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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 UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------



For the Fiscal Year Ended March 31, 2005



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



For the transition period from  to



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DIABETIC TREATMENT CENTERS OF AMERICA, INC.

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                          |  |                        
|-------------------------------------------------------------- |  | ------------------------ |  | -----------------------
|Delaware                                                       |  | 333-82580                |  | 59-3733133             
|(State or other Jurisdiction of Incorporation or Organization) |  | (Commission File Number) |  | (IRS Employer I.D. No.)



975 East 5400 South

Suite 100

Salt
Lake City, Utah 84117

(801) 207-1816

(Address, including zip code and telephone number of registrants executive offices)



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Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B is not contained herein, and will not 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. ̈



Issuers revenues for most recent fiscal year: $0



The aggregate market value of voting common equity held by non-affiliates of the Registrant was $1,479,336 as of July 7, 2005 based upon the closing price of the
Registrants common stock reported for July 7, 2005. The number of shares of common stock of the Registrant outstanding as of July 7, 2005 is 23,249,759.



EXCEPT WHERE AND AS OTHERWISE STATED TO THE CONTRARY IN THIS ANNUAL REPORT, ALL SHARE AND PRICES PER SHARE HAVE BEEN ADJUSTED TO GIVE RETROACTIVE EFFECT TO THE CHANGE
IN THE PRICE PER SHARE OF THE COMMON STOCK RESULTING FROM THE FIVE-FOR-ONE FORWARD SPLIT OF THE COMMON STOCK THAT TOOK EFFECT ON JUNE 01, 2004.



Transitional Small Business Disclosure Format (Check one):    Yes ̈No  x



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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                                                                        |  | 7   
|         |  | Item 3.  |  | Legal Proceedings                                                                              |  | 7   
|         |  | Item 4.  |  | Submissions of Matters to a Vote of Security Holders                                           |  | 7   
|         |  |         
|PART II  |  |          |  | 7                                                                                             
|         |  |          | 
|         |  | Item 5.  |  | Market for Registrants Common Equity and Related Stockholder Matters                          |  | 7   
|         |  | Item 6.  |  | Managements Discussion and Analysis Of Financial Condition and Results of Operations          |  | 8   
|         |  | Item 7.  |  | Financial Statements                                                                           |  | 10  
|         |  | Item 8.  |  | Changes In and Disagreements With Accountants on Accounting and Financial Disclosures          |  | 10  
|         |  | Item 8a. |  | Controls and Procedures                                                                        |  | 11  
|         |  |         
|PART III |  |          |  | 12                                                                                            
|         |  |          | 
|         |  | Item 9.  |  | Directors and Executive Officers of the Registrant                                             |  | 12  
|         |  | Item 10. |  | Executive Compensation                                                                         |  | 13  
|         |  | Item 11. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 14  
|         |  | Item 12. |  | Certain Relationships and Related Transactions                                                 |  | 14  
|         |  | Item 13. |  | Exhibits and Reports on Form 8-K                                                               |  | 14  
|         |  | Item 14. |  | Principal Accountant Fees and Services                                                         |  | 15  



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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, 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
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.



PART I



ITEM 1. DESCRIPTION OF BUSINESS



Overview



Formerly Flagstick Ventures, Inc., 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 avail ourselves of 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 the low volume of purchases we made, it was difficult to reduce our cost of sales.



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 operating diabetic treatment centers.



In October 2004, the Company entered into a license agreement with Diabetes Medical Development Corporation, d/b/a DiabMed. Under the terms of the license agreement, DiabMed was to provide exclusive marketing rights to market, promote,
sell, manage and distribute certain technologies to treat diabetes and other



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metabolic disorders. Based on analysis of management and discussions with executives from DiabMed, the Company believes
that DiabMed is in default of the license agreement between the Company and DiabMed. Diabetic Treatment Centers of America, Inc. is currently reviewing all options and remedies available to cure the alleged breach of the license agreement.



The Company acquired technology from Micro Vas in May 2005.
This therapy increases the blood flow, tissue oxygenation and increases the antibiotic effects of increased blood flow, thus relieving the suffering from diabetic neuropathy and foot ulcers. The Company began treating patients with the Micro Vas
therapy in June 2005.



Employees



We have assembled a management team led by our CEO, Arden Oliphant. We have 3 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 $588,400 as of March 31, 2005. In addition, we have consumed cash in operating activities of
approximately $339,600 and $26,200 for the years ended March 31, 2005 and 2004, 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 a going concern uncertainty on our financial statements as of March 31, 2005. 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.



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.



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



Mr. Arden Oliphant is currently serving as
our CEO and Mr. Jeff Jones is serving as President and director. Neither Mr. Oliphant nor Mr. Jones has 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 are 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.



If acquired businesses have unknown liabilities, then we could be exposed to liabilities
that could harm our business and profitability.



Businesses we acquire may have unknown or contingent liabilities, including liabilities for failure to comply with health care laws. Although we generally attempt to identify practices that may give rise to unknown or contingent liabilities
and conform them to our standards after the acquisition, private plaintiffs or governmental agencies may still assert claims. Even though we generally seek to obtain indemnification from the sellers of businesses we buy, unknown and contingent
liabilities may not be covered by indemnification or may exceed contractual limits or the financial capacity of the indemnifying party.



We are dependent on an exclusive supply agreement.



Our diabetic treatment business is dependent on its exclusive supply relationship with Diabetes Medical Development Corporation, d/b/a DiabMed. Through
this agreement, we have obtained the exclusive right to market and sell certain technologies, including Pulse Insulin Therapy, to treat certain metabolic disorders. Termination of the exclusive supply arrangement or failure to continue it on
favorable terms would have a material adverse effect on our business, as would any interruption in the supply of products from DiabMed or its suppliers, whatever the cause.



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



Our future revenues will depend on reimbursement from third-party payors,
such as managed care companies and government-sponsored health insurance programs. Third-party and governmental payors 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 payors (whether initiated by the payor or legislatively mandated) could have an adverse
impact on our revenues.



Our future sales and profitability
will be affected by the efforts of all payors 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 the Medicare or
Medicaid programs for dialysis, 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, in the flat composite rate for a dialysis treatment; 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;
| | - |  | -------------------



| |  |  | health and safety requirements;
| | - |  | -------------------------------



| |  |  | environmental compliance; and
| | - |  | -----------------------------



| |  |  | medical and toxic waste disposal.
| | - |  | ---------------------------------



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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.



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 payors.
| | - |  | -----------------------------------



Government investigations of health care providers, including dialysis 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 stock is deemed penny stock which may reduce trading activity in the secondary markets.



