UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   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 September 30, 2007

[ ] Transition Report Under Section 13 or 15(d) of The Securities Exchange
    Act of 1934

    For the transition period from ______________ to _____________

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                         Commission File Number: 026504


                                 Diasense, Inc.
        (Exact name of small business issuer as specified in its charter)

        Nevada                                                 25-1605848
(State of incorporation)                                (IRS Employer ID Number)

                       211 West Wall, Midland, Texas 79701
                    (Address of principal executive offices)

                                 (432) 682-1761
                           (Issuer's telephone number)

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

        Securities registered under Section 12(g) of the Exchange Act: -
                        Common Stock - $0.001 par value

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Company'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. [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): Yes [X] No [ ]

The issuer's revenues for the fiscal year ended September 30, 2007 were $-0-.

The aggregate market value of voting common equity held by  non-affiliates as of
October 18, 2007 was approximately $385,176,  based on a closing quotation price
of $0.035 per share as reported on www.bigcharts.com.

As of October 30, 2007, there were 22,105,051  shares of Common Stock issued and
outstanding.

Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
                                 Diasense, Inc.

       Annual Report on Form 10-KSB for the year ended September 30, 2007

                                Index to Contents

                                                                           Page
                                                                          Number
                                                                          ------
PART I

Item 1   Description of Business                                              3
Item 2   Description of Property                                             11
Item 3   Legal Proceedings                                                   11
Item 4   Submission of Matters to a Vote of Security Holders                 11

PART II

Item 5   Market for Company's Common Equity, Related Stockholders Matters
          and Small Business Issuer Purchasers of Equity Securities          11
Item 6   Management's Discussion and Analysis or Plan of Operation           13
Item 7   Financial Statements                                                17
Item 8   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure                                               17
Item 8A  Controls and Procedures                                             18

PART III

Item 9   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act                  18
Item 10  Executive Compensation                                              20
Item 11  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters                                    20
Item 12  Certain Relationships and Related Transactions                      21
Item 13  Exhibits                                                            21
Item 14  Principal Accountant Fees and Services                              22

SIGNATURES                                                                   23

                                       2
<PAGE>
                  CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully  make and integrate  acquisitions;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse  publicity;  competition;  fluctuations  and difficulty in
forecasting  operating  results;  changes in business  strategy  or  development
plans;  business  disruptions;  the  ability  to attract  and  retain  qualified
personnel; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Diasense,  Inc. was  incorporated in the Commonwealth of Pennsylvania on July 5,
1989 as Diasense,  Inc., ("Diasense" or the "Company") a wholly owned subsidiary
of  Biocontrol  Technology,  Inc.,  which  later  changed  its name to BICO Inc.
(BICO).  BICO owned  approximately 52% of Diasense until July 23, 2004 when BICO
sold its  entire  ownership  interest,  11,975,000  shares of common  stock,  to
Dominion Assets, LLC. The focus of the business was the research and development
of a noninvasive  glucose sensor.  As of November 2002 the Company was dependent
solely on BICO to provide the funding for ongoing  operations  and BICO  stopped
funding due to its own financial difficulties. Without funding, between November
2002 and July 2004,  the  Company  had to suspend  operations  and stop  further
development of our noninvasive  glucose sensor. We resumed limited operations in
July 2004 and subsequently resumed development of our noninvasive glucose sensor
in April 2005.  Since the Company's  inception,  none of the Company's  business
endeavors since inception have been successful.

On August 16, 2006,  Diasense,  Inc.  ("Diasense" or the "Company") received two
letters from Dominion Assets, LLC ("Dominion"),  demanding  immediate payment of
principal and interest under, respectively,  (i) that certain Demand Note, dated
July 23, 2004,  in a principal  amount of  $1,954,936,  issued by the Company to
BICO,  Inc.  ("BICO")  and assigned by BICO to  Dominion,  as amended  effective
September 28, 2004 (the "Demand Note"),  and (ii) the additional  loans totaling
$50,700 in  principal  amount  extended by  Dominion  to the Company  under that
certain Note and Security Agreement,  dated October 29, 2004, by and between the
Company and Dominion, as amended.

On August 29, 2006, Diasense,  Inc. ("Diasense" or the "Company") entered into a
Voluntary  Surrender  Agreement  (the  "Voluntary  Surrender   Agreement")  with
Dominion Assets, LLC ("Dominion")  whereby all of the Company's assets,  pledged
as collateral to secure loan  agreements  under which the Company is in default,
were repossessed.  Dominion is the majority shareholder of the Company. Keith R.
Keeling owns a majority 75% interest in Dominion and was also a former member of
the  Company's  Board of  Directors  and the  former  CEO of the  Company  until
resigning from both such positions with the Company on August 4, 2006.

On September 18, 2006, the Company entered into a unit purchase  agreement (Unit
Purchase Agreement) with Glenn A. Little whereby the Company sold and Mr. Little
purchased  1,000 units,  with each unit  consisting  of 11,100  shares of common
stock and 500 common stock  purchase  warrants,  for an aggregate  cash offering
price of $125,000.  The common stock purchase warrants can be exercised from the
date the warrants are issued until the expiration  date to purchase common stock
at a price of $0.10  per  share  and  expire  five  (5)  years  from the date of
issuance.   There  were  no  commissions  or  underwriting   discounts  paid  in
conjunction  with this  transaction and the Company believes that the shares and
warrants were exempt from registration  under Section 4(2) of the Securities Act
of 1933 as amended.

The common  stock  purchase  warrants  can be  exercised  at any time from their
issuance on September 18, 2006 through  September 18, 2011 at an exercise  price
of $0.10 per share.  The  Company  assigned a value of $5,000 to these  warrants
from the $125,000 aggregate purchase price, which is equivalent to the par value
of the underlying common stock supporting the warrants.

                                       3
<PAGE>
On September 18, 2006,  connected with yet separate from the aforementioned Unit
Purchase  Agreement,  the Company  entered into a Share Purchase  Agreement with
Dominion, the Company's then-majority shareholder, whereby the Company purchased
from  Dominion  11,975,000  shares of common stock of the Company for a purchase
price of $1.00.  The shares  were  cancelled  upon  receipt by the  Company  and
returned to unissued status.

Pursuant to the provisions of the Unit Purchase Agreement on September 18, 2006,
the Board of Directors  appointed Glenn A. Little as a Director of Diasense,  to
serve until the next annual meeting of the shareholders of Diasense or until his
successor is duly elected and  qualified  and as Chief  Executive  Officer.  Mr.
Little was appointed as a Director and Chief Executive Officer of

Effective  September 18, 2006, Anthony Patera resigned from his positions as (i)
the Executive  Vice President and (ii) a member of the Board of Directors of the
Company.  Notification  of such  resignation  was  received  from Mr.  Patera on
September 18, 2006 via a letter addressed to Glenn Little, a member of the Board
of Directors of the Company.

As a result of these transactions Mr. Little became the majority  stockholder of
the Company and acts as the Company's sole officer and director.

On November 14, 2006, the Company filed a Definitive  Schedule 14C - Information
Statement Pursuant to Section 14C of the Securities  Exchange Act of 1934 noting
actions to be taken without a meeting upon the written consent of the holders of
a majority of the outstanding shares of the voting capital stock of the Company.
The actions at this meeting  included 1) to reverse split the  currently  issued
and outstanding  common stock (Reverse Split) of the Company on a 100,000 shares
for one (1) share basis, with no stockholder being reversed to less than a round
lot of 100 shares;  and 2) to change the Company's state of  incorporation  from
Pennsylvania to Nevada. On January 19, 2006,  shareholders holding a majority of
the  Company's  common stock voted to rescind the reverse  stock  portion of the
previous approval.

On January 22,  2007,  the Company  filed  Articles of Merger and Plan of Merger
with the  Commonwealth  of  Pennsylvania  and the State of Nevada to change  the
Company's  domicile  from  Pennsylvania  to Nevada by means of a merger with and
into a Nevada  corporation  formed on November 3, 2006 solely for the purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation.  Such Articles of Incorporation  maintained the Company's corporate
name of Diasense, Inc. and modified the Company's capital structure to allow for
the issuance of up to 100,000,000 shares of $0.001 par value common stock and up
to 50,000,000  shares of $0.001 par value preferred  stock.  Although the merger
documents  were filed in both  Pennsylvania  and Nevada on January 22, 2007, the
Commonwealth of Pennsylvania  required  completion of certain documents in order
to issue a tax clearance  certificate  to complete the merger.  The required tax
clearance  was not issued until March 22,,  2007 which  formally  completed  the
domicile  relocation  to Nevada.  The effect of this action is  reflected in the
accompanying  financial  statements  as of the  first  day of the  first  period
presented.

