-bound
Customer Service





Datascension's
expertise in handling customer service calls covers a wide spectrum of
industries from hardware order taking to infomercial support. Activities include
on-line order booking to technical support for client products and
services.





Bilingual
Interviewing





People of
Hispanic or Latino descent comprise approximately 12.5% of the US population,
according to 2000 US Census figures. Datascension has recognized the importance
of surveying this population. Datascension has begun a more concerted effort to
target the Hispanic community and garner their input as a separate and unique
segment of our society.   To that end, we contract a number of
bilingual interviewers who are skilled in conducting research in both Spanish
and English.





Major
Clients





During
the year ended December 31, 2008, the Company had five major clients ,
Ipsos-Reid (15.0%), Synovate  (11.6%), Nielsen (8.3%), Sandelman &
Associates  (8.0%) and Superfly Advertising (6.2%). Management
believes the loss of one of these key clients could materially affect the
operations of the company in the short term.





Approximately
98% of the revenue generated is from the telephone interviewing and customer
service with approximately 2% coming from the data services and programming
division. Customers are located through referrals from existing customers and
from leads generated by our sales staff.




Our
business does not involve “telemarketing". Telemarketing, in the call center
industry, refers to the marketing of goods and services by telephone. We do not
market goods or services for clients, but instead conduct interviews and gather
information from interviewees. As a result the government regulation of the "do
not call list" that has been implemented to stop unsolicited telemarketing does
not affect our industry and we are not bound to comply by the Amended
Telemarketing Sale Rule (TSR).





Who Must
Comply with the Amended Telemarketing Sale Rule (TSR)?





The
amended TSR regulates "telemarketing"- defined in the Rule as “a plan, program,
or campaign. . . to induce the purchase of goods or services or a charitable
contribution" involving more than one interstate telephone call." (The FCC
regulates both intrastate and interstate calling. More information is available
from www.fcc.gov.). With some important exceptions, any businesses or
individuals that take part in "telemarketing" must comply with the Rule. This is
true whether, as "telemarketers," they initiate or receive telephone calls to or
from consumers, or as "sellers," they provide, offer to provide, or arrange to
provide goods or services to consumers in exchange for payment. It makes no
difference whether a company makes or receives calls using low-tech equipment or
the newest technology-such as voice response units (VRUs) and other automated
systems. Similarly, it makes no difference whether the calls are made from
outside the United States; so long as they are made to consumers in the United
States, those making the calls, unless otherwise exempt, must comply with the
TSR's provisions. If the calls are made to induce the purchase of goods,
services, or a charitable contribution, the company is engaging in
"telemarketing."





Certain
sections of the Rule apply to individuals or companies other than "sellers" or
"telemarketers" if these individuals or companies provide substantial assistance
or support to sellers or telemarketers. The Rule also applies to individuals or
companies that provide telemarketers with unauthorized access to the credit card
system.




3





2)
Employees/Contract workers




DSEN
currently has both employees and contracted help. The employees have residence
in the US but spend most of their time in Costa Rica managing the
Company.  In addition to the seven Company employees, of which (5) are
Officers of DSEN, the Company employs approximately 1200 contracted individuals
working for DSEN of which 160 are full-time.





3)
Competition





We
currently face significant competition for outsourced market research services
and expect that competition will increase. We believe that, in addition to
prices, the principal competitive factors in our markets are service quality and
interviewing skills, the ability to develop customized designs and technological
and industry expertise. While numerous companies provide market research
services, we believe our principal competitors include our clients' own in-house
market research groups, including, in some cases, in- house groups operating
offshore, offshore outsourcing companies and U.S.-based outsourcing companies.
The trend toward offshore outsourcing, international expansion by foreign and
domestic competitors and continuing technological changes will result in new and
different competitors entering our markets. These competitors may include
entrants from the communications industries or entrants in geographic locations
with lower costs than those in which we operate.





ITEM
1A.  RISK FACTORS





Risks
Relating to our Business:





1.
Efforts to expand operations through developing new services, features and
functions may drain capital resources if not successful.





There can
be no assurance that we will be able to expand operations in a cost-effective or
timely manner or that any such efforts would maintain or increase overall market
value and acceptance. Furthermore, any new business launched by us that is not
favorably received by consumers could drain us of needed capital, damage our
reputation and diminish the value of our brand name.




Expansion
of our operations would require significant expenditure for development,
operation setup, and training of our management, financial and operational
resources. Any lack of market acceptance of our products or services would
result in the inability to generate satisfactory revenues and to offset our
costs of the expansion, which could have a material adverse effect on our
results of operations and financial condition.





2.
Efforts to establish brand identity is costly and failure to succeed could
adversely affect our ability to grow.





We
believe that establishing and maintaining brand identity is a critical aspect of
our efforts to attract new customers. In order to attract new customers,
advertisers and commerce vendors, and in response to competitive pressures, we
intend to make a commitment to the creation and maintenance of brand loyalty
among these groups. We plan to accomplish this, although not exclusively,
through advertising our products and services through our Web site, through the
various search engines, through other Web sites and marketing our site to
businesses and customers through e-mail, online media, trade publications, trade
shows and other marketing and promotional efforts.




4





There can
be no assurance that brand promotion activities will yield increased revenues or
that any such revenues would offset the expenses incurred by us in building our
brands. If we fail to promote and maintain our brand or incurs substantial
expenses in an attempt to promote and maintain our brand or our existing or
future strategic relationships fail to promote our brand or increase brand
awareness, our business, results of operations and financial condition would be
materially adversely affected.





3. Our
clients may adopt technologies that decrease the demand for our services, which
could reduce our revenues and seriously harm our business.





We target
clients with a high need for our market research services, and we depend on
their continued need of our services, especially our major clients who generate
the substantial majority of our revenues. However, over time, our clients may
adopt new technologies that decrease the need for live customer interaction,
such as interactive voice response, web-based research and other technologies
used to automate interactions with interviewers. The adoption of such
technologies could reduce the demand for our services, pressure our pricing,
cause a reduction in our revenues and harm our business.




4. We
serve markets that are highly competitive, and we may be unable to compete with
businesses that have greater resources than we do.





We
currently face significant competition for outsourced market research services
and expect that competition will increase. We believe that, in addition to
prices, the principal competitive factors in our markets are service quality and
interviewing skills, the ability to develop customized designs and technological
and industry expertise. While numerous companies provide market research
services, we believe our principal competitors include our clients' own in-house
market research groups, including, in some cases, in- house groups operating
offshore, offshore outsourcing companies and U.S.-based outsourcing companies.
The trend toward offshore outsourcing, international expansion by foreign and
domestic competitors and continuing technological changes will result in new and
different competitors entering our markets. These competitors may include
entrants from the communications industries or entrants in geographic locations
with lower costs than those in which we operate.





Additionally,
the market for customer contact services and market research is highly
fragmented and very competitive. In certain segments of the industry, however,
the customer contact services and market research industries have begun to
experience a degree of consolidation, and the development of major customer
contact center companies has resulted in an additional level of competition from
service providers that have greater name recognition, larger installed customer
bases, and significantly greater financial, technical, and marketing resources
than we have. Large established enterprise software companies may leverage their
existing relationships and capabilities to offer customer service applications.
In other instances, many large companies provide their own in-house customer
care support and customer training. Also, a number of existing companies have
experienced rapid internal growth, and several of these companies have been
active in acquiring smaller regional customer contact services and call center
companies and are becoming major competitors with a measurable share of this
rapidly expanding market. If our competitors provide more efficient or less
expensive services, we may lose market share and revenues.





Lastly,
many of our existing competitors and possibly potential new competitors, have or
may have greater financial, personnel and other resources, longer operating
histories, more technological expertise, more recognizable brand names and more
established relationships in industries that we currently serve or may serve in
the future. Increased competition, our inability to compete successfully against
current or future competitors, pricing pressures or loss of market share could
result in increased costs and reduced operating margins, which could harm our
business, operating results, financial condition and future
prospects.





5. Many
of our contracts can be terminated by our clients on short notice and in many
cases without penalty. We also generally do not have exclusive arrangements with
our clients or a minimum revenue commitment from our clients, which creates
uncertainty about the volume of services we will provide and the amount of
revenues we will generate from any of our clients.




5




We may
enter into written agreements with one or more clients for our services. We seek
to sign multi-year contracts with our clients, but many of our contracts permit
our clients to terminate the contracts upon short notice. The volume and type of
services we perform for specific clients may vary from year to year,
particularly since in many cases we are not the exclusive provider of
outsourcing services to our clients. A client in one year may not provide the
same level of revenues in a subsequent year. Many of our clients may terminate
their contracts with us before their expiration with no penalties or limited
penalties.





Many of
our clients could terminate their relationship with us or reduce their demand
for our services due to a variety of factors, including factors that are
unpredictable and outside of our control. The services we provide to a client
could be reduced if the client were to change its outsourcing strategy. Clients
may move more market research functions in-house, to an affiliated outsourcing
provider or to one of our competitors. Clients may reduce spending on
outsourcing services due to changing economic conditions or financial challenges
or political or public relations pressures to reduce or eliminate offshore
outsourcing of business processes. If our clients are not successful or if they
experience any significant decrease in their businesses, the amount of business
they outsource and the prices that they are willing to pay for such services may
be diminished and likely would result in reduced revenues for us.  Any
reduction in revenues would harm our business, negatively affect operating
results and may lead to a decline in the price of our common stock.





6. We
have a limited operating history and our business and future prospects are
difficult to evaluate.





Due to
our limited operating history, especially in Costa Rica, where we consolidated
much of our market research operations in 2002, our business and future
prospects are difficult to evaluate. You should consider the challenges, risks
and uncertainties frequently encountered by early-stage companies using new and
unproven business models in rapidly evolving markets. These challenges include
our ability to:




·
            attract
      and retain clients;





·
            attract and retain key personnel
      and customer management
professionals;





·
            generate sufficient revenues and
      manage costs to maintain
profitability;





·
            manage growth in our operations;
      and





·
            maintain access additional
      capital when required and on reasonable
  terms.





7. Our
operating results may fluctuate significantly and could cause the market price
of our common stock to fall rapidly and without notice.




Our
revenues and operating results are difficult to predict and may fluctuate
significantly from quarter to quarter due to a number of factors,
including:





·the addition or loss of a major client and the volume of services
provided to our major clients;





·the extent to which our services achieve or maintain market acceptance,
which may be affected by political and public relations reactions to offshore
outsourcing;





·our ability to introduce new or enhanced services to our existing and
prospective clients and to attract and retain new clients;





·long sales cycles and fluctuations in sales cycles;




6





· the extent to which we incur expenses in a given period in
anticipation of increased demand in future periods, and the extent to which that
demand materializes;





·changes in our pricing policies or those of our competitors, as well as
increased price competition in general;




·variation in demand for our services and the services or products of our
major clients, particularly clients in the travel and hospitality industry;
and





·the introduction of new or enhanced services by other outsourced service
providers.





Results
of operations in any quarterly or annual period should not be considered
indicative of the results to be expected for any future period. In addition, our
future quarterly and annual operating results may fluctuate and may not meet the
expectations of securities analysts or investors. If this occurs, the trading
price of our common stock could fall substantially, either suddenly or over
time.





8. If we
fail to manage our growth effectively, our business may not
succeed.





We have
expanded significantly since our formation and intend to maintain our growth
focus. However, our growth will place demands on our resources and we cannot be
sure that we will be able to manage our growth effectively. In order to manage
our growth successfully, we must:





·maintain the hiring, training and management necessary to ensure the
quality and responsiveness of our services;





·expand and enhance our administrative and technical infrastructure,
facilities and capacities to accommodate increased call volume and other
customer management demands; and





·continue to improve our management, financial and information systems and
controls.




Continued
growth could place a strain on our management, operations and financial
resources. Our infrastructure, facilities and personnel may not be adequate to
support our future operations or to adapt effectively to future growth. As a
result, we may be unable to manage our growth effectively, in which case our
operating costs may increase at a faster rate than the growth in our revenues,
our margins may decline and we may incur losses.





9. We may
experience significant employee turnover rates in the future and we may be
unable to hire and retain enough sufficiently trained employees to support our
operations, which could harm our business.





The
market research outsourcing industry is very labor intensive and our success
depends on our ability to attract, hire and retain qualified employees. We
compete for qualified personnel with companies in our industry and in other
industries and this competition is increasing in Costa Rica as the outsourcing
industry expands. Our growth requires that we continually hire and train new
personnel. The outsourcing industry, including the customer management services
industry, has traditionally experienced high employee turnover. A significant
increase in the turnover rate among our employees would increase our recruiting
and training costs and decrease operating efficiency and productivity, and could
lead to a decline in demand for our services. If this were to occur, we would be
unable to service our clients effectively and this would reduce our ability to
continue our growth and operate profitably. We may be unable to continue to
recruit, hire, train and retain a sufficient labor force of qualified employees
to execute our growth strategy or meet the needs of our business.





10. Our
senior management team is important to our continued success and the loss of
members of senior management could negatively affect our
operations.




7





The loss
of the services of Lou Persico, our Chief Executive Officer, David Lieberman,
our Chief Financial Officer or Joseph Harmon, our Chief Operating Officer, could
seriously impair our ability to continue to manage and expand our business. Our
success depends on the continued service and performance of our executive
officers, and we cannot guarantee that we will be able to retain these
individuals.




11. Our
facilities are at risk of damage by earthquakes and other natural
disasters.





We
currently rely on the availability and condition of our Costa Rican facilities
to provide service and support to our clients. These facilities are located in a
region that is susceptible to earthquakes and other natural disasters, which may
increase the risk of disruption of information systems and telephone service for
sustained periods. Damage or destruction that interrupts our provision of
outsourcing services could damage our relationship with our clients and may
cause us to incur substantial additional expense to repair or replace damaged
equipment or facilities. While we currently have commercial liability insurance,
our insurance coverage may not be sufficient. Furthermore, we may be unable to
secure such insurance coverage or to secure such insurance coverage at premiums
acceptable to us in the future. Prolonged disruption of our services as a result
of natural disasters may entitle our clients to terminate their contracts with
us.




12. Our
operations could suffer from telecommunications or technology downtime,
disruptions or increased costs.





We are
highly dependent on our computer and telecommunications equipment and software
systems. In the normal course of our business, we must record and process
significant amounts of data quickly and accurately to access, maintain and
expand the databases we use for our services. We are also dependent on
continuous availability of voice and electronic communication with
customers.