The Securities and Exchange Commission has rules that regulate broker-dealers practices in connection with transactions in penny stocks. Penny
stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to
transactions in that security is provided by the exchange or system). The penny stock rules require broker-dealers, prior to a transaction in penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock



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market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation. These disclosure requirements
have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of the foregoing, investors may find it difficult to sell their shares.



The sale of a substantial amount of our restricted shares under rule 144 may adversely affect our ability to raise capital in the future
through the sale of equity securities.



Of the shares of
our common stock that are currently issued and outstanding, 9,801,250 shares are restricted securities. All of these shares are owned by our president, Jeff Jones. Mr. Jones is an affiliate of ours, as that term is defined in Rule 144
under the Securities Act. Absent registration under the Securities Act, the sale of such shares is subject to Rule 144, as promulgated under the Securities Act. All of the restricted securities are eligible for resale under Rule 144. In
general, under Rule 144, subject to the satisfaction of certain other conditions, a person, who has beneficially owned restricted shares of our common stock for at least one year is permitted to sell in a brokerage transaction, within any
three-month period, a number of shares that does not exceed the greater of 1% of the total number of outstanding shares of the same class, or, if our common stock is quoted on a stock exchange, the average weekly trading volume during the four
calendar weeks preceding the sale, if greater. Rule 144 also permits a person who presently is not and who has not been an affiliate of ours for at least three months immediately preceding the sale and who has beneficially owned the shares of common
stock for at least two years to sell such shares without regard to any of the volume limitations described above. Specifically, subject to the satisfaction of the other conditions of Rule 144, of the 9,801,250 shares owned by Mr. Jones, 500 shares
became eligible for resale on April 4, 2002, and the remainder of the shares became eligible for resale on June 5, 2002.



No prediction can be made as to the effect, if any, that sales of shares of common stock or the availability of such shares for sale will have on the
market prices of our common stock prevailing from time to time. The possibility that substantial amounts of our common stock may be sold under Rule 144 into the public market may adversely affect prevailing market prices for the common stock and
could impair our ability to raise capital in the future through the sale of equity securities.



We are, and will continue to be, controlled by our officer and director, which could result in us taking actions that other stockholders do not approve.



Mr. Jones, our executive officer and director beneficially owns
approximately 42% of the voting power of our common stock. Mr. Jones is in a position to elect and remove directors and control the outcome of most matters submitted to a vote of the stockholders. Additionally, Mr. Jones is able to significantly
influence any proposed amendment to our Certificate of Incorporation, a merger proposal, a proposed sale of our assets or other major corporate transaction or a non-negotiated takeover attempt. This concentration of ownership may discourage a
potential acquirer from making an offer to buy us, which, in turn, could adversely affect the market price of our common stock.



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.



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ITEM 2. DESCRIPTION OF PROPERTY



The Company is currently occupying an approximately 4,000 square foot office space at 975 East 5400 South, Suite 100, Salt Lake City, Utah, and this space also serves as our executive offices. Our rent for this location is $4,500 per month
and our four year lease expires on July 31, 2008.



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 us 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 fourth quarter of fiscal year 2005 through the solicitation of proxies or otherwise.



PART II



ITEM 5. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS



Market Information



Our common stock was traded on the OTC Bulletin Board from December 2003 to May 2004 under the symbol FLGV.OB. On June 1, 2004 our symbol changed to FLGS.OB. On August 8, 2005 our symbol
changed to DBTC.OB. The following table presents the range of high and low quotations reported on the OTC Bulletin Board during the past six quarters. The market quotations reflect inter-dealer prices, without retail mark-up, markdown or
commissions and may not necessarily represent actual transactions. Our common stock had a 5-for-1 forward stock split on June 1, 2004. We have approximately 86 stockholders of record as of June 1, 2005.



|               |  |       |      |      |   |     
|-------------- |  | ----- | ---- | ---- | - | ----
|               |  | High1 |      | Low1
|Fiscal 2004    |  |       |      |      |   |     
|Third Quarter  |  | $     | 0.02 |      | $ | 0.02
|Fourth Quarter |  | $     | 0.08 |      | $ | 0.02
|Fiscal 2005    |  |       |      |      |   |     
|First Quarter  |  | $     | 1.32 |      | $ | 0.11
|Second Quarter |  | $     | 1.00 |      | $ | 0.75
|Third Quarter  |  | $     | 1.22 |      | $ | 0.58
|Fourth Quarter |  | $     | 0.71 |      | $ | 0.20

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|1 | Prices are adjusted to reflect forward stock splits
|- | ---------------------------------------------------



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.



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ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion should be read in conjunction with our consolidated financial statements, including the related notes, appearing elsewhere in this Annual
Report. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those discussed in the forward-looking statements as a result of the various
factors set forth under Risk Factors and elsewhere in this annual report.



Overview



Formerly
Flagstick Ventures, Inc., 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 avail ourselves of 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 the low volume of purchases we made, it was difficult to reduce our cost of sales.



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 operating diabetic treatment centers.



In October 2004, the Company entered into a license agreement with Diabetes Medical Development Corporation, d/b/a DiabMed. Under the terms of the license agreement, DiabMed was to provide exclusive marketing rights to market, promote,
sell, manage and distribute certain technologies to treat diabetes and other metabolic disorders. Based on analysis of management and discussions with executives from DiabMed, the Company believes that DiabMed is in default of the license agreement
between the Company and DiabMed. Diabetic Treatment Centers of America, Inc. is currently reviewing all options and remedies available to cure the alleged breach of the license agreement.



The Company acquired technology from Micro Vas in May 2005. This therapy increases the blood flow, tissue oxygenation and
increases the antibiotic effects of increased blood flow, thus relieving the suffering from diabetic neuropathy and foot ulcers. The Company began treating patients with the Micro Vas therapy in June 2005.



We expect that our diabetic treatment center will generate the majority, if
not all, of our revenue in fiscal year 2006.



Plan of Operation



In an effort to obtain the financing necessary to
implement our business plan, we filed a registration statement with the Securities and Exchange Commission (the SEC) registering 15,000,000 shares for sale at $0.0001 per share. The registration statement was declared effective on August
14, 2002. We closed the offering on December 12, 2002 having sold an aggregate of 12,720,645 shares.