On  March  16,  2007,  the  Company  filed  a  new  Preliminary  Schedule  14C -
Information  Statement Pursuant to Section 14C of the Securities Exchange Act of
1934 noting  actions to be taken  without a meeting upon the written  consent of
the holders of a majority of the outstanding  shares of the voting capital stock
of the Company.  The actions at this meeting include a 12,500 shares for 1 share
reverse  stock  split of the  currently  issued  and  outstanding  common  stock
(Reverse Split) of the Company,  with fractional  shares being paid in cash at a
rate of $0.05 for each fractional share.

On  June  20,  2007,  the  Company  filed  another  Preliminary  Schedule  14C -
Information  Statement Pursuant to Section 14C of the Securities Exchange Act of
1934  noting  the  following  actions  to be  taken  by the  Company's  Board of
Directors  pursuant  to actions  taken by a written  consent  of a  majority  of
stockholders  without  meeting  "1. To reverse  split the  currently  issued and
outstanding  common stock (the "Common Stock") of the Company on a 12,500 shares
for 1 share  basis,  with  fractional  shares paid in cash at the rate of ($.05)
cents for each  fractional  share and 2. To  increase  the  number of shares the
Company is authorized to issue to  100,000,000  shares of common stock par value
$.001 and 50,000,000  shares of preferred  stock par value $.001 to be issued in
such services and  designations  as determined from time to time by the Board of
Directors.  The Company's Board of Directors initially approved Item No. 1 above
on February 28, 2008 and  recommended  that the Company effect the reverse split
of its currently  issued and  outstanding  Common Stock.  The Board of Directors
approved Item No. 2 above on December 1, 2006 in  connection  with the Company's
change of  domicile  from  Pennsylvania  to Nevada at which  time the  Company's
authorized  capital stock was increased from  40,000,000  shares of common stock
par value  $0.01 to  100,000,000  shares of Common  Stock par value  $0.001  and
50,000,000  shares of  Preferred  Stock  par  value  $0.001 to be issued in such
series and  designations  as may be determined  by the Board of Directors.  That
approval was adopted at the same time as a proposed  100,000 to 1 reverse  split
with fractional  shares rounded up to the nearest whole share and no shareholder
rounded to less than a round lot of 100 shares. The Company's Board of Directors
decided not to proceed  with that  reverse  split as  announced  in its Form 8 K
filed on January 19, 2007. The change in domicile, however, from Pennsylvania to
Nevada  was  completed  and as a result the  Company's  authorized  capital  was
increased as stated above.

                                       4
<PAGE>
The  Company's  Preliminary  Schedule 14C -  Information  Statement  Pursuant to
Section 14C of the Securities  Exchange Act of 1934 with respect to the proposed
reverse  stock split  remains in the  regulatory  review phase and no definitive
actions have been commenced.

The  Company  may  be  referred  to  as a  reporting  shell  corporation.  Shell
corporations  have zero or nominal  assets and typically no stated or contingent
liabilities.  Private  companies  wishing to become publicly trading may wish to
merge  with a shell (a  reverse  merger  or  reverse  acquisition)  whereby  the
shareholders of the private  company become the majority of the  shareholders of
the combined company. The private company may purchase for cash all or a portion
of the  common  shares of the  shell  corporation  from its major  stockholders.
Typically,  the Board and officers of the private  company  become the new Board
and officers of the combined  Company and often the name of the private  company
becomes the name of the combined entity.

BUSINESS PLAN

Our current  business  plan is to seek and identify a  privately-held  operating
company  desiring to become a publicly held company by combining with us through
a reverse merger or acquisition type  transaction.  Private companies wishing to
have their  securities  publicly  traded may seek to merge or effect an exchange
transaction  with a shell  company with a  significant  stockholder  base.  As a
result of the merger or exchange  transaction,  the  stockholders of the private
company will hold a majority of the issued and  outstanding  shares of the shell
company. Typically, the directors and officers of the private company become the
directors  and  officers  of the shell  company.  Often the name of the  private
company becomes the name of the shell company.

We have no capital and must depend on the  resources of Mr. Little to provide us
with the  necessary  funds to  implement  our business  plan.  We intend to seek
opportunities  demonstrating  the  potential of  long-term  growth as opposed to
short-term  earnings.  However,  at the present time, we have not identified any
business  opportunity that we plan to pursue,  nor have we reached any agreement
or definitive understanding with any person concerning an acquisition or merger.

Glenn A. Little,  our sole officer and director,  will be primarily  responsible
for investigating combination  opportunities.  However, we believe that business
opportunities may also come to our attention from various sources, including Mr.
Little,  professional  advisors such as attorneys,  and accountants,  securities
broker-dealers,  venture capitalists,  members of the financial  community,  and
others who may present unsolicited  proposals.  We have no plan,  understanding,
agreements,  or  commitments  with any  individual  for such  person to act as a
finder of opportunities for us.

No direct  discussions  regarding the possibility of a combination are currently
ongoing and we can give no  assurances  that we will be successful in finding or
acquiring a desirable  business  opportunity,  given the limited  funds that are
expected  to be  available  to us  for  implementation  of  our  business  plan.
Furthermore,  we can give no assurances that any acquisition, if it occurs, will
be on terms that are favorable to us or our current stockholders.

We do not  propose to  restrict  our search for a  candidate  to any  particular
geographical  area or  industry,  and  therefore,  we are unable to predict  the
nature of our future business  operations.  Our  management's  discretion in the
selection of business opportunities is unrestricted, subject to the availability
of such opportunities, economic conditions, and other factors.

Any entity  which has an interest in being  acquired  by, or merging into us, is
expected to be an entity that desires to become a public company and establish a
public trading market for its  securities.  In connection  with such a merger or
acquisition,  it is  anticipated  that an amount of  common  stock  constituting
control of us would be issued by us.

We do not foresee  that we will enter into a merger or  acquisition  transaction
with any business with which Glenn A. Little is currently affiliated.

INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES

Certain  types of business  acquisition  transactions  may be completed  without
requiring  us to first  submit the  transaction  to our  stockholders  for their
approval.  If the  proposed  transaction  is  structured  in such a fashion  our
stockholders (other than Glenn A. Little, our majority  stockholder) will not be
provided with financial or other information  relating to the candidate prior to
the completion of the transaction.

If a proposed  business  combination  or  business  acquisition  transaction  is
structured  that  requires  our  stockholder  approval,  and we are a  reporting
company,  we will be required to provide our  stockholders  with  information as
applicable under Regulations 14A and 14C under the Exchange Act.

                                       5
<PAGE>
The  analysis  of  business  opportunities  will be  undertaken  by or under the
supervision of Glenn A. Little,  our president and sole  director.  In analyzing
potential merger candidates,  our management will consider,  among other things,
the following factors:

     *    Potential for future earnings and appreciation of value of securities;
     *    Perception of how any particular business opportunity will be received
          by the investment community and by our stockholders;
     *    Eligibility  of a candidate,  following the business  combination,  to
          qualify  its  securities  for  listing on a national  exchange or on a
          national automated securities quotation system, such as NASDAQ.
     *    Historical results of operation;
     *    Liquidity and availability of capital resources;
     *    Competitive  position as compared to other  companies  of similar size
          and  experience  within  the  industry  segment  as well as within the
          industry as a whole;
     *    Strength and diversity of existing management or management  prospects
          that are scheduled for recruitment;
     *    Amount of debt and contingent liabilities; and
     *    The  products  and/or  services and  marketing  concepts of the target
          company.

There is no  single  factor  that  will be  controlling  in the  selection  of a
business  opportunity.  Our  management  will  attempt  to analyze  all  factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative  measures  and  available  data.  Potentially  available  business
opportunities  may occur in many  different  industries and at various stages of
development,  all of which will make the task of comparative  investigation  and
analysis of such business opportunities extremely difficult and complex. Because
of our limited  capital  available for  investigation  and our dependence on one
person,  Glenn A. Little,  we may not discover or  adequately  evaluate  adverse
facts about the business opportunity to be acquired.

We are unable to predict when we may participate in a business  opportunity.  We
expect,  however, that the analysis of specific proposals and the selection of a
business opportunity may take several months.

Prior to making a decision to  participate  in a business  transaction,  we will
generally  request that we be provided  with  written  materials  regarding  the
business  opportunity  containing  as much  relevant  information  as  possible,
including,  but not limited to, a description of products,  services and company
history; management resumes; financial information;  available projections, with
related  assumptions  upon which they are based;  an  explanation of proprietary
products and  services;  evidence of existing  patents,  trademarks,  or service
marks,  or  rights  thereto;  present  and  proposed  forms of  compensation  to
management;   a  description  of  transactions  between  such  company  and  its
affiliates  during the relevant  periods;  a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of
operation and estimated capital requirements;  audited financial statements,  or
if  audited  financial   statements  are  not  available,   unaudited  financial
statements, together with reasonable assurance that audited financial statements
would be able to be produced to comply with the requirements of a Current Report
on Form  8-K to be  filed  with  the  Securities  and  Exchange  Commission,  or
Commission, upon consummation of the business combination.