If we
experience interruptions of our telecommunications network with our clients, we
may experience data loss or a reduction in revenues. These disruptions could be
the result of errors by our vendors, clients or third parties, electronic or
physical attacks by persons seeking to disrupt our operations, or the operations
of our vendors, clients or others. A significant interruption of service could
have a negative impact on our reputation and could lead our present and
potential clients not to use our services. The temporary or permanent loss of
equipment or systems through casualty or operating malfunction could reduce our
revenues and harm our business.





13. Our
customer base is concentrated and the loss of one or more of our key customers
would harm our business.





Historically,
a majority of our sales have been to relatively few customers. We expect that
sales to relatively few customers will continue to account for a significant
percentage of our net sales for the foreseeable future. The loss of, or any
reduction in interview hours from, a significant customer would harm our
business.





We
derived approximately 72.9% of our total net revenues from 10 clients in the
year ended December 31, 2008. If we were to lose, or if there were a material
reduction in business from, one or more of these clients or our other
significant clients, our net revenues might decline substantially.





Our ten
largest clients accounted for $13,160,656 of revenues, or approximately 72.9%,
of our total net revenues for the year ended December 31, 2008. If we lose
business from any of our top ten clients, our net revenues may decline
substantially.





14. We
could cause disruptions to our clients' business from inadequate service, and
our insurance coverage may be inadequate to cover this risk.




8





Most of
our contracts with our clients contain service level and performance
requirements, including requirements relating to the timing and quality of
responses to market research. The quality of services that we provide is
measured by quality assurance ratings, which are based in part on the results of
customer satisfaction and direct monitoring of interactions between our
professionals and customers. Failures to meet service requirements of a client
could disrupt the client's business and result in a reduction in revenues or a
claim for damages against us. For example, some of our agreements have standards
for service that, if not met by us, result in lower payments to us. In addition,
because many of our projects are business-critical projects for our clients, a
failure or inability to meet a client's expectations could seriously damage our
reputation and affect our ability to attract new business.




Under our
contracts with our major clients and many of our contracts with other clients,
our liability for breaching our obligations is generally limited to actual
damages up to a portion of the fees paid to us. To the extent that our contracts
contain limitations on liability, such contracts may be unenforceable or
otherwise may not protect us from liability for damages. While we maintain
general liability insurance coverage, this coverage may be inadequate to cover
one or more large claims, and our insurer may deny coverage.





15.
Unauthorized disclosure of sensitive or confidential client and customer data,
whether through breach of our computer systems or otherwise, could expose us to
protracted and costly litigation and cause us to lose clients.





We are
typically required to collect and store sensitive data in connection with our
services, including names, addresses and other personal information. If any
person, including any of our employees, penetrates our network security or
otherwise misappropriates sensitive data, we could be subject to liability for
breaching contractual confidentiality provisions or privacy laws. Penetration of
the network security of our data bases could have a negative impact on our
reputation and could lead our present and potential clients to choose other
service providers.





16. We
are subject to extensive laws and regulation that could limit or restrict our
activities and impose financial requirements or limitations on the conduct of
our business.





The
market research and call center industry has become subject to an increasing
amount of federal and state regulation in the past five years. Despite our focus
on outbound market research and a lesser extent inbound call handling, we are
subject to regulations governing communications with consumers due to the
activities we undertake on behalf of our clients to encourage customers to
provide sensitive personal information about themselves. For example, limits on
the transport of personal information across international borders such as those
now in place in the European Union (and proposed elsewhere) may limit our
ability to obtain customer data.





Additional
federal, state, local or international legislation, or changes in regulatory
implementation, could further limit our activities or those of our clients in
the future or significantly increase the cost of regulatory
compliance.





17. Our
ability to raise capital in the future, if and when needed, may be limited, and
could prevent us from executing our business strategy. The sale of additional
equity securities would result in further dilution to our
stockholders.





We
believe that our existing cash and cash equivalents will be sufficient to
support our anticipated cash needs through 2009. However, the timing and amount
of our working capital and capital expenditure requirements may vary
significantly depending on numerous factors, including:





·market acceptance of and demand for our offshore outsourced services
which may be affected by political and public relations reactions to offshore
outsourcing;




9




·access to and availability of sufficient management, technical, marketing
and financial personnel;





·the need to enhance our operating infrastructure;





·the continued development of new or enhanced services and hosted
designs;





·the need to adapt to changing technologies and technical
requirements;





·the existence of opportunities to acquire businesses or technologies, or
opportunities for expansion; and





·increased competition and competitive pressures.





If our
capital resources are insufficient to satisfy our liquidity requirements, we may
seek to sell additional equity or debt securities or obtain other debt
financing. The sale of additional equity securities or convertible debt
securities would result in additional dilution to our stockholders. Additional
debt would result in increased expenses and could result in covenants that
restrict our operations. We may be unable to secure financing in sufficient
amounts or on terms acceptable to us, if at all, in which case we may not have
the funds necessary to finance our ongoing capital requirements or execute our
business strategy.





Risk
Related to Doing Business Offshore





We may
face wage inflation and additional competition offshore for our professionals,
which could increase the cost of qualified workers and the amount of worker
turnover.





Fees for
our contract workers offshore could increase at a faster rate than for U.S.
employees, which could result in increased costs to employ our outsourcing
center professionals. We also are faced with competition in Costa Rica for
outsourcing center professionals, and we expect this competition to increase as
additional outsourcing companies enter the market and expand their operations.
In particular, there may be limited availability of qualified interviewers and
both middle and upper management candidates. We have benefited from an excess of
supply over demand for college graduates in Costa Rica. If this favorable
imbalance changes due to increased competition, it could affect the availability
or cost of qualified professionals, who are critical to our performance. This
could increase our costs and turnover rates.





Risk
Relating to our Industry





The
marketing research industry is vulnerable to general economic conditions, which
may affect our revenues.




Companies
served by our clients treat all or a portion of their marketing research
expenditures as discretionary.  As general economic conditions worsen
and these companies seek to control variable costs, research projects for which
we have been engaged to collect data may be delayed or cancelled, and new
project bookings may slow. As a result, our growth rate and revenues may
decline.





Risks
Relating to our Stock and Financing Arrangements:





1. The
overhang effect from the resale of the selling shareholders securities on the
market could result in lower stock prices when converted.





Overhang
can translate into a potential decrease in DSEN's market price per share. If the
share volume cannot absorb the sale of these shares, DSEN's market price per
share will likely decrease. As the market price decreases, each subsequent
conversion will require a larger quantity of shares.




10





2. Short
selling common stock by warrant and convertible note holders may drive down the
market price of DSEN's stock.




The
warrant and convertible note holders may sell shares of DSEN's common stock on
the market before exercising the warrant or converting the notes. The stock is
usually offered at or below market since the warrant and debenture holders may
receive stock at a discount to market (depending on the then prevailing market
price as conversion prices and warrant exercise prices are fixed). Once the sale
is completed the holders exercise or convert a like dollar amount of shares. If
the stock sale lowered the market price, upon exercise or conversion, the
holders would receive a greater number of shares than they would have absent the
short sale. This pattern may result in the spiraling down of DSEN's stock's
market price.





3. DSEN's
common stock is subject to the "Penny Stock" rules of the SEC and the trading
market in DSEN's securities is limited, which makes transactions in DSEN's stock
cumbersome and may reduce the value of an investment in DSEN's
stock.





DSEN's
shares of Common Stock are "penny stocks" as defined in the Exchange Act, which
are quoted in the over the counter market on the OTC Bulletin Board. As a
result, an investor may find it more difficult to dispose of or obtain accurate
quotations as to the price of the shares of the Common Stock being registered
hereby. In addition, the "penny stock" rules adopted by the Commission under the
Exchange Act subject the sale of the shares of the Common Stock to certain
regulations which impose sales practice requirements on broker dealers. For
example, broker dealers selling such securities must, prior to effecting the
transaction, provide their customers with a document that discloses the risks of
investing in such securities. Included in this document are the
following:





·The bid and offer price quotes for the penny stock, and the number of
shares to which the quoted prices apply.





·The brokerage companies compensation for the trade.




·The compensation received by the brokerages firm's salesperson for the
trade.





In
addition, the brokerage firm must send the investor:





·Monthly account statement that gives an estimate of the value of each
penny stock in your account.





·A written statement of your financial situation and investment
goals.





Legal
remedies, which may be available to you, are as follows:





·If penny stocks are sold to you in violation of your rights listed above,
or other federal or state securities laws, you may be able to cancel your
purchase and get your money back.





·If the stocks are sold in a fraudulent manner, you may be able to sue the
persons and firms that caused the fraud for damages.





·If you have signed an arbitration agreement, however, you may have to
pursue your claim through arbitration.





If the
person purchasing the securities is someone other than an accredited investor or
an established customer of the broker dealer, the broker dealer must also
approve the potential customer's account by obtaining information concerning the
customer's financial situation, investment experience and investment objectives.
The broker dealer must also make a determination whether the transaction is
suitable for the customer and whether the customer has sufficient knowledge and
experience in financial matters to be reasonably expected to be capable of
evaluating the risk of transactions in such securities. Accordingly, the
Commission's rules may limit the number of potential purchasers of the shares of
the Common Stock.




11





4. Resale
restrictions on transferring "penny stocks" are sometimes imposed by some
states, which may make transactions in our stock cumbersome and may reduce the
value of an investment in DSEN’s stock.





Various
state securities laws impose restrictions on transferring "penny stocks" and as
a result, investors in the Common Stock may have their ability to sell their
shares of the Common Stock impaired. For example, the Utah Securities Commission
prohibits brokers from soliciting buyers for "penny stocks", which makes selling
them more difficult.





5. DSEN's
absence of dividends or the ability to pay them places a limitation on any
investor’s return.





DSEN
anticipates that for the foreseeable future, earnings will be retained for the
development of its business. Accordingly, DSEN does not anticipate paying
dividends on the common stock in the foreseeable future. The payment of future
dividends will be at the sole discretion of DSEN's Board of Directors and will
depend on DSEN's general business condition.




6. The
market price for our common stock may be volatile, making an investment in DSEN
risky.





The
market price for our common stock has been and is likely to continue to be
highly volatile and subject to wide fluctuations in response to factors
including the following:





·actual or anticipated fluctuations in our quarterly operating
results,





·announcements of new services by us or our competitors,





·changes in the economic performance or market valuations of other
companies involved in call center services or market research
services,




·announcements by our competitors of significant acquisitions, new
strategic alliances, joint ventures or capital commitments,





·additions or departures of key personnel,





·potential litigation, or





·economic conditions in the outsourced call center market.





7. We
have entered into a senior secured credit arrangement which, if in default,
could cause the lender to foreclose on our assets.





On
November 7, 2008, we entered into an Account Purchase Agreement (“Agreement”)
with Wells Fargo Bank, National Association (“Wells Fargo”) pursuant to which
Wells Fargo has agreed to purchase certain accounts receivable from we from time
to time, up to $4.5 million, at a price equal to the face value of each such
receivable less a discount equal to .5% plus the then existing prime rate, plus
three percent plus other fees and charges. Any accounts sold to Wells Fargo for
which payment is not received within the proscribed time periods in the
Agreement shall be subject to repurchase by we. To secure this repurchase and
other obligations of we thereunder, we granted a first lien on all of its assets
to Wells Fargo. In connection therewith, the Longview Fund and Alpha Capital
Anstalt agreed to subordinate their security interests in our collateral to the
security interests of Wells Fargo.




12





Accordingly,
if we were to default under this arrangement, Wells Fargo would be able to
foreclose on all of our assets, possibly leaving us with no operating business
or assets.





ITEM 2.
DESCRIPTION OF PROPERTY.


The
principal office of 5,102 square feet of office space at 145 State College
Blvd., Ste. 350,   Brea California 92821 was sub-leased in July, 2007. Net
rent expense recorded during 2008 and 2007 was $7,502 and $54,030,
respectively.





The
address of the Costa Rica facility is: Datascension Mall San Pedro, Quatro
Piso, antiguo Planet Mall, San Pedro, San Jose, Costa Rica, where the Company
leases approximately 42,831 square feet. The Company also leases approximately
22,368 square feet in Limon, Costa Rica which is cancellable on 30 days’ prior
notice.  The details on the leases, which are all cancellable on 90
days’ prior notice, comprising the new Costa Rica facility (described
below) are as follows:




Floor
                                        
                                        Under Name
                                        
                                        Monthly
                                          Amount
                                        
                                        Starting
                                          date
                                        
                                        Ending
                                          DateApartments
                                        
                                        Marcas
      La Union S.A.
                                        
                                        $
                                        8,700
                                        
                                        1-Nov-06
                                        
                                        30-Oct-2011Rent
      3th Floor
                                        
                                        Arrendamientos
      Capitulo Zeta
                                        
                                        $
                                        2,766
                                        
                                        15-Mar-08
                                        
                                        15-Mar-2011Rent
      Ciber City
                                        
                                        Arrendadora
      Coturno S.A
                                        
                                        $
                                        2,685
                                        
                                        15-May-06
                                        
                                        15-May-2013Rent
      Planet Mall
                                        
                                        Increible
      Universo M.O.S.A
                                        
                                        $
                                        20,610
                                        
                                        1-May-06
                                        
                                        1-May-2013$
                                        34,761




DSEN is
of the opinion that the current locations it uses are suitable, adequate, and in
reasonably good condition for current as well as for future operations and
business.





ITEM 3.
LEGAL PROCEEDINGS.





DSEN is
from time to time involved in litigation incident to the conduct of its
business. Certain litigation with third parties and present and former employees
of DSEN is routine and incidental, such litigation can result in large monetary
awards for compensatory or punitive damages.





DSEN is
not currently 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 the Company. To the knowledge of
management, no director, executive officer or affiliate of the Company, any
owner of record or beneficially of more than 5% of the Company's common stock is
a party adverse to the Company or has a material interest adverse to the Company
in any proceeding. The below referenced case was settled in the first quarter of
2007.





ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





No
matters were submitted to a vote of security holders during the fourth quarter
of the fiscal year ended December 31, 2008.





PART
II





ITEM 5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS.





Market
Information




13





Datascension,
Inc., Common Stock is traded on the OTC Bulletin Board (OTCBB) under the symbol
"DSEN". The following table sets forth the high and low bid quotations for the
Common Stock for the periods indicated. These quotations reflect prices between
dealers, do not include retail mark-ups, markdowns, and commissions and may not
necessarily represent actual transactions. These bid quotations have not been
adjusted retroactively by any stock split. As of December 31, 2008, DSEN had
approximately 1,175 shareholders of record.




