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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB



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(Mark One)

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

For the Fiscal Year Ended March 31, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission file number: 333-82580



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DIABETIC TREATMENT CENTERS OF AMERICA, INC.

(Name of small business issuer in its charter)



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|                                                               |  |                        
|-------------------------------------------------------------- |  | -----------------------
|Delaware                                                       |  | 59-3733133             
|(State or other Jurisdiction of Incorporation or Organization) |  | (IRS Employer I.D. No.)

5401 S. Kirkman Road

Suite 310

Orlando, Florida 32819

(407) 926-6180

(Address and
telephone number of principal executive offices)

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



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|None                |  | None                                     

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

$0.0001 Par Value Common Stock

Title
of Class



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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No

Check if there are no disclosures of
delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosures 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.  x

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

Issuers revenues for its most recent fiscal year
were $2,036,331.

Aggregate market value of voting and non-voting common stock held by non-affiliates as of July 9, 2007 was $743,287 based on a price
of $0.02.

The number of shares of the registrants common stock, par value $0.0001 per share, outstanding as of June 28, 2007 was 44,339,659 and
there were 1,510 stockholders of record.

Documents Incorporated by Reference

None

Transitional Small Business Discloser Format: ̈Yes    x  No



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DIABETIC TREATMENT CENTERS OF AMERICA, INC.

FORM 10-KSB

TABLE OF CONTENTS



|         |  |          |  |                                                                                                                 |  |     
|-------- |  | -------- |  | --------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |          |  |                                                                                                                 |  | Page
|PART I   |  | 1       
|         |  |          | 
|         |  | Item 1.  |  | Description of Business                                                                                         |  | 1   
|         |  | Item 2.  |  | Description of Property                                                                                         |  | 9   
|         |  | Item 3.  |  | Legal Proceedings                                                                                               |  | 10  
|         |  | Item 4.  |  | Submissions of Matters to a Vote of Security Holders                                                            |  | 10  
|         | 
|PART II  |  | 10      
|         |  |          | 
|         |  | Item 5.  |  | Market for Common Equity and Related Stockholder Matters                                                        |  | 10  
|         |  | Item 6.  |  | Managements Discussion and Analysis or Plan of Operation                                                       |  | 11  
|         |  | Item 7.  |  | Financial Statements                                                                                            |  | 16  
|         |  | Item 8.  |  | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                            |  | 16  
|         |  | Item 8a. |  | Controls and Procedures                                                                                         |  | 16  
|         |  | Item 8b. |  | Other Information                                                                                               |  | 17  
|         | 
|PART III |  | 17      
|         |  |          | 
|         |  | Item 9.  |  | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(A) of the Exchange Act |  | 17  
|         |  | Item 10. |  | Executive Compensation                                                                                          |  | 18  
|         |  | Item 11. |  | Security Ownership of Certain Beneficial Owners and Management                                                  |  | 20  
|         |  | Item 12. |  | Certain Relationships, Related Transactions, and Director Independence                                          |  | 20  
|         |  | Item 13. |  | Exhibits                                                                                                        |  | 20  
|         |  | Item 14. |  | Principal Accountant Fees and Services                                                                          |  | 21  



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Forward Looking Statements

We have made forward-looking statements, within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, in this Annual Report on Form 10-KSB,
including the sections entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and Business that are based on our managements beliefs and assumptions and on information
currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential
growth opportunities and the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the
words believe, expect, anticipate, intend, plan, estimate or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. You should understand that many important factors, in addition to those
discussed elsewhere in this Annual Report on Form 10-KSB, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, the rapidly changing industry and regulatory
environment, our limited operating history, our ability to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business, our fixed obligations, our dependence on new capital to fund our
growth strategy, our ability to attract and retain quality personnel, our competitive environment, economic and other conditions in markets in which we operate, increases in maintenance costs and insurance premiums and cyclical and seasonal
fluctuations in our operating results. The Company, unless legally required, undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

For further information about these and other risks, uncertainties and factors, please review the disclosure included in this report under the caption 
Risk Factors.





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PART I



|ITEM 1. | DESCRIPTION OF BUSINESS
|------- | -----------------------

Company Background

Our company was incorporated in the State of Delaware on April 4, 2001, under the name of Flagstick Ventures, Inc. On July 1, 2004, we changed our
name to Diabetic Treatment Centers of America, Inc. and became a company focused on the acquisition and development of owning and operating diabetic treatment centers.

Our common stock is quoted for trading on the OTC Bulletin Board under the symbol DBTC. Our principal executive offices are located at 5401 South Kirkman Road, Suite 310, Orlando, Florida 32819. Our telephone number
is (407) 962-9680.

We conduct our operation in two segments  diabetic treatment and orthotics and prosthetics. See Note 13 to our consolidated
financial statements contained herein for further information related to our segments.

Diabetic Treatment

We acquired Microvas Therapy technology in May 2005. The therapy is delivered with a machine with emitter pads that directs powerful electronic waveforms though a
patients limb or body to stimulate neuromuscular contractions. This therapy increases the blood flow through the treatment area increasing blood oxygen, helping move antibiotics to wounds and induces involuntary exercise of muscles. This
therapy can be used to treat diabetic neuropathy, hypoxia, foot ulcers and a variety of other medical disorders. We stopped treatments in April 2006 and are currently evaluating this business model to determine its future sustainability.

Orthotics and Prosthetics

On May 12, 2006 we entered into a
joint venture with Personal Performance Medical Corporation called American Medical Management Technologies to manage and develop the operations of Personal Performance Medical Corporation (d/b/a/ Fit-Well Prosthetics and Orthotic Center), a Utah
based Corporation. Fit-Well offers full service prosthetic and orthotic care and manufacturing (O&P), DME and soft goods sales.

Industry
Overview

We estimate that the O&P patient care market in the United States is approximately $2.5 billion. The O&P patient care services
market is highly fragmented and is characterized by local, independent O&P businesses, with the majority generally having a single facility with annual revenues of less than $1.0 million.

The care of O&P patients is part of a continuum of rehabilitation services including diagnosis, treatment and prevention of future injury. This continuum involves
the integration of several medical disciplines that begins with the attending physicians diagnosis. A patients course of treatment is generally determined by an orthopedic surgeon, vascular surgeon or physiatrist, who writes a
prescription and refers the patient to an O&P patient care services provider for treatment. A practitioner then, using the prescription, consults with both the referring physician and the patient to formulate the design of an orthotic or
prosthetic device to meet the patients needs.

The O&P industry is characterized by stable, recurring revenues, primarily resulting from the need
for periodic replacement and modification of O&P devices. Based on our experience, the average replacement time for orthotic devices is one to three years, while the average replacement time for prosthetic devices is three to five years. There
is also an attendant need for continuing O&P patient care services. In addition to the inherent need for periodic replacement and modification of O&P devices and continuing care, we expect the demand for O&P services will continue to
grow as a result of several key trends, including:

Aging U.S. Population. The growth rate of the over-65 age group is nearly triple that of
the under-65 age group. There is a direct correlation between age and the onset of diabetes and vascular disease, which is the leading cause of amputations. With broader medical insurance coverage, increasing disposable income, longer life
expectancy, greater mobility expectations and improved technology of O&P devices, we believe the elderly will increasingly seek orthopedic rehabilitation services and products.

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Growing Physical Health Consciousness. The emphasis on physical fitness, leisure sports and conditioning,
such as running and aerobics, is growing, which has led to increased injuries requiring orthopedic rehabilitative services and products. These trends are evidenced by the increasing demand for new devices that provide support for injuries, prevent
further or new injuries or enhance physical performance.

Increased Efforts to Reduce Healthcare Costs. O&P services and devices
have enabled patients to become ambulatory more quickly after receiving medical treatment in the hospital. We believe that significant cost savings can be achieved through the early use of O&P services and products. The provision of O&P
services and products in many cases reduces the need for more expensive treatments, thus representing a cost savings to third-party payors.

Advancing Technology. The range and effectiveness of treatment options for patients requiring O&P services have increased in connection with the technological sophistication of O&P devices. Advances in design
technology and lighter, stronger and more cosmetically acceptable materials have enabled patients to replace older O&P devices with new O&P products that provide greater comfort, protection and patient acceptability. As a result, treatment
can be more effective or of shorter duration, giving the patient greater mobility and a more active lifestyle. Advancing technology has also increased the prevalence and visibility of O&P devices in many sports, including skiing, running and
tennis.

Business Strategy

Our strategies are
to:



| |  |  | continue to provide superior patient care
| | - |  | -----------------------------------------



| |  |  | create, license or patent and market devices based on new cutting edge technology
| | - |  | ---------------------------------------------------------------------------------



| |  |  | selectively acquire small and medium-sized O&P patient care service businesses and open satellite patient-care centers primarily to expand our presence within
our existing market and secondarily to enter into new markets
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acquire manufactures of O&P equipment
| | - |  | -------------------------------------

Through
our joint venture, we will continue to provide superior patient care. Our patients consist of amputees with various levels or combinations of limb loss and patients that require orthotic bracing for varied reasons including stroke, diabetic
complications, deformities, and injuries.

We will create, license, or patent and market devices based on new cutting edge technology. Mr. Allen, our
CEO, currently holds three patents with several others currently pending. We want to continue to create new devices and techniques to further establish ourselves as a leader in the O&P industry. These additional technologies could generate
additional revenues through the referral of patients in need of our technologies and the sales or licensing of the technologies.

We plan to add market
share by selectively acquiring small and medium-sized O&P patient care service businesses and opening satellite patient-care centers primarily to expand our presence within our existing market and secondarily to enter into new markets. There are
many locally owned O&P patient-care centers through out the United States. We plan add to our revenues with acquisitions and even additional joint ventures.

We plan to acquire businesses that manufacture O&P equipment. This vertical integration will help to reduce the cost of providing equipment and limbs by eliminating the middle man.

Sales and Marketing

Due primarily to the fragmented nature of
the O&P industry, the success of a particular patient-care center has been largely a function of its local reputation for quality of care, responsiveness and length of service in the local communities. We have relied almost exclusively on
referrals from local physicians or physical therapists and typically are not involved in more sophisticated marketing techniques.

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Competition

The
O&P services industry is highly fragmented, consisting mainly of local O&P patient-care centers. The business of providing O&P patient care services is highly competitive in the market in which we operate. We compete with numerous small
independent O&P providers for referrals from physicians, therapists, employers, HMOs, PPOs, hospitals, rehabilitation centers, out-patient clinics and insurance companies on both a local and regional basis. We compete with other patient care
service providers on the basis of quality and timeliness of patient care, location of patient-care centers and pricing for services.

Government
Regulation

We are subject to a variety of federal, state and local governmental regulations. We make every effort to comply with all applicable
regulations through compliance programs, manuals and personnel training. Despite these efforts, we cannot guarantee that we will be in absolute compliance with all regulations at all times. Failure to comply with applicable governmental regulations
may result in significant penalties, including exclusion from the Medicare and Medicaid programs, which would have a material adverse effect on our business. In November 2003, Congress legislated a three-year freeze on reimbursement levels for all
O&P services starting January 1, 2004. The effect of this legislation has been a downward pressure on our income from operations, however, we have initiated certain purchasing and efficiency programs which we believe will minimize such
effects.