As part of our  investigation,  our executive  officer may meet  personally with
management and key personnel, may visit and inspect material facilities,  obtain
independent  analysis or verification  of certain  provided  information,  check
references  of  management  and  key  personnel,   and  take  other   reasonable
investigative  measures,  to the extent of our limited  financial and management
resources.

We believe that  various  types of  potential  candidates  might find a business
combination  with us to be  attractive.  These  include  candidates  desiring to
create a public market for their  securities  in order to enhance  liquidity for
current stockholders,  candidates which have long-term plans for raising capital
through  public sale of  securities  and believe  that the prior  existence of a
public market for their  securities  would be beneficial,  and candidates  which
plan to acquire additional assets through issuance of securities rather than for
cash, and believe that the  development of a public market for their  securities
will be of  assistance  in that  process.  Companies,  which  have a need for an
immediate cash infusion, are not likely to find a potential business combination
with us to be a prudent business transaction alternative.

EMPLOYEES

The Company currently has no employees. Management of the Company expects to use
consultants,  attorneys and accountants as necessary,  and does not anticipate a
need to engage any full-time  employees so long as it is seeking and  evaluating
business  opportunities.  The need for employees and their  availability will be
addressed  in  connection  with  the  decision  whether  or  not to  acquire  or
participate in specific business opportunities.

                                       6
<PAGE>
RISK FACTORS

The  Company's  business  and plan of  operation  is  subject to  numerous  risk
factors, including, but not limited to, the following:

LIMITED OPERATING HISTORY MAKES POTENTIAL DIFFICULT TO ASSESS

The  Company has had no  operating  history  nor any  revenues or earnings  from
operations  since the  Company's  emergence  from  bankruptcy.  The  Company has
limited financial  resources and no operating  activities.  The Company will, in
all likelihood,  continue to sustain  operating  expenses without  corresponding
revenues, at least until the consummation of a business  combination.  This will
most likely  result in the Company  incurring  a net  operating  loss which will
increase  continuously  until the Company can consummate a business  combination
with a target company.  There is no assurance that the Company can identify such
a target company and consummate such a business combination.

THERE IS NO AGREEMENT FOR A BUSINESS COMBINATION AND NO MINIMUM REQUIREMENTS FOR
A BUSINESS COMBINATION

The Company has no current arrangement,  agreement or understanding with respect
to engaging in a business  combination with a specific  entity.  There can be no
assurance  that the Company will be successful  in  identifying  and  evaluating
suitable  business  opportunities  or in concluding a business  combination.  No
particular  industry or specific  business  within an industry has been selected
for a target  company.  The Company  has not  established  a specific  length of
operating history or a specified level of earnings,  assets,  net worth or other
criteria  which it will require a target  company to have  achieved,  or without
which the Company would not consider a business  combination  with such business
entity.  Accordingly,  the Company may enter into a business  combination with a
business entity having no significant operating history,  losses,  limited or no
potential for immediate  earnings,  limited assets,  negative net worth or other
negative characteristics. There is no assurance that the Company will be able to
negotiate a business combination on terms favorable to the Company.

NO ASSURANCE OF SUCCESS OR PROFITABILITY

There is no  assurance  that the  Company  will  acquire  a  favorable  business
opportunity.   Even  if  the  Company  should  become  involved  in  a  business
opportunity, there is no assurance that it will generate revenues or profits, or
that the market  price of the  Company's  outstanding  shares will be  increased
thereby.

TYPE OF BUSINESS ACQUIRED

The business to be acquired may wish to avoid  effecting its own public offering
and  the  accompanying  expense,  delays,  and  uncertainties.  Because  of  the
Company's  limited  capital,  it is more likely than not that any acquisition by
the Company will involve other parties whose primary interest is the acquisition
of control of a publicly  traded  Company.  Moreover,  any business  opportunity
acquired may be currently unprofitable or present other negative factors.

LACK OF DIVERSIFICATION

Because of the limited financial  resources that the Company has, it is unlikely
that the Company will be able to diversify its  acquisitions or operations.  The
Company's probable inability to diversify its activities into more than one area
will subject the Company to economic  fluctuations  within a particular business
or industry and  therefore  increase  the risks  associated  with the  Company's
operations.

DEPENDENCE UPON MANAGEMENT; LIMITED PARTICIPATION OF MANAGEMENT

Because  management  consists  of only one  person,  while  seeking  a  business
combination,  Glenn A. Little,  the  President of the Company,  will be the only
person responsible in conducting the day-to-day  operations of the Company.  The
Company  does not  benefit  from  multiple  judgments  that a greater  number of
directors or officers would provide, and the Company will rely completely on the
judgment of its one officer and director when  selecting a target  company.  Mr.
Little  anticipates  devoting  only a  limited  amount  of time per month to the
business of the Company.  Mr.  Little has not entered into a written  employment
agreement with the Company and he is not expected to do so. The Company does not
anticipate  obtaining  key man life  insurance  on Mr.  Little.  The loss of the
services of Mr.  Little would  adversely  affect  development  of the  Company's
business and its likelihood of continuing operations.

                                       7
<PAGE>
CONFLICTS OF INTEREST

The Company's sole officer and director has other business interests to which he
currently devotes attention,  and is expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of judgment in a manner which is  consistent  with his  fiduciary  duties to the
Company. (See Management, Conflicts of Interest.)

It  is  anticipated  that  the  Company's  principal  stockholder  may  actively
negotiate  or  otherwise  consent to the  purchase of a portion of their  common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction.  In this process, the Company's principal  stockholder may consider
his own  personal  pecuniary  benefit  rather  than the best  interest  of other
Company  stockholders.  Depending  upon the  nature of a  proposed  transaction,
Company  stockholders  other than the principal  stockholder may not be afforded
the opportunity to approve or consent to a particular transaction.

POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company has very limited funds,  and such funds, may not be adequate to take
advantage  of any  available  business  opportunities.  Even  if  the  Company's
currently available funds prove to be sufficient to pay for its operations until
it is able to acquire an interest in, or complete a transaction with, a business
opportunity,  such funds will clearly not be  sufficient to enable it to exploit
the opportunity. Thus, the ultimate success of the Company will depend, in part,
upon its availability to raise additional capital. In the event that the Company
requires modest amounts of additional capital to fund its operations until it is
able to complete a business acquisition or transaction, such funds, are expected
to be provided by the principal  stockholder.  The Company has not  investigated
the  availability,  source,  or terms that might govern the  acquisition  of the
additional  capital  which is  expected  to be  required  in order to  exploit a
business  opportunity,  and will not do so until it has  determined the level of
need for  such  additional  financing.  There is no  assurance  that  additional
capital  will be  available  from any  source or, if  available,  that it can be
obtained on terms  acceptable to the Company.  If not  available,  the Company's
operations  will be  limited  to those  that  can be  financed  with its  modest
capital.

DEPENDENCE UPON OUTSIDE ADVISORS

To supplement the business  experience of its officer and director,  the Company
may be required to employ accountants, technical experts, appraisers, attorneys,
or other  consultants  or advisors.  The  selection of any such advisors will be
made by the Company's officer,  without any input by stockholders.  Furthermore,
it is anticipated that such persons may be engaged on an as needed basis without
a continuing  fiduciary  or other  obligation  to the Company.  In the event the
officer of the Company considers it necessary to hire outside  advisors,  he may
elect  to hire  persons  who are  affiliates,  if those  affiliates  are able to
provide the required services.

REGULATION OF PENNY STOCKS

The U. S. Securities and Exchange Commission (SEC) has adopted a number of rules
to  regulate  "penny  stocks."  Such rules  include  Rule 3a51-1 and Rules 15g-1
through 15g-9 under the Securities Exchange Act of 1934, as amended. Because the
securities of the Company may  constitute  "penny  stocks" within the meaning of
the rules (as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share,  largely traded in
the National Association of Securities Dealers' (NASD) OTC Bulletin Board or the
"Pink Sheets",  the rules would apply to the Company and to its securities.  The
Commission has adopted Rule 15g-9 which established sales practice  requirements
for certain low price securities.  Unless the transaction is exempt, it shall be
unlawful  for a broker  or dealer  to sell a penny  stock  to, or to effect  the
purchase of a penny stock by, any person  unless prior to the  transaction:  (I)
the broker or dealer has approved the person's account for transactions in penny
stock  pursuant to this rule and (ii) the broker or dealer has received from the
person a written  agreement to the  transaction  setting  forth the identity and
quantity  of the penny  stock to be  purchased.  In order to  approve a person's
account for  transactions in penny stock,  the broker or dealer must: (a) obtain
from  the  person  information  concerning  the  person's  financial  situation,
investment experience,  and investment objectives; (b) reasonably determine that
transactions  in penny stock are suitable  for that person,  and that the person
has  sufficient  knowledge and  experience in financial  matters that the person
reasonably may be expected to be capable of evaluating the risks of transactions
in penny stock; (c) deliver to the person a written  statement setting forth the
basis on which the  broker or dealer  made the  determination  (i)  stating in a
highlighted  format  that it is  unlawful  for the  broker or dealer to affect a
transaction  in penny stock unless the broker or dealer has  received,  prior to
the transaction,  a written  agreement to the transaction  from the person;  and
(ii)  stating  in  a  highlighted  format  immediately  preceding  the  customer
signature line that (iii) the broker or dealer is required to provide the person
with the written  statement;  and (iv) the person should not sign and return the
written statement to the broker or dealer if it does not accurately  reflect the
person's financial situation,  investment experience, and investment objectives;
and (d) receive from the person a manually  signed and dated copy of the written

