**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-KSB**


(Mark
      One)


x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      fiscal year Ended December 31, 2007




o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1935





For
      the
      transition period from __________________ to __________________





Commission
      file number: **132-3**





**DIAPULSE
      CORPORATION OF AMERICA**





(Name
      of
      small business issuer in its charter)




**Delaware**
            
            **13-5671991**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                of organization)
            
            Identification
                No.)




**475
                  Northern
                  Boulevard****Great
                  Neck, New
                  York**
              
              **11021**(Address
                  of principal
              
              (Zip
                  Code)executive
                  offices)
  Issuer’s
                  telephone number
              
              **(516)-466-3030**




Securities
      registered under Section 12(b) of the Act:


**NONE**





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




**COMMON
                STOCK, PAR VALUE $0.025 PER
                SHARE**(Title
                of
                Class)




Check
      whether the issuer is not required to file reports pursuant to Section 13
      or 15(d) of the Exchange Act.  o





Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months, and
      (2) has been subject to such filing requirements for the past 90 days.
      YES xNO o





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





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act). YES o
      NO x




The
      registrant’s revenues for the fiscal year ended December 31, 2007 were
      $67,878.


On
      March
      7, 2007, the aggregate market value of the voting stock held by non-affiliates
      of the registrant, based upon the mean of the bid and the ask prices of the
      common stock as reported by an independent market maker, was: **$1,004,745.90**





Number
      of
      shares outstanding of each of the registrant class of common stock as of March
      6, 2008: 3,962,058. ****





**DOCUMENTS
      INCORPORATED BY REFERENCE**


NONE





Transitional
      Small Business Disclosure Format (check one):


YES oNO
x









**DIAPULSE
      CORPORATION OF AMERICA**




**FORM
      10-KSB**




**FOR
      THE YEAR ENDED DECEMBER 31, 2007**




**TABLE
      OF CONTENTS**








PART
      I.


Item
                  1.
              
              
              Description
                  of Business
              
              
              2Item
                  2.
              
              
              Description
                  of Property
              
              
              3Item
                  3.
              
              
              Legal
                  Proceedings
              
              
              3Item
                  4.
              
              
              Submission
                  of Matters to a Vote of Security Holders
              
              
              3




PART
      II.


Item
                  5.
              
              
              Market
                  for Common Equity, Related Stockholder Matters and Small Business
                  Issuer
                  Purchases of Equity Securities
              
              
              4Item
                  6.
              
              
              Management's
                  Discussion and Analysis or Plan of Operation
              
              
              4Item
                  7.
              
              
              Financial
                  Statements
              
              
              5Item
                  8.
              
              
              Changes
                  In and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              
              
              5Item
                  8A(T).
              
              
              Controls
                  and Procedures
              
              
              5Item
                  8B
              
              
              Other
                  Information
              
              
              6


PART
      III.


Item
                  9.
              
              
              Directors,
                  Executive Officers, Promoters and Control Persons; Compliance with
                  Section
                  16(a) of the Exchange Act
              
              
              7Item
                  10.
              
              
              Executive
                  Compensation
              
              
              8Item
                  11.
              
              
              Security
                  Ownership of Certain Beneficial Owners and Management
              
              
              9Item
                  12.
              
              
              Certain
                  Relationships and Related Transactions
              
              
              10




PART
      IV.


Item
                  13.
              
              
              Exhibits
              
              
              11Item
                  14.
              
              
              Principal
                  Accountant Fees and Services
              
              
              11SIGNATURES
              
              
              12FINANCIAL
                  STATEMENTS
              
              
              F1-F17




1




**PART
      I**





**Item
      1.**  **Description
      of Business.**





Diapulse
      Corporation of America (the "Company" or the "Registrant") is a Delaware
      corporation organized in 1957. The Registrant develops, manufactures and markets
      Diapulse Technology, a proprietary medical system which produces non-thermal
      pulsed high frequency, high peak power electromagnetic energy to treat
      post-operative edema and pain in acute and chronic wounds. It is used in
      hospitals, nursing facilities, outpatient clinics, physicians' practices and
      by
      prescription in patients' homes. The Registrant has not significantly varied
      the
      product or its service rendered for more than the past three years.





*Suppliers* .
      The
      Registrant purchases raw materials and component parts of its units from various
      suppliers of electronic products. A majority of the individual component parts
      of the Diapulse units are standard and available from many suppliers. Were
      the
      Registrant to change from its present suppliers for any reason, it believes
      that
      no significant difficulties would be experienced in the replacement of raw
      materials from other suppliers, and there would be no reduction in the quality
      or quantity of the material purchased.





*Sales
      and Customers* .
      The
      Registrant is not dependent upon any single customer, and sells and rents to
      numerous customers, the loss of any one of which would not have a significant
      adverse effect on the Registrant's results of operations.





The
      Registrant rents and sells Diapulse units to hospitals, nursing homes and
      physicians, and rents its equipment to individuals on prescription. The Company
      has received payment from private insurance and reimbursements have also been
      received from Medicare following administrative procedures. Specifically, in
      a
      decision memorandum issued on December 22, 2003, with an effective date of
      July 1, 2004, the Center for Medicare and Medicaid (CMS) granted approval
      for coverage of the Diapulse(R) Wound Treatment System(TM). This permits payment
      for Diapulse treatments to hospitals, nursing homes, physicians and physical
      therapists for patients who have chronic wounds such as Stage III and
      Stage IV pressure ulcers, arterial ulcers, diabetic ulcers and venous
      stasis ulcers.





*Backlog* .
      The
      Registrant has sufficient inventory of completed units and spare parts to
      manufacture additional units for the foreseeable future to fill orders as they
      arrive. Because orders are filled quickly, firm backlog at most points in time
      is not significant. Orders received by the Registrant are not seasonal and
      are
      routinely filled throughout the year.





*Patents* .
      The
      Company owns several patents. The Company also has trademarks. In order to
      protect the Company’s intellectual property rights, it relies on a combination
      of trade secret, copyright, patent and trademark laws and employee and
      third-party nondisclosure agreements. The Company also limits access to and
      distribution of its proprietary information. Notwithstanding the efforts the
      Company takes to protect its proprietary rights, existing trade secret,
      copyright, and trademark laws afford only limited protection. While the Company
      believes that in the aggregate its patents are important to its operations,
      it
      does not believe that one or any group of them is so important that its
      termination could materially affect the Company’s operations.





*Employees* .
      The
      registrant currently employs seven individuals, including independent
      contractors and commission sales representatives. Of those seven individuals,
      two are full-time employees.





*Forward-Looking
      Information* .
      The
      Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
      certain forward-looking statements made by the Company in its disclosures to
      the
      public. There is certain information contained herein, in the Company's press
      releases and in oral statements made by authorized officers of the Company
      which
      are forward-looking statements, as defined by such Act. When used herein, in
      the
      Company's press releases and in such oral statements, the words "estimate",
      "project", "anticipate", "expect", "intend", "believe", "plans", and similar
      expressions are intended to identify forward-looking statements. Because such
      forward-looking statements involve risks and uncertainties, there are important
      factors that could cause actual results to differ materially from those
      expressed or implied by such forward-looking statements.





*Competition* .
      The
      market for the Company’s Diapulse wound care technology is highly competitive.
      Nevertheless, due to the fact that the Company’s technology is proprietary, with
      fifty years of published studies in peer review medical journals, the Company
      does not believe that any other company can effectively compete with the
      Diapulse technology. The Company believes that its technical expertise enhances
      its market position and customer relationships. The Company competes primarily
      on the basis of technical expertise, quality, service and price.