As a result of our current lack of available resources, and our declining orders from our sole customer, we ceased wholesale golf operations on August 4,
2004 to fully pursue a new business purpose by opening and operating diabetic treatment centers. On July 30, 2004, we hired Alireaz Falahati-Nini, M.D. and Arden Oliphant. Dr. Falahati-Nini is an experienced endocrinologist that will serve as our
Chief Medical Officer and Mr. Oliphant will serve as our Chief Executive Officer. Both Dr. Falahati-Nini and Mr. Oliphant will serve as members of the Board of Directors. On September 28, 2004, Dr. Falahati-Nini resigned from his position as Chief
Medical Officer and member of the Board of Directors. Mr. Jeff Jones remains as our President and Chairman of the Board of Directors.



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##### Table of Contents

The Company acquired Micro Vas Therapy technology in May 2005. This therapy increases the blood flow,
tissue oxygenation and increases the antibiotic effects of increased blood flow, thus relieving the suffering from diabetic neuropathy and foot ulcers. The Company began treating patients with the Micro Vas therapy in June 2005. The Company will
continue to solicit patients by direct marketing and doctor referral.



Comparison of the fiscal year ended March 31, 2005 and March 31, 2004.



CONSOLIDATED FINANCIAL INFORMATION



|                           |  |      |          |   |      |   |         |  
|-------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                           |  | 2005 |          |   | 2004 |  
|Revenue                    |  | $    |         |   |      | $ |        |  
|Cost of Revenue            |  |      |         |   |      |   |        |  
|General and Administrative |  |      | 337,742  |   |      |   |        |  
|Interest Expense, net      |  |      | 17,995   |   |      |   |        |  
|Discontinued operations    |  |      | (20,748  | ) |      |   | (71,225 | )
|Net Loss                   |  | $    | (376,485 | ) |      | $ | (71,225 | )



Net Sales. Net
revenue for the fiscal year ended March 31, 2005 and March 31, 2004 was $0. The Company ceased operating in the wholesale golf industry in August 2004 to fully pursue its new direction of opening diabetic treatment centers.



Cost of Revenue. Cost of sales for the fiscal year ended March 31,
2005 and March 31, 2004 was $0. The Company ceased operating in the wholesale golf industry in August 2004 to fully pursue its new direction of opening diabetic treatment centers.



Selling, General and Administrative. Selling, general and administrative expenses increased approximately $337,700 to
$337,700 from $0 for the same period in 2004. This increase can be attributed to the increase in costs associated with opening a diabetic treatment center in the Salt Lake City, Utah area.



Loss on Discontinued Operations. Loss on Discontinued Operations
decreased $50,477 to $20,748 from $71,225 for the same period in 2004. This decrease can be attributed to the winding down of wholesale golf operations and changing our business plan to begin to open our first diabetic treatment center in the Salt
Lake City, Utah area.



Net Loss. Net loss for 2005 was
approximately $376,500 compared to $71,200 for 2004. The increase in our net loss was a result of increase selling, general and administrative expenses incurred by us in 2005.



Liquidity and Capital Resources



Net cash used in operating activities totaled approximately $339,600 during the fiscal year ended March 31, 2005, compared to net cash used of
approximately $26,200 for the fiscal year ended March 31, 2003. The increase in cash used in operating activities is a result expenses we incurred in preparing to open our first diabetic treatment center.



Net cash provided by financing activities totaled approximately $385,000 and
$20,000 during the fiscal years ended March 31, 2005 and 2004, respectively. During 2004 and 2005, financing activities consisted of loans from stockholders.



At March 31, 2005 we had cash balances in the amount of approximately $9,600. Our principal source of funds has been cash generated from financing
activities. We believe that over the next twelve months, our operations will be unable to be sustained by our cash flow from operations. We are currently seeking additional capital financing to fund our operations. We are currently seeking
additional capital financing to fund our operations.



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##### Table of Contents

We will need additional capital to carry out all of our obligations and business strategies. We intend to
raise any additional capital required to fund its financing needs by issuance of debt and equity. Our management has been exploring a number of other options to meet our obligations and future capital requirements, including the possibility of
equity offering, debt financing, and business combination. There can be no assurance financing will be available or accessible on reasonable terms.



Our failure to generate operating profits since inception raises substantial doubt about our ability to continue as a going concern. We will require
substantial working capital, and we currently have inadequate capital to fund our business strategies. We may be unable to raise the funds necessary for implementing all of its business strategies, which could severely limit our operations.



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:



Net operating loss carryforwards.We have not recognized the benefit in our financial statements with respect to the approximately $588,400 net operating loss carryforward for federal income tax purposes as of
March 31, 2005. 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 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, 2005, the Company did not have any
material capital commitments, other than funding its 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 the Company on a timely basis, or if available, on acceptable terms.



Future payments due on the Companys contractual obligations as of March 31, 2005 are as
follows:



|                |  |         |  |        |  |        |  |           |  |           
|--------------- |  | ------- |  | ------ |  | ------ |  | --------- |  | ----------
|                |  | Total   |  | 2006   |  | 2007   |  | 2008-2009 |  | Thereafter
|Operating lease |  | 180,000 |  | 54,000 |  | 54,000 |  | 72,000    |  |          



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.



ITEM 7. FINANCIAL STATEMENTS



The
financial statements required to be filed hereunder are set forth on pages F-1 through F-10 and are incorporated herein by this reference.



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



None



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##### Table of Contents

ITEM 8A. CONTROLS AND PROCEDURES



(a) 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 and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were, to the best of their knowledge, effective such that
the information relating to Flagstick, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (SEC) reports (i) is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms, and (ii) is accumulated and communicated to Flagsticks management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.



(b) Changes in internal control over financial
reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2005 that have materially affected or are reasonably likely to materially affect our internal control over
financial reporting.



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##### Table of Contents

PART III



ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



Our directors, executive officers and other key employees, and their ages, as of June 15, 2005 are as follows:



|                  |  |     |  |                         |  |              
|----------------- |  | --- |  | ----------------------- |  | -------------
|Name              |  | Age |  | Position                |  | Since        
|Jeff Arthur Jones |  | 33  |  | President and Director  |  | April 4, 2001
|Arden Oliphant    |  | 48  |  | Chief Executive Officer |  | July 30, 2004



The terms of our
director expires at the next annual meeting of the stockholders, the date for which has been set by the Board of Directors as August 11, 2005. Our director is currently serving a term of office until the next annual meeting of stockholders and until
his successors are duly elected and qualified, or until he resigns or is removed.



Mr. Jones does not devote his full time to the management of our business operations.



None of the officers or directors of the Company is currently an officer or director of a company required to file reports with the Securities and
Exchange Commission, other than Diabetic Treatment Centers of America, Inc.