                                       8
<PAGE>
statement.  It is also  required  that  disclosure  be made as to the  risks  of
investing in penny stock and the commissions  payable to the  broker-dealer,  as
well as current price  quotations and the remedies and rights available in cases
of fraud in penny stock  transactions.  Statements,  on a monthly basis, must be
sent to the investor  listing recent prices for the Penny Stock and  information
on  the  limited  market.  Stockholders  should  be  aware  that,  according  to
Securities and Exchange  Commission  Release No. 34-29093,  the market for penny
stocks has  suffered  in recent  years from  patterns  of fraud and abuse.  Such
patterns  include  (I)  control of the market for the  security  by one or a few
broker-dealers   that  are  often  related  to  the  promoter  or  issuer;  (ii)
manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  (iii) "boiler room"  practices  involving
high-pressure  sales tactics and unrealistic  price projections by inexperienced
sales persons;  (iv) excessive and undisclosed bid-ask  differential and markups
by selling broker-dealers;  and (v) the wholesale dumping of the same securities
by promoters and broker dealers after prices have been  manipulated to a desired
level,  along with the  resulting  inevitable  collapse of those prices and with
consequent investor losses. The Company's management is aware of the abuses that
have occurred historically in the penny stock market.  Although the Company does
not  expect to be in a  position  to dictate  the  behavior  of the market or of
broker-dealers who participate in the market,  management will strive within the
confines of practical  limitations to prevent the described  patterns from being
established with respect to the Company's securities.

THERE  MAY  BE  A  SCARCITY  OF  AND/OR  SIGNIFICANT  COMPETITION  FOR  BUSINESS
OPPORTUNITIES AND COMBINATIONS

The  Company is and will  continue  to be an  insignificant  participant  in the
business of seeking mergers with and acquisitions of business entities.  A large
number of established  and  well-financed  entities,  including  venture capital
firms,  are active in mergers and  acquisitions of companies which may be merger
or acquisition target candidates for the Company.  Nearly all such entities have
significantly  greater financial  resources,  technical expertise and managerial
capabilities  than the  Company  and,  consequently,  the  Company  will be at a
competitive  disadvantage in identifying  possible  business  opportunities  and
successfully completing a business combination.  Moreover, the Company will also
compete in seeking  merger or  acquisition  candidates  with other  public shell
companies, some of which may also have funds available for use by an acquisition
candidate.

REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION

Pursuant to the  requirements  of Section 13 of the Exchange Act, the Company is
required to provide certain information about significant acquisitions including
audited  financial  statements  of  the  acquired  company.   Obtaining  audited
financial statements are the economic  responsibility of the target company. The
additional  time  and  costs  that  may be  incurred  by some  potential  target
companies  to prepare  such  financial  statements  may  significantly  delay or
essentially preclude  consummation of an otherwise desirable  acquisition by the
Company.  Acquisition  prospects  that do not have or are  unable to obtain  the
required  audited  statements may not be appropriate  for acquisition so long as
the reporting requirements of the Exchange Act are applicable. Notwithstanding a
target company's  agreement to obtain audited  financial  statements  within the
required time frame, such audited financials may not be available to the Company
at the  time of  effecting  a  business  combination.  In  cases  where  audited
financials  are  unavailable,  the  Company  will  have to rely  upon  unaudited
information  that has not been  verified  by  outside  auditors  in  making  its
decision  to  engage  in a  transaction  with the  business  entity.  This  risk
increases the prospect that a business  combination  with such a business entity
might prove to be an unfavorable one for the Company.

LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION

The Company has neither conducted,  nor have others made available to it, market
research indicating that demand exists for the transactions  contemplated by the
Company.  In the event demand exists for a transaction of the type  contemplated
by the  Company,  there  is no  assurance  the  Company  will be  successful  in
completing any such business combination.

PROBABLE CHANGE IN CONTROL OF THE COMPANY AND/OR MANAGEMENT

In conjunction with completion of a business acquisition, it is anticipated that
the Company will issue an amount of the Company's authorized but unissued common
stock that represents the greater majority of the voting power and equity of the
Company,  which will,  in all  likelihood,  result in  stockholders  of a target
company obtaining a controlling interest in the Company. The resulting change in
control of the Company will likely result in removal of the present  officer and
director of the Company and a  corresponding  reduction in or elimination of his
participation in the future affairs of the Company.

                                       9
<PAGE>
POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS COMBINATION

A business  combination  normally  will  involve the  issuance of a  significant
number of additional shares.  Depending upon the value of the assets acquired in
such business combination, the per share value of the Company's common stock may
increase or decrease, perhaps significantly.

NO PUBLIC MARKET EXISTS

There is currently  no public  market for the  Company's  common  stock,  and no
assurance  can be given that a market will  develop or that a  stockholder  ever
will be able to liquidate his investment without  considerable delay, if at all.
If a market should develop,  the price may be highly  volatile.  Factors such as
those  discussed in this "Risk  Factors"  section may have a significant  impact
upon the market price of the securities  offered hereby.  Owing to the low price
of  the  securities,   many  brokerage  firms  may  not  be  willing  to  effect
transactions  in the  securities.  Even if a purchaser finds a broker willing to
effect  a  transaction  in  theses  securities,  the  combination  of  brokerage
commissions,  state  transfer  taxes,  if any, and any other  selling  costs may
exceed the sales proceeds.

REGISTRATION OF SHARES IS REQUIRED

It is the SEC's position that  securities  issued by a "shell" company cannot be
sold under the  exemption  from  registration  provided by Rule 144  promulgated
under the Securities  Act of 1933,  but must be registered  under the Securities
Act of 1933.

RULE 144 SALES

Of the  22,105,051  presently  issued and  outstanding  shares of the  Company's
stock,  approximately  11,100,000 shares are "restricted  securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended.  As restricted
securities,   these  shares  may  be  resold  only   pursuant  to  an  effective
registration statement or under the requirements of Rule 144 or other applicable
state  securities  law.  Rule 144 provides in essence that a person who has held
restricted  securities for a prescribed  period,  may under certain  conditions,
sell every three months, in brokerage transactions, a number of shares that does
not exceed the greater of 1.0% of a Company's  outstanding  common  stock or the
average  weekly  trading  volume during the four  calendar  weeks prior to sale.
There is no limit on the amount of restricted  securities  that may be sold by a
non-affiliate after the restricted securities have been held by the owner, for a
period of at least two years. A sale under Rule 144, or under an other exemption
from the Act, if available,  or pursuant to subsequent  registrations  of common
stock of present  shareholders,  may have a depressive  effect upon the price of
the Common Stock in may market that may develop.

BLUE SKY CONSIDERATION

Because the securities  registered hereunder have not been registered for resale
under the Blue Sky laws of any state, the holders of such shares and persons who
desire to purchase them in any trading  market that might develop in the future,
should be aware,  that there may be significant  state Blue Sky law restrictions
upon the  ability of  investors  to sell the  securities  and of  purchasers  to
purchase the securities.  Accordingly,  investors  should consider the secondary
market for the Company's securities to be a limited one.

ADDITIONAL RISKS--DOING BUSINESS IN A FOREIGN COUNTRY

The Company may  effectuate a business  combination  with a merger  target whose
business operations or even headquarters, place of formation or primary place of
business are located  outside the United States of America.  In such event,  the
Company may face the significant additional risks associated with doing business
in that country. In addition to the language barriers,  different  presentations
of financial  information,  different  business  practices,  and other  cultural
differences  and barriers  that may make it difficult to evaluate  such a merger
target,   ongoing  business  risks  result  from  the  international   political
situation,  uncertain legal systems and applications of law,  prejudice  against
foreigners,   corrupt  practices,  uncertain  economic  policies  and  potential
political and economic  instability  that may be exacerbated in various  foreign
countries.

TAXATION

Federal  and  state  tax  consequences   will,  in  all  likelihood,   be  major
considerations  in any  business  combination  that the Company  may  undertake.
Currently,  such  transactions  may be  structured  so as to result in  tax-free
treatment  to  both  companies,  pursuant  to  various  federal  and  state  tax
provisions.  The Company intends to structure any business  combination so as to
minimize  the  federal  and state tax  consequences  to both the Company and the
target entity; however, there can be no assurance that such business combination
will meet the statutory  requirements of a tax-free  reorganization  or that the

                                       10
<PAGE>
parties will obtain the intended tax-free  treatment upon a transfer of stock or
assets. A non-qualifying  reorganization  could result in the imposition of both
federal and state taxes, which may have an adverse effect on both parties to the
transaction.