2




*Research
      and Development* .
      The
      Company spent approximately $6,281 and $6,756 for research and development
      in
      the fiscal years ended December 31, 2007, and December 31, 2006, respectively.
      This cost was not borne by consumers of the Company’s products.





**Item
      2.**  **Description
      of Property.**





The
      Registrant maintains its principal office and factory at 475 Northern Boulevard,
      Great Neck, New York. In May 2007, the Company entered into a 5-year lease
      for
      this space, the term of which is set to expire on April 30, 2012. Rental
      payments are as follows: 2007: $23,007; 2008: $40,359; 2009: $41,773; 2010:
      $43,235; 2011: $44,748; 2012: $15,086 .
      The
      Company does not invest in real estate unrelated to its operations. The Company
      believes that this property is adequate for its immediately foreseeable needs.
      In the opinion of management, the property is adequately
      insured.





**Item
      3** **.**  **Legal
      Proceedings.**





The
      Company was involved as plaintiff in litigation filed in August, 1994, alleging
      deceptive acts and practices, false advertising, unfair competition, breach
      of
      fiduciary duty under New York law and under federal law. The complaint
      demanded damages in an unspecified amount for compensatory, punitive and treble
      damages, profits and attorneys' fees against corporate and individual
      defendants. In early 2000, a settlement agreement was reached whereby all claims
      against the Company were dismissed with prejudice, and one of the corporate
      defendants agreed to pay the Company the sum of $50,000 with interest at the
      rate of 9% per year, in level monthly installment payments of $1,867.41. The
      agreement further provided that in the event of failure to make the installment
      payments when due, the entire balance would immediately become due and payable,
      and the Company would be entitled to enter a judgment for the balance. The
      agreement also provided for the defendants to refrain from engaging in certain
      marketing practices in the future. The defendants failed to make any payments
      after the payment due on January 1, 2001, and in late 2001 a judgment for
      $39,215.61 was entered against the corporate defendant who had agreed to the
      monetary settlement. The Company is currently attempting to enforce the judgment
      but is not aware of any assets owned by the judgment debtor. ****





For
      equipment and services provided between September 1, 1995 and October 31, 2004,
      the Company submitted claims totaling approximately $800,000 for Medicare
      Insurance Benefits for the Aged and Disabled Program. Following the rejection
      of
      these claims by administrative law judges, the Company sought their review
      of
      the decisions by Departmental Appeals Board, Medicare Appeals Council, which
      review was denied in March 2006. In connection with its claims, the Company
      commenced in May 2006 an action against Michael O. Leavitt (in his
      representative capacity as Secretary of Health and Human Services) in the United
      States District Court for the Eastern District of New York. The action is
      currently pending.




**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 covered by this report.




3




**PART
      II**





**Item
      5.**  **Market
      for** **Common
      Equity, Related** **Stockholder Matters and Small Business Issuer Purchases of Equity
      Securities.**





The
      Registrant’s common stock trades on the NASDAQ over-the-counter market, under
      the symbol DIAC. The bid and asked closing sales prices are listed
      below.




Quarter
                  Ended2007
              
              20063/31
              
              6/30
              
              9/30
              
              12/31
              
              3/31
              
              6/30
              
              9/30
              
              12/31Bid:
              
              $
              .45
              
              $
              .55
              
              $
              .40
              
              $
              .45
              
              $
              .75
              
              $
              .60
              
              $
              .80
              
              $
              .60




As
      of
      December 31, 2007, there were approximately 1,407 stockholders of record.
      The Company has not paid any cash dividends during any of the periods indicated
      above. The Company anticipates that it will continue to retain its earnings
      to
      finance the growth of its business.





**Item
      6.**  **Management's** **Discussion
      and Analysis or Plan of Operation.**





**Results
      of Operations**





*Overview* .
      During
      the fiscal year ended December 31, 2007, the Registrant has been establishing
      and expanding its distribution network, sales force and sales and rental
      programs. Controlled and double-blind studies demonstrating the clinical value
      of the Registrant's product have been published in peer review medical journals
      which continue to aid marketing. At the present time there are 40 Diapulse
      publications on Medline. Sales and rentals to hospitals and long-term care
      facilities have continued to increase as a result of the Center for Medicare
      and
      Medicaid’s grant of approval for coverage of the Diapulse® Wound Treatment
      SystemTM, effective July 1, 2004.





*Net
      Revenues* .
      During
      the year ended December 31, 2007, revenues decreased by $100,431, or 11%,
      as compared to the year ended December 31, 2006. This decrease was due, in
      large part, to the diversions
      of management and other sales employee efforts due to the relocation of the
      Company’s principal executive offices in connection with its cost-cutting
      program, as well as to the reduction in the Company’s pursuit of Medicare claimsfollowing the death of the Company’s principal executive officer, Jesse
      Ross, early in the year.





*Cost
      of Sales* .
      During
      the year ended December 31, 2007, cost of sales increased by
      $14,927 **** as
      compared to the year ended December 31, 2006. This increase was a result of
      increased costs associated with the higher price of raw materials and component
      parts used in the manufacture of Diapulse units when compared to the prior
      fiscal period.





*Operating
      Expenses* .
      Operating expenses, exclusive of interest and Provisions for Doubtful Accounts,
      decreased by $81,830 in 2007 as compared with 2006, due to the implementation
      of
      a cost-cutting program that helped reduce payroll and rent.





*Interest
      Expense* .
      Interest expense from 2006 to 2007 decreased by $229,890 due to a reduction
      in
      the amount of indebtedness outstanding during the 2007 fiscal period, together
      with a reduction in the interest rate applied to such indebtedness.





*Inflation* .
      In the
      opinion of management, inflation has not had a material effect on the operations
      of the Registrant.




4




**Liquidity
      and Capital Resources**





As
      of
      December 31, 2007, the Registrant had working capital of $405,078. Working
      capital as of December 31, 2006, was $651,407.





The
      Registrant considers, and currently uses for internal management purposes,
      a
      number of measures of liquidity. These measures include working capital and
      operating ratios, all of which are set forth below. The Company is expanding
      its
      distribution network to facilitate the movement of its parts, components,
      sub-assemblies and finished goods inventory to generate revenues. Also the
      president of the Company has periodically made loans to the Company and has
      been
      reimbursed.





**Working
      Capital Ratios**





These
      ratios measure the Registrant's ability to meet its short-term obligations.
      As
      used in the table below, the current ratio refers to an evaluation of working
      capital that is computed by dividing current liabilities into current assets.
      The quick ratio compares the highly liquid current assets (cash, cash
      equivalents and accounts receivable) with current liabilities.




December
                31,
            
            December
                31,2007
            
            2006Working
                Capital
            
            $
            405,078
            
            $
            651,407Current
                ratio
            
            
            2.87
                to 1
            
            
            3.9
                to 1Quick
                ratio
            
            
            .86
                to 1
            
            
            1.4
                to 1




The
      Company was party to a line of credit agreement with Bank of America for
      borrowings of up to $200,000, at an interest rate of 2.0% above prime and
      payable on demand. As of March 6, 2008, the Company had no outstanding balance
      on this credit line, which was terminated on or about November 21, 2007. The
      Company’s former president personally guaranteed the credit line.





**Off-Balance
      Sheet Arrangements**





The
      Company has no off-balance sheet arrangements that have or are reasonably likely
      to have a current or future effect on the small business issuer’s financial
      condition, changes in financial condition, revenues or expenses, results of
      operations, liquidity, capital expenditures or capital resources that is
      material to investors.





**Item
      7.**  **Financial** **Statements.**





The
      financial statements to be provided pursuant to this Item are included under
      Pages F1 - F17 of
      this
      report.