The business experience of each of the persons listed above during the past five years is as follows:



Jeff Arthur JonesPrior to founding A and Z Golf in April of 1999 as a sole proprietorship, Mr. Jones was an Assistant Golf Professional. During
the last five years, Mr. Jones has served and continues to serve as Assistant Golf Professional at Golden Gate Country Club, Naples, Florida and as Tournament Director for Pine Lake Golf Club, Mt. Gilead, Ohio. His experience includes pro shop
operations management, tournament organization and instruction. His skills include merchandising, personnel management, budget and inventory control.



Arden OliphantPrior to joining the Company Mr. Oliphant founded his own consulting company, Golfing 2000, in January of 1997; Mr. Oliphants
company provided direct sales and marketing consulting for both national companies and emerging e-commerce companies.



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;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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.



Based solely on a review of Forms 3 and 4, and amendments
thereto furnished to the Company under Rule 16a-3(e) promulgated under the Securities Exchange Act of 1934 during the most recent fiscal year, that either failed to file or were delinquent in filing all such required reports.



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, controller and other finance organization employees. A copy of the finance code of ethics may be obtained



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##### Table of Contents

from the Company, free of charge, upon written request delivered to the Companys Investor Relations Department, c/o
Diabetic Treatment Centers of America, Inc., 2394 41stStreet SW, Naples, Florida 34116. 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, our Chief Financial Officer or controller, 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, 2005 and 2004. None of our other executive officers received salary and bonus exceeding $100,000 during those years.



Summary Compensation Table



|                                             |  |              |  |                     |                 |                             |     |        
|-------------------------------------------- |  | ------------ |  | ------------------- | --------------- | --------------------------- | --- | -------
|                                             |  |              |  | Annual Compensation
|Name and Position                            |  | Year         |  | Salary ($)          |                 | Other AnnualCompensation($)
|Arden Oliphant, CEO, Secretary and Director  |  | 2005         |  | $                   | 34,000          |                             |     |       
|                                             |  |              | 
|Jeff Arthur Jones, President and Director(1) |  | 200520042003 |  | $$$                 |   38,27039,813 |                             | $$$ |     

---

|(1) | Effective September 1, 2001, A & Z Golf Corp. agreed in principal to compensate Jeff Jones at a rate of $3,000 a month. This agreement is cancelable by either party upon 30 days
written notice. Prior to September 1, 2001, Mr. Jones services were donated to A & Z Golf Corp. and the value of those services which amounted to approximately $16,673, were recorded as a capital contribution. During 2004, Mr. Jones
services were donated to A & Z Golf Corp. and the value of those services was recorded as a capital contribution.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mr. Jones presently serves as our President. However, we do not pay Mr. Jones a salary.



The Company entered into an employment agreement with Arden Oliphant to be its Chief Executive Officer. The agreement commenced on July 30,
2004 and expires on July 30, 2006. The agreement includes the payment of a base salary of $3,500 per month and up to 1,000,000 shares of restricted stock based upon performance goals defined in the agreement by the Board of Directors. Per the
agreement, the base salary is adjusted to $5,000 per month from the date the clinic opens through the termination date of the agreement. To date, Mr. Oliphant has not met the any of the performance goals defined by his employment agreement and
therefore has not been awarded any restricted shares of the Companys common stock pursuant to the agreement.



Directors are not currently compensated, although each is entitled to be reimbursed for reasonable and necessary expenses incurred on our behalf.



We do no have any employee stock option or other benefit plans.



Directors Compensation



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 have not compensated our directors for service on the Board of Directors or any committee thereof. As of March 31, 2005, 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.



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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 March 31, 2005, 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
23,249,759 shares of common stock outstanding as of June 15, 2005. 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 |  
|Jeff Arthur Jones(1)                  |  | 9,801,250                                        |  | 42.2                                   | %
|Arden Oliphant)                       |  | 0                                                |  | 0.0                                    | %
|All directors and officers (1 person) |  | 9,801,250                                        |  | 42.2                                   | %

---

|(1) | The address of each of our officers listed in the table is in care of Diabetic Treatment Centers of America, Inc, 975 East 5400 South, Suite 100, Salt Lake City, Utah 84117.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Other than as described below, we have not entered into any transactions during the last two years, or proposed transactions, to which we were or are to be a party in which any of our directors, executive officers,
any 5% shareholder listed in Item 11 or any member of the immediate family of any of these persons had a material interest.



We were organized by our President and sole director for the purpose of acquiring and operating the business which he had been operating as a sole
proprietorship. We acquired the business from Mr. Jones on June 5, 2001 in exchange for 10,000,000 shares. The shares were issued in exchange for receivables that originated from Mr. Jones sole proprietorship valued at $.001526 per share for a
total of $15,262.



ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K



Exhibits and Financial Statements.



(A) Financial Statements and Schedules



See
Index to Financial Statements



(B)
Exhibits



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##### Table of Contents

|               |  |                                                                                                      
|-------------- |  | -----------------------------------------------------------------------------------------------------
|EXHIBIT NUMBER |  | DESCRIPTION                                                                                          
|3.1            |  | Form of Articles of Incorporation of Diabetic Treatment Centers of America, Inc.(1)                  
|               | 
|3.2            |  | By-laws of Diabetic Treatment Centers of America, Inc.(1)                                            
|               | 
|14.1           |  | Code of Ethics.(2)                                                                                   
|               | 
|31.1           |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 
|               | 
|31.2           |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 
|               | 
|32.1           |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* 
|               | 
|32.2           |  | Certification of Chief Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|               | 
|99.1           |  | Board of Directors Pre-Approval Policy Regarding Independent Auditors.(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
|--- | -------------------------------------------------------------------------------------------------------------------------



(C) Reports on Form 8-K



On February 25, 2005, the Company filed a Current Report on Form 8-K to
report that the Company believes that it is not in violation of any patents held by others and the Company did not know of any reasons for the increase in the volume of its stock trading or for the decline in the value of its stock.



On March 22, 2005 the Company filed a Current Report on Form
8-K to report that the Company had converted certain notes payable to common stock.