ITEM 2 - DESCRIPTION OF PROPERTY

The  Company  currently  maintains  a mailing  address at 211 West Wall  Street,
Midland,  Texas 79701.  The Company's  telephone number there is (432) 682-1761.
Other than this mailing  address,  the Company does not  currently  maintain any
other office facilities, and does not anticipate the need for maintaining office
facilities at any time in the  foreseeable  future.  The Company pays no rent or
other  fees  for the use of the  mailing  address  as  these  offices  are  used
virtually  full- time by other  businesses  of the  Company's  sole  officer and
director.

It is  likely  that  the  Company  will not  establish  an  office  until it has
completed a business acquisition transaction,  but it is not possible to predict
what   arrangements  will  actually  be  made  with  respect  to  future  office
facilities.

ITEM 3 - LEGAL PROCEEDINGS

The  Company  is not a  party  to any  pending  legal  proceedings,  and no such
proceedings are known to be contemplated.

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

The Company has not conducted any meetings of stockholders  during the preceding
quarter or periods subsequent thereto.

                                     PART II

ITEM 5 - MARKET FOR COMPANY'S  COMMON EQUITY,  RELATED  STOCKHOLDER  MATTERS AND
         SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR TRADING

The  Company's  securities  are eligible  for trading on the OTC Bulletin  Board
under SEC Rule  15c2-11,  Subsection  (a)(5).  The Company's  trading  symbol is
"DSNS" As of the date of this report, the Company's  securities have experienced
irregular and infrequent trading volumes and pricing.

The table below sets forth the high and low bid prices for the Company's  common
stock as obtained from the  "historical  quotes"  section of  www.bigcharts.com.
Bids  represent  inter  dealer  prices,  without  retail  mark up,  markdown  or
commissions, and may not represent actual transactions.

The  following  table  sets  forth the high and low  closing  bid prices for the
periods indicated:

                                                High              Low
                                                ----              ---
Year ended September 30, 2006
   1st Quarter                                  not listed for trading
   2nd Quarter                                  not listed for trading
   3rd Quarter                                  not listed for trading
   4th Quarter                                  not listed for trading

Year ended September 30, 2007
   1st Quarter                                  not listed for trading
   2nd Quarter                                  $1.25            $0.04
   3rd Quarter                                  $0.06            $0.03
   4th Quarter                                  $0.03            $0.02

These  quotations are  inter-dealer  prices  without retail markup,  markdown or
commissions, and may not necessarily represent actual transactions.

As of October 30, 2007, there were  approximately  638 shareholders of record of
the Company's common stock

                                       11
<PAGE>
COMMON STOCK

The Company's  Articles of  Incorporation  authorize the issuance of 100,000,000
shares of $0.001 par value Common  Stock.  Each record holder of Common Stock is
entitled to one vote for each share held on all matters  properly  submitted  to
the stockholders for their vote. The Company's  Articles of Incorporation do not
permit for cumulative voting for the election of directors.

Holders of outstanding  shares of Common Stock are entitled to such dividends as
may be  declared  from time to time by the  Board of  Directors  out of  legally
available funds; and, in the event of liquidation,  dissolution or winding up of
the affairs of the Company,  holders are entitled to receive,  ratably,  the net
assets of the Company  available to stockholders  after  distribution is made to
the  preferred  stockholders,  if  any,  who are  given  preferred  rights  upon
liquidation.  Holders of outstanding  shares of Common Stock have no preemptive,
conversion or redemptive  rights.  All of the issued and  outstanding  shares of
Common Stock are,  and all  unissued  shares when offered and sold will be, duly
authorized,  validly issued, fully paid, and non-assessable.  To the extent that
additional  shares of the  Company's  Common  Stock  are  issued,  the  relative
interests of then existing stockholders may be diluted.

PREFERRED STOCK

The  Company's  Articles  of  Incorporation  allow  for  the  issuance  of up to
50,000,000 shares of $0.001 par value Preferred Stock.

As of the date of this filing, there are no shares of Preferred Stock issued and
outstanding.

STOCK OPTION PLAN

The Company currently has no stock option plan.

DIVIDEND POLICY

No dividends  have been paid to date and the Company's  Board of Directors  does
not anticipate  paying  dividends in the foreseeable  future.  It is the current
policy to retain all earnings, if any, to support future growth and expansion.

RECENT ISSUANCES OF UNREGISTERED SECURITIES

On September 18, 2006, the Company entered into a unit purchase  agreement (Unit
Purchase Agreement) with Glenn A. Little whereby the Company sold and Mr. Little
purchased  1,000 units,  with each unit  consisting  of 11,100  shares of common
stock and 500 common stock  purchase  warrants,  for an aggregate  cash offering
price of $125,000.  The common stock purchase warrants can be exercised from the
date the warrants are issued until the expiration  date to purchase common stock
at a price of $0.10  per  share  and  expire  five  (5)  years  from the date of
issuance.   There  were  no  commissions  or  underwriting   discounts  paid  in
conjunction  with this  transaction and the Company believes that the shares and
warrants were exempt from registration  under Section 4(2) of the Securities Act
of 1933 as amended.

The common  stock  purchase  warrants  can be  exercised  at any time from their
issuance on September 18, 2006 through  September 18, 2011 at an exercise  price
of $0.10 per share.  The  Company  assigned a value of $5,000 to these  warrants
from the $125,000 aggregate purchase price, which is equivalent to the par value
of the underlying common stock supporting the warrants.

RECENT ACQUISITION OF SECURITIES

On September 18, 2006,  connected with yet separate from the aforementioned Unit
Purchase  Agreement,  the Company  entered into a Share Purchase  Agreement with
Dominion, the Company's then-majority shareholder, whereby the Company purchased
from  Dominion  11,975,000  shares of common stock of the Company for a purchase
price of $1.00.  The shares  were  cancelled  upon  receipt by the  Company  and
returned to unissued status.

RESTRICTED SECURITIES

We currently  have  approximately  11,100,000  shares of issued and  outstanding
common stock that  qualify as  "restricted  securities"  as defined in Rule 144.
Depending  on our need for working  capital  during  this phase of our  business
plan, we may or may not issue  additional  securities  prior to  consummating  a
reverse merger transaction. The securities we issue in a merger transaction will
most  likely  be  restricted  securities.  Since  we are a blank  check or shell
company,  we believe the resale of  restricted  securities  we issue in a merger
transaction  will be subject to the  restrictions  as stated in the Wulff Letter
discussed below.

                                       12
<PAGE>
Generally,  restricted  securities  can be resold  under Rule 144 once they have
been held for at least one year,  provided  that the  securities  satisfies  the
current  public  information  requirements  of the Rule;  no more than 1% of the
outstanding  securities  of the issuer are sold in any three month  period;  the
seller does not arrange or solicit the solicitation of buyers for the securities
in anticipation of or in connection with the sale transactions and does not make
any payment to anyone in connection with the sale transactions except the broker
dealer who executes the trade or trades in the  securities;  the shares are sold
in broker's  transactions  only;  the seller files a Notice on Form 144 with the
Securities and Exchange  Commission at or prior to the sales  transactions;  and
the seller has a bona fide  intent to sell the  securities  within a  reasonable
time of the  filing.  Once two years  have  lapsed,  assuming  the holder of the
securities  is not an  affiliate  of the  issuer,  unlimited  sales  can be made
without further compliance with the terms and provisions of Rule 144.

In January 2000, Richard K. Wulff, the then-Chief of the Securities and Exchange
Commission's Office of Small Business, wrote a letter to Ken Worm, the Assistant
Director of the OTC Compliance Unit of NASD Regulation, Inc. (the Wulff Letter).
The Wulff  Letter was written in response  to a request  for  guidance  from Mr.
Worm.  In his  request,  Mr.  Worm  referred  to  several  situations  in  which
non-affiliate stockholders of blank check or shell companies had sought to treat
their shares as free trading or unrestricted securities. As defined in the Wulff
Letter,  a blank check or shell company is a development  stage company that has
no specific  business  plan or purpose or has  indicated its business plan is to
engage in a merger or acquisition with an unidentified company or companies,  or
other entity or person.

Citing the  concerns  of the  United  States  Congress  and the  Securities  and
Exchange  Commission  over potential  fraud and market  manipulations  involving
blank check or shell  companies,  the Wulff Letter stated that the promoters and
affiliates of blank check or shell  companies,  as well as  transferees of their
securities,  are  "underwriters"  with respect to such securities.  Accordingly,
transactions in these  companies'  securities by promoters,  affiliates or their
transferees  do not fall within the scope of the Rule 144 "safe harbor"  resales
for securities that have been beneficially  owned for at least one year and that
satisfy informational and certain other requirements of the Rule, or the Section
4(1) exemption  from  registration  for resales under the  Securities  Act, that
exempts sales by persons other than "an issuer,  underwriter  or a dealer." As a
result, it is the position of the Securities and Exchange  Commission that these
securities  may be resold by these persons only pursuant to  registration  under
the  Securities  Act.  According to the Wulff  Letter,  this  restriction  would
continue to apply even after the blank check or shell company completes a merger
or acquisition transaction with an operating entity.