Period
                            
                            High
                            
                            
                            LowCalendar
      Year 2007March
      31, 2007
                            
                            
                            0.65
                            
                            
                            
                            0.36June
      30, 2007
                            
                            
                            0.85
                            
                            
                            
                            0.35September
      30, 2007
                            
                            
                            0.90
                            
                            
                            
                            0.45December
      31, 2007
                            
                            
                            0.69
                            
                            
                            
                            0.26Calendar
      Year 2008March
      31, 2008
                            
                            
                            0.63
                            
                            
                            
                            0.30June
      30, 2008
                            
                            
                            0.30
                            
                            
                            
                            0.09September
      30, 2008
                            
                            
                            0.09
                            
                            
                            
                            0.06December
      31, 2008
                            
                            
                            0.11
                            
                            
                            
                            0.01





These
quotations do not necessarily reflect actual transactions, retail mark-ups,
mark-downs or commissions. The transactions include inter-dealer
transactions.





These
quotations reflect inter dealer prices, without retail mark-up, markdown or
commission, and may not necessarily represent actual transactions. These bid
quotations have not been adjusted retroactively by any stock split.





Shareholders
of Record and Outstanding Shares





The
authorized capital stock of DSEN consists of 200,000,000 shares of common stock
with a par value of $.001 per share and 20,000,000 shares of preferred stock
with a par value of $.001 per share.





As of
December 31, 2008, DSEN had 21,307,361 shares of its $.001 par value common
voting stock issued and outstanding which are held by 1,175 shareholders of
record. As of December 31, 2008, there were 505,900 shares of Series B Preferred
Stock outstanding.   DSEN has not paid any dividends to date. In
addition, it does not anticipate paying dividends in the immediate foreseeable
future. The Board of Directors of the Company will review its dividend policy
from time to time to determine the desirability and feasibility of paying
dividends after giving consideration to the Company's earnings, financial
condition, capital requirements and such other factors as the board may deem
relevant.





Reverse
Split





On
November 4, 2004, Datascension Inc., announced its board of directors authorized
a reverse split of the company's common stock at a ratio of
one-for-ten.  The reverse split, which was approved by the Company's
stockholders at the last shareholder meeting, took effect on November 5, 2004.
Each ten shares of the Company's issued and outstanding common stock were
automatically converted into one share of common stock. No fractional shares
were issued. Holders of fractional shares received shares rounded to the nearest
whole share.  The reverse split affected all of stockholders uniformly
and did not affect any stockholder's percentage ownership interests in the
Company or proportionate voting power.




14




Preferred
Shares
 
 The
Series B preferred shares pursuant to the certificate of designation were to be
converted two years after issuance.  To date this conversion has not
been completed.
 
 Securities
Authorized for Issuance under Equity Compensation Plans
 
 No
securities were issued under an equity compensation plan in 2008.
 
 Recent
Sales of Unregistered Securities
 
 During
the fiscal year ended December 31, 2008, the Company issued securities using the
exemptions available under the Securities Act of 1933 including unregistered
sales made pursuant to Section 4(2) of the Securities Act of 1933 as
follows:
 
 221,389
shares of common stock were issued to settle $77,826 of accrued
interest
 
 200,000
shares of common stock were issued to a consultant as compensation, valued at
$60,000
 
 30,000   shares
of common stock were issued to a director for fees, valued at
$11,700
 
 80,000   shares
of common stock were issued to settle an agreement for services, valued at
$24,000
 
 50,000   stock
options were issued to employees, valued at $15,000
  There
were no other issuances of stock or options other than those mentioned
above.
 
 All of
these transactions were exempt from the registration requirements of the
Securities Act of 1933, as amended, by virtue of the exemptions provided under
section 4(2) was available because:
 
 ·The
transfer or issuance did not involve underwriters, underwriting discounts or
commissions;
 
 ·A
restriction on transfer legend was placed on all certificates
issued;
  ·The
distributions did not involve general solicitation or advertising;
and,
 
 ·The
distributions were made only to insiders, accredited investors or investors who
were sophisticated enough to evaluate the risks of the investment. Each
shareholder was given access to all information about our business and the
opportunity to ask questions and receive answers about our business from our
management prior to making any investment decision.
 
 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
 Introduction
 
 The
following discussion and analysis should be read in conjunction with our
accompanying financial statements and the notes to those financial statements
included elsewhere in this Annual Report. The following discussion includes
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in these forward-
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
Annual Report.
  15


Overview





Revenue
Recognition.





We
recognize revenues when survey data is delivered to 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.





Plan of
Operation





(a) Cash
Requirements





Estimated
future cash requirements





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 DSEN’s current or past management or who come to the
attention of the Company through brokers, financial institutions and other
intermediaries. DSEN’s access to capital is always dependent upon general
financial market conditions. DSEN's capital resources are not anticipated to
change materially in 2009.





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 in that it has a
receivables purchase line with Wells Fargo.





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.


16


DSEN has
a contractual restriction on its ability to incur debt. Pursuant to subscription
agreements for certain of its fundings, DSEN cannot enter into any further
equity or convertible debt financings, without consent, until the date the notes
has been fully paid.





A result
of this restriction is that any additional funds needed with most likely have to
be provided by the current note holders or would require their
consent.


In the
event that we are required to repay the balance of these notes in cash on
demand, we would be forced to seek additional funding which would probably be at
a large discount. If we were unable to obtain the additional funding, we may be
forced to close down operations (see risk factors for addition
discussion).





Expected
Significant Changes in the Number of Contract Workers





DSEN does
not expect any significant change in the number of contract workers over the
next 12 months of operations. As noted previously, DSEN currently coordinates
most operations using part time employees, consultants and contract
labor.   In the next twelve months, the Company's focus is on
expanding our client base to meet or exceed the capacity that our new space
provides us, while also seeking a strategic acquisition.





Managements
Discussion and Analysis of Financial Condition and Results of
Operations




For the
calendar year ended December 31, 2008, the Company generated $18,056,808 in
revenues as compared to $20,260,054 during the calendar year ended December 31,
2007, a decrease of $2,203,246 or 10.9%. For the calendar year ended December
31, 2008, the Company’s cost of goods sold was $15,955,766 as compared to
$17,780,061 during the calendar year ended December 31, 2007, a decrease of
$1,824,295 or 10.2 %. For the calendar year ended December, 31, 2008, the
Company generated a gross profit of $2,101,042 compared to $2,479,993 for the
calendar year ended December 31, 2007, a decrease of $378,951or 15.2%. The
decrease in revenue and  in cost of goods sold resulted primarily in
the loss of Orbis, Inc. a “cost plus” client in May, 2008.   Cost
plus business generates a lower gross profit margin; therefore, a greater
reduction in cost of sales as a percentage of the total business when this
business is lost. For the calendar year ended December 31, 2008, the Company
increased its working capital position by $77,012 from $(1,446,455) as of
December 31, 2007 to $ (1,369,443) as of December 31, 2008.





Analysis
of the calendar year ended December 31, 2008 compared to the calendar year ended
December 31, 2007.





The
Company had a net loss of $6,503,644 for the calendar year ended December 31,
2008 compared to a net loss of $907,311 for the calendar year ended December 31,
2007, an increase in net loss of $5,596,333. The increase in net loss was
attributable to the write-off of Goodwill and fixed assets.  In
addition, the Company’s business decreased due to the loss of a significant
customer and the increase in additional senior personal.





Total
expenses increased to $3,184,560 for the calendar year ended December 31, 2008
from $2,387,671 for the calendar year ended December 31, 2007, an increase of
$796,889. The increase in expenses related mainly to the hiring of a full time
CFO and a Vice President of Inbound Sales, increased costs related to increasing
the number of members of the Board of Directors along with increased compliance
and audit costs related to the filing of amendments filed with the SEC and
additional marketing costs.





Depreciation
expense for the calendar year ended December 31, 2008 was $381,245 compared to
$215,311 for the calendar year ended December 31, 2007, an increase of
$165,934.


17


Interest
expense for the calendar year ended December 31, 2008 was $1,087,403 compared to
$1,006,815 for the calendar year ended December 31, 2007 an increase of
$80,588.





Liquidity
and Capital Resources





Liquidity





For the
calendar year ended December 31, 2008, the Company increased its working capital
position by $77,012 from $(1,446,455) as of December 31, 2007 to $(1,369,443) as
of December 31, 2008 as a result of certain debtholders extending the maturity
date of notes payable from the Company to them.





Management
believes that its revenues from operations and collections on accounts
receivable will meet its minimum general and administrative cost requirements
and provide the basic liquidity DSEN needs to operate at current levels over the
next twelve months.





Wells
Fargo





On
November 7, 2008, the Company entered into an Account Purchase Agreement
(“Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”)
pursuant to which Wells Fargo agreed to purchase certain accounts receivable
from the Company from time to time, up to $4.5 million, at a price equal to the
face value of each such receivable less a discount equal to .5% plus the then
existing prime rate, plus three percent plus other fees and charges. Any
accounts sold to Wells Fargo for which payment is not received within the
proscribed time periods in the Agreement shall be subject to repurchase by the
Company. To secure this repurchase and other obligations of the Company
thereunder, the Company granted a first lien on all of its assets to Wells
Fargo. In connection therewith, the Longview Fund and Alpha Capital Anstalt
agreed to subordinate their security interests in the Company’s collateral to
the security interests of Wells Fargo.





The short
term source of liquidity is from operations. Any long term needs that are above
and beyond what is derived from operations would come from outside sources. The
long term needs and possible sources of funds are not identified at this time.
If required, DSEN could stop growing and hold operations at the current level
without any need for additional funding. However, additional funding will be
required to execute its business plan of expanding the Costa Rica operations in
order to expand the inbound call center initiative above what was accomplished
in 2008 in terms of utilizing capacity at its new facility. The balance of the
funding required to execute DSEN's planning will need to be obtained from other
sources such as debt or the sale of additional equity.




The call
center initiative is as follows: we currently utilize the majority of our
interviewing stations for no more than six hours per day. The majority of those
six hour shifts are during the early afternoon/evening. We are pursuing day time
work.





On
December 31, 2008 DSEN had total assets of $3,141,150 compared to $9,563,879 on
December 31, 2007, a decrease of $6,422,729. The decrease in assets is the
result of the write off of goodwill in the amount of $1,692,782, the net write
off of fixed assets $2,606,644 and the sale of receivables to Wells Fargo
Business Credit.  DSEN had a total stockholders' equity (deficit) of
$(3,775,137) on December 31, 2008 compared to $3,365,963 on December 31, 2007, a
decrease in equity of $7,141,100.




Capital
Resources





The
Registrant's capital resources are comprised primarily of private investors who
are either existing contacts of Datascension's management or who come to the
attention of the Registrant through brokers, financial institutions and other
intermediaries. Datascension's access to capital is always dependent upon
general financial market conditions, especially those which pertain to venture
capital situations.


18


Material
Commitments for Capital Expenditures.





The
Company has made no material commitments for future expansion. When potential
expansion or the need for expansion arises, management reviews the potential of
each property as its leases come up for renewal and makes a decision whether or
not to renew each lease or expand the current facilities, in light of the
Company's business planning at that time.





The
Company has no agreements with management, investors, shareholders or anyone
else respecting additional financing at this time. Because of the nature of the
Company’s business, there are no trends in the nature of its capital resources
which could be considered predictable.





Inflation





The
Company's results of operations have not been affected by inflation; however,
 management does expect inflation may have a material impact on
its operations in the future.





Off-Balance
Sheet Arrangements.





The
company currently does not have any off-balance sheet arrangements.





Safe
Harbor





The
discussions of the results of operations and financial condition of the Company
should be read in conjunction with the financial statements and notes pertaining
to them that appear elsewhere in this Form 10-K. Statements made in this Form
10-K that are not historical or current facts are "forward- looking statements"
made pursuant to the safe harbor provisions of Section 27A of the Securities Act
of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934.
These statements often can be identified by the use of terms such as "may,"
"will," "expect," "believe," "anticipate," "estimate," "approximate" or
"continue," or the negative thereof. The Company intends that such
forward-looking statements be subject to the safe harbors for such statements.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond the control of the Company that could
cause actual results and events to differ materially from historical results of
operations and events and those presently anticipated or projected. These
factors include adverse economic conditions, risks of foreign operation, entry
of new and stronger competitors, inadequate capital and unexpected costs. The
Company disclaims any obligation subsequently to revise any forward-looking
statements to reflect events or circumstances after the date of such statement
or to reflect the occurrence of anticipated or unanticipated
events.




19


ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





TABLE OF
CONTENTS





PAGEINDEPENDENT
      AUDITORS' REPORT:Independent
      Auditors Reports - 2007 & 2008
                F-1FINANCIAL
      STATEMENTS:Balance
      Sheets
                F-2Statements
      of Operations
                F-3Statement
      of Changes in Stockholders' (Deficit) Equity
                F-4Statements
      of Cash Flows
                F-6NOTES
      TO FINANCIAL STATEMENTS:
                F-7 to F-19


20


KBL,
LLP


CERTIFIED
PUBLIC ACCOUNTANTS & ADVISORS


REPORT
OF REGISTERED INDEPENDENT AUDITORS





To the
Board of Directors


Datascension,
Inc.


Las
Vegas, Nevada





We have
audited the accompanying balance sheet of Datascension, Inc., as of December 31,
2008, and the related consolidated statements of operations, changes in
stockholders' (deficit) equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.





We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Datascension, Inc. as of December
31, 2008 , and the results of its operations and cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.





KBL,
LLP


April 9,
2009








Larry
O'Donnell, CPA, P.C.


Telephone
      (303)745-4545
              2228
      South Fraser StreetFax
      (303)369-9384
              Unit
      1e-mail  larryodonnelcpa@msn.com
              Aurora,
      Colorado 80014www.larryodonnellcpa.com





Report
of Independent Registered Public Accounting Firm





To the
Board of Directors


Datascension,
Inc.


Brea,
California





I have
audited the accompanying balance sheet of Datascension, Inc., as of December 31,
2007, and the related statements of loss, changes in stockholders’ equity, and
cash flows for the year then ended.  These financial statements are
the responsibility of the Company’s management.  My responsibility is
to express an opinion on these financial statements based on my
audit.





I
conducted my audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  I believe that my audit provides a reasonable basis for
my opinion.





In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Datascension, Inc. as of December
31, 2007, and the results of its operations and cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.





Larry
O’Donnell, CPA, P.C.


April 14,
2008


F-1


DATASCENSION,
INC.


CONSOLIDATED
BALANCE SHEET




DATASCENSION,
INC.