**Item
      8.**  **Changes** **In
      and Disagreements With Accountants on Accounting and Financial
      Disclosure.**





None





**Item
      8** **A(T).**  **Controls
      and Procedures.**





Disclosure
      Controls and Procedures





As
      of the
      end of the period covered by this Annual Report, the Company carried out an
      evaluation, under the supervision and with the participation of the individual
      who serves as its Chief Executive Officer and Principal Financial Officer,
      of
      the effectiveness of the Company’s disclosure controls and procedures. Based on
      this evaluation, the Company’s Chief Executive and Principal Financial Officer
      concluded that information required to be disclosed is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms and is accumulated and communicated to management, including to the Chief
      Executive and Principal Financial Officer, to allow for timely decisions
      regarding required disclosure of information required to be included in our
      periodic SEC reports. The Company’s disclosure controls and procedures are
      designed to provide reasonable assurance of achieving their objectives and
      the
      Chief Executive and Principal Financial Officer has concluded that these
      disclosure controls and procedures are effective to a reasonable assurance
      level
      of achieving such objectives. However, the design of any system of controls
      is
      based in part upon certain assumptions about the likelihood of future events,
      and there can be no assurance that any design will succeed in achieving its
      stated goals under all potential future conditions, regardless of how
      remote.




5




Internal
      Control Over Financial Reporting





There
      were no changes in the Company’s internal controls in the last fiscal quarter
      that have materially affected or are reasonably likely to materially affect
      the
      Company’s internal control over financial reporting.





**Management’s
      Annual Report on Internal Control Over Financial Reporting**





The
      Company’s management is responsible for establishing and maintaining an adequate
      system of internal control over financial reporting. The Company’s internal
      control over financial reporting includes those policies and procedures
      that:





·
            pertain
                to the maintenance of records that, in reasonable detail, accurately
                and
                fairly reflect the transactions and dispositions of our
                assets;·
            provide
                reasonable assurance that transactions are recorded as necessary
                to permit
                preparation of the Company’s financial statements in accordance with
                generally accepted accounting principles in the United States, and
                that
                the Company’s receipts and expenditures are being made only in accordance
                with authorizations of our management and directors;
                and·
            provide
                reasonable assurance regarding prevention or timely detection of
                unauthorized acquisition, use or disposition of the Company’s assets that
                could have a material effect on the financial
                statements.





The
      Company’s management assessed the effectiveness of the Company’s system of
      internal control over financial reporting as of December 31, 2007. In
      making this assessment, management used the framework in *Internal
      Control — Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway Commission
      (“COSO”). Based on the Company’s assessment and the criteria set forth by COSO,
      management believes that Diapulse did not maintain effective internal control
      over financial reporting as of December 31, 2007, primarily due to the lack
      of segregation of duties related to accounting and reporting of financial
      transactions as a result of the fact that one person serves as both Chief
      Executive and Chief Financial Officer of the Company.





This
      annual report does not include an attestation report of the Company’s registered
      public accounting firm regarding internal control over financial reporting
      identified by management. Management’s report is not subject to attestation by
      the Company’s registered public accounting firm pursuant to temporary rules of
      the Securities and Exchange Commission that permit the Company to provide only
      management’s report in this annual report.




**Item
      8** **B.**  **Other
      Information.**





None




6




**PART
      III**





**I** **tem
      9.**  **Directors,
      Executive Officers, Promoters and Control Persons; Compliance with
      Section 16(a) of the Exchange Act.**





The
      directors, executive officers and key employees of the Company as of March
      6,
      2008, were as follows:




Name
              Age
              TitleDavid
                  M. Ross
              60
              President,
                  Chief Executive Officer, Treasurer, Secretary, Director and Chairman
                  of
                  the BoardJonathan
                  E. Ross
              24
              DirectorAbraham
                  Jaeger, MD
              60
              Director




David M.
      Ross became the Company’s sole executive officer and serves as Chairman of the
      Board, President, Chief Executive Officer, Treasurer and Secretary on January
      22, 2007. Prior to that date, from July 2002, Mr. Ross was a Vice President
      of the Company. Mr. Ross was an independent sales representative and
      consultant since 1971 and has been a full-time employee since 1998.
      Mr. Ross became a Director of the Company during 1989.





Jonathan E.
      Ross, a graduate of Rochester Institute of Technology with a B.S. degree in
      Microelectronic Engineering, has worked with the Company in the areas of
      production, service, and Research and Development. He worked as a Research
      and
      Development Oncology Engineer with Boston Scientific form January to June 2006,
      during which period he also worked as a Process Engineer with Micron
      Semiconductor Ltd. Since March 2007, he has worked for Accenture Ltd., a
      business consulting company. Mr. Ross became a director on August 21,
      2007.





Abraham
      Jaeger, MD, has a specialty in Internal Medicine and has worked, for more than
      five years, as an independent consultant to the Company in the area of wound
      care and pain management. He has lectured worldwide to the medical community
      on
      application of Diapulse(R) Medical Technology. Mr. Jaeger became a director
      on August 21, 2007.





Jesse
      Ross had been actively engaged in the business of the Registrant and had been
      its President since its incorporation. He had devoted his full-time services
      to
      the business of the Registrant since 1957. Jesse Ross passed away on
      January 13, 2007. His son, David M. Ross, became the sole executive
      officer of the Company on January 22, 2007





Jonathan E.
      Ross is the son of David M. Ross.





**Board
      of Directors**





Directors
      are elected at the annual meeting of the Company's stockholders to hold office
      until the next annual meeting and until their successors are elected and
      qualified. Officers serve at the discretion of the Board of Directors and may
      receive such compensation for their services as is fixed from time to time
      by
      resolution of the Board.





**Code
      of Ethics**





A
      copy of
      the Diapulse Corporation of America Code of Professional Ethics can be obtained
      upon request from the company free of charge.





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Pursuant
      to Section 16(a) of the Securities Exchange Act of 1934 and the rules
      issued thereunder, the Company's directors and executive officers are required
      to file with the Securities and Exchange Commission and the National Association
      of Securities Dealers Inc. reports of ownership and changes in ownership of
      common stock and other equity securities of the Company. Copies of such reports
      are required to be furnished to the Company. Based on the Company’s
      understanding that the shares of common stock previously owned by Jesse Ross
      were transferred to his heirs, including David Ross, during the fiscal year
      ended December 31, 2007, and the fact that no copy of a report regarding that
      transfer was furnished to the Company during fiscal 2007, the Company believes
      that Mr. Ross failed to timely comply with the requirements of
      Section 16(a) during fiscal 2007. Based
      solely on verbal representations that no other reports were required, the
      Company believes that its other directors complied with the requirements of
      Section 16(a).




7




The
      Company does not have a separately-designated standing audit committee; rather,
      the Board of Directors performs the duties of an audit committee. In addition,
      the Company does not have an audit committee financial expert due to its current
      inability to adequately compensate an independent director with those
      qualifications.





**Policy
      For Stockholder Communications**





Mail
      can
      be addressed to the Company’s Directors in care of Diapulse Corporation of
      America, 475 Northern Boulevard, Great Neck, New York 11021. At the direction
      of
      the Board of Directors, all mail received will be opened and screened for
      security purposes. Mail addressed to a particular Director will be forwarded
      or
      delivered to that Director. Mail addressed to the “Board of Directors” will be
      forwarded or delivered to the Chairman of the Board.




**Item
      10.**  **Executive** **Compensation.**





*Cash
      Compensation* .
      For the
      years ended December 31, 2006 and 2007, no officer received or was entitled
      to receive more than $100,000 in compensation from the Registrant.