TRANSFER AGENT

Our independent stock transfer agent is Securities Transfer  Corporation.  Their
address is 2591 Dallas Parkway,  Suite 102, Frisco,  Texas 75034.  Their contact
numbers  are  (469)  633-0101  for  voice  calls  and  (469)  633-0088  for  fax
transmissions. Their website is located at www.stctransfer.com.

REPORTS TO STOCKHOLDERS

The  Company  intends  to  remain  compliant  with  its  obligations  under  the
Securities Exchange Act of 1934, as amended,  and,  therefore,  plans to furnish
its stockholders  with an annual report for each fiscal year ending September 30
containing  financial  statements  audited by its registered  independent public
accounting  firm.  In the event the Company  enters into a business  combination
with another  Company,  it is the present  intention of  management  to continue
furnishing annual reports to stockholders. Additionally, the Company may, in its
sole  discretion,  issue  unaudited  quarterly or other  interim  reports to its
stockholders  when  it  deems  appropriate.  The  Company  intends  to  maintain
compliance with the periodic reporting  requirements of the Securities  Exchange
Act of 1934.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully  make and integrate  acquisitions;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse  publicity;  competition;  fluctuations  and difficulty in
forecasting  operating  results;  changes in business  strategy  or  development

                                       13
<PAGE>
plans;  business  disruptions;  the  ability  to attract  and  retain  qualified
personnel; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2) GENERAL

Diasense, Inc. (Company) was incorporated on July 5, 1989 in accordance with the
Laws of the  Commonwealth of Pennsylvania as a wholly-owned  subsidiary of BICO,
Inc. (BICO) (formerly Biocontrol Technology, Inc.).

On January 22,  2007,  the Company  filed  Articles of Merger and Plan of Merger
with the  Commonwealth  of  Pennsylvania  and the State of Nevada to change  the
Company's  domicile  from  Pennsylvania  to Nevada by means of a merger with and
into a Nevada  corporation  formed on November 3, 2006 solely for the purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation.  Such Articles of Incorporation  maintained the Company's corporate
name of Diasense, Inc. and modified the Company's capital structure to allow for
the issuance of up to 100,000,000 shares of $0.001 par value common stock and up
to 50,000,000  shares of $0.001 par value preferred  stock.  Although the merger
documents  were filed in both  Pennsylvania  and Nevada on January 22, 2007, the
Commonwealth of Pennsylvania  required  completion of certain documents in order
to issue a tax clearance  certificate  to complete the merger.  The required tax
clearance  was not issued until March 22,,  2007 which  formally  completed  the
domicile  relocation  to Nevada.  The effect of this action is  reflected in the
accompanying  financial  statements  as of the  first  day of the  first  period
presented.

The  Company was  approximately  52% owned by BICO until July 23, 2004 when BICO
sold its entire ownership interest to Dominion Assets, LLC (Dominion). On August
29, 2006, the Company entered into a Voluntary Surrender Agreement with Dominion
whereby  all of the  Company's  assets,  which had  previously  been  pledged as
collateral to secure loan agreements by and between the Company and Dominion and
under which the Company was then in default, were repossessed.  Dominion was, at
that time,  the majority  shareholder  of the  Company.  Keith R. Keeling owns a
majority  interest in  Dominion  and was also a former  member of the  Company's
Board of Directors and the Company's former Chief Executive Officer (CEO) of the
Company through his resignation from both positions on August 4, 2006.

Thorough the date of the Voluntary Surrender  Agreement,  the Company's business
efforts were focused on developing a noninvasive  glucose sensor  (Sensor).  The
Sensor  was  proposed  to  use   electromagnetic   technology   to  measure  the
concentration  of glucose in human tissue  without  requiring the user to take a
blood sample.

The  Company's  business  plan  is to  locate  and  combine  with  an  existing,
privately-held  company which is profitable or, in management's view, has growth
potential,  irrespective  of the industry in which it is engaged.  However,  the
Company does not intend to combine with a private company which may be deemed to
be an  investment  company  subject to the  Investment  Company  Act of 1940.  A
combination  may be  structured  as a  merger,  consolidation,  exchange  of the
Company's  common  stock for stock or assets or any other form which will result
in the combined enterprise's becoming a publicly-held corporation.

The Company has never fully  implemented any business plan(s) and,  accordingly,
is considered to be in the development stage.

(3) RESULTS OF OPERATIONS

The Company had no revenue for either of the years ended  September  30, 2007 or
2006,  respectively.  The  Company  does not expect to generate  any  meaningful
revenue or incur  operating  expenses for  purposes  other than  fulfilling  the
obligations  of a reporting  company under the  Securities  Exchange Act of 1934
unless and until such time that the Company's  completes a business  combination
transaction and commences meaningful operations.

General and  administrative  expenses for each of the years ended  September 30,
2007 and 2007 were approximately $38,000 and $208,000,  respectively. The Fiscal
2007 expenses were related to the aforementioned  change in control  transaction
and the  maintenance of the corporate  entity and compliance  with the Company's
reporting obligations under the Securities Exchange Act of 1934, as amended. The
Fiscal  2006  expenses  were  related  to the  winding  down of  prior  business
endeavors and compliance with the Voluntary Surrender Agreement with Dominion.

                                       14
<PAGE>
It is anticipated  that future  expenditure  levels will remain in line with the
Fiscal 2007  expenditure  levels  until such time that the  Company  completes a
business  combination  transaction.  Upon  completion of a business  combination
transaction,  it is  anticipated  that  the  Company's  expenses  will  increase
significantly.

Earnings per share for the  respective  years ended  September 30, 2007 and 2007
were  $0.00  and  $(0.02)  based  on  the  weighted-average  shares  issued  and
outstanding at the end of each respective period.

(4) PLAN OF BUSINESS

GENERAL

The Company's current purpose is to seek, investigate and, if such investigation
warrants, merge or acquire an interest in business opportunities presented to it
by persons or companies who or which desire to seek the perceived  advantages of
a Securities Exchange Act of 1934 registered corporation. As of the date of this
registration  statement,  the Company has no particular acquisitions in mind and
has not entered into any negotiations regarding such an acquisition, and neither
the Company's officer and director nor any promoter and affiliate has engaged in
any  negotiations  with any  representatives  of the owners of any  business  or
company regarding the possibility of a merger or acquisition between the Company
and such other company.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

MANAGEMENT

The  Company  is a blank  check  or  shell  corporation,  and  currently  has no
full-time  employees.  Glenn A. Little is the Company's sole officer,  director,
and controlling shareholder.  All references herein to management of the Company
are to Mr.  Little.  Mr.  Little,  as president  of the  Company,  has agreed to
allocate a limited  portion of his time to the  activities  of the Company after
the  effective  date  of  this  Registration   Statement  without  compensation.
Potential conflicts may arise with respect to the limited time commitment by Mr.
Little  and the  potential  demands  of the  Company's  activities.  See Item 7,
"Certain Relationships and Related Transactions - Conflicts of Interest."

The amount of time spent by Mr.  Little on the  activities of the Company is not
predictable. Such time may vary widely from an extensive amount when reviewing a
target company to an essentially  quiet time when activities of management focus
elsewhere,  or some  amount in between.  It is  impossible  to predict  with any
precision the exact amount of time Mr. Little will actually be required to spend
to locate a suitable target company. Mr. Little estimates that the business plan
of the Company can be  implemented  by devoting  less than 5 hours per month but
such figure cannot be stated with precision.

SEARCH FOR BUSINESS OPPORTUNITIES

The Company's search will be directed toward small and medium-sized enterprises,
which  have a desire  to  become  reporting  corporations  and which are able to
provide audited financial  statements.  The Company does not propose to restrict
its search for investment  opportunities to any particular  geographical area or
industry, and may, therefore,  engage in essentially any business, to the extent
of its limited resources.  The Company's discretion in the selection of business
opportunities   is   unrestricted,   subject   to  the   availability   of  such
opportunities, economic conditions, and other factors. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business
opportunity,  and no  assurance  can be given that any  acquisition,  which does
occur,  will be on terms  that  are  favorable  to the  Company  or its  current
stockholders.

The Company may merge with a company that has  retained one or more  consultants
or outside  advisors.  In that situation,  the Company expects that the business
opportunity will compensate the consultant or outside advisor. As of the date of
this filing,  there have been no discussions,  agreements or understandings with
any party  regarding  the  possibility  of a merger or  acquisition  between the
Company and such other company.  Consequently,  the Company is unable to predict

                                       15
<PAGE>
how the amount of such  compensation  would be  calculated  at this time.  It is
anticipated  that  any  finder  that  the  target  company  retains  would  be a
registered broker-dealer.