Medical Device Regulation. We distribute products that are subject to regulation as medical devices by the U.S. Food and
Drug Administration (FDA) under the Federal Food, Drug and Cosmetic Act (FDCA) and accompanying regulations. With the exception of two products which have been cleared for marketing under section 510(k) of the FDCA, we
believe that the products we distribute, including O&P devices, accessories and components, are exempt from the FDAs regulations for pre-market clearance of approval requirements and from requirements relating to quality system regulation
(except for certain recordkeeping and complaint handling requirements). We are required to adhere to regulations regarding adverse event reporting, and are subject to inspection by the FDA for compliance with all applicable requirements. Labeling
and promotional materials also are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission. Although we have never been challenged by the FDA for non-compliance with FDA requirements, we cannot assure that we
would be found to be or to have been in compliance at all times. Non-compliance could result in a variety of civil and/or criminal enforcement actions, which could have a material adverse effect on our business and results of operations.

Fraud and Abuse. Violations of fraud and abuse laws are punishable by criminal and/or civil sanctions, including, in some instances, imprisonment and
exclusion from participation in federal healthcare programs, including Medicare, Medicaid, U.S. Veterans Administration health programs and the Department of Defenses TRICARE program, formerly known as CHAMPUS. These laws, which include but
are not limited to, antikickback laws, false claims laws, physician self-referral laws, and federal criminal healthcare fraud laws, are discussed in further detail below. We believe our billing practices, operations, and compensation and financial
arrangements with referral sources and others materially comply with applicable federal and state requirements. However, we cannot assure that such requirements will not be interpreted by a governmental authority in a manner inconsistent with our
interpretation and application. The failure to comply, even if inadvertent, with any of these requirements could require us to alter our operations and/or refund payments to the government. Such refunds could be significant and could also lead to
the imposition of significant penalties. Even if we successfully defend against any action against us for violation of these laws or regulations, we would likely be forced to incur significant legal expenses and divert our managements
attention from the operation of our business. Any of these actions, individually or in the aggregate, could have a material adverse effect on our business and financial results.

Antikickback Laws. Our operations are subject to federal and state antikickback laws. The federal Antikickback Statute (Section 1128B(b) of the Social Security Act) prohibits persons or entities from
knowingly and willfully soliciting, offering, receiving, or paying any remuneration in return for, or to induce, the referral of persons eligible for benefits under a federal healthcare program (including Medicare, Medicaid, the U.S. Veterans
Administration health programs and TRICARE), or the ordering, purchasing, leasing, or arranging for, or the recommendation of purchasing, leasing or ordering of, items or services that may be paid for, in whole or in part, by a federal healthcare
program. Courts have held that the statute may be violated when even one purpose (as opposed to a primary or sole purpose) of a payment is to induce referrals or other business.

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Recognizing that the law is broad and may technically prohibit beneficial arrangements, the Office of Inspector General
of the Department of Health and Human Services developed regulations addressing certain business arrangements that will not be subject to scrutiny under the law. These Safe Harbors describe activities which are not considered to be
illegal provided that they meet all the requirements of the applicable Safe Harbor. For example, the Safe Harbors cover activities such as offering discounts to healthcare providers and contracting with physicians or other individuals or entities
that have the potential to refer business to us that would ultimately be billed to a federal healthcare program. Failure to qualify for Safe Harbor protection does not mean that an arrangement is illegal. Rather, the arrangement must be analyzed
under the antikickback statute to determine whether there is an intent to pay or receive remuneration in return for referrals. Conduct and business arrangements that do not fully satisfy one of the Safe Harbors may result in increased scrutiny by
government enforcement authorities. In addition, some states also have antikickback laws that vary in scope and may apply regardless of whether a federal healthcare program is involved.

HIPAA Violations. The Health Insurance Portability and Accountability Act (HIPAA) provides for criminal penalties for, among other offenses, healthcare fraud, theft or embezzlement in
connection with healthcare, false statements related to healthcare matters, and obstruction of criminal investigation of healthcare offenses. Unlike the federal antikickback laws, these offenses are not limited to federal healthcare programs.

In addition, HIPAA authorizes the imposition of civil monetary penalties where a person offers or pays remuneration to any individual eligible for
benefits under a federal healthcare program that such person knows or should know is likely to influence the individual to order or receive covered items or services from a particular provider, practitioner or supplier. Excluded from the definition
of remuneration are incentives given to individuals to promote the delivery of preventive care (excluding cash or cash equivalents), incentives of nominal value and certain differentials in or waivers of coinsurance and deductible
amounts.

False Claims Laws. We are also subject to federal and state laws prohibiting individuals or entities from knowingly presenting, or
causing to be presented, claims for payment to third-party payors (including Medicare and Medicaid) that are false or fraudulent, are for items or services not provided as claimed, or otherwise contain misleading information. Each of our
patient-care centers is responsible for the preparation and submission of reimbursement claims to third-party payors for items and services furnished to patients. In addition, our personnel may, in some instances, provide advice on billing and
reimbursement to purchasers of our products. While we endeavor to assure that our billing practices comply with applicable laws, if claims submitted to payors are deemed to be false, fraudulent, or for items or services not provided as claimed, we
could face liability for presenting or causing to be presented such claims.

Physician Self-Referral Laws. We are also subject to federal and
state physician self-referral laws. With certain exceptions, the federal Medicare physician self-referral law (the Stark II law) (Section 1877 of the Social Security Act) prohibits a physician from referring Medicare beneficiaries to an
entity for designated health services  including prosthetic and orthotic devices and supplies  if the physician or the physicians immediate family member has a financial relationship with the entity. A financial
relationship includes both ownership or investment interests and compensation arrangements. A violation occurs when any person presents or causes to be presented to the Medicare program a claim for payment in violation of Stark II.

With respect to ownership/investment interests, there is an exception under Stark II for referrals made to a publicly traded entity in which the physician has an
investment interest if the entitys shares are traded on certain exchanges, including the New York Stock Exchange, and had shareholders equity exceeding $75.0 million for its most recent fiscal year, or as an average during the three
previous fiscal years. We meet these tests and, therefore, believe that referrals from physicians that have ownership interests in our stock should not trigger liability under Stark II.

Certification and Licensure. The state of Utah does not require separate licensure for practitioners. However, we are certified by the American Board for Certification.

The American Board for Certification conducts a certification program for practitioners and an accreditation program for patient-care centers. The minimum requirements
for a certified practitioner are a college degree,

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completion of an accredited academic program, one to four years of residency at a patient-care center under the supervision of a certified practitioner and
successful completion of certain examinations. Minimum requirements for an accredited patient-care center include the presence of a certified practitioner and specific plant and equipment requirements. While we endeavor to comply with all state
licensure requirements, we cannot assure that we will be in compliance at all times with these requirements.

Confidentiality and Privacy
Laws. The Administrative Simplification Provisions of HIPAA, and their implementing regulations, set forth privacy standards and implementation specifications concerning the use and disclosure of individually identifiable health information
(referred to as protected health information) by health plans, healthcare clearinghouses and healthcare providers that transmit health information electronically in connection with certain standard transactions (Covered
Entities). HIPAA further requires Covered Entities to protect the confidentiality of health information by meeting certain security standards and implementation specifications. In addition, under HIPAA, Covered Entities that electronically
transmit certain administrative and financial transactions must utilize standardized formats and data elements (the transactions/code sets standards). HIPAA imposes civil monetary penalties for non-compliance, and, with respect to
knowing violations of the privacy standards, or violations of such standards committed under false pretenses or with the intent to sell, transfer or use individually identifiable health information for commercial advantage, criminal penalties. We
believe that we are subject to the Administrative Simplification Provisions of HIPAA and are taking steps to meet applicable standards and implementation specifications. The new requirements have had a significant effect on the manner in which we
handle health data and communicate with payers.

In addition, state confidentiality and privacy laws may impose civil and/or criminal penalties for certain
unauthorized or other uses or disclosures of individually identifiable health information. We are also subject to these laws. While we endeavor to assure that our operations comply with applicable laws governing the confidentiality and privacy of
health information, we could face liability in the event of a use or disclosure of health information in violation of one or more of these laws.

Employees

We have assembled a management team led by our CEO, Scott Allen and CFO Steven Weldon. We have eighteen full time employees. None
of our employees are covered by a collective bargaining agreement, nor have we experienced a strike or other adverse work stoppage due to organized labor. We offer our employees a benefits package that includes vacation and medical coverage.

RISK FACTORS

Risks Specific to Our Company

We have limited operating funds, and our ability to continue as a going concern is dependent upon our ability to obtain additional capital to operate the business.

We have experienced net losses since April 4, 2001 (date of inception), which losses have caused an accumulated deficit of approximately $1,600,000 as of
March 31, 2007. In addition, we have consumed net cash used in operating activities of approximately $233,300 and $318,400 for the years ended March 31, 2007 and 2006, respectively. We will require additional funds to sustain and expand our
current business, and to continue implementing our business plan. Our lack of sufficient financing to implement our business plan, and our expectation to continue operating losses for the foreseeable future raises substantial doubt about our ability
to continue as a going concern. Our independent certified public accountants issued their report, which included an explanatory paragraph for going concern uncertainty on our financial statements as of March 31, 2007. Our ability to continue as
a going concern is heavily dependent upon our ability to obtain additional capital to sustain operations. Currently, we have no commitments to obtain additional capital, and there can be no assurance that financing will be available in amounts or on
terms acceptable to us, if at all.

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Since we are in the early stage of development and have a limited operating history, it may be difficult for you to
assess our business and future prospects.

We were incorporated on April 4, 2001 and engaged primarily in the business of wholesale distribution of
golf-related equipment, accessories and apparel until August 2004. In August 2004, we ceased operations in the wholesale golf industry to fully pursue our new direction of opening diabetic treatment centers. Because of this limited operating
history, our prospects are difficult to predict and must be considered in light of the risks, expenses and problems frequently encountered by companies that are in the early stages of development and that operate in new and rapidly changing markets
which are discussed in greater detail in this section.

We will need additional capital, the availability of which is uncertain, to fund our business
and complete the implementation of our business plan.

We will require additional financing in order to carry out our business plan. Such financing may
take the form of the issuance of common or preferred stock or debt securities, or may involve bank financing. There can be no assurance that we will obtain such additional capital on a timely basis, on favorable terms, or at all. If we are unable to
generate the required amount of additional capital, our ability to meet our financial obligations and to implement our business plan may be adversely affected.

Our current management does not have experience in managing a public company; this may negatively impact our business operations.

Mr. Scott Allen is currently serving as our CEO. Mr. Allen has not had any previous experience managing a public company. There can be no assurance that we will be able to effectively manage the expansion of our operations, that
our systems, procedures, or controls will be adequate to support our operations or that our management team will be able to achieve the rapid execution necessary to fully exploit the market opportunity. Any inability to operate our business, manage
our growth, comply with the regulatory requirements of a company subject to regulation by governmental agencies such as the Securities & Exchange Commission could reduce the efficiency of our business operations, thereby causing our
operating expenses to increase and our operating margins to decrease.

As we have incurred losses since inception, we are not now, nor will we be in the
foreseeable future, in a position to pay dividends on our issued and outstanding stock.

We have never declared or paid cash dividends on our capital
stock and do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business.

Our management may be unable to effectively integrate our acquisitions and to manage our growth and we may be unable to fully realize any anticipated benefits of
these acquisitions.

Our future results will depend in part on our success in implementing our growth and acquisition strategy. Our ability to implement
this strategy will be dependent on our ability to identify, consummate and successfully assimilate acquisitions on economically favorable terms. In addition, acquisitions involve a number of special risks that could adversely effect our operating
results, including the diversion of managements attention, failure to retain key acquired personnel, risks associated with unanticipated events or liabilities, legal, accounting and other expenses associated with acquisitions, some or all of
which could increase our operating costs, reduce our revenues and cause a material adverse effect on our business, financial condition and results of operations. We have no preliminary agreements or understandings to acquire or be acquired by a
company as of the date of this prospectus.