**SUMMARY
      COMPENSATION TABLE**





The
      following table sets forth the annual compensation paid to the individual
      serving as the Company’s chief executive officer for the two fiscal years ended
      December 31, 2007, and December 31, 2006. For these two fiscal years,
      no employee that served as an executive officer of the Company was paid
      compensation in excess of $100,000.





Name
                and
              Principal
                Position
            
            Year
            
            Salary
                ($)
            
            Bonus
                ($)
            
            Stock
              Awards
            
            Option
              Awards
            
            Non-Equity
              Incentive
              Plan
              Compensation
            
            Nonqualified
              Deferred
              Compensation
              Earnings
            
            All
                Other
              Compensation
                ($)
            
            Total
              ($)David
                Ross, President,
            
            
            2007
            
            
            80,000
            
            $
            18,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            0
            
            
            98,000Director
                andChairman
                of the Board(1)Jesse
                Ross, President,
            
            
            2007
            
            
            0
            
            
            0
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            0
            
            
            0Director
                and Chairman of the Board
            
            
            2006
            
            
            100,000
            (2)
            
            0
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            0
            
            
            100,000





(1)
      David
      Ross was elected Chairman of the Board, Chief Executive Officer and Principal
      Financial Officer on January 22, 2007. Prior thereto, Jesse Ross served as
      President, Director and Chairman of the Board until his death on
      January 13, 2007.





(2)
      For
      the year ended December 31, 2006, Mr. Jesse Ross, then President of
      the Company, deferred $100,000 of salary.





8





**OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END**





The
      following table sets forth information concerning outstanding equity awards
      of
      named executive officers as of December 31, 2007.





**Name**
            
            **Number
                of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options
                (#)**
              **Exercisable**
            
            **Number
                of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options
                (#)**
              **Unexercisable**
            
            **Option**
              **Exercise**
              **Price**
              **($)**
            
            **Option**
              **Expiration**
              **Date**Jesse
                Ross,
              President,
              Director
                andChairman
                ofthe
                Board*
            
            
            1,000,000
            
            
            -
            
            $
            .65
            
            
            03/27/08





*
      On
      March 29, 1997, the Company granted to Jesse Ross, as President of the Company,
      an option to purchase an aggregate of 1,000,000 shares of common stock of the
      Company at the exercise price of $.50 per share for one year from March 27,
      1997, and if not exercised during that period, at $.65 per share from March
      27,
      1998 for the balance of the term of the option. Jesse Ross died on January
      13,
      2007.





*Compensation
      Pursuant to Plans.* The
      Registrant has no pension, retirement, stock or any other form of deferred
      compensation plans.







**DIRECTORS'
      COMPENSATION**





Directors
      of the Company currently receive no compensation for their service as such.





**Item
      11.**  **Security** **Ownership
      of Certain Beneficial Owners and Management.**





*Security
      Ownership of Certain Beneficial Owners* .
      The
      following table sets forth certain information with respect to shares of the
      Registrant’s common stock beneficially owned by individuals owning more than
      five percent of the Registrant's common stock.




Name
                  and Address of
              
              Amount
                  and Nature of
              
              PercentBeneficial
                  Owner
              
              Beneficial
                  Ownership
              
              of
                  ClassDaniel
                  Ross
              
              
              529,750
                  (1
              )
              
              13.4
              %6567
                  Petunia PlaceCarlsbad,
                  CA 92009




(1) Consists
      of shares for which David M. Ross exercises voting control.




9




*Security
      Ownership of Management and Directors* .
      The
      following table sets forth certain information with respect to shares of the
      Registrant's common stock beneficially owned by directors and named executive
      officers of the Registrant as of March 6,
      2008.




Name
                  of
              
              Amount
                  and Nature of
              
              PercentBeneficial
                  Owner
              
              Beneficial
                  Ownership
              
              of
                  ClassDavid
                  M. Ross
              
              
              1,589,450
                  (1
              )
              
              40.12Jonathan
                  E. Ross
              
              
              8,500
              
              
              *All
                  officers and directors as a
                  group
              
              
              1,597,950
              
              
              40.33




(1)
      Does
      not include 529,750 shares of common stock owned by Daniel Ross as to which
      David M. Ross has voting control and as to which David M. Ross disclaims
      beneficial ownership.


*
      Less than 1%.





**Item
      12.****Certain****Relationships
      and Related****Transactions.**





As
      of
      December 31, 2007, the Company had notes payable to Jesse Ross in the
      amount of $3,270,145. Effective January 1, 2007, the executors of the
      estate of Jesse Ross elected to reduce the interest rate on these notes to
      1.25%. Prior thereto, the interest rate was 1% above prime. During fiscal 2007,
      payments on these notes of $238,355 were made in
      the
      aggregateto Jesse Ross and his estate. Effective
      January 1, 2008, the executors of the estate elected to change the interest
      rate
      to 1% above prime.





As
      of
      December 31, 2007, the Company had an outstanding advance commission of $36,580
      paid to Daniel Ross, a son of Jesse Ross, who served as an independent sales
      agent and became an employee of the Company on January 21, 2003. Commission
      advances represent cash advances by the Company to independent sales
      representatives, which are to be applied against future sales. These advances
      are non-interest bearing. The Company has determined that the advance to Daniel
      Ross is uncollectible and has reduced its accounts receivable by that
      amount.





As
      of
      December 31, 2007, the amount of $73,054 was owed to Gladys Ross, the widow
      of Jesse Ross, for unpaid salary and accumulated interest based on a rate of
      1%
      above prime. Interest incurred on this debt during 2007 equals $6,334, a portion
      of which was paid during fiscal 2007.





**Company
      Policy**





The
      Company believes that each of the foregoing transactions embodies terms no
      less
      favorable to the Company than those that could have been obtained from
      unaffiliated parties. Any ongoing or future transactions between the Company
      and
      its officers, directors, principal stockholders, or other affiliates will be
      on
      terms no less favorable to the Company than could be obtained from unaffiliated
      third parties on an arms-length basis and will be approved by a majority of
      the
      Company's independent and disinterested directors.





**Director
      Independence**





The
      Company’s directors are David M. Ross, Jonathan E. Ross and Abraham
      Jaeger, MD, none of whom are independent under the listing standards of The
      Nasdaq Stock Market.




10




**PART
      IV**





**Item
      13.**  **Exhibits.**




Exhibits :
      The
      following Exhibits are filed as part of this report:




3.1
              
              
              Certificate
                  of Incorporation of Diapulse Corporation of America, filed October
                  2,
                  1957.3.2
              
              
              Amendment
                  to Certificate of Incorporation, filed October 16, 1959.3.3
              
              
              Amendment
                  to Certificate of Incorporation, filed December 20, 1961.3.4
              
              
              Amendment
                  to Certificate of Incorporation, filed June 13, 1990.3.5
              
              
              Amendment
                  to Certificate of Incorporation, filed July 12, 1994.4.1
              
              
              Form
                  of Stock Certificate of Diapulse Corporation of America.10.1
              
              
              Lease
                  Agreement between Affiliated Developers, Inc. and Diapulse Corporation
                  commencing May 1, 2007.31.1
              
              
              Rule
                  13a-14(a)/15d-14(a) Certification.32.1
              
              
              CEO/CFO
                  Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to
                  Section 906 of the Sarbanes-Oxley Act of 2002.




**Item
      14.**  **Principal
      Accountant Fees and Services.**





**AUDIT
      FEES**





The
      aggregate fees billed by Granick & Gendler, CPAs for professional services
      rendered for the audits of the company's annual financial statements on Form
      10-KSB and the reviews of the financial statements on Form 10-QSB for the
      fiscal year ended December 31, 2007 were approximately $41,000, and for the
      year
      ended December 31, 2006 were approximately $41,000.