BALANCE
SHEET


AT
DECEMBER 31, 2008





12/31/2008
                                                      
                                                      
                                                      12/31/2007AUDITED
                                                      
                                                      
                                                      AUDITEDASSETSCurrent
      assets:Cash
                                                      
                                                      $
                                                      73,713
                                                      
                                                      
                                                      $
                                                      46,930Accounts
      receivable
                                                      
                                                      
                                                      1,303,960
                                                      
                                                      
                                                      
                                                      3,071,764Receivable
      due from related party
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,530,124Prepaid
      expenses
                                                      
                                                      
                                                      14,322
                                                      
                                                      
                                                      
                                                      56,666Total
      current assets
                                                      
                                                      
                                                      1,391,995
                                                      
                                                      
                                                      
                                                      4,705,484Property
      and equipment, net of accumulated depreciation of $787,285 and $1,083,299,
      respectively
                                                      
                                                      
                                                      1,633,139
                                                      
                                                      
                                                      
                                                      3,146,788Other
      assets:Website,
      net of amortization
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      3,207Deposits
                                                      
                                                      
                                                      116,016
                                                      
                                                      
                                                      
                                                      15,618Goodwill
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,692,782Total
      other assets
                                                      
                                                      
                                                      116,016
                                                      
                                                      
                                                      
                                                      1,711,607Total
      assets
                                                      
                                                      $
                                                      3,141,150
                                                      
                                                      
                                                      $
                                                      9,563,879LIABILITIES
      AND STOCKHOLDERS' (DEFICIT) EQUITYCurrent
      liabilities:Accounts
      payable
                                                      
                                                      $
                                                      490,845
                                                      
                                                      
                                                      $
                                                      316,333Accrued
      expenses
                                                      
                                                      
                                                      2,197,641
                                                      
                                                      
                                                      
                                                      491,603Short
      term notes payable
                                                      
                                                      
                                                      17,464
                                                      
                                                      
                                                      
                                                      35,499Loan
      payable to Comerica Bank
                                                      
                                                      
                                                      0
                                                      
                                                      
                                                      
                                                      1,727,688Current
      portion of long term debt
                                                      
                                                      
                                                      55,488
                                                      
                                                      
                                                      
                                                      3,580,816Total
      current liabilities
                                                      
                                                      
                                                      2,761,438
                                                      
                                                      
                                                      
                                                      6,151,939Long term debt , net of current
      portion
                                                      
                                                      
                                                      4,154,849
                                                      
                                                      
                                                      
                                                      45,977Total
      liabilities
                                                      
                                                      
                                                      6,916,287
                                                      
                                                      
                                                      
                                                      6,197,916Stockholders'
      (deficit) equity:Preferred
      stock, $.001 par value, 20,000,000 shares authorized, 505,900 of preferred
      stock Series B issued and outstanding
                                                      
                                                      
                                                      506
                                                      
                                                      
                                                      
                                                      506Additional
      paid-in capital- preferred Series B
                                                      
                                                      
                                                      481,994
                                                      
                                                      
                                                      
                                                      481,994Preferred
      stock Series C
                                                      
                                                      
                                                      1Additional
      paid-in capital-preferred Series C
                                                      
                                                      
                                                      14,999Common
      stock, $0.001 par value, 200,000,000 shares authorized, 21,307,361and
      35,775,972 shares issued and outstanding at December 31, 2008 and December
      31, 2007 Respectively
                                                      
                                                      
                                                      21,307
                                                      
                                                      
                                                      
                                                      35,776Additional
      paid-in capital-common stock
                                                      
                                                      
                                                      16,361,777
                                                      
                                                      
                                                      
                                                      16,188,782Treasury
      stock, at cost, 95,833 shares
                                                      
                                                      
                                                      (134,388
                                                      )
                                                      
                                                      
                                                      (134,388
                                                      )Accumulated
      deficit
                                                      
                                                      
                                                      (20,521,333
                                                      )
                                                      
                                                      
                                                      (13,206,707
                                                      )Total
      stockholders'(deficit) equity
                                                      
                                                      
                                                      (3,775,137
                                                      )
                                                      
                                                      
                                                      3,365,963Total
      liabilities and stockholders' (deficit) equity
                                                      
                                                      $
                                                      3,141,150
                                                      
                                                      
                                                      $
                                                      9,563,879




See
accompanying notes.


F-2


DATASCENSION
INC.


CONSOLIDATED
STATEMENT OF OPERATIONS





DATASCENSION,
INC.


CONSOLIDATED
STATEMENT OF OPERATIONS




For the year
                                                
                                                
                                                For the yearended
                                                
                                                
                                                ended12/31/2008
                                                
                                                
                                                12/31/2007Audited
                                                
                                                
                                                AuditedRevenue
                                                
                                                $
                                                18,056,808
                                                
                                                
                                                $
                                                20,260,054Cost
      of goods sold
                                                
                                                
                                                15,955,766
                                                
                                                
                                                
                                                17,780,061Gross
      profit
                                                
                                                
                                                2,101,042
                                                
                                                
                                                
                                                2,479,993Expenses:Selling,
      general and administrative
                                                
                                                
                                                2,803,315
                                                
                                                
                                                
                                                2,172,360Depreciation
      and amortization
                                                
                                                
                                                381,245
                                                
                                                
                                                
                                                215,311Total
      expenses
                                                
                                                
                                                3,184,560
                                                
                                                
                                                
                                                2,387,671Operating
      (loss) income
                                                
                                                
                                                (1,083,518
                                                )
                                                
                                                
                                                92,322Other
      (expense) income :Loss
      on write-off of goodwill
                                                
                                                
                                                (1,692,782
                                                )
                                                
                                                
                                                -Loss
      on write-off of property and equipment
                                                
                                                
                                                (2,606,644
                                                )Loss
      on write-off of website assets
                                                
                                                
                                                (3,207
                                                )Loss
      on exiting non-cancellable operating lease
                                                
                                                
                                                (41,800
                                                )Other
      income
                                                
                                                
                                                9,420
                                                
                                                
                                                
                                                7,182Interest
      expense
                                                
                                                
                                                (1,087,403
                                                )
                                                
                                                
                                                (1,006,815
                                                )Interest
      income
                                                
                                                
                                                2,290
                                                
                                                
                                                
                                                -Total
      other  (expense) income
                                                
                                                
                                                (5,420,126
                                                )
                                                
                                                
                                                (999,633
                                                )Net
      loss
                                                
                                                $
                                                (6,503,644
                                                )
                                                
                                                $
                                                (907,311
                                                )Basic
      weighted average number of commonshares
      outstanding
                                                
                                                
                                                29,746,947
                                                
                                                
                                                
                                                29,455,007Diluted
      weighted average number of commonshares
      outstanding
                                                
                                                
                                                29,746,947
                                                
                                                
                                                
                                                29,455,007Basic
      net loss per share
                                                
                                                $
                                                (0.22
                                                )
                                                
                                                $
                                                (0.06
                                                )Diluted
      net loss per share
                                                
                                                $
                                                (0.22
                                                )
                                                
                                                $
                                                (0.06
                                                )





See
accompanying notes.


F-3


DATASCENSION,
INC.


CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY


AS OF
DECEMBER 31, 2008





COMMON
                                                      STOCK
                                                      SHARES
                                                    
                                                    
                                                    COMMON
                                                      STOCK
                                                      AMOUNT
                                                    
                                                    
                                                    ADDITIONAL
                                                      PAID-IN
                                                      CAPITAL
                                                    
                                                    
                                                    STOCK
                                                      SHARES
                                                      SERIES
      B
                                                    
                                                    
                                                    PREFERRED
                                                      STOCK
                                                      SERIES
      B
                                                    
                                                    
                                                    ADD
                                                      PAID
      IN
                                                      CAPITAL
                                                    
                                                    
                                                    TREASURY
                                                      STOCK
                                                    
                                                    
                                                    PREFERRED
                                                      STOCK
                                                      SHARES
                                                      SERIES
      C
                                                    
                                                    
                                                    PREFERRED
                                                      STOCK
                                                      SERIES
      B
                                                    
                                                    PREFERRED
      STOCK
      SERIES
                                                      C
      Paid-
                                                      in
                                                      Capital
                                                    
                                                    ACCUMULATED
                                                      (DEFICIT)
                                                    
                                                    
                                                    TOTAL
                                                      EQUITYBALANCE
      AT DECEMBER 31, 2006
                                                    
                                                    
                                                    23,031,547
                                                    
                                                    
                                                    $
                                                    23,032
                                                    
                                                    
                                                    $
                                                    13,150,159
                                                    
                                                    
                                                    
                                                    505,900-
                                                    
                                                    
                                                    $
                                                    506
                                                    
                                                    
                                                    $
                                                    481,994
                                                    
                                                    
                                                    $
                                                    (134,388
                                                    )
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    
                                                    $
                                                    (12,299,396
                                                    )
                                                    
                                                    $
                                                    1,221,907Stock
      issued for services
                                                    
                                                    
                                                    50,000
                                                    
                                                    
                                                    
                                                    50
                                                    
                                                    
                                                    
                                                    18,550
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    18,600Stock
      issued in connection with loan
                                                    
                                                    
                                                    10,000
                                                    
                                                    
                                                    
                                                    10
                                                    
                                                    
                                                    
                                                    4,790
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    4,800Stock
      issued in settlement of debt
                                                    
                                                    
                                                    171,429
                                                    
                                                    
                                                    
                                                    171
                                                    
                                                    
                                                    
                                                    59,829
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    60,000Stock
      issued in settlement of debt and interest
                                                    
                                                    
                                                    9,401,586
                                                    
                                                    
                                                    
                                                    9,402
                                                    
                                                    
                                                    
                                                    2,958,568
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    2,967,970Net
      loss for the year Ended December 31, 2007
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (907,311
                                                    )
                                                    
                                                    
                                                    (907,311
                                                    )Warrants
      exercised
                                                    
                                                    
                                                    3,111,410
                                                    
                                                    
                                                    
                                                    3,111
                                                    
                                                    
                                                    
                                                    (3,114
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (3
                                                    )BALANCE
      AT DECEMBER 31, 2007 as originally reported
                                                    
                                                    
                                                    35,775,972
                                                    
                                                    
                                                    
                                                    35,776
                                                    
                                                    
                                                    
                                                    16,188,782
                                                    
                                                    
                                                    
                                                    505,900
                                                    
                                                    
                                                    
                                                    506
                                                    
                                                    
                                                    
                                                    481,994
                                                    
                                                    
                                                    
                                                    (134,388
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    
                                                    (13,206,707
                                                    )
                                                    
                                                    
                                                    3,365,963Correction
      of prior years’ financial statements to reflect proper consolidation of
      the subsidiary’s balance sheet and elimination of parent entity investment
      in that subsidiary
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (810,892
                                                    )
                                                    
                                                    
                                                    (810,892
                                                    )BALANCE
      AT DECEMBER 31, 2007  ,as restated
                                                    
                                                    
                                                    35,775,972
                                                    
                                                    
                                                    
                                                    35,776
                                                    
                                                    
                                                    
                                                    16,188,782
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    506
                                                    
                                                    
                                                    
                                                    481,994
                                                    
                                                    
                                                    
                                                    (134,388
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    
                                                    (14,017,689
                                                    )
                                                    
                                                    
                                                    2,554,981
                                                    )Stock
      issued in settlement of interest
                                                    
                                                    
                                                    221,389
                                                    
                                                    
                                                    
                                                    221
                                                    
                                                    
                                                    
                                                    77,605
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    77,826Stock
      issued for services
                                                    
                                                    
                                                    310,000
                                                    
                                                    
                                                    
                                                    310
                                                    
                                                    
                                                    
                                                    95,390
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    95,700Stock
      converted into Series C Preferred Stock
                                                    
                                                    
                                                    (15,000,000
                                                    )
                                                    
                                                    
                                                    (15,000
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    1,000
                                                    
                                                    
                                                    
                                                    1
                                                    
                                                    14,999Net
      loss for the year Ended December 31, 2008
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (6,503,644
                                                    )
                                                    
                                                    
                                                    (6,503,644
                                                    )BALANCE
      AT DECEMBER 31, 2008
                                                    
                                                    
                                                    21,307,361
                                                    
                                                    
                                                    
                                                    21,307
                                                    
                                                    
                                                    
                                                    16,361,777
                                                    
                                                    
                                                    
                                                    505,900
                                                    
                                                    
                                                    
                                                    506
                                                    
                                                    
                                                    
                                                    481,994
                                                    
                                                    
                                                    
                                                    (134,388
                                                    )
                                                    
                                                    
                                                    1,000
                                                    
                                                    
                                                    
                                                    1
                                                    
                                                    14,999
                                                    
                                                    
                                                    (20,521,333
                                                    )
                                                    
                                                    
                                                    (3,775,137
                                                    )




See
accompanying notes.