If we complete future acquisitions, we may dilute existing stockholders by issuing more of our common stock
or we may incur expenses related to debt and goodwill, which could reduce our earnings.

We may issue equity securities in future acquisitions that
could be dilutive to our shareholders. We also may incur additional debt in future acquisitions. Interest expense on debt incurred to fund our acquisitions may significantly reduce our profitability. While goodwill and other intangible assets with
indefinite lives are not amortized to expense under generally accepted accounting principles, we would be required to review all of these assets at regular intervals for impairment and to charge an appropriate amount to expense when we identify
impairment. If we identify impairment and are required to write-off a significant portion of our intangible assets at one time, then there could be a material adverse impact on our stock price.

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Risks Specific to Our Industry

Third party payers and government-sponsored programs may reduce payments to us.

Our future revenues will depend on
reimbursement from third-party payers, such as managed care companies and government-sponsored health insurance programs. Third-party and governmental payers exercise significant control over patient access and increasingly use their enhanced
bargaining power to secure discounted rates and other concessions from providers. This trend, as well as other changes in reimbursement rates, policies or payment practices by third-party and governmental payers (whether initiated by the payer or
legislatively mandated) could have an adverse impact on our revenues.

Our sales and profitability are affected by the efforts of all payers to contain or
reduce the cost of healthcare by lowering reimbursement rates and limiting the scope of covered services. Any changes that lower reimbursement levels under Medicare, Medicaid or private pay programs, including managed care contracts, could adversely
affect us. Furthermore, other changes in these reimbursement programs or in related regulations could adversely affect us. These changes may include modifications in the timing or processing of payments and more stringent reimbursement procedures.
Any failure to comply with Medicare or Medicaid reimbursement procedures could result in delays in, or loss of, reimbursement and other sanctions, including fines and exclusion from participation in the programs.

If Congress or CMS changes Medicare or Medicaid programs for services we provide, then our future revenue and earnings could be adversely affected.

If the government changes the Medicare, Medicaid or similar government programs or the rates those programs pay for our services, then our future revenue and earnings may
be adversely affected. Any of the following actions in connection with government programs could cause our revenue and earnings to be adversely affected:



| |  |  | a reduction of the amount paid to us under government programs;
| | - |  | ---------------------------------------------------------------



| |  |  | an increase in the costs associated with performing our services that are subject to inflation, such as labor and supply costs, without a corresponding increase in
reimbursement rates;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the inclusion of some or all ancillary services, for which we are now reimbursed separately; or
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | changes in laws, or the interpretations of laws, which could cause us to modify our operations.
| | - |  | -----------------------------------------------------------------------------------------------

If our business is alleged or found to violate heath care or other applicable laws, our future revenue and earnings could be adversely affected.

We are subject to extensive federal, state and local regulation. The laws that apply to our operations include, but are not limited to, the following:



| |  |  | fraud and abuse prohibitions under state and federal health care laws;
| | - |  | ----------------------------------------------------------------------



| |  |  | prohibitions and limitations on patient referrals;
| | - |  | --------------------------------------------------



| |  |  | billing and reimbursement rules, including false claims prohibitions under health care reimbursement laws;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | rules regarding the collection, use, storage and disclosure of patient health information, including the federal Health Insurance Portability and Accountability Act
of 1996, which we refer to as HIPAA, and state law equivalents of HIPAA;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | facility licensure;
| | - |  | -------------------



| |  |  | and health and safety requirements.
| | - |  | -----------------------------------

Much of the
regulation of our business, particularly in the areas of fraud and abuse and patient referral, is complex and open to differing interpretations. Due to the broad application of the statutory provisions and the absence in many instances of
regulations or court decisions addressing the specific arrangements by which we conduct our business, including our arrangements with medical directors, physician stockholders and physician joint venture partners, governmental agencies could
challenge some of our practices under these laws.

7



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New regulations governing electronic transactions and the collection, use, storage, and disclosure of health information
impose significant administrative and financial obligations on our business. If, after the required compliance date, we are found to have violated these regulations, we could be subject to:



| |  |  | criminal or civil penalties, including significant fines;
| | - |  | ---------------------------------------------------------



| |  |  | claims by people who believe their health information has been improperly used or disclosed; and
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | administrative penalties by payers.
| | - |  | -----------------------------------

Government
investigations of health care providers have continued to increase, and the government may investigate our business in the future. If any of our operations are found to violate applicable laws, then we may be subject to severe sanctions, or we could
be required to alter or discontinue the challenged conduct or both. If we are required to alter our practices, we may not be able to do so successfully. If any of these events occurs, our future revenue and earnings may be adversely affected.

Changes in the health care delivery, financing or reimbursement systems could adversely affect our business.

The healthcare industry in the United States may be entering a period of change and uncertainty. Health care organizations, public or private, may dramatically change the
way they operate and pay for services. Our business is designed to function within the current health care financing and reimbursement system. During the past several years, the health care industry has been subject to increasing levels of
government regulation of, among other things, reimbursement rates and relationships with referring physicians. In addition, proposals to reform the health care system have been considered by Congress. In light of the continued increases in the cost
of health care and the current economic weakness, there may be new proposals to change the health care system and control costs. These proposals, if enacted, could further increase the governments oversight role and involvement in health care,
lower reimbursement rates and otherwise change the operating environment for health care companies. We cannot predict the likelihood of those events or what impact they may have on our business.

We operate in highly competitive businesses.

The healthcare industry
is characterized by rapidly developing technology and increased competition. In all of our product and service lines, we compete with companies, large and small, located in the United States and abroad. Competition is strong in all of our lines
without regard to the number and size of the competing companies involved. Some of our competitors and potential competitors have significantly greater financial, technical and sales resources than we do and may, in some locations, possess licenses
or certificates that permit them to provide products and services that we cannot currently provide. We compete on a number of factors, including innovative products and services, customer loyalty and price.

There can be no assurance that we will not encounter increased or more effective competition in the future which could limit our ability to maintain or increase our
business and adversely affect our operating results.

Risks Related to Our Securities

Our common stock is subject to the penny stock rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a penny stock, for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the rules require:



| |  |  | that a broker or dealer approve a persons account for transactions in penny stocks; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

In order to approve a persons account for transactions in penny stocks, the broker or dealer must:



| |  |  | obtain financial information and investment experience objectives of the person; and
| | - |  | ------------------------------------------------------------------------------------

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##### Table of Contents

| |  |  | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of transactions in penny stocks.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The broker or dealer must also deliver, prior
to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:



| |  |  | sets forth the basis on which the broker or dealer made the suitability determination; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
| | - |  | ----------------------------------------------------------------------------------------------------------

Generally, brokers may be less willing to execute transactions in securities subject to the penny stock rules. This may make it more difficult for investors
to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny
stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Future sales of shares may adversely impact the value of our stock

We will seek to raise additional capital through the sale of our common stock. Future sales of our common stock could cause the market price of our common stock to decline.

Possible issuance of additional shares may impact the price of our stock

Our Certificate of Incorporation authorizes
the issuance of 300,000,000 shares of common stock. Approximately 85% of our authorized common stock remains un-issued. Our Board of Directors has the power to issue any or all of such additional common stock without stockholder approval. Investors
should be aware that any stock issuances might result in a reduction of the book value or market price, if any, of the then outstanding common stock. If we were to issue additional common stock, such issuance will reduce proportionate ownership and
voting power of the other stockholders. Also, any new issuance of common stock may result in a change of control.

Our share price may be highly
volatile.

The market prices of equity securities of small companies have experienced extreme price volatility in recent years not necessarily related
to the individual performance of specific companies. Factors such as announcements by us, or our competitors concerning products, technology, governmental regulatory actions, other events affecting healthcare companies generally and general market
conditions may have a significant impact on the market price of our shares and could cause it to fluctuate substantially.



|ITEM 2. | DESCRIPTION OF PROPERTY
|------- | -----------------------

Our executive offices are located at 5401
South Kirkman Road, Suite 310, Orlando, FL 32819. All of our operations relating to our joint venture are based out of facility located at 975 East 5400, Suite 100, Salt Lake City, UT, 84117. This facility is own by Scott Allen, our President, Chief
Executive Officer and Director. We also have two satellite offices in Utah for the purpose of meeting with patients. We do not pay any rent for the facility in Salt Lake City and pay a total of $2,213 for the two satellite offices through the joint
venture.

9



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##### Table of Contents

|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

We are not a party to any pending legal
proceeding or litigation. In addition, none of our property is the subject of a pending legal proceeding. We are not aware of any legal proceedings against the Company or our property contemplated by any governmental authority.



|ITEM 4. | SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ----------------------------------------------------

No matters
were submitted to a vote of security holders during the last quarter of the fiscal year ended March 31, 2007

Part II



|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|------- | --------------------------------------------------------

Our
common stock is quoted on the OTC Bulletin Board under the symbol DBTC.

For the periods indicated, the following table sets
forth the high and low per share intra-day sales prices per share of common stock. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.



|                 |  |          |      |         |   |     
|---------------- |  | -------- | ---- | ------- | - | ----
|Fiscal Year 2007 |  | High ($) |      | Low ($)
|Fourth Quarter   |  | $        | 0.04 |         | $ | 0.02
|Third Quarter    |  | $        | 0.07 |         | $ | 0.03
|Second Quarter   |  | $        | 0.08 |         | $ | 0.04
|First Quarter    |  | $        | 0.11 |         | $ | 0.03
|                 |  |         
|Fiscal Year 2006 |  |          |      |        
|Fourth Quarter   |  | $        | 0.13 |         | $ | 0.04
|Third Quarter    |  | $        | 0.10 |         | $ | 0.04
|Second Quarter   |  | $        | 0.16 |         | $ | 0.06
|First Quarter    |  | $        | 0.25 |         | $ | 0.11

Dividends and Dividend Policy

We have never declared or paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any,
to finance the expansion of our business and for general corporate purposes. We cannot assure you that we will pay dividends in the future. Our future dividend policy is within the discretion of our Board of Directors and will depend upon various
factors, including our results of operations, financial condition, capital requirements and investment opportunities.

Recent Sales of Unregistered
Securities

On November 21, 2005, we entered into a stock purchase agreement with a group of
investors. This agreement allows the investors to purchase a minimum of 7,500,000 and a maximum of 18,750,000 shares of our common stock at a purchase price of $.04 per a share. These shares are deemed restricted securities as defined in Rule 144 of
the Securities Act of 1933. The investors must invest a minimum of $300,000 in order to receive shares. As of March 31, 2007 the investors have invested a total of $300,000 and we issued 7,500,000 shares on April 12, 2006. The proceeds
from the sale were used for working capital.

10



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##### Table of Contents

Equity Compensation Plan Information

On August 11, 2005, the Board of Directors adopted the Diabetic Treatment Centers of America, Inc. 2005 Restricted Stock Plan (the 2005 Plan) and it was approved on August 11, 2005 by our
stockholders at the 2005 Annual Meeting. The terms of the 2005 Plan provide for grants of restricted stock awards.

Under the 2005 Plan, the total number
of shares of restricted common stock that may be subject to the granting of Awards during the term of the 2005 Plan shall be equal to 5,000,000 shares. Shares with respect to which awards previously granted that are forfeited, cancelled or
terminated are returned to the plan and may be reissued. A grant of 200,000 shares was made to a director and 100,000 shares to an employee. The director forfeited 70,000 shares on April 21, 2006 when he resigned and the employee forfeited
10,000 shares on May 31, 2006 when he was terminated.



|ITEM 6. | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|------- | ---------------------------------------------------------

The following discussion of our plan of operation, financial condition and results of operations should be read in conjunction with the Companys consolidated financial statements, and notes thereto, included elsewhere herein. This
discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to,
those discussed in this Annual Report.