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Our Board of Directors reviews and approves audit and permissible non-audit services performed by its independent accountants, as well as the fees charged for such services. In its review of non-audit service fees and
its appointment of Tedder, James, Worden & Associates, P.A. as our independent accountants, the Board of Directors considered whether the provision of such services is compatible with maintaining independence. All of the services provided and
fees charged by Tedder, James, Worden & Associates, P.A in 2005 and 2004, respectively, were approved by the Board of Directors. The following table presents fees for audit services rendered by Tedder, James, Worden & Associates, P.A. for
the audit of our annual financial statements for the years ended March 31, 2005 and March 31, 2004 and fees billed for other services rendered during those periods.



|                      |  |             |        |     |             |   |       |    
|--------------------- |  | ----------- | ------ | --- | ----------- | - | ----- | ---
|                      |  | Fiscal 2005 |        |     | Fiscal 2004 |  
|Audit Fees            |  | $           | 23,500 | (1) |             | $ | 9,000 | (1)
|Audit-Related Fees(3) |  |             | -0-    |     |             |   | -0-   |    
|Tax Fees(4)           |  |             | -0-    |     |             |   | -0-   |    
|Subtotal              |  | $           | 23,500 |     |             | $ | 9,000 |    
|All other Fees(5)     |  |             | -0-    |     |             |   | -0-   |    
|Total                 |  | $           | 23,500 |     |             | $ | 9,000 |    

---

|(1) | Audit Fees  Audit fees billed to us by Tedder, James, Worden & Associates, P.A. for auditing our annual financial statements for 2004 and 2005
included in our annual report on Form 10-KSB and for reviewing our quarterly financial statements for 2005 included in our quarterly reports on Form 10-QSB.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|(3) | Audit-Related Fees  There were no other fees billed by 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Tax Fees  There were no tax fees billed during the last past fiscal year for professional services by Tedder, James, Worden & Associates, P.A.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(5) | All Other Fees  There were no other fees billed by during the last two fiscal years for products and services provided.
|--- | ------------------------------------------------------------------------------------------------------------------------



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.



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##### 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 12, 2005 |  | By:                                         |  | /S/ Arden Oliphant     
|                     |  | Name:                                       |  | Arden Oliphant         
|                     |  | Title:                                      |  | Chief Executive Officer



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 12, 2005 |  | By:                                         |  | /S/ Allan Woodlief     
|                     |  | Name:                                       |  | Allan Woodlief         
|                     |  | Title:                                      |  | Chief Financial Officer



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY



Consolidated Financial Statements



March 31, 2005 and 2004



Table of Contents



|                                                                                                |  |    
|----------------------------------------------------------------------------------------------- |  | ---
|Report of Independent Registered Certified Public Accounting Firm                               |  | F-1
|                                                                                                | 
|Consolidated Financial Statements:                                                              |  |    
|                                                                                                | 
|Consolidated Balance Sheets  March 31, 2005 and 2004                                           |  | F-2
|                                                                                                | 
|Consolidated Statements of Operations  Years ended March 31, 2005 and 2004                     |  | F-3
|                                                                                                | 
|Consolidated Statements of Stockholders Equity (Deficit)  Years ended March 31, 2005 and 2004 |  | F-4
|                                                                                                | 
|Consolidated Statements of Cash Flows  Years ended March 31, 2005 and 2004                     |  | F-5
|                                                                                                | 
|Notes to Consolidated Financial Statements                                                      |  | F-6



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##### Table of Contents

TEDDER, JAMES, WORDEN & ASSOCIATES, P.A.

CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS

AN INDEPENDENTLY OWNED MEMBER OF THE RSM MCGLADREY NETWORK



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 sheets of DIABETIC TREATMENT CENTERS OF AMERICA, INC. and Subsidiary as of March 31,
2005 and 2004, and the related consolidated statements of operations, stockholders equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our 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, 2005 and 2004, and the results of their operations and their cash flows for the years then ended 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 adjustment that might result from the outcome of this uncertainty.



/s/ Tedder, James, Worden & Associates, P.A.



Orlando, Florida

July 6, 2005



F-1



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. AND SUBSIDIARY

Consolidated
Balance Sheets

March 31, 2005 and 2004



|                                                                                                                                                                |  |      |          |   |      |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                                                                                                                |  | 2005 |          |   | 2004 |  
|ASSETS                                                                                                                                                          |  |      |          |   |      |   |          |  
|Current assets:                                                                                                                                                 |  |      |          |   |      |   |          |  
|Cash                                                                                                                                                            |  | $    | 9,589    |   |      | $ | 9,214    |  
|Accounts receivable                                                                                                                                             |  |      |         |   |      |   | 1,623    |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Total current assets                                                                                                                                            |  |      | 9,589    |   |      |   | 10,837   |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Property and equipment, net                                                                                                                                     |  |      | 40,865   |   |      |   |         |  
|Other assets                                                                                                                                                    |  |      | 4,500    |   |      |   |         |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Total assets                                                                                                                                                    |  | $    | 54,954   |   |      | $ | 10,837   |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                  |  |      |          |   |      |   |          |  
|Current liabilities:                                                                                                                                            |  |      |          |   |      |   |          |  
|Accounts payable                                                                                                                                                |  | $    | 19,574   |   |      | $ | 4,685    |  
|Accrued expenses                                                                                                                                                |  |      | 6,559    |   |      |   | 4,100    |  
|Loan from stockholders                                                                                                                                          |  |      |         |   |      |   | 20,000   |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Total current liabilities                                                                                                                                       |  |      | 26,133   |   |      |   | 28,785   |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Commitments and contingencies ( Note 8 and 10)                                                                                                                  |  |      |          |   |      |   |          |  
|                                                                                                                                                                |  |     
|Stockholders equity (deficit):                                                                                                                                 |  |      |          |   |      |   |          |  
|Common stock, $0.0001 par value, 50,000,000 shares authorized, 23,249,759 and 22,721,145 shares issued and outstanding at March 31, 2005 and
2004, respectively |  |      | 2,325    |   |      |   | 2,272    |  
|Additional paid-in capital                                                                                                                                      |  |      | 614,896  |   |      |   | 191,695  |  
|Accumulated deficit                                                                                                                                             |  |      | (588,400 | ) |      |   | (211,915 | )
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Total stockholders equity (deficit)                                                                                                                            |  |      | 28,821   |   |      |   | (17,948  | )
|                                                                                                                                                                |  |      |          |   |      |   |          |  
|Total liabilities and stockholders equity (deficit)                                                                                                            |  | $    | 54,954   |   |      | $ | 10,837   |  
|                                                                                                                                                                |  |      |          |   |      |   |          |  