F-4


DATASCENSION,
INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS




For the year
                                                                                            
                                                                                            
                                                                                            For the yearended
                                                                                            
                                                                                            
                                                                                            ended12/31/2008
                                                                                            
                                                                                            
                                                                                            12/31/2007Audited
                                                                                            
                                                                                            
                                                                                            AuditedCash flows
      from operating activities:Net  (loss)
                                                                                            
                                                                                            $
                                                                                            (6,503,644
                                                                                            )
                                                                                            
                                                                                            $
                                                                                            (907,311
                                                                                            )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                                                                                            
                                                                                            
                                                                                            381,245
                                                                                            
                                                                                            
                                                                                            
                                                                                            215,311Loss
      on write off of goodwill
                                                                                            
                                                                                            
                                                                                            1,692,782
                                                                                            
                                                                                            
                                                                                            
                                                                                            -Loss
      on write off of website assets
                                                                                            
                                                                                            
                                                                                            3,207Loss
      on write off of property and equipment
                                                                                            
                                                                                            
                                                                                            2,606,644Issuance
      of common stock for services and debt (cancellation)
                                                                                            
                                                                                            
                                                                                            173,526
                                                                                            
                                                                                            
                                                                                            
                                                                                            (432,338
                                                                                            )Correction
      of prior years financial statements to reflect properConsolidation
      of the subsidiary  balance sheet and the
      eliminationOf
      parent entity investment in that subsidiary
                                                                                            
                                                                                            
                                                                                            (810,982
                                                                                            )(Increase)
      decrease in accounts receivable
                                                                                            
                                                                                            
                                                                                            1,767,804
                                                                                            
                                                                                            
                                                                                            
                                                                                            (666,005
                                                                                            )(Increase)
      decrease in related party receivable
                                                                                            
                                                                                            
                                                                                            1,530,124
                                                                                            
                                                                                            
                                                                                            
                                                                                            (1,530,124
                                                                                            )(Increase)
      decrease in prepaid expenses
                                                                                            
                                                                                            
                                                                                            42,344
                                                                                            
                                                                                            
                                                                                            
                                                                                            202,960(Increase)
      decrease in deposits
                                                                                            
                                                                                            
                                                                                            (100,398
                                                                                            )
                                                                                            
                                                                                            
                                                                                            26,131Increase
      (decrease) in accounts payable
                                                                                            
                                                                                            
                                                                                            174,492
                                                                                            
                                                                                            
                                                                                            
                                                                                            56,678Increase
      (decrease) in accrued expenses
                                                                                            
                                                                                            
                                                                                            1,706,058
                                                                                            
                                                                                            
                                                                                            
                                                                                            36,722Net
      cash used by operating activities
                                                                                            
                                                                                            
                                                                                            2,663,202
                                                                                            
                                                                                            
                                                                                            
                                                                                            (2,997,976
                                                                                            )Cash
      flows from investing activities:Purchase
      of property and equipment
                                                                                            
                                                                                            
                                                                                            1,290,696
                                                                                            
                                                                                            
                                                                                            
                                                                                            226,169Net
      cash used by investing activities
                                                                                            
                                                                                            
                                                                                            1,290,696
                                                                                            
                                                                                            
                                                                                            
                                                                                            226,169Cash
      flows from financing activities:Increase
      (decrease) in short-term notes payable
                                                                                            
                                                                                            
                                                                                            (18,035
                                                                                            )
                                                                                            
                                                                                            
                                                                                            (321,126
                                                                                            )Increase
      (decrease) in loan payable to Comerica Bank
                                                                                            
                                                                                            
                                                                                            (1,727,688
                                                                                            )
                                                                                            
                                                                                            
                                                                                            1,727,688Decrease
      in long term debt
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            (2,231,481
                                                                                            )Proceeds
      of issuance of convertible long term debt
                                                                                            
                                                                                            
                                                                                            400.000
                                                                                            
                                                                                            
                                                                                            
                                                                                            -Issuance
      of common stock
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            3,051,367Net
      cash provided by financing activities
                                                                                            
                                                                                            
                                                                                            (1,345,723
                                                                                            )
                                                                                            
                                                                                            
                                                                                            2,226,448Net
      increase (decrease) in cash
                                                                                            
                                                                                            
                                                                                            26,783
                                                                                            
                                                                                            
                                                                                            
                                                                                            (545,359Balance
      - beginning
                                                                                            
                                                                                            
                                                                                            46,930
                                                                                            
                                                                                            
                                                                                            
                                                                                            592,289Balance
      - ending
                                                                                            
                                                                                            $
                                                                                            73,713
                                                                                            
                                                                                            
                                                                                            $
                                                                                            46,930Interest
      paid
                                                                                            
                                                                                            $
                                                                                            181,168
                                                                                            
                                                                                            
                                                                                            $
                                                                                            184,314Taxes
      paid
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            $
                                                                                            -


F-5


DATASCENSION,
INC.


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 Swiss Technique, 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 is a data
solutions company representing a unique expertise in the collecting, storage,
processing, and interpretation of data. During 2002,
Datascension  expanded operations into Costa Rica where it has
continued to conduct most of its operations through 2008.





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.





Cash and
Cash Equivalents





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





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.


F-6


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, 2008.





Income
taxes:




The
Company follows SFAS No. 109, “Accounting for Income Taxes.” Under the asset and
liability method of SFAS No. 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. A valuation allowance has been provided for the
Company's net deferred tax asset, due to uncertainty of
realization.





Effective
January 1, 2007, the Company adopted Financial Accounting Standard Board
Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN
48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise’s financial statements in accordance with SFAS Statement No. 109
Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and
measurement attributes for the financial statement recognition and measurement
of a tax position taken or expected to be taken in tax return. FIN 48 also
provides guidance on derecognition, classification, interest and penalties,
accounting interim period, disclosure and transition. There were no adjustments
required upon adoption of FIN 48.





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:




Leasehold
      improvements
                6.25
      yearsComputer
      equipment
                5
      yearsFurniture
      and fixtures
                5-10
      yearsOffice
      equipment
                5
      years





Revenue
Recognition





We
recognize revenues when survey data is delivered to 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.


F-7


Goodwill
and Other Intangible Assets





In
accordance with SFAS 142, “Goodwill and Other Intangible Assets” the Company
assesses the impairment of identifiable intangibles whenever events or changes
in circumstances indicate that the carrying value may not be recoverable.
Intangible assets were comprised of website assets. Factors the Company
considers to be important which could trigger an impairment review include the
following:





1.
            Significant underperformance
      relative to expected historical or projected future operating
      results;





2.
            Significant changes in the manner
      of use of the acquired assets or the strategy for the overallbusiness;
    and





3.
            Significant negative industry or
      economic trends.





When the
Company determines that the carrying value of intangibles may not be recoverable
based upon the existence of one or more of the above indicators of impairment
and the carrying value of the asset cannot be recovered from projected
undiscounted cash flows, the Company records an impairment charge. The Company
measures any impairment based on a projected discounted cash flow method using a
discount rate determined by management to be commensurate with the risk inherent
in the current business model. Significant management judgment is required in
determining whether an indicator of impairment exists and in projecting cash
flows. A provision for the write down of goodwill and website asset costs has
been made during the year ended December 31, 2008 and is summarized in Note 13
..





Long-Lived
Assets





In
accordance with FASB Statement 144,Accounting for the Impairment or
Disposal of Long-Lived Assets, the carrying value of intangible assets
and other long-lived assets are reviewed, such as other properties and
equipment, on a regular basis for the existence of facts or circumstances that
may suggest impairment. The Company recognizes impairment when the sum of the
expected undiscounted future cash flow is less than the carrying amount of the
asset. The Company measures impairment losses, if any, as the excess of the
carrying amount of the asset over its estimated fair value. A provision for the
write down of property and equipment asset costs has been made during the year
ended December 31, 2008 and is summarized in Note 13 hereinbelow.





Foreign
Currency Translation





The
Company's functional currency is the U.S. dollar. In those instances where DSEN
has foreign currency transactions, the financial statements are translated to
U.S. dollars in accordance with Statement 52 of the Financial Accounting
Standards Board (FASB), Foreign Currency Translation.  Monetary assets
and liabilities denominated in foreign currencies are translated using the
exchange rate prevailing at the balance sheet date. Gains and losses arising on
translation or settlement of foreign-currency-denominated transactions or
balances are included in the determination of income. The Company's primary
foreign currency transactions are in Costa Rica Colon. The Company has not
entered into derivative instruments to offset the impact of foreign currency
fluctuations. The Company has had nominal translation or transactions gains or
losses of substance to reflect during the year ended December 31, 2008 and
2007.





Net Loss
Per Share





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





Diluted
net 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.


F-8







Advertising





Advertising
costs are expensed when incurred. Advertising for the years ended December 31,
2008 and December 31, 2007 amounted to $ 36,267 and $9,000,
respectively.





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. 100% of the
Company's customers are located within the United States of
America.





Major
Customers





During
the year ended December 31, 2008, the Company had three major clients,
Ipsos-Reid (15.0%), Synovate  (11.5%), and Nielsen (8.3%). Management
believes the loss of one of these key clients would materially affect the
operations of the Company in the short term.





During
the year ended December 31, 2007, the Company had three major clients,
Ipsos-Reid (21.2%), Orbis (10.6%), and Synovate (8.3%). Management believes the
loss of one of these key clients would materially 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.





In
February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS
No.159, “The Fair Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No.115”. SFAS No.159 permits entities
to choose to measure eligible financial instruments and other items at fair
value at specified election dates. A business entity shall report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. The fair value option may be applied
instrument by instrument but only upon the entire instrument - not portions of
the instrument. Unless a new election date occurs, the fair value option is
irrevocable. SFAS No.159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. The Company does not expect
that the adoption of SFAS No. 159 will have a material effect on the Company's
consolidated financial statements.


F-9





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.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” The current GAAP hierarchy, as set forth in the American
Institute of Certified Public Accountants (AICPA) Statement on Auditing
Standards No. 69, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles, has been criticized because (1) it is directed
to the auditor rather than the entity, (2) it is complex, and (3) it ranks FASB
Statements of Financial Accounting Concepts. The FASB believes that the GAAP
hierarchy should be directed to entities because it is the entity (not its
auditor) that is responsible for selecting accounting principles for financial
statements that are presented in conformity with GAAP. Accordingly, the FASB
concluded that the GAAP hierarchy should reside in the accounting literature
established by the FASB and is issuing this Statement to achieve that result.
This Statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. The
adoption of FASB 162 is not expected to have a material impact on the Company’s
financial position.


F-10





In June
2008, the FASB issued EITF No. 07-5, “Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock” effective for
financial statements issued for fiscal years and interim periods beginning after
December 15, 2008. EITF No.07-5 provides guidance for determining whether an
equity-linked financial instrument (or embedded feature) is indexed to an
entity’s own stock. The adoption of EITF No. 07-5 is not expected to have a
material effect on the Company’s consolidated financial statements.





In June
2008, the FASB issued FSP Emerging Issues Task Force (EITF) No. 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities.” Under the FSP, unvested share-based payment awards
that contain rights to receive nonforfeitable dividends (whether paid or unpaid)
are participating securities, and should be included in the two-class method of
computing EPS. The FSP is effective for fiscal years beginning after December
15, 2008, and interim periods within those years, and is not expected to have a
significant impact on the Company’s results of operations, financial condition
or cash flows.





In
October 2008, the FASB issued FSP SFAS No. 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset Is Not Active”, (“FSP 157-3”),
to clarify the application of the provisions of SFAS 157 in an inactive market
and how an entity would determine fair value in an inactive market. FSP 157-3
was effective upon issuance and applies to the Company’s current financial
statements. The application of the provisions of FSP 157-3 did not materially
affect the Company’s results of operations or financial condition for the year
ended December 31, 2008.





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 December 31, 2008 and
2007:


2008
                                  
                                  
                                  2007Leasehold
      improvements
                                  
                                  $
                                  880,959
                                  
                                  
                                  $
                                  2,004,285Computer
      equipment
                                  
                                  
                                  932,550
                                  
                                  
                                  
                                  922,889Office
      equipment
                                  
                                  
                                  464,991
                                  
                                  
                                  
                                  945,474Vehicles
                                  
                                  
                                  127,439
                                  
                                  
                                  
                                  127,439Software
      License
                                  
                                  
                                  14,485
                                  
                                  
                                  
                                  230,0002,420,424
                                  
                                  
                                  
                                  4,230,087Less:
      Accumulated depreciation & amortization
                                  
                                  
                                  (787,285
                                  )
                                  
                                  
                                  (1,083,299
                                  )$
                                  1,633,139
                                  
                                  
                                  
                                  3,146,788


F-11





Depreciation
expense for the years ended December 31, 2008 and 2007 was $381,245 and
$215,311, respectively.





NOTE 4 –
LONG-TERM DEBT





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 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 December 31,
2008.





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





In
November 2004, the Company issued $1,875,000 in principal amount of secured
promissory notes. 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 were due and
payable in November 2007. The notes were entered into pursuant to the terms of a
subscription agreement between the Company and the Holder.  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
long-term debt 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
December 31, 2008, the unpaid principal amount due on the remaining secured
convertible promissory note to Alpha Capital Anstalt, which was due in November
2007 and bears a default interest rate of 10% per annum, is $157,500. The note
holder has extended the due date of this note to January 15, 2010. There is
accrued and unpaid interest of $ 32,363 at December 31, 2008.





LONGVIEW
FUND, L.P. AND ALPHA CAPITAL ANSTALT





In June
2006, the Company issued two secured convertible promissory notes. One note is
due to Long View Fund L.P.  (“Longview”) and had a principal amount of
$1,702,859 and the other note due to Alpha Capital Anstalt (“Alpha”) 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
$1,702,859 promissory note due Longview accrues interest at a rate of 6% per
annum. Interest is to be paid quarterly.  The note was due and payable
in June 2008. It was entered into pursuant to the terms of a subscription
agreement between the Company and the Holder.  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 long-term debt in
the financial statements. The debt discount was being accreted using the
effective interest method over the term of the note.


F-12





In
December, 2007, accrued interest of $25,753 was added to the note due to
Longview increasing the principal amount of the note to $1,728,612. The $571,429
promissory note due to Alpha accrued interest at a rate of 6% per annum. The
interest rate on this note has increased to the 10% default rate.





The note
holders have extended the due date of the notes to January 15,
2010.





As of
December 31, 2008, both notes are unpaid and there is $319,563 of accrued
interest.





In
December 2006, the Company issued $2,065,458 in principal amount in a secured
promissory note to Longview. As part of the financing transaction, 1,280,000
warrants were issued to the note holder 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 note
due Longview described in the preceding paragraph accrues interest at a rate 14%
per annum. The note was due and payable in December 2008.  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 56%
volatility, five year terms, and a $0.45 exercise price. The debt discount of
$198,130 was amortized over the two year term of the note.





In
December 2007 accrued interest of $40,685 was added to the note due to Longview
increasing the amount of the note at December 31, 2007 to $1,193,643. The note
is unpaid and there is $ 215,444 of accrued interest outstanding at December 31,
2008.





Longview,
as the note holder, has extended the due date of the remainder due on the note
to January 15, 2010.





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 December
31, 2008, this note is unpaid and there is $38,342 of accrued
interest.





Below is
a summary of secured convertible promissory notes payable due to Longview and
Alpha and related accrued interest payable at December 31, 2008





Longview





Notes
                  
                  $
                  2,922,255Accrued
      interest payable
                  
                  
                  388,784$
                  3,311,039





Alpha





Notes
                  
                  $
                  832,594Accrued
      interest payable
                  
                  
                  216,928$
                  1,049,522





Interest
expenses incurred during the year ended December 31, 2008 on the above tabled
debt due to Longview and Alpha is as follows:





Longview
                  
                  $
                  388,784Alpha
                  
                  
                  91,803$
                  480,587


F-13





OTHER
CONVERTIBLE PROMISSORY NOTES





On or
about September 4, 2008, the Company borrowed $400,000 from three
individuals.  The Notes have a term of 18 months from the date of
issuance and bear interest at the rate of $12% per annum.  Interest is
due and payable quarterly in arrears during the term of the Notes and principal
and accrued and unpaid interest are due in full at maturity.  Warrants
to purchase 250,000 shares of the Company’s common stock were issued in
connection therewith.  The warrants have an exercise price of $.10 per
share and a term of five years from the date of issuance.