Overview

Diabetic Treatment Centers of America, Inc. is a Delaware corporation incorporated on April 4, 2001 for the purpose of acquiring the wholesale golf equipment and accessories business previously conducted by our president, Jeff Arthur
Jones, as a sole proprietorship under the name A and Z Golf. We acquired the business from Mr. Jones, through our wholly owned subsidiary, A & Z Golf Corp., on June 5, 2001, in exchange for 10,000,000 shares of our common
stock. Prior to that date, Mr. Jones conducted the business as a sole proprietorship.

Until August 2004, through our wholly-owned subsidiary, A &
Z Golf Corp., we engaged primarily in the business of wholesale distribution of golf-related equipment, accessories and apparel. Our goal was to grow our wholesale customer base through client solicitation efforts and expanded product offerings. Our
strategy was to benefit from our managements experience and relationships in the golf industry to grow our business as a wholesaler by expanding our supplier base and adding customers. Due to our low volume of purchases, it was difficult to
improve our cost of sales.

Due to our inability to expand our wholesale golf operations, on July 1, 2004, the Board of Directors approved changing
our name from Flagstick Ventures, Inc. to Diabetic Treatment Centers of America, Inc. to reflect our new business direction of owning and operating diabetic treatment centers. On August 4, 2004, we ceased operating in the wholesale golf
industry to fully pursue our new direction of owning and operating diabetic treatment centers. Our prior wholesale golf operations are included on the statement of operations as discontinued operations.

On October 7, 2004, we entered into an Agreement with Diabetes Medical Development Corporation, d/b/a DiabMed, to secure the exclusive rights to market and sell
certain technologies and products used to treat diabetes in Murray, Utah. As of June 2006, DiabMed has not provided a licensing agreement with terms that are acceptable to us, and therefore, we have been unable to finalize this agreement. We do not
anticipate being able to reach an agreement and have no further plans of pursuing these rights.

We acquired Microvas Therapy technology in May 2005. The
therapy is delivered with a machine with emitter pads that directs powerful electronic waveforms though a patients limb or body to stimulate neuromuscular contractions. This therapy increases the blood flow through the treatment area
increasing blood oxygen, helping move antibiotics to wounds and induces involuntary exercise of muscles. This therapy can be used to treat diabetic neuropathy, hypoxia, foot ulcers and a variety of other medical disorders. We stopped treatments in
April 2006 and are currently evaluating this business model to determine its future sustainability.

On May 12, 2006 we entered into a joint venture
with Personal Performance Medical Corporation called American Medical Management Technologies to manage and develop the operations of Personal Performance Medical Corporation (d/b/a/ Fit-Well Prosthetics and Orthotic Center), a Utah based
Corporation. Fit-Well offers full service prosthetic and orthotic care and manufacturing, DME and soft goods sales.

11



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##### Table of Contents

Based upon the current level of revenues and the cash position, we will need to raise additional capital prior to the end
of the second quarter of 2008 in order to fund current operations. These factors raise substantial doubt about our ability to continue as a going concern. We are pursuing several alternatives to address this situation, including the raising of
additional funding through equity or debt financing. We are in discussions with our existing stockholders to provide additional funding in exchange for a notes or equity. In order to finance existing operations and pay current liabilities over
the next twelve months, we will need to raise $162,000 of capital. However, there can be no assurance that the requisite financing will be consummated in the necessary time frame or on terms acceptable to us. Should we be unable to raise
sufficient funds, we may be required to curtail our operating plans or worst case cease operations. No assurance can be given that we will be able to operate profitably on a consistent basis, or at all, in the future.

Plan of Operation

The Company continues to operate with very limited
capital. Since our inception in 2001, we have been unable to locate a consistent source of additional financing for use in our operational or expansion plans. Additionally, we have also been unsuccessful in the owning and operating our diabetic
treatment centers due to the inability to collect money due for treatment from insurance companies viewing our services as experimental or not necessary. We have also been unable to convince owners of other medical facilities to sell their
businesses to us solely in exchange for our securities. In the absence of additional financing and medical facility owners who are willing to sell their businesses in exchange only for our securities, we will be unable to continue to pursue our
expansion plan.

We also recognize that the operation of a single O&P joint venture in the form of a public company is highly inefficient. In an effort
to protect our stockholders, we intend not only to continue to search for an appropriate source of additional financing, but to re-evaluate our business and expansion plans to include an evaluation of other lines of business, both in the medical
industry and other industries. Until we complete the re-evaluation of our business plan, we intend to focus our available capital resources on the operation of our O&P joint venture.

Cash Requirements

We estimate that we will require an additional $162,000 above the cash generated from our
joint venture to fund our currently anticipated requirements for ongoing operations for our existing business for the next twelve-month period. We expect to pay $80,000 for professional fees and expense related to being a public company, and $20,000
for expenses related to general operations. We will also need approximately $62,000 to repay $60,500 of notes payable and the related interest of approximately $1,500.

Results of Operations

Comparison of the fiscal year ended March 31, 2007 and March 31, 2006.

CONSOLIDATED FINANCIAL INFORMATION



|                           |  |      |           |   |      |   |          |  
|-------------------------- |  | ---- | --------- | - | ---- | - | -------- | -
|                           |  | 2007 |           |   | 2006 |  
|Net revenue                |  | $    | 2,036,000 |   |      | $ | 55,000   |  
|Cost of revenue            |  |      | 952,000   |   |      |   | 116,000  |  
|General and administrative |  |      | 1,636,000 |   |      |   | 382,000  |  
|Other expense              |  |      | 6,000     |   |      |   | 2,000    |  
|                           |  |      |           |   |      |   |          |  
|Net loss                   |  | $    | (558,000  | ) |      | $ | (445,000 | )
|                           |  |      |           |   |      |   |          |  

Net Revenue. Net revenue increased by approximately $1,981,000 in 2007. This is due to the revenue
generated from our joint venture which has been consolidated into our results of operations.

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##### Table of Contents

Cost of Revenue. Cost of revenue increased by $836,000 in 2007. The increase in cost of revenues is
associated with our joint venture which has been consolidated into our results of operations.

General and Administrative. General and
administrative expenses increased by $1,254,000 in 2007. This increase can be attributed to the increase in costs associated with our prosthetic and orthotic care joint venture of approximately $1,149,000. The remaining costs are associated with the
increase of professional fees of approximately $236,000 and a loss on the sale of property and equipment of $11,000. We have temporarily stopped treating patients due to our inability to collect revenue from Medicare and insurance companies. This
has resulted in a decrease in rental, payroll, office, insurance, and marketing expenses of $261,000.

Net Loss. Net loss increased by
$113,000 as a result of our joint venture.

Diabetic Treatment Segment



|                |      |                      |        |  |   |        
|--------------- | ---- | -------------------- | ------ |  | - | -------
|                |      | Year Ended March 31,
|                | 2007 |                      | 2006  
|Revenue         |      | $                    | 1,000  |  | $ | 55,000 
|Cost of Revenue |      |                      | 17,000 |  |   | 116,000

Net Revenue. Net revenue decreased by $54,000 in 2007. Due to the inability to collect revenue from
Medicare and insurance companies, we have stopped treating patients temporarily, or until we can bill these carriers for the services we perform and are reimbursed on a timely basis.

Cost of Revenue. Our cost of revenue decreased by $99,000 in 2007. Due to the inability to collect revenue from Medicare and insurance companies, we have stopped treating patients temporarily, or until
we can bill these carriers for the services we perform and are reimbursed on a timely basis.

Prosthetic and Orthotic Care Segment



|                |      |                      |           |  |   |  
|--------------- | ---- | -------------------- | --------- |  | - | -
|                |      | Year Ended March 31,
|                | 2007 |                      | 2006     
|Revenue         |      | $                    | 2,035,000 |  | $ | 
|Cost of Revenue |      |                      | 935,000   |  |   | 

Net Revenue. Net revenue increased by $2,035,000 in 2007. We began operations of this segment in
June 2006 as a result of our joint venture with Personal Performance Medical Corporation.

Cost of Revenue. Our cost of revenue increased by
$935,000 in 2007. We began operations of this segment in June 2006.

Liquidity and Capital Resources

We had cash balances totaling approximately $73,800 as of March 31, 2007. Historically, our principal source of funds has been cash generated from financing
activities.

Cash flow from operations. We have been unable to generate either significant liquidity or cash flow to fund our current
operations. We anticipate that cash flows from operations will be insufficient to fund our business operations for the next twelve-month period.

Cash flows from investing activities.Net cash provided by investing activities for the year ended March 31, 2007 was from the sale of office equipment of approximately $600.



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##### Table of Contents

Cash flows from financing activities. Net cash provided by financing activities for the year ended
March 31, 2007 was generated from unsecured promissory notes that total $60,500 from a stockholder and a net shareholder advance of $138,000 relating to the joint venture.

Variables and Trends

We have a limited operating history in connection with the current operation of diabetic
treatments and orthotics and prosthetics. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of our future performance and must be considered in light of our limited operating history.

Critical Accounting Policies

We prepare our financial
statements in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available
to us. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies
that we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Revenue
Recognition.We recognize revenue from medical treatments on the date the procedures are performed, and accounts receivable are recorded at that time. Revenues are reported at the estimated realizable amounts from the third-party
payers. If such third-party payers were to change their reimbursement policies, the effect on revenue could be significant and have a material impact on the Companys results of operations. Provisions have been made, based on prior period
collections, for uncollectible accounts at March 31, 2007.

Net operating loss carryforwards.We have not recognized the benefit
in our financial statements with respect to the approximately $1,428,000 net operating loss carryforward for federal income tax purposes as of March 31, 2007. This benefit was not recognized due to the possibility that the net operating loss
carryforward would not be utilized, for various reasons, including the potential that we might not have sufficient profits to use the carryforward or that the carryforward may be limited as a result of changes in our equity ownership. We intend to
use this carryforward to offset our future taxable income. If we were to use any of this net operating loss carryforward to reduce our future taxable income and the Internal Revenue Service were to then successfully assert that our carryforward is
subject to limitation under Code Section 382 as a result of capital transactions occurring in 2002 or otherwise, we may be liable for back taxes, interest and, possibly, penalties prospectively.

Commitments

Except as shown in the following table, as of
March 31, 2007, we did not have any material capital commitments, other than funding our operating losses and repaying outstanding debt. It is anticipated that any capital commitments that may occur will be financed principally through
borrowings from shareholders (although such additional financing has not been arranged). However, there can be no assurance that additional capital resources and financings will be available to us on a timely basis, or if available, on acceptable
terms.



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##### Table of Contents

Future payments due on our contractual obligations as of March 31, 2007 are as follows:



|                           |  |   |       
|-------------------------- |  | - | ------
|Lease settlement liability |  | $ | 20,000
|Loans from stockholders    |  |   | 60,500
|Accrued interest           |  |   | 883   
|                           |  |   |       
|Total                      |  | $ | 81,383
|                           |  |   |       

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to investors.

Stock-Based Compensation

Before April 1, 2006, the Company accounted for stock-based compensation under the recognition and measurement principles of Accounting Principles Board Opinion
(APB) No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations. The Company did not recognize compensation expense related to stock options granted to employees and directors
where the exercise price was at or above fair value at the date of grant. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation plans. As permitted by SFAS No. 123, the Company elected to continue to apply the intrinsic-value-based method of APB No. 25 described above, and adopted only the
disclosure requirements of SFAS No. 123, as amended by SFAS No. 148, Accounting For Stock-Based CompensationTransition and Disclosure.