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY

Consolidated Statements of Operations

For The Years Ended March 31, 2005 and 2004



|                                                                    |  |      |            |   |      |   |            |  
|------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                    |  | 2005 |            |   | 2004 |  
|Revenue                                                             |  | $    |           |   |      | $ |           |  
|Cost of revenue                                                     |  |      |           |   |      |   |           |  
|                                                                    |  |      |            |   |      |   |            |  
|Gross profit                                                        |  |      |           |   |      |   |           |  
|                                                                    |  |     
|General and administrative expenses                                 |  |      |            |   |      |   |            |  
|Payroll and related expenses                                        |  |      | 91,946     |   |      |   |           |  
|Investor relations                                                  |  |      | 62,190     |   |      |   |           |  
|Licensing fees                                                      |  |      | 50,000     |   |      |   |           |  
|Rent                                                                |  |      | 36,000     |   |      |   |           |  
|Marketing and advertising                                           |  |      | 34,574     |   |      |   |           |  
|Professional fees                                                   |  |      | 7,313      |   |      |   |           |  
|Depreciation                                                        |  |      | 4,186      |   |      |   |           |  
|Other general and administrative expenses                           |  |      | 51,533     |   |      |   |           |  
|                                                                    |  |      |            |   |      |   |            |  
|Total expenses                                                      |  |      | 337,742    |   |      |   |           |  
|                                                                    |  |      |            |   |      |   |            |  
|Loss from continuing operations                                     |  |      | (337,742   | ) |      |   |           |  
|                                                                    |  |      |            |   |      |   |            |  
|Interest expense, net                                               |  |      | (17,995    | ) |      |   |           |  
|                                                                    |  |     
|Net loss from continuing operations                                 |  | $    | (355,737   | ) |      | $ |           |  
|                                                                    |  |      |            |   |      |   |            |  
|Loss from discontinued operations                                   |  |      | (20,748    | ) |      |   | (71,225    | )
|                                                                    |  |      |            |   |      |   |            |  
|Net loss                                                            |  | $    | (376,485   | ) |      | $ | (71,225    | )
|                                                                    |  |      |            |   |      |   |            |  
|Weighted average common shares outstanding                          |  |      | 22,742,869 |   |      |   | 22,721,145 |  
|                                                                    |  |      |            |   |      |   |            |  
|Net loss per share from continuing operations - basic and diluted   |  | $    | (0.02      | ) |      | $ | (0.00      | )
|                                                                    |  |      |            |   |      |   |            |  
|Net loss per share from discontinued operations - basic and diluted |  | $    | (0.00      | ) |      | $ | (0.00      | )
|                                                                    |  |      |            |   |      |   |            |  



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY

Consolidated Statements of Stockholders
Equity (Deficit)

For The Years Ended March 31, 2005 and 2004



|                                             |  |              |  |                          |       |                    |   |         |       |   |          |   |  |   |          |  
|-------------------------------------------- |  | ------------ |  | ------------------------ | ----- | ------------------ | - | ------- | ----- | - | -------- | - |  | - | -------- | -
|                                             |  | Common Stock |  | Additionalpaid-incapital |       | Accumulateddeficit |   |         | Total |  
|                                             |  | Shares       |  | Par Value                |       |                    |  
|Balances at March 31, 2003                   |  | 22,721,145   |  | $                        | 2,272 |                    | $ | 153,425 |       | $ | (140,690 | ) |  | $ | 15,007   |  
|                                             |  |              |  |                          |      
|Capital contribution  forgiveness of salary |  |             |  |                          |      |                    |   | 38,270  |       |   |         |   |  |   | 38,270   |  
|Net loss                                     |  |             |  |                          |      |                    |   |        |       |   | (71,225  | ) |  |   | (71,225  | )
|                                             |  |              |  |                          |       |                    |   |         |       |   |          |   |  |   |          |  
|Balances at March 31, 2004                   |  | 22,721,145   |  | $                        | 2,272 |                    | $ | 191,695 |       | $ | (211,915 | ) |  | $ | (17,948  | )
|                                             |  |              |  |                          |       |                    |   |         |       |   |          |   |  |   |          |  
|Conversion of loans to common stock          |  | 528,614      |  |                          | 53    |                    |   | 423,201 |       |   |         |   |  |   | 423,254  |  
|Net loss                                     |  |             |  |                          |      |                    |   |        |       |   | (376,485 | ) |  |   | (376,485 | )
|                                             |  |              |  |                          |       |                    |   |         |       |   |          |   |  |   |          |  
|Balances at March 31, 2005                   |  | 23,249,759   |  | $                        | 2,325 |                    | $ | 614,896 |       | $ | (588,400 | ) |  | $ | 28,821   |  
|                                             |  |              |  |                          |       |                    |   |         |       |   |          |   |  |   |          |  



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY

Consolidated Statements of Cash Flows

For The Years Ended March 31, 2005 and 2004



|                                                                            |  |      |          |   |      |   |         |  
|--------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                                                                            |  | 2005 |          |   | 2004 |  
|Cash flows from operating activities:                                       |  |      |          |   |      |   |         |  
|Net loss from continuing operations                                         |  | $    | (355,737 | ) |      | $ |        |  
|                                                                            |  |     
|Adjustments to reconcile net loss to net cash used in operating activities: |  |      |          |   |      |   |         |  
|Loss from discontinued operations                                           |  |      | (20,748  | ) |      |   | (71,225 | )
|Depreciation                                                                |  |      | 4,186    |   |      |   |        |  
|Interest on loans from stockholders                                         |  |      | 18,254   |   |      |   |        |  
|Contributed services                                                        |  |      |         |   |      |   | 38,270  |  
|Changes in operating assets and liabilities:                                |  |      |          |   |      |   |         |  
|Accounts receivable                                                         |  |      | 1,623    |   |      |   | (537    | )
|Other assets                                                                |  |      | (4,500   | ) |      |   |        |  
|Accounts payable                                                            |  |      | 14,889   |   |      |   | 3,905   |  
|Accrued expenses                                                            |  |      | 2,459    |   |      |   | 3,350   |  
|                                                                            |  |      |          |   |      |   |         |  
|Net cash used in operating activities                                       |  |      | (339,574 | ) |      |   | (26,237 | )
|                                                                            |  |      |          |   |      |   |         |  
|Cash flows from investing activities:                                       |  |      |          |   |      |   |         |  
|Purchase of property and equipment                                          |  |      | (45,051  | ) |      |   |        |  
|                                                                            |  |      |          |   |      |   |         |  
|Net cash used in investing activities                                       |  |      | (45,051  | ) |      |   |        |  
|                                                                            |  |      |          |   |      |   |         |  
|Cash flows from financing activities:                                       |  |      |          |   |      |   |         |  
|Loans from stockholders                                                     |  |      | 385,000  |   |      |   | 20,000  |  
|                                                                            |  |      |          |   |      |   |         |  
|Net cash provided by financing activities                                   |  |      | 385,000  |   |      |   | 20,000  |  
|                                                                            |  |      |          |   |      |   |         |  
|Net increase (decrease) in cash                                             |  |      | 375      |   |      |   | (6,237  | )
|                                                                            |  |      |          |   |      |   |         |  
|Cash, beginning of period                                                   |  | $    | 9,214    |   |      | $ | 15,451  |  
|                                                                            |  |      |          |   |      |   |         |  
|Cash, end of period                                                         |  | $    | 9,589    |   |      | $ | 9,214   |  
|                                                                            |  |      |          |   |      |   |         |  
|Supplemental disclosures of cash flow information:                          |  |      |          |   |      |   |         |  
|Cash paid during the period for:                                            |  |      |          |   |      |   |         |  
|Interest                                                                    |  | $    |         |   |      | $ | 6       |  
|                                                                            |  |      |          |   |      |   |         |  
|Non cash financing activities:                                              |  |      |          |   |      |   |         |  
|Conversion of loans from                                                    |  |      |          |   |      |   |         |  
|stockholders to common stock                                                |  | $    | 423,254  |   |      | $ |        |  
|                                                                            |  |      |          |   |      |   |         |  