**AUDIT
      RELATED FEES**





There
      were no fees billed by the principal accountants in the years ended
      December 31, 2007 and 2006 for assurance and related services that are
      reasonably related to the performance of the audit of the Company’s financial
      statements.





**TAX
      FEES**





The
      fees
      billed by our audit firm for the preparation of our Corporate tax return for
      the
      year ended December 31, 2007, were **$** 1,600
      and
      for the year ended December 31, 2006 were $1,500.





**ALL
      OTHER FEES**





There
      were no other fees for professional services rendered by the Company's
      independent auditors for the fiscal years ended December 31, 2007 and
      2006.





The
      Board
      of Directors approved 100% of the fees paid to the principal accountant for
      audit-related, tax and other fees. The Board of Directors pre-approved all
      non-audit services to be performed by the auditor.




11




**SIGNATURES**





In
      accordance with Section 13 or 15 (d) of the Exchange Act, the registrant has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




**DIAPULSE
                  CORPORATION OF AMERICA**
                RegistrantBy:
              /s/
                David M. RossDavid
                M. Ross, President


Date:
      March 31, 2008







In
      accordance with 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.




Name
                and Capacity
              
              Date/s/
                  David M. Ross
              
              March
                  31, 2008Name:
              David
                  M. RossTitle:
              President,
                  Director andChairman
                  of the Board/s/
                  Jonathan E. Ross
              
              March
                  31, 2008Name:
              Jonathan
                  E. RossTitle:
              Director/s/
                    Abraham Jaeger
              
              March
                    31, 2008Name:
              Abraham
                  Jaeger, MDTitle:
              Director
  12
  PART
        II
 
 DIAPULSE
        CORPORATION OF AMERICA
 
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2007 AND 2006
 
  CONTENTS
 
 
 PageReport
                  of Independent Certified Public Accountants
              
              
              F-2Financial
                  statements:Balance
                  sheets
              
              
              F-3
                  - F-4Statements
                  of operations
              
              
              F-5Statements
                  of stockholders’ equity (deficiency)
              
              
              F-6Statements
                  of cash flows
              
              
              F-7
                  - F-8Notes
                  to financial statements
              
              
              F-9
                  - F-17
  F-1
  Granick
        & Gendler
 CERTIFIED
        PUBLIC ACCOUNTANTS
 
 60
        EAST
        42ND STREET
 NEW
        YORK,
        NY 10165
 (212)
        697-1075
 
 
 Report
        of Independent Registered Public Accounting Firm
 
 
 To
        the
        Board of Directors and Stockholders of
 Diapulse
        Corporation of America
 
 We
        have
        audited the accompanying balance sheets of Diapulse Corporation of America
        as of
        December 31, 2007 and the related statements of operations, stockholders’
deficiency and cash flows for each of the two-year periods ended December
        31,
        2007. These financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these statements
        based on our audits.
 
 We
        conducted our audits in accordance with auditing 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 audits provide 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 Diapulse Corporation of America
        as
        of December 31, 2007 and the results of its operations and its cash flows
        for
        each of the two-year periods ended December 31, 2007 in conformity with
        accounting principles generally accepted in the United States of
        America.
 
 **GRANICK
        & GENDLER**
 Certified
        Public Accountants
 
 New
        York,
        New York
 March
        27,
        2008
  F-2
 
 DIAPULSE
        CORPORATION OF AMERICA
 
 BALANCE
        SHEETS
 
 DECEMBER
        31, 2007
 
 
 ASSETS
  Current
                  assets:Cash
                  and cash equivalents
              
              $
              172,936Current
                  portion of accounts receivable, net ofallowance
                  for doubtful accounts of $276,530
              
              
              14,160Inventory
              
              
              423,623Other
                  current assets
              
              
              11,510Total
                  current assets
              
              
              622,229Property
                  and equipment, net
              
              
              5,574Other
                  assets:Accounts
                  receivable, net of current portion
              
              
              55,247Security
                  deposits
              
              
              9,763Total
                  other assets
              
              
              65,010Total
                  assets
              
              $
              692,813
  The
        accompanying Notes are an integral part of these financial
        statements.
  F-3
 
 The
        accompany DIAPULSE CORPORATION OF AMERICA
 
 BALANCE
        SHEETS (CONTINUED)
 
 DECEMBER
        31, 2007
 
 LIABILITIES
        AND STOCKHOLDERS’ DEFICIENCY
  Current
                  liabilities:Accounts
                  payable and accrued liabilitiesincluding
                  $ 73,054 to related parties
              
              $
              216,096Accrued
                  income taxes
              
              
              1,055Total
                  current liabilities
              
              
              217,151Long-term
                  portion of notes payable to former officer/stockholder
              
              
              3,270,145Total
                  liabilities
              
              
              3,487,296CommitmentsStockholders’
                  deficiencyCommon
                  stock, $.025 par value per shareauthorized
                  15,000,000 shares, issued3,962,058
                  shares
              
              
              99,051Additional
                  paid-in capital
              
              
              2,293,272Accumulated
                  deficit
              
              
              (5,184,478
              )(2,792,155
              )Less
                  treasury stock, 1,328 shares at cost
              
              
              (2,328
              )Total
                  stockholders’ deficiency
              
              
              (2,794,483
              )Total
                  liabilities and stockholders’ deficiency
              
              $
              692,813
  The
        accompanying Notes are an integral part of these financial
        statements.
  F-4
  DIAPULSE
        CORPORATION OF AMERICA
 
 STATEMENT
        OF OPERATIONS
 
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2007 AND 2006
  2007
              
              2006RevenueRental
                  income
              
              $
              67,878
              
              $
              270,530Sales
                  of machinery
              
              
              730,750
              
              
              628,529Total
                  revenue
              
              
              798,628
              
              
              899,059Cost
                  of sales and rentals
              
              
              131,487
              
              
              116,560Gross
                  margin
              
              
              667,141
              
              
              782,499Operating
                  expenses:Selling,
                  general and administrative
              
              
              711,838
              
              
              793,668Provision
                  for doubtful accounts
              
              
              36,633
              
              
              144,946Interest
                  expense (principally to related parties)
              
              
              57,783
              
              
              287,673Total
                  operating expenses
              
              
              806,254
              
              
              1,226,287(Loss)
                  from operations
              
              
              (139,113
              )
              
              (443,788
              )Interest
                  and other income
              
              
              19,141
              
              
              41,046(Loss)
                  from sale of investments
              
              
              (797
              )
              
              --(Loss)
                  before income taxes
              
              
              (120,769
              )
              
              (402,742
              )Income
                  taxes
              
              
              1,268
              
              
              4,144Net
                  (Loss)
              
              $
              (122,037
              )
              $
              (406,886
              )Basic
                  and diluted loss per share
              
              $
              (0.03
              )
              $
              (0.10
              )Weighted
                  average number of common sharesoutstanding
              
              
              3,960,730
              
              
              3,960,730
  The
        accompanying Notes are an integral part of these financial
        statements.
 