On April 1, 2006, the start of the first quarter of fiscal 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS
No. 123(R)) which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The Company adopted SFAS No. 123(R) using the modified prospective
application method under which the provisions of SFAS No. 123(R) apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite
service has not been rendered that are outstanding as of the adoption date is recognized in the Consolidated Statement of Operations over the remaining service period after the adoption date based on the grant date fair value. In accordance with
SFAS No. 123(R), results for prior periods have not been restated.

Recent Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board (FASB) issued FAS 155, Accounting for Certain Hybrid Financial Instruments, which
clarifies when certain financial instruments and features of financial instruments must be treated as derivatives and reported on the balance sheet at fair value with changes in fair value reported in net income. We will implement FAS 155 beginning
with financial instruments acquired on or after January 1, 2007, which is the effective date of FAS 155. We do not expect the adoption of FAS 155 to have a material impact on our financial position at our date of adoption. However, FAS 155 may
affect future income recognition for certain financial instruments that contain certain embedded derivatives as any changes in their fair values will be recognized in net income each period.



15



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##### Table of Contents

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to define fair value,
establish a framework for measuring fair value in accordance with generally accepted accounting principles, and expand disclosures about fair value measurements. SFAS No. 157 will be effective for fiscal years beginning after November 15,
2007, thus it will start affecting the Company on April 1, 2008, the beginning of the Companys 2008 fiscal year. The Company is assessing the impact the adoption of SFAS No. 157 will have on the Companys consolidated financial
position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities  including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to measure eligible assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We will adopt SFAS 159 on April 1, 2008, and have not yet determined the impact, if any, on our consolidated financial statements.



|ITEM 7. | FINANCIAL STATEMENTS
|------- | --------------------

The financial statements required to be filed
hereunder are set forth on pages F-1 through F-15 and are incorporated herein by this reference.



|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|------- | -------------------------------------------------------------------------------------

None.



|ITEM 8A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Evaluation of disclosure controls and
procedures. Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Annual Report (the Evaluation Date). Based on this
evaluation, our Chief Executive Officer/Chief Financial Officer concluded that its disclosure controls and procedures were not effective due to the material weakness discussed below.

Material Weakness Related to Depth of Accounting Personnel

Internal controls over financial reporting related to the
accounting for stock-based compensation and various accrued liabilities did not operate effectively resulting in adjustments and additional note disclosure in the financial statements that were not detected by the Companys accounting staff on
a timely basis. This resulted from a lack of qualified financial reporting personnel with sufficient depth, skills, and experience to record accounting transactions in accordance with generally accepted accounting principles in the United States of
America.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the year ended March 31, 2007 that have materially affected or are reasonably likely to materially affect our internal control over
financial reporting.



16



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##### Table of Contents

Inherent Limitations on Effectiveness of Controls

The Companys management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that the control systems objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls
must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls
can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on 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. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time,
controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.



|ITEM 8B. | OTHER INFORMATION
|-------- | -----------------

None.

PART III



|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
|------- | ---------------------------------------------------------------------------------------------------------------

The names of our executive officers and directors, their ages as of June 25, 2007, and the positions currently held by each are as follows:



|              |  |     |  |                                     
|------------- |  | --- |  | ------------------------------------
|Name          |  | Age |  | Position                            
|Scott Allen   |  | 39  |  | Chief Executive Officer and Director
|Steven Weldon |  | 31  |  | Chief Financial Officer and Director

Scott Allen is the owner of Fit-Well, a prosthetics company and orthopedic appliance company with
multiple locations throughout Utah. Mr. Allen has over 25 years experience in the treatment of the end-stage complications of diabetes, which is the target market of vascular stimulation therapy. Mr. Allen is a member in
the American Academy of Orthotists & Prosthetists and the International Society for Prosthetics and Orthotics. Mr. Allen holds three United States Patents related to prosthetic feet and is also the founder of Corporation Fitness
Wellness Centers, a nonprofit company which provides therapy, support, instruction and training to amputees to aid in their recovery and improves their quality of life.

Steven Weldon, a Certified Public Accountant,has served as our Chief Financial Officer since September 2005. Prior to joining Diabetic Treatment Centers of America, Inc. Mr. Weldon
was the Tax Manager for Westgate Resorts, Ltd., a timeshare developer, since July 2000. Since September 2005, Mr. Weldon has also served as the Chief Financial Officer of Inverted Paradigms Corp., a golf retailer and software developer.
Mr. Weldon was an adjunct professor at Florida Southern College from January 2002 to October 2005. Since May 2005, Mr. Weldon has served as the president, sole stockholder and director of Steven W. Weldon, PA, a public accounting firm
providing tax and accounting services. Mr. Weldon received his Bachelor of Science degree and his Masters in Business Administration from Florida Southern College.

During the past five years none of our directors, executive officers, promoters or control persons was:



| | 1) | the subject of 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;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



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##### Table of Contents

| | 2) | convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | 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
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or
commodities law.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 16(a) Beneficial Ownership Reporting Compliance.

Since we have no stock registered under Section 12(b) or Section 12(g) of the Exchange Act, there are no persons who need to file reports under
Section 16(a) of the Exchange Act.

Code of Ethics

We adopted the Diabetic Treatment Centers of America, Inc. Code of Ethics for the CEO and Senior Financial Officers (the finance code of ethics), a code of ethics that applies to our Chief Executive Officer, Chief Financial
Officer and other finance organization employees. A copy of the finance code of ethics may be obtained from the Company, free of charge, upon written request delivered to Diabetic Treatment Centers of America, Inc. 5401 South Kirkman Road, Suite 310
Orlando, Florida, 32819. If we make any substantive amendments to the finance code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer or Chief Financial Officer, we will disclose
the nature of such amendment or waiver in a report on Form 8-K.



|ITEM 10. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The following summary compensation table
reflects all compensation awarded to, earned by, or paid to our Chief Executive Officer and president and other employees for all services rendered to us in all capacities during each of the years ended March 31, 2007, 2006 and 2005. None of
our other executive officers received salary and bonus exceeding $100,000 during those years.



18



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##### Table of Contents

Summary Compensation Table



|                                               |  |      |  |           |  |          |  |                |  |                  |  |                                       |  |                                               |  |                       |  |        
|---------------------------------------------- |  | ---- |  | --------- |  | -------- |  | -------------- |  | ---------------- |  | ------------------------------------- |  | --------------------------------------------- |  | --------------------- |  | -------
|Name and Position                              |  | Year |  | Salary($) |  | Bonus($) |  | StockAwards($) |  | OptionAwards ($) |  | Non-EquityIncentive Plan Compensation |  | Nonqualified DeferredCompensationEarnings ($) |  | All OtherCompensation |  | Total  
|Scott Allen, CEO, Director, and President      |  | 2007 |  | 102,450   |  |         |  | 250,000        |  |                 |  |                                      |  |                                              |  |                      |  | 252,450
|                                               |  | 2006 |  | 12,000    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 12,000 
|Steven Weldon, CFO and Director                |  | 2007 |  | 30,000    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 30,000 
|                                               |  | 2006 |  | 8,750     |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 8,750  
|Allen Woodlief, former CFO and former Director |  | 2007 |  |          |  |         |  |               |  |                 |  |                                      |  |                                              |  |                       |  |       
|                                               |  | 2006 |  | 13,750    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                       |  | 13,750 
|Arden Oliphant, former CEO and former Director |  | 2007 |  |          |  |         |  |               |  |                 |  |                                      |  |                                              |  |                       |  |       
|                                               |  | 2006 |  | 25,000    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 25,000 
|                                               |  | 2005 |  | 34,000    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 34,000 
|Jeff Jones, former President                   |  | 2007 |  |          |  |         |  |               |  |                 |  |                                      |  |                                              |  |                       |  |       
|                                               |  | 2006 |  |          |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  |       
|                                               |  | 2005 |  | 38,270    |  |         |  |               |  |                 |  |                                      |  |                                              |  |                      |  | 38,270 

Directors Compensation

Directors are not currently compensated, although each is entitled to be reimbursed for reasonable and necessary expenses incurred on our behalf. All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. We compensated one of our former directors, Robert Genesi, for service on the Board of Directors with 130,000 shares
of restricted stock from our 2005 Restricted Stock Plan. As of March 31, 2006, no director has accrued any expenses or compensation. Officers are appointed annually by the Board of Directors and each executive officer serves at the discretion
of the Board of Directors. Our board of directors does not have an audit or any other committee.

2005 Restricted Stock Plan

On August 11, 2005, the Board of Directors adopted the Diabetic Treatment Centers of America, Inc. 2005 Restricted Stock Plan (the 2005 Plan) and
recommended that it be submitted to our stockholders for their approval at the 2005 Annual Meeting. The terms of the 2005 Plan provide for grants of restricted stock awards.

Under the 2005 Plan, the total number of shares of restricted common stock that may be subject to the granting of Awards during the term of the 2005 Plan shall be equal to 5,000,000 shares. Shares with respect to
which awards previously granted that are forfeited, cancelled or terminated are returned to the plan and may be reissued. A grant of 200,000 shares was made to a director and 100,000 shares to an employee. The director forfeited 70,000 shares on
April 21, 2006 when he resigned and the employee forfeited 10,000 shares on May 31, 2006 when he was terminated.



19



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##### Table of Contents

|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

The following table presents information known to us, as of July 9, 2007, relating to the beneficial ownership of common stock by:



| |  |  | each person who is known by us to be the beneficial holder of more than 5% of our outstanding common stock;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | each of our named executive officers and directors; and
| | - |  | -------------------------------------------------------



| |  |  | our directors and executive officers as a group.
| | - |  | ------------------------------------------------

We
believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them, except as noted.

Percentage ownership in the following table is based on 44,339,659 shares of common stock outstanding as of July 9, 2007. A person is deemed to be the beneficial owner of securities that can be acquired by that person within 60 days
from the date of this Annual Report upon the exercise of options, warrants or convertible securities. Each beneficial owners percentage ownership is determined by dividing the number of shares beneficially owned by that person by the base
number of outstanding shares, increased to reflect the shares underlying options, warrants or other convertible securities included in that persons holdings, but not those underlying shares held by any other person.



|                                              |  |                                                  |  |                                        |  
|--------------------------------------------- |  | ------------------------------------------------ |  | -------------------------------------- | -
|Name of Beneficial Owner                      |  | Number ofShares of CommonStock BeneficiallyOwned |  | Percentage of SharesBeneficially Owned |  
|Scott Allen                                   |  | 12,826,900                                       |  | 26.10                                  | %
|Jeff Jones                                    |  | 9,533,828                                        |  | 19.32                                  | %
|Steven Weldon                                 |  | 4,348,400                                        |  | 8.81                                   | %
|Darren Cassels                                |  | 4,348,400                                        |  | 8.81                                   | %
|American Medical Technologies Management, LLC |  | 5,000,000                                        |  | 10.13                                  | %
|All directors and officers (2 persons)        |  | 17,175,300                                       |  | 34.91                                  | %

---

|(1) | Unless otherwise noted, the address of each person listed isc/o Diabetic Treatment Centers of America, Inc. 5401 South Kirkman Road, Suite 310, Orlando, Florida, 32819.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 12. | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|-------- | ---------------------------------------------------------------------

On May 15, 2006 we entered into a joint venture agreement with Performance Medical Corporation which is owned
by Scott Allen, our Chief Executive Officer and a Director. The joint ventures pays Scott Allen $1,000 per month for rent of facilities.