Based
upon the relative fair values of the convertible debt and warrants none of the
proceeds of $400,000 has been allocated as additional paid in capital to the
warrants.




NOTE 5 –
SHORT-TERM NOTES PAYABLE





Short-term
notes payable consist of the following at December 31, 2008:




A
      note payable to Wells Fargo Bank which bears interest at
      12.75%
                  
                  $
                  17,464




NOTE
6. INCOME TAXES




As of
December 31, 2008, the components of deferred income taxes are as
follows:




Net
      operating loss carryforward
                  
                  $
                  6,977,253Total
      deferred tax assets
                  
                  
                  6,977,253Less
      valuation allowance
                  
                  
                  (6,977,253
                  )Net
      deferred tax assets
                  
                  $
                  -




Reconciliation
of the differences between the statutory tax rate and the effective tax rate
is:




December 31,
                  2008Federal
      statutory tax rate
                
                
                34.0
                %Effective
      Tax Rate
                
                
                34.0
                %Valuation
      Allowance
                
                
                (34.0
                )%Net
      Effective Tax Rate
                
                
                —




As of
December 31, 2008, the Company has a net operating loss carryforward of
$20,521,333 expiring through 2028. The Company has provided a valuation
allowance against the full amount of the deferred tax asset due to management's
uncertainty about its realization. Furthermore, the net operating loss carry
forward may be subject to further limitation pursuant to Section 382 of the
Internal Revenue Code.


F-14


NOTE 7 -
STOCKHOLDERS' (DEFICIT) EQUITY





During
the year ended December 31, 2008, the Company issued shares of common stock as
follows:





Valued at*200,000
      shares were issued to a consultant as compensation
                      
                      $
                      60,00030,000
      shares were issued to Bob Sandelman, a former Board Member for director’s
      fees
                      
                      
                      11,70080,000 shares
      were issued to settle a prior agreement for services
                      
                      
                      24,000310,000
      Charged to selling, general and administration expenses during the year
      ended December 31, 2008
                      
                      
                      95,700221,389 shares
      of common stock were issued in settlement of prior year accrued interest
      liability due on a secured convertible promissory note due to
      Longview
                      
                      
                      77,826531,389
      Total
                      
                      $
                      173,526





* Based
upon the publicly traded share price of the Company’s common stock on the date
of issuance.




NOTE 8 -
COMMITMENTS AND CONTINGENCIES





Leases





The
Company is committed under several non-cancelable lease agreements for office
space with various expiration dates through 2013.





At
December 31, 2008, aggregate future minimum payments under these leases, are as
follows:





For
      the years ended December 31,2009
                      
                      $
                      534,9882010
                      
                      
                      525,1632011
                      
                      
                      417,1322012
                      
                      
                      279,5402013
                      
                      
                      94,522Total
                      
                      $
                      1,851,345




During
the year ended December 31, 2008, the Company entered into an agreement with the
landlord for space located in Costa Rica, SA for which the Company incurred a
loss on exiting that non cancelable operating lease of $41,800, effective
December 31, 2008.





Accrued
expenses at December 31, 2008 includes $41,800 to reflect the liability for
exiting this lease.





NOTE 9 -
RELATED PARTY TRANSACTIONS





Series
B Preferred Stock





Preferred
stock, $.001 par value, 20,000,000 shares authorized, 505,900 of preferred stock
Series B issued and outstanding.


F-15





The
Series B preferred shares pursuant to the certificate of designation were to be
converted two years after issuance.  To date this conversion has not
been completed.





Series
C Preferred Stock





On July
25, 2008, the Company 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:
                
                1,000Per
      Share Stated Value:
                
                $4,500Liquidation
      Preference:
                
                Per
      share Stated ValueConversion
      Price into Common Stock:
                
                $.30
      per share, as adjusted from time to time as set forth in the Certificate
      of DesignationVoting
      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 Company 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.





Since the
fair value of the convertible Preferred Stock received in exchange for the
15,000,000 shares of its Common Stock would be immediately exchangeable into
common stock with a trading price lower than the conversion price, the Company
does not have a beneficial conversion feature to recognize by way of charge to
the Statement of Operation for the year ended December 31, 2008.





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.





Longview
Fund





As of December 31, 2008, Longview Fund,
L.P. owned 14.7% 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 this footnotesuprafor 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.


F-16





Other
Related Parties





During
the year ended December 31, 2008, the Company billed  $ 1,446,931 to
Sandelman & Associates, a Company controlled by a former board member, which
amounted to approximately 8.00% of total revenue for the period. At December 31,
2008 Accounts Receivable includes $23,548 due from Sandelman &
Associates.





On
December 31, 2008, Scott Kincer resigned as the CEO, President and a Director of
the issuer to pursue other opportunities.  Pursuant to a Separation
Agreement between the parties which is effective as of December 31, 2008, the
issuer is paying Mr. Kincer the sum of $64,750 over a period of five and one
half months as well as reimbursing him for accrued and unpaid expenses. The
agreement contains other standard terms and provisions as to releases and the
like. Selling, general and administrative expenses for the year ended December
31, 2008 includes provision for the amount due under this
agreement.





During
the year ended December 31, 2008, the Company incurred $5,000 in a director’s
fee and $62,500 in consulting fees to Lou Persico who became the CEO and
Chairman of the Company effective December 31, 2008. These amounts are including
with in selling, general and administrative expenses for the year ended December
31, 2008.





There are
no other related party transactions, other than that stated above and in Notes 4
and 7.





NOTE 10 -
WARRANTS AND OPTIONS





The
Company has adopted FASB No. 123R and will account for stock issued for services
and stock options under the fair value method.





There
were no other options granted or exercised by the directors and executive
officers outstanding as of December 31, 2008.





The
following is a schedule of the activity relating to the Company's stock options
and warrants.




Year Ended
                  
                  
                  Year EndedDecember 31, 2008
                  
                  
                  December 31, 2007Weighted Avg.
                  
                  
                  Weighted Avg.Shares Exercise
                  
                  
                  Shares Exercise(x 1,000)
                  
                  
                  Price
                  
                  
                  
                  (x 1,000)
                  
                  
                  PriceOptions
      and warrants outstanding at beginning of year
                  
                  
                  2,851
                  
                  
                  
                  0.36
                  
                  
                  
                  2,651
                  
                  
                  $
                  0.36Granted:Options
                  
                  
                  50
                  
                  
                  
                  0.30Warrants
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  200
                  
                  
                  
                  .30ExercisedExpired:Warrants
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (
                  )Options
      and warrants outstanding and exercisable at end of period
                  
                  
                  2,901
                  
                  
                  
                  0.36
                  
                  
                  
                  2,851
                  
                  
                  $
                  0.36Weighted
      average fair value of options and warrants granted during the
      year
                  
                  $
                  -
                  
                  
                  $$
                  -
                  
                  
                  $
                  -


F-17




The
following table summarizes information about the Company’s stock options and
warrants outstanding at December 31, 2008, all of which are
exercisable:




Outstanding
                                              
                                              
                                              ExercisableOutstandingWeighted average
                                                remaining
                                              
                                              
                                              Weighted
                                              
                                              
                                              VestedNumber of
                                              
                                              
                                              contractual
                                              
                                              
                                              Average
                                              
                                              
                                              Number of
                                              
                                              
                                              Exerciseshares
                                              
                                              
                                              life (years)
                                              
                                              
                                              exercise price
                                              
                                              
                                              shares
                                              
                                              
                                              Prices$0.00-$0.40
                                              
                                              
                                              2,900,987
                                              
                                              
                                              
                                              2.15
                                              
                                              
                                              $
                                              0.36
                                              
                                              
                                              
                                              2,900,987
                                              
                                              
                                              $
                                              .0.36




NOTE 11 -
FOREIGN OPERATIONS





The
Company has its principal operating facilities located in  Costa Rica,
SA.  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 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 12 -
CREDIT AGREEMENT





Wells
Fargo





On
November 7, 2008, the Company entered into an Account Purchase Agreement
(“Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”)
pursuant to which Wells Fargo agreed to purchase certain accounts receivable
from the Company from time to time, up to $4.5 million, at a price equal to the
face value of each such receivable less a discount equal to .5% plus the then
existing prime rate, plus three percent plus other fees and charges. Any
accounts sold to Wells Fargo for which payment is not received within the
proscribed time periods in the Agreement shall be subject to repurchase by the
Company. To secure this repurchase and other obligations of the Company
thereunder, the Company granted a first lien on all of its assets to Wells
Fargo. In connection therewith, the Longview Fund and Alpha Capital Anstalt
agreed to subordinate their security interests in the Company’s collateral to
the security interests of Wells Fargo.





NOTE 13 –
LOSS ON WRITE-OFF AND WRITEDOWN OF IMPAIRED ASSETS





Provisions
for impairment of intangibles and long-lived assets totaling of $4,302,633 have
been made by the Company during the year ended December 31, 2008, as
follows:





Loss
      on write-off of goodwill
                  
                  $
                  1,692,782Loss
      on write-off of property and equipment
                  
                  
                  2,606,644Loss
      on write-off of website assets
                  
                  
                  3,207Total
                  
                  $
                  4,302,633


F-18





NOTE 14 –
CORRECTION OF STOCKHOLDERS’ (DEFICIT) EQUITY FOR PRIOR YEARS’ ERRORS IN
PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS





During
the year ended December 31, 2008, Management of the Company determined that the
Financial Statements issued by the Company for the year ended December 31, 2007
and years prior to that had been incorrectly prepared
concerning  consolidation of the subsidiary's balance sheet and
elimination of parent entity investment in that subsidiary.





Accordingly
the Consolidated Statement of Stockholders’ (Deficit) Equity for the year ended
December 31, 2008 has been corrected to reflect the opening balance in
accumulated deficit as originally reported for the year ended December 31,
2007in a manner that reflects the proper consolidation of the subsidiary's
balance sheet and elimination of parent entity investment in that subsidiary as
if it had been done so for the years ended December 31, 2007 and
prior.





NOTE 15 -
SUBSEQUENT EVENTS





On March
31, 2009, The Company entered into Waiver of Default Interest Agreements with
each of Longview Fund, L.P. and Alpha Capital Anstalt.  These
Agreements call for the making of two monthly interest payments at nondefaulted
interest rates to each of Longview Fund and Alpha Capital until all past due
interest is paid in full to each of Longview Fund and Alpha Capital and in
consideration of these payments being made, both companies have agreed to waive
default interest rates and additional interest owed due to the otherwise
increase of interest rates existing in indebtedness between the Company and each
of Longview Fund L.P. and Alpha Capital Anstalt, in the amounts of $117,215.44
and $30,031.18, respectively.




F-19





ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.





None





ITEM
9A(T). CONTROLS AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures




As of the
end of the period covered by this Annual Report on Form 10-K, 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 December 31, 2008, our disclosure controls and
procedures were effective.





Management's
Annual Report on Internal Control Over Financial Reporting.




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:


21





(i)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of our assets;





(ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements; and





(iii)
provide reasonable assurance regarding prevention or timely detection of
unauthorized transactions.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management's
assessment of the effectiveness of the small business issuer's internal control
over financial reporting is as of the year ended December 31, 2008. In making
this assessment, our management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated
Frameworkand Internal
Control over Financial Reporting-Guidance for Smaller Public Companies.We believe that internal control over financial reporting is effective.
We have not identified any, current material weaknesses considering the nature
and extent of our current operations and any risks or errors in financial
reporting under current operations.





This
annual report does not include an attestation report of the company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the SEC that permit the
Company to provide only management's report in this annual report.





There was
no change in our internal control over financial reporting that occurred during
the fiscal quarter ended December 31, 2008, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.




There
have been no changes during the quarter ended December 31, 2008 in our Company's
internal control over financial reporting identified in connection with the
evaluation required by Exchange Act Rules 13a-15(d) and 15d-15(d) that have
material affected, or are reasonably likely to materially affect, our internal
controls over our financial reporting.




ITEM 9B.
OTHER INFORMATION.





None.




PART
III





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





Directors
and Executive Officers





The
following table sets forth information regarding our executive officers, certain
other officers and directors as of December 31, 2008:




Name
                    
                    Age
                    
                    Position/Office
                    
                    Served SinceJoseph
      Harmon
                    
                    34
                    
                    Secretary/COO/Director
                    
                    September
      2001Stanley
      Hirschman
                    
                    62
                    
                    Director
                    
                    August
      2008David
      Lieberman
                    
                    64
                    
                    Director
      /CFO
                    
                    May
      2006Lou
      Persico
                    
                    53
                    
                    Chairman/President/CEO
                    
                    December
      2008


22





The
following is a brief description of the business background of the directors and
executive officers of the Company:





Joseph
Harmon - Secretary/COO/Director





After
attending California State University, Mr. Harmon started his career in 1992 at
The Verity Group, a full service market research company in Fullerton, CA. At
the Verity Group, Mr. Harmon worked his way up to Director of Operations and
managed a 300-employee operation. He helped grow the company to a 12 million
dollar business and was a key player in the acquisition by The Polk Company in
1997. He then went to Diagnostic Research where he managed Telephone Research.
In 1998 The Polk Company brought Mr. Harmon back in as a Sales Manager to help
increase sales in the Market Research division. After Polk, Mr. Harmon helped
start Datascension and became Vice President. Mr. Harmon is also Vice President
and a Director of Datascension International.





Stan
Hirschman - Director





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.





David P.
Lieberman – CFO and Director





Mr.
Lieberman's experience includes serving in various Senior Executive positions
with a strong financial and operations background. Currently Mr. Lieberman is on
the Board of Directors of South Texas Oil Company, an over the counter public
company. Mr. Lieberman has been the Chief Financial Officer for John Goyak &
Associates, Inc., an aerospace consulting firm located in Las Vegas, NV since
2003. Lieberman previously served as President and Chief Operating Officer of
both JLS Services, Inc., since 1996, and International Purity, since 1997. From
1994 through 1996 Mr. Lieberman served as Chief Financial Officer and Chief
Operating officer for California Athletic Clubs, Inc. Mr. Lieberman has over
forty years of financial experience beginning with five years as an accountant
with Price Waterhouse from 1967 through 1972. Mr. Lieberman attended the
University of Cincinnati, where he received his B.A. in Business. Mr. Lieberman
is also a licensed CPA in the state of California.