The Company will not restrict its search to any specific  kind of firm,  but may
acquire a venture,  which is in its preliminary or development  stage, one which
is already in operation,  or in a more mature stage of its corporate  existence.
The acquired  business may need to seek additional  capital,  may desire to have
its shares publicly  traded,  or may seek other perceived  advantages  which the
Company may offer.  The Company  does not intend to obtain  funds to finance the
operation of any acquired  business  opportunity  until such time as the Company
has successfully consummated the merger or acquisition transaction. There are no
loan arrangements or arrangements for any financing  whatsoever  relating to any
business opportunities.

EVALUATION OF BUSINESS OPPORTUNITIES

The  analysis of business  opportunities  will be under the  supervision  of the
Company's sole officer and director, who is not a professional business analyst.
In analyzing prospective business  opportunities,  management will consider such
matters as available  technical,  financial and  managerial  resources;  working
capital  and  other  financial  requirements;  history  of  operations,  if any;
prospects  for the  future;  nature of present  and  expected  competition;  the
quality and  experience  of management  services  which may be available and the
depth of that management;  the potential for further research,  development,  or
exploration;  specific risk factors not now  foreseeable,  but which then may be
anticipated to impact the proposed activities of the Company;  the potential for
growth or expansion;  the potential for profit; the perceived public recognition
or acceptance of products,  services, or trades; name identification;  and other
relevant  factors.  In many  instances,  it is  anticipated  that the historical
operations of a specific business  opportunity may not necessarily be indicative
of the potential for the future because of a variety of factors,  including, but
not limited  to, the  possible  need to expand  substantially,  shift  marketing
approaches, change product emphasis, change or substantially augment management,
raise  capital  and  the  like.  Management  intends  to  meet  personally  with
management  and key  personnel  of the  target  business  entity  as part of its
investigation.  To the extent  possible,  the Company intends to utilize written
reports and  personal  investigation  to evaluate  the above  factors.  Prior to
making a decision to  participate  in a business  opportunity,  the Company will
generally  request that it be provided  with  written  materials  regarding  the
business  opportunity  containing  as much  relevant  information  as  possible.
Including, but not limited to, such items as a description of products, services
and  company  history;  management  resumes;  financial  information;  available
projections,  with related assumptions upon which they are based; an explanation
of proprietary products and services; evidence of existing patents,  trademarks,
or service marks, or rights thereto;  present and proposed forms of compensation
to  management;  a  description  of  transactions  between  such company and its
affiliates  during the relevant  periods;  a description of present and required
facilities;,  an analysis of risks and competitive conditions;  a financial plan
of operation and estimated capital  requirements;  audited financial statements,
or if they are not  available  at that  time,  unaudited  financial  statements,
together with reasonable  assurance that audited  financial  statements would be
able to be produced within a required period of time; and the like.

The Company is currently  subject to the reporting  requirements of the Exchange
Act.  Under the Exchange Act, any merger or  acquisition  candidate  will become
subject to the same  reporting  requirements  of the Exchange Act as the Company
following  consummation  of any merger or  acquisition.  Thus,  in the event the
Company  successfully  completes the  acquisition of or merger with an operating
business entity, that business entity must provide audited financial  statements
for at least two most recent  fiscal years or, in the event the business  entity
has been in business for less than two years,  audited financial statements will
be required from the period of  inception.  Acquisition  candidates  that do not
have or are  unable  to  obtain  the  required  audited  statements  will not be
considered appropriate for acquisition.

Management  believes  that  various  types of  potential  merger or  acquisition
candidates might find a business  combination with the Company to be attractive.
These  include  acquisition  candidates  desiring to create a public  market for
their shares in order to enhance liquidity for current stockholders, acquisition
candidates which have long-term plans for raising capital through public sale of
securities and believe that the possible prior  existence of a public market for
their securities would be beneficial,  and acquisition  candidates which plan to
acquire  additional  assets through issuance of securities rather than for cash,
and believe that the  possibility  of  development  of a public market for their
securities will be of assistance in that process.  Acquisition  candidates,  who
have a need for an immediate cash  infusion,  are not likely to find a potential
business  combination  with  the  Company  to  be  an  attractive   alternative.
Nevertheless,  the Company has not conducted market research and is not aware of
statistical  data which  would  support  the  perceived  benefits of a merger or
acquisition transaction for the owners of a business opportunity. The Company is
unable to predict when it may participate in a business opportunity. It expects,
however, that the analysis of specific proposals and the selection of a business
opportunity  may take several  months or more.  There can also be no  assurances
that we are able to successfully pursue a business  opportunity.  In that event,
there is a  substantial  risk to the Company that failure to complete a business
combination  will  significantly  restrict  its  business  operation  and  force
management to cease  operations  and  liquidate  the Company.

                                       16
<PAGE>
(5) LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2007 and 2006, respectively, the Company had working capital of
approximately $700 and $25,000, respectively.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant  stockholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The Company's need for working  capital may change  dramatically  as a result of
any business acquisition or combination  transaction.  There can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

The Company has no current plans, proposals, arrangements or understandings with
respect to the sale or issuance of additional  securities  prior to the location
of a merger or  acquisition  candidate.  Accordingly,  there can be no assurance
that sufficient  funds will be available to the Company to allow it to cover the
expenses related to such activities.

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

ITEM 7 - INDEX TO FINANCIAL STATEMENTS

The required financial statements begin on page F-1 of this document.

ITEM 8 - CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

RESIGNATION OF GOFF, BACKA, ALFREA & COMPANY, LLC

On December 18,  2006,  the Company  received a letter  dated  December 6, 2006,
whereby the Company's  Registered  Independent  Public  Accounting  Firm,  Goff,
Backa,  Alfrea & Company,  LLC of Pittsburgh,  PA (GBACO) formally  acknowledged
prior oral communication from the Company's current management that, as a result
of the September 18, 2006 change in control  transaction,  that GBACO's services
would no longer be required.

No accountant's report on the financial statements issued by GBACO for either of
the past two (2) years  contained an adverse  opinion or a disclaimer of opinion
or was  qualified  or modified  as to  uncertainty,  audit  scope or  accounting
principles,  except for a going concern  opinion  expressing  substantial  doubt
about the ability of the Company to continue as a going concern.

During the Company's two most recent fiscal years (ended  September 30, 2005 and
2004)  and from  October  1,  2005 to the  date of this  Report,  there  were no
differences  with GBACO on any matter of  accounting  principles  or  practices,
financial disclosure,  or auditing scope or procedure.  There were no reportable
events,  as described in Item  304(a)(1)(iv)(B)  of Regulation  S-B,  during the
Company's  two most recent  fiscal years (ended June 30, 2005 and 2004) and from
July 1, 2005 through the filing date of our Current Report on Form 8-K.

APPOINTMENT OF S. W. HATFIELD, CPA

The Company has engaged the Registered  Independent  Certified Public Accounting
Firm of S. W. Hatfield, CPA of Dallas, Texas (SWHCPA) as the Company's auditors.

During the Company's two most recent fiscal years (ended  September 30, 2005 and
2004) and from October 1, 2005 to the date of this  Report,  the Company had not
consulted  with S. W.  Hatfield,  CPA regarding  either (I) the  application  of
accounting   principles  to  a  specified   transaction,   either  completed  or
contemplated,  or the type of  audit  opinion  that  might  be  rendered  on the
Company's financial  statements,  and either written or oral advice was provided
to the  Company  that was an  important  factor  considered  by the  Company  in
reaching a decision as to the accounting, auditing or financial reporting issue;
(ii) or any matter that was the subject of a  disagreement  or event required to
be  reported  under Item  304(a)(1)(iv)  of the  Regulation  S-B and the related
instructions thereto.

                                       17
<PAGE>
MANAGEMENT'S STATEMENT WITH REGARD TO DISCONTINUED AUDIT PRACTICE

"The   accounting  and  auditing   practice  of  Thompson  Dugan,  PC  has  been
discontinued.  Accordingly,  for all  periods  subsequent  to the date of any of
Thompson Dugan, PC's issued audit reports and/or consent statements,  there have
been no subsequent event audit procedures  performed by Thompson Dugan PC on the
financial statements of Diasense, Inc. Additionally, the cessation of operations
of Thompson Dugan, PC and the discontinuance of their auditing services severely
impacts the ability of investors to sue, and  potentially,  recover damages from
Thompson  Dugan,  PC for material  misstatements  or  omissions,  if any, in any
document filed with the U. S. Securities and Exchange Commission  containing any
report  or  consent  issued by  Thompson  Dugan,  PC,  including  the  financial
statements   covered  in  Thompson   Dugan's  audit  report(s)   and/or  consent
statements."

ITEM 8A - CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the  participation  of our management,  including
our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure  controls and  procedures,  as such term is defined
under Rule 13a-15(e)  promulgated under the Securities  Exchange Act of 1934, as
amended (Exchange Act), as of September 30, 2007. Based on this evaluation,  our
principal  executive officer and principal  financial officer concluded that our
disclosure  controls and  procedures  are effective in alerting them on a timely
basis to material information relating to our Company required to be included in
our reports filed or submitted under the Exchange Act.