 F-5


DIAPULSE
        CORPORATION OF AMERICA
 
 STATEMENT
        OF STOCKHOLDERS’ DEFICIENCY
 
 FOR
        THE
        YEAR ENDED DECEMBER 31, 2007
  Common
                  Stock
              
              
              Additional
              
              
              
              
              
              
              
              
              
              
              
              TotalIssued
              
              
              Paid-In-
              
              
              Accumulated
              
              
              Treasury
              
              
              Stock
              
              
              Stockholders’Shares
              
              
              Amounts
              
              
              Capital
              
              
              Deficit
              
              
              Shares
              
              
              Amounts
              
              
              DeficiencyBalance,
                  January 1, 2006
              
              
              3,962,058
              
              $
              99,051
              
              $
              2,293,272
              
              
              (4,655,555
              )
              
              1,328
              
              
              ($2,328
              )
              
              ($2,265,560
              )Net
                  (loss)
              
              
              
              
              
              
              
              
              
              
              
              (406,886
              )
              
              
              
              
              
              
              
              (406,886
              )Balance,
                  December 31, 2006
              
              
              3,962,058
              
              $
              99,051
              
              $
              2,293,272
              
              
              (5,062,441
              )
              
              1,328
              
              
              ($2,328
              )
              
              ($2,672,446
              )Net
                  (loss)
              
              
              
              
              
              
              
              
              
              
              
              (122,037
              )
              
              
              
              
              
              
              
              (122,037
              )Balance,
                  December 31, 2007
              
              
              3,962,058
              
              $
              99,051
              
              $
              2,293,272
              
              
              (5,184,478
              )
              
              1,328
              
              
              ($2,328
              )
              
              ($2,794,483
              )
  The
        accompanying Notes are an integral part of these financial
        statements.
  F-6
  DIAPULSE
        CORPORATION OF AMERICA
 
 STATEMENTS
        OF CASH FLOWS
 
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2007 AND 2006
  2007
              
              
              2006Operating
                  activities:Net
                  Loss
              
              $
              (122,037)
              
              $
              (406,886)Adjustments
                  to reconcile net (loss) to net cashProvided
                  by (used in) operating activities:Depreciation
              
              
              2,530
              
              
              8,127Provision
                  for losses on accounts receivable
              
              
              276,530
              
              
              249,990Accrued
                  interest to officer
              
              
              1,332,727
              
              
              1,315,166Changes
                  in assets and liabilities:Accounts
                  receivable
              
              
              (195,985
              )
              
              (134,959
              )Inventories
              
              
              (21,545
              )
              
              (41,254
              )Commission
                  advances
              
              
              109,660
              
              
              (46,129
              )Other
                  current assets
              
              
              3,076
              
              
              16,253Security
                  deposits
              
              
              14,316
              
              
              1,974Accounts
                  payable and accrued liabilities
              
              
              (1,293,994
              )
              
              (1,064,058
              )Total
                  adjustments
              
              
              227,315
              
              
              305,110Net
                  cash provided by (used in) operating activities
              
              
              105,278
              
              
              (101,776
              )Net
                  cash (used in) investing activitiesCapital
                  expenditures
              
              
              (1,901)
              
              
              -Net
                  cash (used in) investing activities
              
              
              (1,901)
              
              
              -
  The
        accompanying Notes are an integral part of these financial
        statements.
  F-7
  DIAPULSE
        CORPORATION OF AMERICA
 
 STATEMENTS
        OF CASH FLOWS (CONTINUED)
 
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2007 AND 2006
  2007
              
              2006Financing
                  activities:Loans
                  from officers
              
              
              40,884
              
              
              539,263Repayments
                  of loans to officers
              
              
              (238,555
              )
              
              (450,000
              )Loan
                  from Bank
              
              
              (44,797
              )
              
              (155,254
              )Net
                  cash provided by (used in) financing activities
              
              
              (242,468
              )
              
              (65,991
              )Net
                  increase (decrease) in cash
              
              
              (139,091
              )
              
              (167,767
              )Cash
                  and cash equivalents, beginning of year
              
              
              312,027
              
              
              479,794Cash
                  and cash equivalents, end of year
              
              $
              172,936
              
              $
              312,027Cash
                  paid during the years for:Interest
              
              $
              9,272
              
              $
              29,744Taxes
              
              
              2,179
              
              
              500
  The
        accompanying Notes are an integral part of these financial
        statements.
  F-8
  DIAPULSE
        CORPORATION OFAMERICA
 
 NOTES
        TO
        FINANCIAL STATEMENTS
   1
              Description of Business and Summary
                  of
                  Significant Accounting Policies
  Diapulse
        Corporation of America (“the Company”) develops, manufactures and markets
        Diapulse (Registered Trademark) technology, a proprietary medical system
        which
        produces non-thermal pulsed high-frequency, high-peak power electromagnetic
        energy to treat post-operative edema and pain in acute and chronic wounds.
        For
        the years 2007 and 2006 there were no major suppliers of component parts
        or raw
        materials. The Company’s product is sold and rented to hospitals, nursing
        facilities, outpatient clinics, physicians’ practices and prescribed for use in
        patients’ homes throughout the United States. In 2007 and 2006 there were no
        major customers. The Company does not require collateral for its accounts
        receivable.
 
 Inventories
 
 Inventories
        are valued at the lower of cost or market. Cost is determined using the
        first-in, first-out (FIFO) method for parts and components and the specific
        identification method for finished goods. When equipment on rental is sold,
        the
        net book value of the equipment is included in the cost of sales and the
        proceeds are included in sales.
 
 The
        Company classifies machinery which is held for resale as inventory.
 
 Income
        Recognition
 
 Income
        from the sale of a machine is recognized upon shipping of the machine. Rental
        income is recognized on a monthly basis.
 
 Depreciation
 
 Depreciation
        is computed based on a straight-line method over the estimated useful lives
        of
        the related assets, ranging from five to fifteen years. Rental equipment
        is
        depreciated over a five-year life on a straight-line basis.
  F-9
 1
                  Description of Business and
                      Summary of
                      Significant Accounting Policies
                      (continued)
 Income
        Taxes
 
 The
        Company follows Statement of Financial Accounting Standards (“SFAS”) No. 109,
“Accounting for Income Taxes.” This statement requires the use of the asset and
        liability approach in the recognition of deferred tax assets and liabilities
        for
        the expected future tax consequences of events that have been recognized
        in the
        Company’s financial statements or tax returns. If it is more likely than not
        that some portion or all of a deferred tax asset will not be realized, a
        valuation allowance is recognized.
 
 The
        Company adopted the provisions of FASB issued Interpretation No. 48. “Accounting
        for Uncertainty in Income Taxes - an Interpretation of FASB Statement 109” (“FIN
        48”) effective January 1, 2007. As a result of the implementation of FIN 48.
        no
        adjustment in the liability for unrecognized income tax benefits relating
        to
        uncertain tax positions was necessary.
 
 Impairment
        of Long-lived Assets
 
 The
        Company reviews the carrying value of long-lived assets to determine if
        circumstances exist indicating whether there has been any impairment of the
        carrying values of property and equipment or whether the depreciation periods
        should be modified. Long-lived assets are reviewed for impairment whenever
        events or changes in business circumstances indicate that the carrying value
        of
        the assets may not be fully recoverable. The Company performs undiscounted
        cash
        flow analysis to determine if any impairment exists. If any impairment is
        determined to exist, any related impairment loss is calculated based on fair
        value. The Company does not believe that there are any current facts or
        circumstances indicating impairment of any long-lived assets.
 
 (Loss)
        Per Share
 
 The
        Company adopted SFAS No. 128, “Earnings Per Share”. In accordance with SFAS No.
        128, the Company is required to present both basic net loss per share and
        diluted net loss per share in the financial statements for all periods
        presented. However, the Company did not present the diluted net loss per
        share
        since all options outstanding were anti-dilutive and not considered.
 