|ITEM 13. | EXHIBITS
|-------- | --------



|              |  |                                                                                    
|------------- |  | -----------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                        
|3.1           |  | Form of Articles of Incorporation of Diabetic Treatment Centers of America, Inc.(1)
|              | 
|3.2           |  | Bylaws of Diabetic Treatment Centers of America, Inc.(1)                           



20



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##### Table of Contents

|     |  |                                                                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Code of Ethics(2)                                                                                                                                                              
|     | 
|10.2 |  | Diabetic Treatment Centers of America, Inc. 2005 Restricted Stock Plan(3)                                                                                                      
|     | 
|10.3 |  | Joint Venture Agreement(4)                                                                                                                                                     
|     | 
|23.1 |  | Consent of Tedder, James, Worden and Associates, P.A.*                                                                                                                         
|     | 
|31.1 |  | Certification of Chief Executive Officer Pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|     | 
|31.2 |  | Certification of Chief Financial Officer Pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|     | 
|32.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                            
|     | 
|32.2 |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                            
|     | 
|99.1 |  | Audit Committee Pre-Approval Policy(2)                                                                                                                                         

---

|* | Filed Herewith
|- | --------------

|(1) | Incorporated by reference to the Registrants Registration Statement on Form SB-2, filed on February 12, 2002, File No. 333-82580
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to the Registrants Form 10KSB dated March 31, 2004, filed on June 22, 2004, File No. 333-82580
|--- | -------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to the Companys Proxy Statement on Schedule 14A (filed 8/11/05) (No. 333-83580).
|--- | -----------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to the Companys Form 8-K filed on May 16, 2006, File No. 333-82580
|--- | ---------------------------------------------------------------------------------------------



|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------



|                      |  |             |        |             |   |       
|--------------------- |  | ----------- | ------ | ----------- | - | ------
|                      |  | Fiscal 2007 |        | Fiscal 2006
|Audit Fees(1)         |  | $           | 52,250 |             | $ | 35,111
|Audit-Related Fees(2) |  |             | -0-    |             |   | -0-   
|Tax Fees(3)           |  |             | -0-    |             |   | -0-   
|                      |  |             |        |             |   |       
|Subtotal              |  | $           | 52,250 |             | $ | 35,111
|All other Fees(4)     |  |             | -0-    |             |   | -0-   
|                      |  |             |        |             |   |       
|Total                 |  | $           | 52,250 |             | $ | 35,111
|                      |  |             |        |             |   |       

---

|(1) | Audit Fees  Audit fees billed to the Company by Tedder, James, Worden &
Associates, P.A. for auditing the Companys annual financial statements and reviewing the financial statements included in the Companys Quarterly Reports on Form 10-QSB.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-Related Fees  There were no other fees billed by Tedder, James, Worden &
Associates, P.A. during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Companys financial statements and not reported under Audit Fees
above.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax Fees There were no tax fees billed during the last past fiscal year for professional
services by Tedder, James, Worden & Associates, P.A.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(4) | All Other Fees  There were no other fees billed by during the last two fiscal years for
products and services provided.
|--- | ------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Pre-approval of Audit and Non-Audit Services of Independent Auditor

The Board of Directors policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services,
audit-related services, tax services and other services. The Board of Directors pre-approval policy with respect to non-audit services is included as Exhibit 99.1 of to this Annual Report. Pre-approval is generally provided for up to 12 months
from the date of pre-approval and any pre-approval is detailed as to the particular service or category of services. The Board of Directors may delegate pre-approval authority to one or more of its members when expedition of services is necessary.
The Board of Directors has determined that the provision of non-audit services by Tedder, James, Worden & Associates, P.A. is compatible with maintaining its independence.



---

##### Table of Contents

SIGNATURES

In accordance
with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |  |  |                                             |  |                                                
|-------------------- |  |  |  | ------------------------------------------- |  | -----------------------------------------------
|                     |  |  |  | DIABETIC TREATMENT CENTERS OF AMERICA, INC.
|Dated: July 16, 2007 |  |  |  |                                             |  |                                                
|                     |  |  |  | By:                                         |  | /s/ Scott Allen                                
|                     |  |  |  | Name:                                       |  | Scott Allen                                    
|                     |  |  |  | Title:                                      |  | Chief Executive Officer, President and Director

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.



|                     |  |  |  |                                             |  |                                                
|-------------------- |  |  |  | ------------------------------------------- |  | -----------------------------------------------
|                     |  |  |  | DIABETIC TREATMENT CENTERS OF AMERICA, INC.
|                     |  |  | 
|Dated: July 16, 2007 |  |  |  |                                             |  |                                                
|                     |  |  | 
|                     |  |  |  | By:                                         |  | /s/ Scott Allen                                
|                     |  |  |  | Name:                                       |  | Scott Allen                                    
|                     |  |  |  | Title:                                      |  | Chief Executive Officer, President and Director
|                     |  |  | 
|                     |  |  |  | By:                                         |  | /s/ Steven Weldon                              
|                     |  |  |  | Name:                                       |  | Steven Weldon                                  
|                     |  |  |  | Title:                                      |  | Chief Financial Officer and Director           



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Table of Contents



|                                                                                                           |  |    
|---------------------------------------------------------------------------------------------------------- |  | ---
|Report of Independent Registered Certified Public Accounting Firm                                          |  | F-1
|                                                                                                           | 
|Consolidated Financial Statements:                                                                         |  |    
|                                                                                                           | 
|Consolidated Balance Sheet  March 31, 2007                                                                |  | F-2
|                                                                                                           | 
|Consolidated Statements of Operations  Years ended March 31, 2007 and 2006                                |  | F-3
|                                                                                                           | 
|Consolidated Statements of Stockholders Equity (Capital Deficiency)  Years ended March 31, 2007 and 2006 |  | F-4
|                                                                                                           | 
|Consolidated Statements of Cash Flows  Years ended March 31, 2007 and 2006                                |  | F-5
|                                                                                                           | 
|Notes to Consolidated Financial Statements                                                                 |  | F-6



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##### Table of Contents

Report of Independent Registered Certified Public Accounting Firm

To the Board of Directors and Stockholders of

Diabetic Treatment Centers of America, Inc.

We have audited the accompanying consolidated balance sheet of Diabetic Treatment Centers of America, Inc. and Subsidiary as of March 31, 2007, and the related consolidated statements of operations, stockholders equity (capital
deficiency), and cash flows for the years ended March 31, 2007 and 2006. 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
audits.

We conducted our audits in accordance with the 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 consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of March 31, 2007, and the results of their operations and their cash flows for the years ended March 31, 2007 and 2006, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred net losses and negative cash flows from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans, raise
substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters are also discussed in Note 2. The consolidated financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



|                                              
|----------------------------------------------
|/s/ Tedder, James, Worden and Associates, P.A.

Orlando, Florida

July 11, 2007

F-1



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Consolidated Balance Sheet

March 31, 2007



|                                                                                                         |  |               |            |  
|-------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | -
|                                                                                                         |  | March 31,2007 |           
|Assets                                                                                                   | 
|                                                                                                         | 
|Current assets:                                                                                          |  |               |            |  
|Cash                                                                                                     |  | $             | 73,833     |  
|Accounts receivable, net                                                                                 |  |               | 276,503    |  
|Inventories                                                                                              |  |               | 28,365     |  
|                                                                                                         |  |               |            |  
|Total assets                                                                                             |  | $             | 378,701    |  
|                                                                                                         |  |               |            |  
|                                                                                                        
|Liabilities and Capital Deficiency                                                                       | 
|                                                                                                         | 
|Current liabilities:                                                                                     |  |               |            |  
|Accounts payable                                                                                         |  | $             | 225,110    |  
|Accrued expenses                                                                                         |  |               | 115,423    |  
|Loan from related party                                                                                  |  |               | 137,240    |  
|Loans from stockholders                                                                                  |  |               | 60,500     |  
|Related party payables                                                                                   |  |               | 20,058     |  
|                                                                                                         |  |               |            |  
|Total current liabilities                                                                                |  |               | 558,331    |  
|                                                                                                         |  |               |            |  
|Capital deficiency:                                                                                      |  |               |            |  
|Common stock, $0.0001 par value, 300,000,000 shares authorized, 44,339,659 shares issued and outstanding |  |               | 4,434      |  
|Additional paid-in capital                                                                               |  |               | 1,407,249  |  
|Accumulated deficit                                                                                      |  |               | (1,591,313 | )
|                                                                                                         |  |               |            |  
|Total capital deficiency                                                                                 |  |               | (179,630   | )
|                                                                                                         |  |               |            |  
|Total liabilities and capital deficiency                                                                 |  | $             | 378,701    |  
|                                                                                                         |  |               |            |  

See accompanying notes to the consolidated financial statements.

F-2



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Consolidated Statements of Operations

For the years ended March 31, 2007 and 2006



|                                                               |  |      |            |   |      |   |            |  
|-------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                               |  | 2007 |            |   | 2006 |  
|Net revenue                                                    |  | $    | 2,036,331  |   |      | $ | 54,593     |  
|                                                               |  |     
|Cost of revenue                                                |  |      | 951,706    |   |      |   | 115,537    |  
|                                                               |  |      |            |   |      |   |            |  
|Gross profit (loss)                                            |  |      | 1,084,625  |   |      |   | (60,944    | )
|                                                               |  |     
|General and administrative expenses                            |  |      | 1,635,695  |   |      |   | 381,952    |  
|                                                               |  |      |            |   |      |   |            |  
|Loss from operations                                           |  |      | (551,070   | ) |      |   | (442,896   | )
|                                                               |  |     
|Other income (expense):                                        |  |      |            |   |      |   |            |  
|Interest expense                                               |  |      | (6,614     | ) |      |   | (11,933    | )
|Rental income                                                  |  |      |           |   |      |   | 9,600      |  
|                                                               |  |      |            |   |      |   |            |  
|Other expense, net                                             |  |      | (6,614     | ) |      |   | (2,333     | )
|                                                               |  |      |            |   |      |   |            |  
|Net loss                                                       |  | $    | (557,684   | ) |      | $ | (445,229   | )
|                                                               |  |      |            |   |      |   |            |  
|Weighted average common shares outstanding  basis and diluted |  |      | 37,957,850 |   |      |   | 23,290,003 |  
|                                                               |  |      |            |   |      |   |            |  
|Net loss per sharebasic and diluted                           |  | $    | (0.01      | ) |      | $ | (0.02      | )
|                                                               |  |      |            |   |      |   |            |  

See accompanying notes to the consolidated financial statements.