Lou
Perisco – Chairman and Chief Executive Officer and President (effective December
31, 2008)


23





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). Persico went on to sell one
of the early stage companies to Quest Software (QSFT), a publicly traded
company, after scaling the business from $1.5M to $20M in 13 months for $61M. 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.





Significant
Employees





The
Company has not identified any employee who is not an executive who is expected
to make a significant contribution to the business.





Family
Relationships





There are
no family relationships among the directors, executive officers or persons
nominated or chosen by the Company to become directors or executive
officers.





Legal
Proceedings





None of
the Company's executive officers or nominees for such office have been involved
in any legal proceedings related to bankruptcy of an entity where they held such
positions; nor charged or convicted in any criminal proceedings; nor subject to
any order, judgment, or decree permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities; nor found in any manner whatsoever to have
violated a federal or state securities or commodities law.




None of
the Company's officers or directors, nor to the knowledge of the Company, any of
the Company's control persons, has:





·
            had any bankruptcy petition filed
      by or against any business of which such person was a general partner or
      executive officer either at the time of the bankruptcy or within two years
      prior to that time;





·
            been convicted in a criminal
      proceeding or is subject to a pending criminal proceeding (excluding
      traffic violations and other minor
  offenses);





·
            been subject to any order,
      judgment, or decree, not subsequently reversed, suspended or vacated, of
      any court of competent jurisdiction, permanently or temporarily enjoining,
      barring, suspending or otherwise limiting his involvement in any type of
      business, securities or banking activities;
  or





·
            been found by a court of
      competent jurisdiction (in a civil action), the Securities and Exchange
      Commission or the Commodity Futures Trading Commission to have violated a
      federal or state securities or commodities law, where the judgment has not
      been reversed, suspended or
vacated.


24





Committees





The
Company does not have any audit, compensation, and executive committees of its
board of directors. The entire board of directors is serving as the Company's
audit committee. The Company has not yet implemented any such committees due to
limited financial and personnel resources; however, it is exploring the set up
and functions of committees and is seriously considering implementation during
2009.





Conflicts
of Interest





The
officers and directors of the Company are now and may in the future become
shareholders, officers or directors of other companies which may be engaged in
business activities similar to those conducted by the Company. Accordingly,
additional direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of the Company or other entities. Moreover,
additional conflicts of interest may arise with respect to opportunities which
come to the attention of such individuals in the performance of their duties or
otherwise. The Company does not currently have a right of first refusal
pertaining to opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business
operations.





The
officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such
transactions.




Compliance
with Section 16(a) of the Exchange Act





Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who beneficially own more than ten percent of a
registered class of our equity securities (referred to as "reporting persons"),
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of common stock. Reporting persons are
required by Commission regulations to furnish us with copies of all Section
16(a) forms they file.





We are
not aware of any person who at any time during the fiscal year ended December
31, 2008, was a director, officer, or beneficial owner of more than ten percent
of our common stock, who failed to file reports required by Section 16(a) of the
Securities Exchange Act of 1934 during such fiscal year, which have not been
accurately updated, even if not on a timely basis.





Code of
Ethics





We have
adopted a code of ethics that applies to our executive officers, including our
Chief Executive Officer and Chief Financial Officer.


25





Indemnification
of Directors and Officers.





The
By-laws of the Company state that to the extent allowed by Nevada State law, as
same may be amended, and subject to the required procedure thereof, the
corporation shall indemnify any person who was or is a party of is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.




ITEM 11.
EXECUTIVE COMPENSATION.





Compensation
of Executive Officers





The
following table sets forth the aggregate cash compensation paid by the Company
for services rendered during the periods indicated to its directors and
executive officers. The compensation disclosed in the compensation table is
inclusive of any and all compensation paid through the parent company or the
subsidiary, Datascension International, Inc.




SUMMARY
COMPENSATION TABLE





LONG TERM
                                          COMPENSATIONANNUAL COMPENSATION
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        AWARDS PAYOUTSNAME AND
                                          PRINCIPAL
                                          POSITION
                                        
                                        
                                        YEAR
                                        
                                        SALARY
                                        
                                        
                                        BONUS &
                                          COMMISSIONS
                                        
                                        
                                        HOUSING
                                          ALLOWANCE
                                        
                                        
                                        ALL OTHER
                                          COMPENSATION
                                        
                                        
                                        TOTALLou
      Persico - CEO
                                        
                                        (4)
                                        2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        62,500
                                        1
                                        
                                        $
                                        62,500David
      Scott Kincer – CEO
                                        
                                        (3)
                                        2008
                                        
                                        $
                                        240,558
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        44,000
                                        
                                        
                                        
                                        75,500
                                        
                                        
                                        $
                                        300,058David
      Scott Kincer - CEO
                                        
                                        
                                        2007
                                        
                                        $
                                        275,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        12,000
                                        
                                        
                                        $
                                        15,500
                                        2
                                        
                                        $
                                        287,000David
      Lieberman – CFO
                                        
                                        
                                        2008
                                        
                                        $
                                        173,077
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        173,077David
      Lieberman -
                                        
                                        
                                        2007
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        42,500
                                        1
                                        
                                        
                                        42,500Joseph
      Harmon – COO
                                        
                                        
                                        2008
                                        
                                        $
                                        175,000
                                        
                                        
                                        
                                        60,275
                                        
                                        
                                        
                                        30,000
                                        
                                        
                                        $
                                        11,073
                                        2Joseph
      Harmon - COO
                                        
                                        
                                        2007
                                        
                                        $
                                        140,000
                                        
                                        
                                        
                                        147,000
                                        (3)
                                        
                                        
                                        30,000
                                        
                                        
                                        $
                                        
                                        (
                                        
                                        $
                                        317,000





(1)
            Professional
      fees.





(2)
            401
      (k) match





(3)
            Mr.
      Kincer resigned on December 31,
2008.





(4)
            Mr.
      Persico was appointed Chairman, CEO and President on December 31,
      2008.





Employment
Agreements





Effective
June 9, 2006, we entered into separate employment agreements with our Chief
Executive Officer, David S. Kincer; and our Chief Operating
Officer.  Neither agreement was renewed after December 31,
2008.





The main
terms of Mr. Kincer's agreement were as follows:





(a) Base
Salary The Executive shall receive an annual base salary of $275,000.00 payable
in monthly or more frequent installments in accordance with the Company's
payroll policies ("Base Salary"). The Executive's Base Salary shall be reviewed,
and may be increased but not decreased, annually, by the Board pursuant to its
normal performance review policies for senior executives, with the first such
review occurring not later than December 2006. Should the Company for any reason
be unable to pay the Executive monthly or more frequent installments in
accordance with the Company's payroll policies, the Executive may elect either
of the following alternatives, or a combination thereof;


26




(i)
Executive may elect to treat the unpaid compensation as a loan payable on demand
that accrues an annual interest of ten (10%) percent; and/or





(ii)
Executive may elect to receive common stock of the Company issued under an S-8
registration statement which will provide the Executive common stock at fair
market value based on the average closing price for the five (5) trading days
preceding the request for issuance of stock for the effective pay period.
Executive may also elect to receive common stock of the Company issued under an
S-8 registration statement which will provide the Executive common stock at fair
market value based on the average closing price of the five (5) trading days
preceding the request for issuance of stock for the loan payable on demand
pursuant to subsection 3(a)(i).





(b)
Initial Restricted Stock Award. The Company shall make an initial signing award
to the Executive of 500,000 restricted shares of the Company's common stock
under and subject to the terms and conditions of the Company's Stock
Compensation Plan dated January 1, 2004 or as thereafter amended (the "Stock
Plan").





(c)
Restricted Stock Option Award. The Company shall make an award to the Executive
of restricted shares of the Company's common stock under and subject to the
terms and conditions of the Stock Plan and Common Stock Purchase Warrant, as
follows:





(i) For
calendar year 2006, if the Company's sales exceed $12,000,000 and $500,000 in
EBIDTA, 500,000 options at $.30 per share.





(ii) For
calendar year 2007, if the Company's sales exceed $15,000,000 and $1,000,000 in
EBIDTA, 1,000,000 options at $.30 per share. Nevertheless, if the Company's 2007
sales/EBIDTA exceed the prior year (2006), there will be an award of 500,000
options at $.30 per share.




(iii) For
calendar year 2008, if the Company's sales exceed $18,000,000 in sales and
$1,500,000 in EBIDTA, 1,000,000 options at $.30 per share. Nevertheless, if the
Company's 2008 sales/EBIDTA exceed the prior year (2007), there will be an award
of 500,000 options at $.30 per share. In any event resulting in the sale of the
Company, all options awarded to Executive shall become immediately redeemable.
If the Executive is terminated, without cause, at any time, the options become
immediately redeemable.





The main
terms of Mr. Harmon's agreement were as follows:





(a) Base
Salary. The Executive shall receive an annual base salary of $175,000.00 plus 1%
on all work revenues on services rendered over $14.00 per hour that is not
otherwise pass through costs payable in monthly or more frequent installments in
accordance with the Company's payroll policies ("Base Salary"). The Executive's
Base Salary shall be reviewed, and may be increased but not decreased, annually,
by the Board pursuant to its normal performance review policies for senior
executives, with the first such review occurring not later than December 2006.
Should the Company for any reason be unable to pay the Executive monthly or more
frequent installments in accordance with the Company's payroll policies, the
Executive may elect either of the following alternatives, or a combination
thereof;





(i)
Executive may elect to treat the unpaid compensation as a loan payable on demand
that accrues an annual interest of ten (10%) percent; and/or





(ii)
Executive may elect to receive common stock of the Company issued under an S-8
registration statement which will provide the Executive common stock at fair
market value based on the average closing price for the five (5) trading days
preceding the request for issuance of stock for the effective pay period.
Executive may also elect to receive common stock of the Company issued under an
S-8 registration statement which will provide the Executive common stock at fair
market value based on the average closing price of the five (5) trading days
preceding the request for issuance of stock for the loan payable on demand
pursuant to subsection 3(a)(i).




(b)
Initial Restricted Stock Award. The Company shall make an initial signing award
to the Executive of 150,000 restricted shares of the Company's common stock
under and subject to the terms and conditions of the Stock Compensation Plan
dated January 1, 2004 or as thereafter amended (the "Stock Plan")





(c)
Restricted Stock Option Award. The Company shall make an award to the Executive
of restricted shares of the Company's common stock under and subject to the
terms and conditions of the Stock Plan and Common Stock Purchase Warrant, a copy
of which is attached and incorporated herein as follows:





(i) For
calendar year 2006, if the Company's sales exceed $12,000,000 and $500,000 in
EBIDTA, 150,000 options at $.30 per share.




(ii) For
calendar year 2007, if the Company's sales exceed $15,000,000 and $1,000,000 in
EBIDTA, 300,000 options at $30 per share. Nevertheless, if the Company's 2007
sales/EBIDTA exceed the prior year (2006), there will be an award of 150,000
options at $.30 per share.





(iii) For
calendar year 2008, if the Company's sales exceed $18,000,000 in sales and
$1,500,000 in EBIDTA, 300,000 options at $.30 per share. Nevertheless, if the
Company's 2008 sales/EBIDTA exceed the prior year (2007), there will be an award
of 150,000 options at $.30 per share. In any event resulting in the sale of the
Company, all options awarded to Executive shall become immediately redeemable.
If the Executive is terminated, without cause at any time, the options become
immediately redeemable.




27





Compensation
of Directors





There
were no arrangements pursuant to which any director of the Company was
compensated through December 31, 2008 for any service provided as a director,
except as follows.





DIRECTOR
COMPENSATION TABLE





Name
                                                                  
                                                                  Fees
                                                                    Earned
                                                                    or
                                                                    Paid in
                                                                    Cash
                                                                  
                                                                  Stock
                                                                    Awards
                                                                  
                                                                  Option
                                                                    Awards
                                                                    (1)
                                                                  
                                                                  Non-Equity
                                                                    Incentive Plan
                                                                    Compensation
                                                                  
                                                                  Nonqualified
                                                                    Deferred
                                                                    Compensation
                                                                    Earnings
                                                                  
                                                                  All Other
                                                                    Compensation
                                                                  
                                                                  TotalJoseph
      HarmonStanley
      Hirschman
                                                                  
                                                                  $
                                                                  5,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  5,000Scott
      KincerDavid
      Lieberman
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  $Lou
      Persico
                                                                  
                                                                  $
                                                                  5,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  5,000Robert
      Sandelman
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  $
                                                                  11,700
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  $
                                                                  11,700




(1)  Stock
options to purchase common stock at an exercise price of $.30 per
share.





OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END FOR 2008





Option Awards
                  
                  Stock AwardsName and Principal
                    Position
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options (#)
                    Exercisable
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options (#)
                    Unexercisable
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Unearned
                    Options (# )
                  
                  Option
                    Exercise
                    Price
                  
                  Option
                    Expiration
                    Date
                  
                  Number
                    of
                    Shares
                    or Units
                    of
                    Stock
                    That
                    Have
                    Not
                    Vested
                  
                  Market
                    Value
                    of
                    Shares
                    or
                    Units
                    of
                    Stock
                    That
                    Have
                    Not
                    Vested
                  
                  Number
                    of
                    Unearned
                    Shares or
                    Other
                    Rights
                    That
                    Have Not
                    Vested
                  
                  Market
                    Value or
                    Payout
                    Value of
                    Unearned
                    Shares,
                    Units or
                    Other
                    Rights
                    That
                    Have Not
                    VestedDavid
      Scott Kincer CEO
                  
                  
                  -
                  
                  -
                  
                  
                  -
                  
                  -
                  
                  
                  -
                  
                  -
                  
                  
                  -
                  
                  -
                  
                  
                  -Lou
      Persico CEOJoseph
      Harmon COO
                  
                  
                  -
                  
                  -
                  
                  
                  -
                  
                  -
                  
                  
                  -
                  
                  435,000
                  
                  
                  -
                  
                  -
                  
                  
                  -David
      Lieberman CFO
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  100,000





ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS





Security
Ownership of Management and Certain Beneficial Owners





The
following table sets forth information as of the date of this Form 10-K certain
information with respect to the beneficial ownership of the Common Stock of the
Company concerning stock ownership by (i) each director, (ii) each executive
officer, (iii) the directors and officers of the Company as a group, (iv) and
each person known by the Company to own beneficially more than five (5%) of the
Common Stock. Unless otherwise indicated, the owners have sole voting and
investment power with respect to their respective shares.