 The
        Company uses SFAS No. 128, “Earnings Per Share” (“EPS”). (Loss) per share is
        computed by dividing the (loss) by the weighted average number of common
        shares
        outstanding during the period.
  F-10
 1
                Description of Business and
                    Summary of
                    Significant Accounting Policies
                    (continued)
 For
                    The Year Ended 2006(Loss)
                
                Shares
                
                Per-Share(Numerator)
                
                (Denominator)
                
                Amount(Loss)
                    Per Share
                
                $
                (406,886
                )
                
                3,960,730
                
                $
                (0.10
                )
  For
                    The Year Ended 2007(Loss)
                
                
                Shares
                
                
                Per-Share(Numerator)
                
                
                (Denominator)
                
                
                Amount(Loss)
                    Per Share
                
                $
                (122,037
                )
                
                3,960,730
                
                $
                (0.03
                )
 
 All
        options outstanding during 2007 and 2006 were anti-dilutive and therefore
        not
        considered in the above computation.
 
 Stock-Based
        Compensation
  In
        December 2004, the Financial Accounting Standards Board ("FASB") issued
        Statement of Financial Accounting Standards ("SFAS") No. 123R, “Share-Based
        Payment”. SFAS No. 123R is a revision of SFAS No. 123, “Accounting for Stock
        Based Compensation”, and supersedes APB 25. Among other items, SFAS 123R
        eliminates the use of APB 25 and the intrinsic value method of accounting,
        and
        requires companies to recognize the cost of employee services received in
        exchange for awards of equity instruments, based on the grant date fair value
        of
        those awards, in the financial statements. The effective date of SFAS 123R
        is
        the first reporting period beginning after June 15, 2005, which is third
        quarter
        2005 for calendar year companies, although early adoption is allowed. SFAS
        123R
        requires companies to adopt its requirements using a “modified prospective”
method. Under the “modified prospective” method, compensation cost is recognized
        in the financial statements beginning with the effective date, based on the
        requirements of SFAS 123R for all share-based payments granted after that
        date,
        and based on the requirements of SFAS 123 for all unvested awards granted
        prior
        to the effective date of SFAS 123R. The “modified retrospective” method also
        permits entities to restate financial statements of previous periods based
        on
        pro-forma disclosures made in accordance with SFAS 123.
 
 The
        Company currently utilizes a standard option pricing model (i.e., Black-Scholes)
        to  measure
        the fair value of stock options granted to employees. While SFAS 123R permits  entities
        to continue to use such a model, the standard also permits the use of a
“lattice”  model.
        The full adoption of SFAS 123R will have no material impact on the financial  statement
  F-11
 1
                  Description of Business and
                      Summary of
                      Significant Accounting Policies
                      (continued)
 Use
        of
        Estimates
 
 In
        preparing financial statements in conformity with generally accepted accounting
        principles, management is required to make estimates and assumptions that
        affect
        the reported amounts of assets and liabilities, the disclosure of contingent
        assets and liabilities at the date of the financial statements and the reported
        amounts of revenues and expenses during the reporting period. Actual results
        could differ from those estimates. Significant estimates are used in accounting
        for accounts receivable allowance, depreciation and amortization, inventory
        and
        income taxes.
  Financial
        Instruments
 
 Fair
        values of financial instruments are estimates that, in many cases, may differ
        significantly from the amounts that could be realized upon immediate
        liquidation. In cases where market prices are not available, estimates of
        fair
        value are based on discounted cash flow analysis, which utilize current interest
        rates for similar financial instruments with comparable terms and credit
        equity.
 
 Cash
        and
        Cash Equivalents
 
 The
        Company considers all highly liquid debt instruments purchased with an original
        maturity of three months or less to be cash equivalents.
 
 Newly
        Enacted Accounting Pronouncements
 
 The
        Company does not anticipate the adoption of recently issued accounting
        pronouncements to have a significant impact on the Company’s results of
        operations, financial position, or cash flows.
  2
                    Accounts
                        Receivable
 Accounts
        receivable as of December 31, 2007, are summarized as follows:
 
 Gross
                  receivables - Medicare
              
              $
              309,468Gross
                  receivables - Other
              
              
              36,469Less
                  allowance for doubtful accounts
              
              
              (276,530
              )Net
                  receivables
              
              $
              69,407Current
                  portion of accounts receivable
              
              
              14,160Accounts
                  receivable, net of current portion
              
              
              55,247$
              69,407
  F-12
  The
        Company evaluates the accounts receivable by reviewing historic percentages
        of
        collections against billings. The historic percentage is used to determine
        the
        allowance for uncollectible accounts. When an account is deemed uncollectible,
        it is charged against the allowance. Additions to the allowance are charged
        against operations.
 3
                      Inventories
 The
        components of inventories as of December 31, 2007 are summarized as
        follows:
 
 Parts,
                  components and sub-assemblies
              
              $
              212,438Finished
                  goods
              
              
              211,185$
              423,623
  4
                    Commission Advances and Accrued
                      Commissions
 Commission
        advances represent cash advances by the Company to several of its independent
        sales representatives, which are to be applied against future sales made
        by the
        representatives. These advances are non-interest bearing. See Note 6 for
        commission advances to related parties. Accrued commissions are generally
        paid
        upon receipt of accounts receivable.
  5
                      Fair
                          values of Financial Instruments
 The
        Company estimates that the fair value of all financial instruments at December
        31, 2007 does not differ materially from the aggregate carrying value of
        its
        financial instruments recorded in the accompanying Balance Sheet. Considerable
        judgment is necessarily required in interpreting market data to develop the
        estimate of fair value and, accordingly, the estimates are not necessarily
        indicative of the amount that the Company could realize in a current market
        exchange.
  6
                                      Related
                                          Party Transactions
 Due
        to
        the estate of a deceased officer/stockholder at December 31, 2007 are as
        follows:
  Long
                    term portion of notes payable
                
                $
                3,270,145
  F-13
  6
                                                  Related
                                                        party transactions
                                                        (continued)
 These
        notes bear interest at a rate of 1% above prime per year in year 2006. The
        executors for the estate elected to reduce the interest rate on these notes
        to
        1.25% per year effective January 1, 2007. The Company will be charged an
        interest rate of 1%
        above
        prime per yearcommencing January 1, 2008.
 
 The
        total
        interest charged to operations was $40,884 for 2007 and $279,577 for
        2006.
  Accounts
        payable and accrued liabilities as of December 31, 2007 included $73,054
        (see
        Note 8), representing unpaid salaries and interest thereon to an individual
        related to the President of the Company. Interest incurred on the debt to
        this
        individual during 2007 was $6,334.
  7
                                                    Property
                                                          and Equipment
 Property
        and equipment, at cost, as of December 31, 2007 consisted of the following:
 
 Rental
                  equipment
              
              $
              51,280Autos
              
              
              73,297Furniture
                  and fixtures
              
              
              58,262Machinery
                  and equipment
              
              
              10,019Office
                  equipment
              
              
              25,012Computer
                  equipment
              
              
              24,489Total
                  property and equipment
              
              
              242,359Less
                  accumulated depreciation
              
              
              236,785$
              5,574
 
 The
        above
        schedule reflects the retirement of obsolete assets.
  8
                                        Accounts
                                              Payable and Accrued
                                              Liabilities
 Accounts
        payable and accrued liabilities at December 31, 2007.
 