F-3



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Consolidated Statements of Stockholders
Equity (Capital Deficiency)

For the years ended March 31, 2007 and 2006



|                                                           |  |              |   |  |                   |       |   |                             |   |           |              |  |   |         |   |  |       |            |   |  |   |          |  
|---------------------------------------------------------- |  | ------------ | - |  | ----------------- | ----- | - | --------------------------- | - | --------- | ------------ |  | - | ------- | - |  | ----- | ---------- | - |  | - | -------- | -
|                                                           |  | Common stock |   |  | Additionalpaid-in |       |   | Deferredstock-basedemployee |   |           | Accumulated  |  |   |         |  
|                                                           |  | Shares       |   |  | Amount            |       |   | capital                     |   |           | compensation |  |   | deficit |   |  | Total |           
|Balance, March 31, 2005                                    |  | 23,249,759   |   |  | $                 | 2,325 |   |                             | $ | 614,896   |              |  | $ |        |   |  | $     | (588,400   | ) |  | $ | 28,821   |  
|                                                           |  |              |   |  |                   |      
|Issuance of employee restricted stock                      |  | 300,000      |   |  |                   | 30    |   |                             |   | 23,970    |              |  |   | (24,000 | ) |  |       |           |   |  |   |         |  
|                                                           |  |              |   |  |                   |      
|Sale of restricted stock                                   |  | 7,500,000    |   |  |                   | 750   |   |                             |   | 299,250   |              |  |   |        |   |  |       |           |   |  |   | 300,000  |  
|                                                           |  |              |   |  |                   |      
|Amortization of deferred stock based employee compensation |  |             |   |  |                   |      |   |                             |   |          |              |  |   | 13,030  |   |  |       |           |   |  |   | 13,030   |  
|                                                           |  |              |   |  |                   |      
|Net loss                                                   |  |             |   |  |                   |      |   |                             |   |          |              |  |   |        |   |  |       | (445,229   | ) |  |   | (445,229 | )
|                                                           |  |              |   |  |                   |       |   |                             |   |           |              |  |   |         |   |  |       |            |   |  |   |          |  
|Balance, March 31, 2006                                    |  | 31,049,759   |   |  | $                 | 3,105 |   |                             | $ | 938,116   |              |  | $ | (10,970 | ) |  | $     | (1,033,629 | ) |  | $ | (103,378 | )
|                                                           |  |              |   |  |                   |       |   |                             |   |           |              |  |   |         |   |  |       |            |   |  |   |          |  
|Issuance of restricted stock compensation                  |  | 5,000,000    |   |  |                   | 500   |   |                             |   | 349,500   |              |  |   |        |   |  |       |           |   |  |   | 350,000  |  
|                                                           |  |              |   |  |                   |      
|Unamortized stock compensation                             |  |             |   |  |                   |      |   |                             |   | (39,554   | )            |  |   |        |   |  |       |           |   |  |   | (39,554  | )
|                                                           |  |              |   |  |                   |      
|Cancel employee restricted stock                           |  | (80,000      | ) |  |                   | (8    | ) |                             |   | (7,374    | )            |  |   | 7,382   |   |  |       |           |   |  |   |         |  
|                                                           |  |              |   |  |                   |      
|Amortization of deferred stock based employee compensation |  |             |   |  |                   |      |   |                             |   |          |              |  |   | 3,588   |   |  |       |           |   |  |   | 3,588    |  
|                                                           |  |              |   |  |                   |      
|Conversion of loans into common stock                      |  | 8,369,900    |   |  |                   | 837   |   |                             |   | 166,561   |              |  |   |        |   |  |       |           |   |  |   | 167,398  |  
|                                                           |  |              |   |  |                   |      
|Net loss                                                   |  |             |   |  |                   |      |   |                             |   |          |              |  |   |        |   |  |       | (557,684   | ) |  |   | (557,684 | )
|                                                           |  |              |   |  |                   |       |   |                             |   |           |              |  |   |         |   |  |       |            |   |  |   |          |  
|Balance, March 31, 2007                                    |  | 44,339,659   |   |  | $                 | 4,434 |   |                             | $ | 1,407,249 |              |  | $ |        |   |  | $     | (1,591,313 | ) |  | $ | (179,630 | )
|                                                           |  |              |   |  |                   |       |   |                             |   |           |              |  |   |         |   |  |       |            |   |  |   |          |  

See accompanying notes to consolidated financial statements.

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the years ended March 31, 2007 and 2006



|                                                                            |  |      |          |   |      |   |          |  
|--------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                            |  | 2007 |          |   | 2006 |  
|Cash flows from operating activities:                                       |  |      |          |   |      |   |          |  
|Net loss from continuing operations                                         |  | $    | (557,684 | ) |      | $ | (445,229 | )
|                                                                            |  |     
|Adjustments to reconcile net loss to net cash used in operating activities: |  |      |          |   |      |   |          |  
|Depreciation                                                                |  |      | 2,633    |   |      |   | 12,551   |  
|Bad debt                                                                    |  |      | 47,476   |   |      |   | 24,402   |  
|Interest on loans from stockholders                                         |  |      | 6,361    |   |      |   | 11,933   |  
|Impairment loss on property and equipment                                   |  |      | 22,354   |   |      |   | 34,956   |  
|Amortization of deferred stock-based consulting fees                        |  |      | 310,446  |   |      |   |         |  
|Gain on extinguishment of debt                                              |  |      | (41,324  | ) |      |   |         |  
|Amortization of deferred stock-based employee compensation                  |  |      | 3,588    |   |      |   | 13,030   |  
|Changes in operating assets and liabilities:                                |  |      |          |   |      |   |          |  
|Accounts receivable                                                         |  |      | (319,299 | ) |      |   | (29,082  | )
|Inventories                                                                 |  |      | (28,365  | ) |      |   |         |  
|Other assets                                                                |  |      | 655      |   |      |   | (3,845   | )
|Accounts payable                                                            |  |      | 215,267  |   |      |   | 22,193   |  
|Accrued expenses                                                            |  |      | 84,490   |   |      |   | 40,667   |  
|Related party payables                                                      |  |      | 20,058   |   |      |   | ^@       |  
|                                                                            |  |      |          |   |      |   |          |  
|Net cash used in operating activities                                       |  |      | (233,344 | ) |      |   | (318,424 | )
|                                                                            |  |      |          |   |      |   |          |  
|Cash flows from investing activities:                                       |  |      |          |   |      |   |          |  
|Sale of property and equipment                                              |  |      | 625      |   |      |   |         |  
|Purchase of property and equipment                                          |  |      |         |   |      |   | (32,853  | )
|                                                                            |  |      |          |   |      |   |          |  
|Net cash provided by (used in) investing activities                         |  |      | 625      |   |      |   | (32,853  | )
|                                                                            |  |      |          |   |      |   |          |  
|Cash flows from financing activities:                                       |  |      |          |   |      |   |          |  
|Loan from related party                                                     |  |      | 407,735  |   |      |   |         |  
|Repayments of loan from related party                                       |  |      | (270,495 | ) |      |   |         |  
|Loans from stockholders                                                     |  |      | 60,500   |   |      |   | 150,500  |  
|Sale of restricted stock                                                    |  |      |         |   |      |   | 300,000  |  
|                                                                            |  |      |          |   |      |   |          |  
|Net cash provided by financing activities                                   |  |      | 197,740  |   |      |   | 450,500  |  
|                                                                            |  |      |          |   |      |   |          |  
|Net (decrease) increase in cash                                             |  |      | (34,979  | ) |      |   | 99,223   |  
|                                                                            |  |      |          |   |      |   |          |  
|Cash, beginning of year                                                     |  | $    | 108,812  |   |      | $ | 9,589    |  
|                                                                            |  |      |          |   |      |   |          |  
|Cash, end of year                                                           |  | $    | 73,833   |   |      | $ | 108,812  |  
|                                                                            |  |      |          |   |      |   |          |  
|Supplemental disclosures of cash flow information:                          |  |      |          |   |      |   |          |  
|Cash paid during the year for:                                              |  |      |          |   |      |   |          |  
|Interest                                                                    |  | $    |         |   |      | $ |         |  
|                                                                            |  |      |          |   |      |   |          |  
|Non-cash investing and financing activities:                                |  |      |          |   |      |   |          |  
|Issuance of restricted stock for consulting services                        |  | $    | 350,000  |   |      | $ |         |  
|                                                                            |  |      |          |   |      |   |          |  
|Conversion of stockholder loans into common stock                           |  | $    | 167,398  |   |      | $ |         |  
|                                                                            |  |      |          |   |      |   |          |  

See accompanying notes to the consolidated financial statements.

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007

NOTE 1
 ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

Reporting Entity. Diabetic Treatment Centers of America, Inc. (Diabetic
or the Company) was incorporated on April 4, 2001 under the laws of the State of Delaware. The Company is authorized to issue 300,000,000 shares of common stock, par value $.0001. The Companys activities were originally
devoted primarily to the wholesaling of golf equipment.

Due to our inability to expand our wholesale golf operations, on July 1, 2004, the Board of
Directors approved changing the name of the Company from Flagstick Ventures, Inc. to Diabetic Treatment Centers of America, Inc. to reflect our new business direction of owning and operating diabetic treatment centers. On August 4, 2004, the
Company ceased operating in the wholesale golf industry to fully pursue its new direction of opening diabetic treatment centers. Due to the inability to collect revenue from Medicare and insurance companies, in April 2006 we stopped treating
patients temporarily, or until we can bill these carriers for the services we perform and are reimbursed on a timely basis.

On May 12, 2006, Diabetic
Treatment Centers of America, Inc. entered into a Joint Venture Agreement with Personal Performance Medical Corporation (PPMC) called American Medical Management Technologies to manage and develop the operations of Personal Performance
Medical Corporation (d/b/a/ Fit-Well Prosthetics and Orthotic Center) (the Joint Venture), a Utah based Corporation that offers full service Prosthetic and Orthotic Care and Manufacturing, durable medical equipment and soft goods sales.
The Joint Venture commenced operations on June 1, 2006 and was to originally continue for two consecutive years, but was extended for an additional year in January 2007 or until the Joint Venture is liquidated or dissolved. Diabetic Treatment
Centers of America, Inc. owns 75% of the Joint Venture and Personal Performance Medical Corporation owns the remaining 25%.

Principles of
Consolidation. The Companys consolidated financial statements for the years ended March 31, 2007 and 2006, include the accounts of its wholly owned subsidiary A&Z Golf Corp., a Delaware corporation and our joint venture with
Personal Performance Medical Corporation. All intercompany balances and transactions have been eliminated.

NOTE 2  BASIS OF PRESENTATION

The Companys consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has
experienced net losses since April 4, 2001 (date of inception), which losses have caused an accumulated deficit of approximately $1,591,000 as of March 31, 2007. In addition, the Company has consumed cash in its operating activities of
approximately $233,000 and $318,000 for the years ended March 31, 2007 and 2006, respectively. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

Management has been able, thus far, to finance the losses through a public offering, private placements and obtaining operating funds from stockholders. The Company is
continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals.

In view of these conditions,
the Companys ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. The Company is currently
operating a joint venture in the orthotics and prosthetics business and plans to expand by acquiring or partnering with other medical businesses. Management believes that its current and future plans provide an opportunity to continue as a going
concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event the
Company cannot continue as a going concern.

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007



NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition.The Company recognizes revenue from its medical treatments on the date the procedures are performed, and accounts receivable are
recorded at that time. Revenues on the sale of orthotic and prosthetic devices and associated services to patients are recorded when the device is accepted by the patient, provided that delivery has occurred or services have been rendered. Revenues
are reported at the estimated realizable amounts from the third-party payers. If such third-party payers were to change their reimbursement policies, the effect on revenue could be significant and have a material impact on the Companys results
of operations. Provisions have been made, based on prior period collections, for uncollectible accounts at March 31, 2007. The provision for uncollectible accounts was $72,000 as of March 31, 2007.

Cost of Revenue. The components of cost of revenue in the accompanying consolidated statements of operations include all direct labor and direct material
associated with the delivery of the Companys products and services. In addition, an allocation of overhead costs is included in cost of revenue.

Advertising Costs. The company expenses advertising costs as they are incurred.

Use of Estimates. The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

Income Taxes. The Company utilizes Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes,
which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns. Under this method, deferred income taxes are recognized for the
tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has net operating loss carryforwards that may be offset against
future taxable income. Due to the uncertainty regarding the success of future operations, management has valued the deferred tax asset allowance at 100% of the related deferred tax assets.