28





Beneficial
ownership is determined under the rules of the Securities and Exchange
Commission. In general, these rules attribute beneficial ownership of securities
to persons who possess sole or shared voting power and/or investment power with
respect to those securities and includes, among other things, securities that an
individual has the right to acquire within 60 days. Unless otherwise indicated,
the stockholders identified in the following table have sole voting and
investment power with respect to all shares shown as beneficially owned by
them.




Class
                        
                        Name and Address of Beneficial
                          Owner (1)
                        
                        Number of
                          Shares
                        
                        
                        Percent
                          Owned
                          (2)Common
                        
                        Joseph
      Harmon
                        
                        
                        400,556
                        
                        
                        
                        1.88
                        %Warrants
                        
                        Joseph
      Harmon
                        
                        
                        435,000
                        
                        
                        
                        2.00
                        %Common
                        
                        Stanley
      Hirschman
                        
                        
                        -
                        
                        
                        
                        -
                        %Warrants
                        
                        Stanley
      Hirschman
                        
                        
                        -
                        
                        
                        
                        -
                        %Common
                        
                        Lou
      Persico
                        
                        
                        -
                        
                        
                        
                        -
                        %Warrants
                        
                        Lou
      Persico
                        
                        
                        -
                        
                        
                        
                        -
                        %Common
                        
                        David
      Lieberman
                        
                        
                        30,000
                        
                        
                        
                        .14
                        %Warrants
                        
                        David
      Lieberman
                        
                        
                        100,000
                        
                        
                        
                        .47
                        %Common
      & Warrants
                        
                        Officers
      and Directors as a group
                        
                        
                        965,556
                        
                        
                        
                        4.47
                        %Common
                        
                        Scott
      Kincer (5)
                        
                        
                        2,742,167
                        
                        
                        
                        12.83
                        %Warrants
                        
                        Scott
      Kincer (5)
                        
                        
                        
                        
                        
                        
                        %Common
                        
                        Longview
      Fund, LP (3)
                        
                        
                        3,125,488
                        
                        
                        
                        14.67
                        %Warrants
                        
                        Longview
      Fund, LP (3)
                        
                        
                        -
                        
                        
                        
                        -
                        %Common
                        
                        Alpha
      Capital Anstalt (4)
                        
                        
                        1,054,615
                        
                        
                        
                        4.90
                        %Warrants
                        
                        Alpha
      Capital Anstalt (4)
                        
                        
                        2,215,987
                        
                        
                        
                        10.37
                        %




(1)
Unless otherwise cited, address is care of the Company's principal
address.





(2) The
percentage ownership calculations listed above are based upon 21,307,261 shares
of common stock being outstanding and common stock issuable upon exercise of
warrants which are exercisable within 60 days, as of April 10,
2009.





(3) The
address of Longview Fund, L.P. is c/o Viking Asset Management, LLC, 505 Sansome
Street, Suite 1275, San Francisco, CA 94111.





(4) The
address of Alpha Capital Anstalt is Pradafant 7, Furstatums 9490, Vadus,
Lichtenstein. Warrants held by Alpha Capital are subject to a blocker that would
prevent Alpha Capital's and its affiliates' aggregate ownership at any given
time from exceeding 9.99% of our outstanding common stock.





(5) Mr.
Kincer is the former CEO and President of the Company.  He resigned on
December 31, 2008.





Persons
Sharing Ownership of Control of Shares





Management
has no knowledge of the existence of any arrangements or pledges of the
Company's securities which may result in a change in control of the
Company.





No person
shares the power to vote ten percent (10%) or more of the Company's
securities.




29





ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE





In June
2006, the Company issued two secured convertible promissory notes. One note is
due to Long View Fund L.P.  (“Longview”) and had a principal amount of
$1,702,859 and the other note due to Alpha Capital Anstalt (“Alpha”) 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
$1,702,859 promissory note due Longview accrues interest at a rate of 6% per
annum. Interest is to be paid quarterly.  The note was due and payable
in June 2008. It was entered into pursuant to the terms of a subscription
agreement between the Company and the Holder.  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 long-term debt in
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 to
Longview increasing the principal amount of the note to $1,728,612. The $571,429
promissory note due to Alpha accrued interest at a rate of 6% per annum. The
interest rate on this note has increased to the 10% default rate.





The
note holders have extended the due date of the notes to January 15,
2010.





As of
December 31, 2008, both notes are unpaid and there is $319,563 of accrued
interest.





In
December 2006, the Company issued $2,065,458 in principal amount in a secured
promissory note to Longview. As part of the financing transaction, 1,280,000
warrants were issued to the note holder 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 note
due Longview described in the preceding paragraph accrues interest at a rate 14%
per annum. The note was due and payable in December 2008.  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 56%
volatility, five year terms, and a $0.45 exercise price. The debt discount of
$198,130 was amortized over the two year term of the note.





In
December 2007 accrued interest of $40,685 was added to the note due to Longview
increasing the amount of the note at December 31, 2007 to $1,193,643. The note
is unpaid and there is $ 215,444 of accrued interest outstanding at December 31,
2008.





Longview,
as the note holder, has extended the due date of the remainder due on the note
to January 15, 2010.





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 December
31, 2008, this note is unpaid and there is $38,342 of accrued
interest.





Below is
a summary of secured convertible promissory notes payable due to Longview and
Alpha and related accrued interest payable at December 31, 2008




30





LongviewNotes
                  
                  $
                  2,922,255Accrued
      interest payable
                  
                  
                  388,784$
                  3,311,039AlphaNotes
                  
                  $
                  832,594Accrued
      interest payable
                  
                  
                  216,928$
                  1,049,522





Interest
expenses incurred during the year ended December 31, 2008 on the above tabled
debt due to Longview and Alpha is as follows:





Longview
                  
                  $
                  388,784Alpha
                  
                  
                  91,803$
                  480,587





Series
C Preferred Stock





On July
25, 2008, the Company 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:
                1,000Per
      Share Stated Value:
                $4,500Liquidation
      Preference:
                Per
      share Stated ValueConversion
      Price into Common Stock:
                $.30
      per share, as adjusted from time to time as set forth in the Certificate
      of DesignationVoting
      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 Company 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.





Longview
Fund





As of
December 31, 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 this footnote supra  for
a further description of the Series C Preferred Stock.




31





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 6 above for a discussion of
certain promissory notes due by the Company to Longview Fund, L.P.





During
the twelve months ended December 31, 2008, the Company billed approximately $
1,058,369 to Sandelman & Associates, a company controlled by a former board
member, which amounted to 7.5% of total revenue for the period.





On
December 31, 2008, Scott Kincer resigned as the CEO, President and a Director of
the issuer to pursue other opportunities.  Pursuant to a Separation
Agreement between the parties which is effective as of December 31, 2008, the
issuer is paying Mr. Kincer the sum of $64,750 over a period of five and one
half months as well as reimbursing him for accrued and unpaid expenses. The
agreement contains other standard terms and provisions as to releases and the
like.





ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES





Audit
Fees





For the
fiscal year ended December 31, 2008 , the Company's principal accountant, KBL,
LLP,  billed $25,000 for the audit of the Company's annual financial
statements and review of financial statements included in the Company's Form
10-Q filings.





For the
fiscal year ended December 31, 2007, the Company's principal accountant, Larry
O’ Donnell, CPA, P.C.  billed $20,000, for the audit of the Company's
annual financial statements and review of financial statements included in the
Company's Form 10-Q filings.





Audit-Related
Fees





For the
fiscal years ended December 31, 2008 and 2007, the Company's principal
accountant billed $0 and $0, respectively, for assurance and related services
that were reasonably related to the performance of the audit or review of the
Company's financial statements outside of those fees disclosed above under
"Audit Fees".





Tax
Fees





For the
fiscal years ended December 31, 2008 and 2007, the Company's principal
accountant billed $0 and $0, respectively, for tax compliance, tax advice, and
tax planning services.





All Other
Fees





For the
fiscal years ended December 31, 2008 and 2007, the Company's principal
accountant billed $0 and $0, respectively, for products and services other than
those described above.





Pre-approval
Policies and Procedures





Prior to
engaging the Company's accountants to perform a particular service, the
Company's board of directors obtains an estimate for the service to be
performed. The board of directors, in accordance with procedures for the
Company, approved all of the services described above prior to the services
being performed.




32





PART
IV





ITEM 15.
EXHIBITS , FINANCIAL STATEMENT SCHEDULES


(a)
EXHIBITS.





The
following documents are included or incorporated by reference as exhibits to
this report:





(2) a)
Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession.





2.1 Plan
and Articles of Merger, filed 8/23/91(1)




2.2 Plan
of Reorganization and Agreement, dated 9/20/97(1)





(3)
Articles of Incorporation & By-Laws





3.1
Articles of Incorporation of the Company Filed August 23, 1991(1)




3.2
Articles of Amendment filed on April 10, 1992(1)




3.3
Certificate of Amendment of Articles of Incorporation filed on
3/3/95(1)




3.4
By-Laws of the Company adopted August 24, 1991(1)




3.5
Certificate of Amendment of Articles of Incorporation filed on
2/19/01




3.6
Articles of Incorporation - Nutek Oil, Inc. (Subsidiary)




3.7
Articles of Incorporation - Kristi and Co, Inc. (Subsidiary)




3.8
Articles of Incorporation - SRC International, Inc. (Subsidiary)




3.9
Articles of Incorporation - Century Innovations, Inc. (Subsidiary)




3.10
Articles of Incorporation - Datascension International, Inc.
(Subsidiary)




3.11
Certificate of Amendment of Articles of Incorporation filed on
1/26/04





(4)
Instruments Defining the Rights of Security Holders





4.1 Those
included in exhibit 3, and sample of Stock Certificate (1)




4.2
Preferred Stock (1)





5.1 Legal
Opinion *





(10)
Material Contracts





10.1
Purchase Agreement - Kristi and Co dated 1/6/00 (1)




10.2
Agreement for Promotion and Revenue Sharing Plan, dated 9/2/99 (1)




10.3
Purchase Agreement - Elite Fitness, dated 10/4/99 (1)




10.4
Purchase Agreement - Patent #5833350, dated 9/15/99 (1)




10.5
Purchase Agreement - Clock Mold, dated 4/30/99 (1)




33




10.6 Plan
of Purchase and Agreement, dated 11/30/97 (1)




10.7
Transitional Employer Agreement (1)




10.8
Lease, dated October 15, 1999 (1)




10.9
Letter of Intent - Mineral Acres, dated 11/1/99 (1)




10.10
Compensation Plan (1)




10.11 Key
Employees Incentive Stock Option Plan (1)




10.12
Purchase Agreement - Kristi & Company (2)




10.13
Blank




10.14
Purchase Agreement - Printing Equipment (3)




10.15
Blank




10.16
Employment Agreement Murray N. Conradie (4)




10.17
Employment Agreement Donald L. Hejmanowski (4)




10.18
Employment Agreement Kristi L. Conradie (4)




10.19
Purchase Agreement - Datascension Inc. (5)




10.20
Employment Agreement David Scott Kincer (5)




10.21
Certificate of Preference Rights.




10.22
Purchase Agreement - Sin Fronteras Inc




10.23
Press Release dated May 29, 2002




10.24
Subscription Agreement for November 17, 2004 Funding (6)




10.25
Form of Convertible Note - November 17, 2004 Funding (6)




10.26
Form of Warrant - November 17, 2004 Funding (6)




10.27
Subscription Agreement for March 31, 2005 issuance. (7)




10.28
Convertible Note - March 31, 2005. (7)




10.29
Warrant - March 31, 2005. (7)




10.30
Service Agreement - Harris Interactive, Inc. (8)




10.31
Service Agreement - Towne, Inc. (8)




10.32
Service Agreement - Sandelman & Associates (8)




10.33
Service Agreement - Knowledge Networks, Inc. (8)




34




10.34
Employment Agreement David Scott Kincer (9)*




10.35
Warrant Agreement David Scott Kincer (9)*




10.36
Employment Agreement Joseph Harman *




10.37
Warrant Agreement Joseph Harman (9)*




10.38
June 7, 2006 Subscription Agreement (10)




10.39
June 7, 2006 Note Issued to Longview Fund, L.P. (10)




10.40
June 7, 2006 Note Issued to Alpha Capital (10)




10.41
June 7, 2006 Warrant Issued to Longview Fund, L.P. (10)




10.42
June 7, 2006 Warrant Issued to Alpha Capital (10)




10.43
December 12, 2006 Subscription Agreement (11)




10.44
December 12, 2006 Form of Note (11)




10.45
December 12, 2006 Form of Warrant (11)




10.46.
Credit Agreement with Comerica Bank, dated as of August 30, 2007, and related
ancillary agreements




(1)
              Previously filed as an exhibit to
      the Company's Form 10-SB, filed January 24,
  2000.
 
 (2)
              Previously filed as an exhibit to
      the Company's Number 1 Amendment to Form 10-SB, filed May 22,
      2000.
 
 (3)
              Previously filed as an exhibit to
      the company's quarterly report for the period ended March 31,
      2003
 
 (4)
              Previously filed as an exhibit to
      the company's quarterly report for the period ended June 30,
      2003
 
 (5)
              Previously filed as an exhibit to
      the company's quarterly report for the period ended September 30,
      2003
 
 (6)
              Previously filed on Form 8-K
      November 23, 2004, File No.
000-29087
 
 (7)
              Previously filed as an exhibit to
      the Company's Form SB2/A, filed April 27,
  2005
 
 (8)
              Previously filed as an exhibit to
      the Company's Form SB2/A, filed October 11,
  2005
 
 (9)
              Previously filed as an exhibit to
      the Company's Form SB-2 filed on June 30,
  2006
 
 (10)
              Previously filed as an Exhibit 99
      to the Company’s 8-K filed on June 15,
  2006
 
 (11)
              Previously filed as an Exhibit 99
      to the Company's 8-K filed on December 18,
  2006





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




35





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.




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.





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.April
      10, 2009By:
              /s/ Lou PersicoLou
      PersicoPresident
      and Chief Executive Officer




In
accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Signature
                    
                    Title
                    
                    Date/s/ LOU PERSICO
                    
                    President
      and Chief Executive Officer
                    
                    April
      10, 2009Lou
      Persico
                    
                    and
      Director(Principal
      Executive Officer)/s/ DAVID P. LIEBERMAN
                    
                    Chief
      Financial Officer and Director
                    
                    April
      10, 2009David
      P. Lieberman
                    
                    (Principal
      Accounting Officer)/s/ JOSEPH HARMON
                    
                    Chief
      Operating Officer and Director
                    
                    April
      10, 2009Joseph
      Harmon


36