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



NOTE 1
 ORGANIZATION AND PRINCIPLES OF CONSOLIDATION



Reporting
Entity. Diabetic Treatment Centers of America, Inc. (Diabetic, Flagstick or the Company) was incorporated on April 4, 2001 under the laws of the State of Delaware. The Company is authorized to issue 50,000,000
shares of common stock, par value $.0001. On April 4, 2001 Flagstick issued 500 shares to Jeff Arthur Jones in consideration for $100. Also on April 4, 2001 A&Z Golf Corp. was incorporated as a wholly owned subsidiary of Flagstick. On June 5,
2001 Flagstick issued 10,000,000 shares to Jeff Arthur Jones in exchange for certain receivables purchased from Jeff A. Jones d/b/a A&Z Golf, pursuant to an asset purchase agreement. Flagsticks activities were 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.



The Company acquired technology from Micro Vas in May 2005 and began treating patients with the Micro Vas therapy in June 2005.



Principles of Consolidation.The Companys consolidated financial
statements for the years ended March 31, 2005 and 2004, include the accounts of its wholly owned subsidiary A&Z Golf Corp., a Delaware corporation. All intercompany balances and transactions have been eliminated.



Stock Split.On June 1, 2004, the Company effectuated a five for one forward
split of its common stock. The financial statements have been adjusted retroactively to account for the split.



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 $588,400 as of March 31, 2005. In addition, the Company has consumed cash in its operating activities of approximately $339,600 and $26,200 for the years ended March 31, 2005 and 2004, 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 and obtaining operating funds from stockholders. The Company is continuing to seek
other sources of financing and attempting to increase revenues and has changed its core business of wholesale golf equipment to owning and operating diabetic treatment centers. 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. 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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DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



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 as of the
date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, 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 basis 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.



Net Loss Per Share. The Company computes earnings (loss) per share in accordance with SFAS No. 128, Earnings per
Share. This standard requires dual presentation of basic and diluted earnings per share on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the
diluted earnings per share computation.



Net loss per common share (basic and
diluted) is based on the net loss divided by the weighted average number of common shares outstanding during the year.



Fair Value of Financial Instruments. SFAS No. 107 Disclosures about Fair Value of Financial Instruments requires the disclosures of the fair
value of financial instruments. The Companys financial instruments, including cash, accounts receivable and accounts payable are carried at cost, which approximates their fair value because of the short-term nature of these instruments.



Property and Equipment.Property and equipment are carried at
cost, less accumulated depreciation. Major replacements and improvements that extend the useful lives of property and equipment are capitalized. Routine maintenance and repairs are charged to expense when incurred. Depreciation is computed using the
straight-line method over the following estimated useful lives of the related assets.



|                        |  |                       
|----------------------- |  | ----------------------
|Description             |  | Estimated Useful Lives
|Machinery and equipment |  | 3  5 years           
|Furniture and fixtures  |  | 5                     
|Leasehold improvements  |  | 4                     



Impairment of Long-Lived Assets.The carrying values of long-lived assets are reviewed if the facts and circumstances indicate a potential impairment of their carrying values. Management evaluates the recoverability of the net carrying value of its property and equipment by
comparing the carrying values to the estimated future undiscounted cash flows. A deficiency in these cash flows relative to the carrying amounts is an indication of the need for a write-down due to impairment. The impairment write-down would be the
difference between the carrying amounts and the fair value of these assets. Any loss on impairment is recognized by a charge to operations in the period identified.



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



NOTE 4  STOCKHOLDERS EQUITY



The Company issued 10,000,000 restricted shares of the Companys common stock to Mr.
Jeff Jones, the founder and original sole shareholder. The shares were issued in exchange for receivables that originated from Mr. Jones sole proprietorship valued at $.001526 per share for a total of $15,262.



On December 12, 2002, the Company issued 12,720,645 shares of common stock for net proceeds
of $100,473.



On June 1, 2004, the Company effectuated a five for one forward
split of its common stock. The financial statements have been adjusted retroactively to account for the split.



On March 23, 2005 the Company issued 528,614 shares to convert both the principal balance and accrued interest of promissory notes held by certain shareholders. At the date of the conversion the principal and accrued
interest on the loans from stockholders were $405,000 and $18,254, respectively.



NOTE 5  DEFERRED INCOME TAXES



The Company has a net
operating loss carryforward for income tax purposes of $588,400 that may be offset against future taxable income. The carryforward loss expires in the year 2021. Due to the uncertainty regarding the success of the future operations, management has
valued the deferred tax asset allowance at 100% of the related deferred tax assets. The deferred tax assets, liabilities and valuation allowances as of March 31, 2005 and 2004 consist of the following:



|                                                      |  |           |          |   |      |   |         |  
|----------------------------------------------------- |  | --------- | -------- | - | ---- | - | ------- | -
|                                                      |  | March 31, |         
|                                                      |  | 2005      |          |   | 2004 |  
|Deferred tax assets arising from net operating losses |  | $         | 199,877  |   |      | $ | 71,872  |  
|Less: Valuation allowance                             |  |           | (199,877 | ) |      |   | (71,872 | )
|                                                      |  |           |          |   |      |   |         |  
|Net deferred tax liabilities                          |  | $         |         |   |      | $ |        |  
|                                                      |  |           |          |   |      |   |         |  
|Net deferred tax assets                               |  | $         |         |   |      | $ |        |  
|                                                      |  |           |          |   |      |   |         |  



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DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