 Accrued
                  expenses and interest to relatedparty
                  (see Note 6)
              
              $
              73,054Accounts
                  payable and other accrued liabilities
              
              
              143,042$
              216,096
  F-14
 9
                                            Income
                                                    taxes
 The
        annual provision for income taxes for the years ended December 31, 2007 and
        2006
        consisted of the following:
 
 2007
              
              2006FederalCurrent
              
              $
              0
              
              $
              0Deferred
              
              
              0
              
              
              0StateCurrent
              
              
              1,268
              
              
              4,144Deferred
              
              
              0
              
              
              0$
              1,268
              
              $
              4,144
 
 The
        reasons for the difference between the total tax provision and the amounts
        computed by applying the statutory Federal income tax rate to the income
        (loss)
        before income taxes are as follows:
 2007
              
              2006Expected
                  tax (benefit) including the effect ofState
                  taxes
              
              $
              (12,897
              )
              $
              (102,732
              )Deferred
                  interest
              
              
              14,165
              
              
              76,876Deferred
                  salary payable to officer
              
              
              0
              
              
              30,000$
              1,268
              
              $
              4,144
  Income
        Taxes (continued)
 
 Deferred
        tax assets at December 31, 2007, consisted of the following:
 
 Deferred
                  tax assets:Deferred
                  salaries
              
              $
              300,000Deferred
                  interest
              
              
              404,880Gross
                  deferred tax assets
              
              
              704,880Deferred
                  tax assets valuation allowance
              
              
              (704,880
              )$
              0
  As
        described in Note 1, the Company adopted FIN 48 on January 1, 2007, which
        prescribes treatment of “unrecognized tax positions,” and requires measurement
        and disclosure of such amounts. At both January 1, 2007 and December 31,
        2007,
        the Company had no material unrecognized tax benefits.
  F-15
  10
                                          Bank
                                                  Line of Credit
 The
        Company had a line of credit with Bank of America for $200,000 due on demand.
        This line of credit was charged interest of 2% above prime guaranteed by
        the
        former President of the Company, the credit line was paid in full during
        2007
        and was then closed. Interest paid on this line of credit was $10,565 in
        2007.
  11
                                            Stock
                                                    Options
 On
        March
        27, 1997 the Company granted to the President an option to purchase an aggregate
        of 1,000,000 shares of common stock of the Company at the exercise price
        of $.50
        per share for one year from March 27, 1997, and if not exercised during that
        period, at $.65 per share from March 27, 1998 for the balance of the term
        of the
        option. The expiration date of the option is March 27, 2008.
 
 On
        March
        29, 1997, in connection with the sale of equipment, the Company entered into
        an
        equipment purchase and stock agreement (“the agreement”) with an independent
        sales representative whereby the Company sold $1,125,000 of equipment and
        granted the representative a stock option to purchase 100,000 shares of the
        Company’s common stock at $1.00 per share, and 100,000 shares at $1.50 per
        share. These stock options must be exercised within 120 days after the market
        price of the stock is maintained for 30 days at a price of $5.00 per share
        for
        100,000 shares, and $6.00 per share for the next 100,000 shares. The options
        lapse if they are not exercised before the expiration of 120 days after the
        above prices are maintained for 30 days.
  12
                                                  Litigation
 The
        Company was involved as plaintiff in litigation filed in August 1994, alleging
        deceptive acts and practices, false advertising, unfair competition, breach
        of
        fiduciary duty under New York Law and under Federal Law. The complainant
        demanded damages in an unspecified amount for compensatory, punitive and
        treble
        damages, profits and attorneys’ fees against corporate and individual
        defendants. In early 2000, a settlement agreement was reached whereby all
        claims
        against the Company were dismissed with prejudice and one of the Corporate
        defendants agreed to pay the Company the sum of $50,000 with interest at
        the
        rate of 9% per year, in level monthly installment payments of $1,786.41.
        The
        agreement further provided that in the event of failure to make the installment
        payments when due, the entire balance would immediately become due and payable
        and the Company would be entitled to enter judgment for the balance. The
        agreement also provided for the defendants to refrain from engaging in certain
        marketing practices in the future. The defendants failed to make any payments
        after the payment due on January 1, 2001 and in late 2001 a judgment for
        $39,215.61 was entered against the corporate defendant who had agreed to
        the
        monetary settlement. The Company attempted to enforce the judgment but was
        not
        aware of any assets owned by the judgment debtor.
  F-16
  12
                                                        Litigation
                                                                  (continued)
 For
        equipment and services provided between September 1, 1995 and October 31,
        2004,
        the Company submitted claims totaling approximately $800,000 for Medicare
        Insurance Benefits for the Aged and Disabled Program. Following the rejection
        of
        these claims by administrative law judges, the Company sought review of the
        decisions by the Departmental Appeals Board, Medicare Appeals Council, which
        review was denied in March 2006. In connection with its claims, the Company
        commenced in May 2006, an action against Michael O. Leavitt (in his
        representative capacity as Secretary of Health and Human Services) in the
        United
        States District Court for the Eastern District of New York. The action is
        currently pending.
 
 The
        Company is a defendant in an action initiated by a previous landlord concerning
        alleged outstanding rent payments of approximately $47,000 due by the Company.
        The Company has accrued an amount in excess of the rent security deposit
        held by
        the previous landlord against this claim. The Company has filed a counterclaim
        alleging property damage in an amount greater than the claim for rent allegedly
        outstanding.
  13
                                                            Commitments
 In
        May of
        2007, the Company entered into a five year lease for rental space in Great
        Neck,
        New York through April 30, 2012. The minimum yearly commitments are as
        follows:
 Year
                  
                  Amount2008
                  
                  $
                  40,3592009
                  
                  $
                  41,7732010
                  
                  $
                  43,2352011
                  
                  $
                  44,7482012
                  
                  $
                  15,086Total:
                  
                  $
                  185,201
 
 
 Rent
        expenses for the years ending 2007 was $81,496 and 2006 was
        $139,473
  F-17
 
 DIAPULSE
        CORPORATION OFAMERICA
 
 YEARS
        ENDED DECEMBER 31, 2007 AND 2006
 
  
 SIGNATURES
 
 Pursuant
        to the requirements of Section 13 or 15 ( d ) of the
        Securities Exchange Act of 1934, the Registrant has duly caused this report
        to
        be signed on its behalf by the undersigned, thereunto duly
        authorized.
  **DIAPULSE
                  CORPORATION OF AMERICA**
                RegistrantBy:
              /s/
                  David M. RossDavid
                  M. Ross - President Date:
        March 27, 2008
 
 
 In
        accordance with the Securities Exchange Act, this report has been signed
        below
        by the following persons on behalf of the registrant and in the capacities
        and
        dates indicated.
  Name
                    of Capacity
                
                
                Date/s/
                    David M. Ross
                
                
                March
                    27, 2008
 Name:
                
                
                David
                    M. RossTitle:
                
                
                President,
                    Director andChairman
                    of the Board(Principal
                    Executive Officerand
                    Principal Financial and
                  Accounting
                    Officer)


**EXHIBIT
      INDEX**


3.1
              
              
              Certificate
                  of Incorporation of Diapulse Corporation of America, filed October
                  2,
                  1957.3.2
              
              
              Amendment
                  to Certificate of Incorporation, filed October 16, 1959.3.3
              
              
              Amendment
                  to Certificate of Incorporation, filed December 20, 1961.3.4
              
              
              Amendment
                  to Certificate of Incorporation, filed June 13, 1990.3.5
              
              
              Amendment
                  to Certificate of Incorporation, filed July 12, 1994.3.6
              
              
              Bylaws
                  of Diapulse Corporation of America.4.1
              
              
              Form
                  of Stock Certificate of Diapulse Corporation of America.10.1
              
              
              Lease
                  Agreement between Affiliated Developers, Inc. and Diapulse Corporation
                  commencing May 1, 2007.31.1
              
              
              Rule
                  13a-14(a)/15d-14(a) Certification.32.1
              
              
              CEO/CFO
                  Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to
                  Section 906 of the Sarbanes-Oxley Act of 2002.
  13