In June 2006, The FASB issued interpretation no. 48, Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109 (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes (SFAS 109). This Interpretation prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company
adopted FIN 48 effective April 1, 2007. The adoption of this statement had no impact on the Companys financial position or results of operation.

Loss per Share. The Company utilizes Financial Accounting Standards Board Statement No. 128, Earnings Per Share. Statement No. 128 requires the presentation of basic and diluted loss per share on the face
of the statement of operations.

Basic loss per share has been calculated using the weighted average number of common shares outstanding during the period.
The Company had no common stock equivalent shares outstanding as of March 31, 2007 and 2006. However, if the Company had such common stock equivalents, they would not have been included in the computation of diluted net loss per share as their
inclusion would have been anti-dilutive.

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007



NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED



Stock-Based Compensation.Before April 1, 2006, the Company accounted for stock-based compensation
under the recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations. The Company did not
recognize compensation expense related to stock options granted to employees and directors where the exercise price was at or above fair value at the date of grant. Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation, established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As permitted by SFAS No. 123, the Company elected to continue to apply the
intrinsic-value-based method of APB No. 25 described above, and adopted only the disclosure requirements of SFAS No. 123, as amended by SFAS No. 148, Accounting For Stock-Based CompensationTransition and Disclosure.

On April 1, 2006, the start of the first quarter of fiscal 2007, the Company adopted the provisions of Statement of Financial Accounting Standards
No. 123 (revised 2004), Share-Based Payment (SFAS No. 123(R)) which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The
Company adopted SFAS No. 123(R) using the modified prospective application method under which the provisions of SFAS No. 123(R) apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally,
compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the Consolidated Statement of Operations over the remaining service period after the
adoption date based on the grant date fair value. In accordance with FAS 123(R), results for prior periods have not been restated.

As of March 31,
2007 the only share-based payment awards outstanding related to the restricted stock agreement described in Note 12.

Fair Value of Financial
Instruments. The carrying amount of cash, accounts receivable, accounts payable, and other current liabilities approximates fair value because of the short term maturity of these instruments.

NOTE 4  IMPAIRMENT OF ASSETS

During the year ended
March 31, 2007 the Company recognized an impairment loss on its property and equipment of $22,354. The impairment loss relates to the Companys diabetic treatment operations and has been included in general and administrative expense for
the year ended March 31, 2007.

NOTE 5  LOAN FROM RELATED PARTY

The Company received a loan from PPMC as a result of the formation of the Joint Venture. No interest is accrued for this loan and there is no agreement on when this loan is to be repaid.

NOTE 6  DEFERRED INCOME TAXES

At March 31, 2007, the
Company had net operating loss carryforwards for income tax purposes of approximately $1,428,000 available as offsets against future taxable income. The net operating loss carryforwards are expected to expire at various times from 2022 through 2027.

The tax effects of the primary temporary differences giving rise to the Companys deferred tax assets and liabilities are as follows for the year
ended March 31, 2007:



|                                |  |      |          |  
|------------------------------- |  | ---- | -------- | -
|                                |  | 2007 |         
|Deferred tax assets:            |  |      |          |  
|Net operating loss carryforward |  | $    | 537,000  |  
|Allowance for doubtful accounts |  |      | 27,000   |  
|Accrued expenses                |  |      | 15,000   |  
|Stock based compensation        |  |      | 13,000   |  
|                                |  |      |          |  
|Total deferred tax assets       |  |      | 592,000  |  
|                                | 
|Less valuation allowance        |  |      | (592,000 | )
|                                |  |      |          |  
|Net deferred tax asset          |  | $    |         |  
|                                |  |      |          |  

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007



NOTE 6  DEFERRED INCOME TAXES, CONTINUED



Because of the Companys lack of earnings history, the deferred tax assets have been fully offset by a valuation
allowance. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during those periods that the temporary differences become deductible. During the year ended March 31, 2007, the increase in the deferred tax asset valuation allowance amounted to
approximately $240,000.

The provision for income taxes is different than would result from applying the U.S. statutory rate to profit before taxes for the
reasons set forth in the following reconciliation:



|                                               |  |      |          |  
|---------------------------------------------- |  | ---- | -------- | -
|                                               |  | 2007 |         
|Tax benefit computed at U.S. statutory rates   |  | $    | (190,000 | )
|                                               | 
|Increases (decreases) in taxes resulting from: |  |      |          |  
|Change in valuation allowance                  |  |      | 240,000  |  
|State taxes                                    |  |      | (50,000  | )
|                                               |  |      |          |  
|Total                                          |  | $    |         |  
|                                               |  |      |          |  

NOTE 7  WARRANTY RESERVES

The Company has established a provision for warranty claims in anticipation of a certain degree of warranty activity. For the fiscal year ended March 31, 2007, the Company has included a provision of $19,726 for
warranty issues. The provision, which is included in accrued expenses on the balance sheet, is based upon recent warranty experience.

NOTE 8 
ACCRUED EXPENSES

Accrued expenses consist of the following as of March 31, 2007:



|                           |  |   |        
|-------------------------- |  | - | -------
|Customer refunds payable   |  | $ | 16,103 
|Warranty reserves          |  |   | 19,726 
|Lease settlement liability |  |   | 20,000 
|Accrued property taxes     |  |   | 16,840 
|Accrued compensation       |  |   | 41,871 
|Accrued interest           |  |   | 883    
|                           |  |   |        
|                           |  | $ | 115,423
|                           |  |   |        

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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007



NOTE 9  LOANS FROM STOCKHOLDERS

The following is a table of loans from stockholders at March 31, 2007 and their related accrued interest:



|           |  |          |  |                 |        |                 |   |    
|---------- |  | -------- |  | --------------- | ------ | --------------- | - | ---
|DateIssued |  | Due Date |  | PrincipalAmount |        | AccruedInterest
|10/13/06   |  | 01/11/07 |  | $               | 6,000  |                 | $ | 278
|11/03/06   |  | 02/01/07 |  |                 | 6,000  |                 |   | 245
|12/20/06   |  | 03/20/07 |  |                 | 6,000  |                 |   | 100
|12/26/06   |  | 03/26/07 |  |                 | 6,500  |                 |   | 170
|02/19/07   |  | 05/18/07 |  |                 | 6,000  |                 |   | 66 
|03/28/07   |  | 06/28/07 |  |                 | 30,000 |                 |   | 24 
|           |  |          |  |                 |        |                 |   |    
|           |  | Total    |  | $               | 60,500 |                 | $ | 883
|           |  |          |  |                 |        |                 |   |    

The loans from shareholders are collateralized by 6,050,000 restricted shares of the Companys common stock
and bear interest at 10% per annum. As of March 31, 2007, accrued interest payable of $883 is included in accrued expenses in the accompanying consolidated balance sheet. The loans from shareholders and related accrued interest are due no
later than ninety days from the date of the loan.

The Company is currently in default on all of these loans. The Company may use the collateral to satisfy
these loans.

NOTE 10  COMMITMENT AND CONTINGENCIES

On August 1, 2004, the Company signed a lease agreement to occupy approximately 4,000 square feet of office space in Salt Lake City, Utah, which would have served as our executive offices. Our rent for this location was $4,500 per
month and our four year lease was to expire on July 31, 2008. On April 28, 2006, the Company broke its lease and vacated the property. Lease termination costs of $30,000 were included in accrued expenses as of June 30, 2006. On
September 29, 2006 the Company entered into a settlement agreement with the landlord to pay $20,000 within ninety days to fully release the Company from its lease and settle all outstanding rent due. A gain of $41,234 has been included in the
accompanying consolidated statements of operations as an offset to general and administrative expense for the year ended March 31, 2007 to reflect the Companys release from this obligation which includes the reduction in lease termination
cost and forgiveness of rent payable included in accounts payable.

NOTE 11  STOCKHOLDERS EQUITY (CAPITAL DEFICIENCY)

On August 21, 2006 the Company issued 8,369,900 common shares to convert both the principal balance and accrued interest of promissory notes held by a shareholder.
At the date of the conversion, the principal and accrued interest balance amounted to $150,500 and $16,898, respectively.

On August 16, 2006, the
majority holders of the Companys common stock approved by written consent amendments to our Certificate of Incorporation to increase the number of shares of our capital stock we are authorized to issue to 300,000,000 shares, of which all
300,000,000 shares will be Common Stock.

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DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

March 31, 2007



NOTE 12  RESTRICTED STOCK BASED COMPENSATION

On August 11, 2005, the Board of Directors adopted the Diabetic Treatment Centers of America, Inc. 2005 Restricted Stock Plan (the 2005 Plan) and
it was approved on August 11, 2005 by our stockholders at the 2005 Annual Meeting. The terms of the 2005 Plan provide for grants of restricted stock awards.

Under the 2005 Plan, the total number of shares of restricted common stock that may be subject to the granting of Awards during the term of the 2005 Plan shall be equal to 5,000,000 shares. Shares with respect to which awards previously
granted that are forfeited, cancelled or terminated are returned to the plan and may be reissued. As of March 31, 2007, 300,000 shares have been issued under this Plan. On April 21, 2006, a director forfeited 70,000 shares when he resigned
and an employee forfeited 10,000 shares on May 31, 2006 when he was terminated.

Consulting Agreement. On May 12, 2006, the Company
entered into a one year agreement with Scott Allen, our Chief Executive Officer, to assist in business development and expansion. Mr. Allen was compensated with 5,000,000 shares of restricted common stock valued at $350,000 which is being
charged to general and administrative expenses ratably over the term of the agreement. $310,445 has been included in general and administrative expense for the year ended March 31, 2007.

NOTE 13  SEGMENT REPORTING

The Company operates two reportable
segments consisting of diabetic treatment and orthotics and prosthetics.

Summarized financial information for each of the reportable segments is provided
in the following tables:



|                          |  |                   |          |   |                          |   |       |  |   |          |  
|------------------------- |  | ----------------- | -------- | - | ------------------------ | - | ----- |  | - | -------- | -
|Year Ended March 31, 2006 |  | DiabeticTreatment |          |   | Orthoticsand Prosthetics |   | Total | 
|Net revenue               |  | $                 | 54,593   |   |                          | $ |      |  | $ | 54,593   |  
|Net loss                  |  | $                 | (445,229 | ) |                          | $ |      |  | $ | (445,229 | )



|                          |  |                   |          |   |                          |   |           |       |  |   |           |  
|------------------------- |  | ----------------- | -------- | - | ------------------------ | - | --------- | ----- |  | - | --------- | -
|Year Ended March 31, 2007 |  | DiabeticTreatment |          |   | Orthoticsand Prosthetics |   |           | Total | 
|Total assets              |  | $                 | 873      |   |                          | $ | 377,828   |       |  | $ | 378,701   |  
|Net revenue               |  | $                 | 1,101    |   |                          | $ | 2,035,230 |       |  | $ | 2,036,331 |  
|Net loss                  |  | $                 | (472,362 | ) |                          | $ | (85,322   | )     |  | $ | (557,684  | )

NOTE 14  SUBSEQUENT EVENT

Loans From Stockholders. On May 9, 2007, the Company entered into two loan agreements with stockholders for $6,000. The loans from stockholder are secured by 600,000 shares of the Companys
common stock and bear interest at 10 percent per annum. The loans from shareholders and related accrued interest are due no later than ninety days from the date of the loan.

One June 25, 2007, the Company entered into a loan agreement with a stockholder for $22,000. The loan from stockholder is secured by 2,200,000 shares of the Companys common stock and bears interest at 10
percent per annum. The loan from stockholder and related accrued interest are due no later than ninety days from the date of the loan.

F-11