NOTE 6  ACCRUED EXPENSES



Accrued expenses of the Company as of March 31, 2005 and 2004 consisted of the following:



|                         |  |           |       |      |   |      
|------------------------ |  | --------- | ----- | ---- | - | -----
|                         |  | March 31,
|                         |  | 2005      |       | 2004
|Accrued rent expenses    |  | $         | 4,500 |      | $ | 3,750
|Accrued interest expense |  |           |      |      |   | 333  
|Accrued payroll expense  |  |           | 2,059 |      |   | 17   
|                         |  |           |       |      |   |      
|Total accrued expenses   |  | $         | 6,559 |      | $ | 4,100
|                         |  |           |       |      |   |      



NOTE 7  LOAN FROM
STOCKHOLDERS



On February 2, 2004, the Company entered into two promissory
notes for $10,000 each with certain stockholders. On June 8, 2004, the Company entered into a promissory note for $25,000 with a certain stockholder. On July 12, 2004, the Company entered into a promissory note for $25,000 with a certain
stockholder. On August 12, 2004, the Company entered into a promissory note for $25,000 with a certain stockholder. On September 2, 2004, the Company entered into a promissory note for $25,000 with a certain stockholder. On September 29, 2004, the
Company entered into a promissory note for $75,000 with a certain stockholder. On October 7, 2004, the Company entered into a promissory note for $75,000 with a certain stockholder. On November 27, 2004, the Company entered into a promissory note
for $25,000 with a certain stockholder. On December 17, 2004, the Company entered into a promissory note for $25,000 a certain stockholder. On January 5, 2005, the Company entered into a promissory note for $23,000 with a certain stockholder. On
January 28, 2005, the Company entered into a promissory note for $27,000 with a certain stockholder. On March 3, 2005, the Company entered into a promissory note for $35,000 with a certain stockholder (collectively the Notes). The Notes
are unsecured, bear interest at 10 percent per annum and are to be repaid no later than six months from the date of issuance. On March 23, 2005 the Company reached an agreement with the stockholders to convert both the principal balance and the
accrued interest into the Companys common stock at a conversion rate of $0.80 per share. The Company issued 528,614 shares of common stock in the conversion of the promissory notes.



NOTE 8  OPERATING LEASE OBLIGATION



The Company is currently opening a diabetic treatment center. On August 1, 2004, the Company signed a new lease agreement to occupy approximately 4,000 square feet of
office space in Salt Lake City, Utah, which will also serve as our executive offices. Our rent for this location is $4,500 per month and our four year lease expires on July 31, 2008. Rental expense during the year ended March 31, 2005 amounted to
$36,000.



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DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



Future minimum lease payments under non-cancelable operating leases (with initial or
remaining terms in excess of one year) as of March 31, 2005 are as follows:



|                             |  |                 |        
|---------------------------- |  | --------------- | -------
|Year ended March 31,         |  | Operatingleases
|2006                         |  | $               | 54,000 
|2007                         |  |                 | 54,000 
|2008                         |  |                 | 54,000 
|2009                         |  |                 | 18,000 
|                             |  |                 |        
|Total minimum lease payments |  | $               | 180,000
|                             |  |                 |        



NOTE 9  PROPERTY AND
EQUIPMENT



Property and equipment consist of the following as of March 31,
2005:



|                                 |  |   |        |  
|-------------------------------- |  | - | ------ | -
|Machinery and equipment          |  | $ | 28,311 |  
|Furniture and fixtures           |  |   | 14,087 |  
|Leasehold improvements           |  |   | 2,653  |  
|                                 |  |   |        |  
|                                 |  |   | 45,051 |  
|Less accumulated depreciation    |  |   | (4,186 | )
|                                 |  |   |        |  
|Total net property and equipment |  | $ | 40,865 |  
|                                 |  |   |        |  



Depreciation expense charged to
operations was $4,186 and $0 for the years ended March 31, 2005 and 2004, respectively.



NOTE 10  EMPLOYMENT AGREEMENT



Effective September 1,
2001, A & Z Golf Corp. agreed in principal to compensate Jeff Jones at a rate of $3,000 a month. This agreement is cancelable by either party upon 30 days written notice. Prior to September 1, 2001, Mr. Jones services were donated to A
& Z Golf Corp. and the value of those services which amounted to $16,673, were recorded as a capital contribution. Payroll and payroll related expenses forgiven during the years ended March 31, 2005 and 2004 amounted to $0 and $38,270,
respectively. As of April 1, 2004, Mr. Jones agreed to cancel this employment agreement as the Company searches for new executives.



Employment Agreement  Chief Executive Officer.In accordance with the new direction of the Company, our Board of Directors entered into an employment
agreement with Arden Oliphant to be its Chief Executive Officer. The agreement commenced on July 30, 2004 and expires on July 30, 2006. The agreement includes the payment of a base salary of $3,500 per month and up to 1,000,000 shares of restricted
stock based upon performance goals defined in the agreement by the Board of Directors. Per the employment agreement, the base salary is adjusted to $5,000 per month from the date the clinic opens through the termination date of the employment
agreement. To date, Mr. Oliphant has not met the any of the performance goals defined by his employment agreement and therefore has not been awarded any restricted shares of the Companys common stock pursuant to the employment agreement.



NOTE 11  LICENSING AGREEMENT



Agreement with DiabMed. On October 7, 2004, the Company entered into a
licensing agreement with Diabetes Medical Development Corporation, d/b/a DiabMed, to secure the exclusive rights to market and sell certain



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##### Table of Contents

DIABETIC TREATMENT CENTERS OF AMERICA, INC. & SUBSIDIARY



Notes to Consolidated Financial Statements



March 31, 2005 and 2004



technologies and products used to treat diabetes and other metabolic disorders in Murray,
Utah. Upon signing the agreement, the Company paid $50,000 which it recorded in the financial statements as Licensing Fees. As of June 1,2005, based on analysis of management and discussions with executives from DiabMed, the Company believes that
DiabMed is in default of the licensing agreement between the Company and DiabMed. Diabetic Treatment Centers of America, Inc. is currently reviewing all options and remedies available to cure the alleged breach of the licensing agreement.



NOTE 12  SUBSEQUENT EVENTS



Promissory Note. On April 12, 2005, the Company entered into a promissory note
for $30,000 with a certain stockholder. On May 18, 2005, the Company entered into a promissory note for $40,000 with a certain stockholder. On June 29, 2005, the Company entered into a promissory note for $10,000 with a certain stockholder
(collectively the Notes). The Notes are unsecured, bear interest at 10 percent per annum and are to be repaid no later than April 12, 2006, May 18, 2006, and June 29, 2006, respectively.



F-11