(b) Changes in Internal Controls

There were no significant  changes (including  corrective actions with regard to
significant  deficiencies or material  weaknesses) in our internal controls over
financial  reporting that occurred  during the three months ended  September 30,
2007 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.

                                    PART III

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

The directors and executive officers serving the Company are as follows:

      Name             Age                  Position Held and Tenure
      ----             ---                  ------------------------
Glenn A. Little        54     President, Chief Executive Officer Chief Financial
                              Officer and Director

The  director  named  above  will  serve  until the next  annual  meeting of the
Company's  stockholders  or  until  any  successors  are duly  elected  and have
qualified.   Directors  will  be  elected  for  one-year  terms  at  the  annual
stockholders meeting.  Officers will hold their positions at the pleasure of the
board of directors,  absent any  employment  agreement,  of which none currently
exists or is contemplated.  There is no arrangement or understanding between any
of the  directors  or officers of the Company and any other  person  pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement,  plan or understanding as to whether non-management
shareholders  will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements,  agreements or
understandings  between   non-management   shareholders  that  may  directly  or
indirectly participate in or influence the management of the Company's affairs.

The directors and officers will devote their time to the Company's affairs on an
as needed  basis,  which,  depending  on the  circumstances,  could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely encompass less than four (4) hours per month.  There are no agreements or
understandings  for any  officer or director to resign at the request of another
person,  and none of the officers or directors  are acting on behalf of, or will
act at the direction of, any other person.

                                       18
<PAGE>
BIOGRAPHICAL INFORMATION

Glenn A.  Little,  is a  graduate  of The  University  of  Florida,  Gainesville
(Bachelor  of Science in  Business  Administration)  and the  American  Graduate
School  of  International   Management  (Master  of  Business  Administration  -
International  Management)  and has been the  principal  of Little  and  Company
Investment  Securities  (LITCO),  a  Securities  Broker/Dealer  with  offices in
Midland,  Texas since 1979.  Before founding LITCO, Mr. Little was a stockbroker
with Howard,  Weil,  Labouisse  Friedrich in their New  Orleans,  Louisiana  and
Midland,  Texas  offices and also worked for First  National Bank of Commerce in
New Orleans, Louisiana.

Mr. Little was appointed an Adjudicatory Official for the State Bar of Texas and
served in that capacity from 1997 through 2003.

Mr. Little currently serves as an officer and director of Ameri-First  Financial
Group, Inc. a Delaware corporation;  Diasense,  Inc. and 8888 Acquisition Corp.,
Nevada corporations.  Each of the  afore-referenced  companies is current in the
filing  of  their  periodic  reports  with the  SEC.  Additionally,  each of the
afore-referenced  companies for which Mr. Little acts as an officer and director
may be deemed  reporting shell  corporations.  Mr. Little will devote as much of
his time to our business  affairs as may be necessary to implement  our business
plan.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act requires our executive officers and
directors  and person who own more than 10% of our common  stock to file reports
regarding  ownership of and  transactions  in our securities with the Securities
and Exchange Commissioner and to provide us with copies of those filings.  Based
solely on our review of the copies received by or a written  representation from
certain reporting persons we believe that during fiscal year ended September 30,
2007,  we  believe  that  all  eligible  persons  are  in  compliance  with  the
requirements of Section 16(a).

INDEMNIFICATION OF OFFICERS AND DIRECTORS.

The  Company's  By-Laws  provide  for the  indemnification  of  its,  directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses  incurred by them in any litigation to which they become
a party  arising  from their  association  with or  activities  on behalf of the
Company.  The Company will also bear the expenses of such  litigation for any of
its directors,  officers,  employees,  or agents,  upon such persons  promise to
repay the Company  therefor if it is ultimately  determined that any such person
shall not have been entitled to  indemnification.  This  indemnification  policy
could result in substantial  expenditures by the Company, which it may be unable
to recoup.

CONFLICTS OF INTEREST

None of the  officers  of the Company  will devote more than a small  portion of
their  respective  time to the affairs of the  Company.  There will be occasions
when the time  requirements of the Company's  business conflict with the demands
of the officers'  other business and investment  activities.  Such conflicts may
require that the Company  attempt to employ  additional  personnel.  There is no
assurance  that the  services of such persons will be available or that they can
be obtained upon terms favorable to the Company.

The officers,  directors and principal  shareholders of the Company may actively
negotiate for the purchase of a portion of their common stock as a condition to,
or in  connection  with, a proposed  merger or  acquisition  transaction.  It is
anticipated  that  a  substantial  premium  may be  paid  by  the  purchaser  in
conjunction  with any sale of shares by the  Company's  officers,  directors and
principal shareholders made as a condition to, or in connection with, a proposed
merger or acquisition  transaction.  The fact that a substantial  premium may be
paid to members of Company management to acquire their shares creates a conflict
of interest for them and may compromise  their state law fiduciary duties to the
Company's  other  shareholders.  In making  any such  sale,  members  of Company
management  may consider  their own personal  pecuniary  benefit rather than the
best  interests of the Company and the  Company's  other  shareholders,  and the
other shareholders are not expected to be afforded the opportunity to approve or
consent to any particular buy-out  transaction  involving shares held by members
of Company management.

The Company has adopted a policy under which any  consulting or finders fee that
may be paid to a third party for  consulting  services to assist  management  in
evaluating a prospective business opportunity would be paid in stock rather than
in  cash.  Any  such  issuance  of  stock  would  be  made  on an ad hoc  basis.
Accordingly,  the Company is unable to predict whether,  or in what amount, such
stock issuance might be made.

It is not currently anticipated that any salary,  consulting fee, or finders fee
shall be paid to any of the Company's directors or executive officers, or to any
other affiliate of the Company except as described under Executive  Compensation
above.

                                       19
<PAGE>
Although  management  has no current  plans to cause the Company to do so, it is
possible  that the  Company  may enter  into an  agreement  with an  acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's  current  stockholders  to the  acquisition  candidate  or  principals
thereof,  or to other individuals or business entities,  or requiring some other
form of payment to the Company's current  stockholders,  or requiring the future
employment  of specified  officers  and payment of salaries to them.  It is more
likely  than  not  that  any  sale  of  securities  by  the  Company's   current
stockholders  to an  acquisition  candidate  would  be at a price  substantially
higher than that  originally paid by such  stockholders.  Any payment to current
stockholders  in the context of an  acquisition  involving  the Company would be
determined  entirely by the largely  unforeseeable  terms of a future  agreement
with an unidentified business entity.

INVOLVEMENT ON CERTAIN MATERIAL LEGAL PROCEEDINGS DURING THE PAST FIVE (5) YEARS

(1) No director, officer,  significant employee or consultant has been convicted
in a criminal  proceeding,  exclusive of traffic violations or is subject to any
pending criminal proceeding.

(2) No  bankruptcy  petitions  have been filed by or  against  any  business  or
property of any  director,  officer,  significant  employee or consultant of the
Company nor has any  bankruptcy  petition been filed  against a  partnership  or
business  association  where these  persons were  general  partners or executive
officers.

(3)  No  director,   officer,   significant  employee  or  consultant  has  been
permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking activities.

(4) No director, officer or significant employee has been convicted of violating
a federal or state securities or commodities law.

ITEM 10 - EXECUTIVE COMPENSATION

Since the  change in  control  in  September  2006,  management  of the  Company
requires less than four (4) hours per calendar quarter.  Accordingly, no officer
or director has received any  compensation  from the Company.  Until the Company
acquires  additional capital, it is not anticipated that any officer or director
will  receive  compensation  from  the  Company  other  than  reimbursement  for
out-of-pocket   expenses  incurred  on  behalf  of  the  Company.   See  Certain
Relationships and Related Transactions.

The Company has no stock option, retirement, pension, or profit-sharing programs
for the  benefit of  directors,  officers or other  employees,  but the Board of
Directors may recommend adoption of one or more such programs in the future.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                                  Change in
                                                                                   Pension
                                                                                  Value and
                                                                 Non-Equity      Nonqualified
 Name and                                                        Incentive         Deferred
 Principal                                Stock      Option         Plan         Compensation     All Other
 Position    Year   Salary($)  Bonus($)  Awards($)   Awards($)  Compensation($)   Earnings($)   Compensation($)  Totals($)
 --------    ----   ---------  --------  ---------   ---------  ---------------   -----------   ---------------  ---------
<S>          <C>       <C>       <C>         <C>        <C>        <C>          <C>         <C>        <C>
Glenn A.     2006     $-0-       $-0-       $-0-        $-0-         $-0-             $-0-           $-0-          $-0-
Little,      2005     $-0-       $-0-       $-0-        $-0-         $-0-             $-0-           $-0-          $-0-
Principal    2004     $-0-       $-0-       $-0-        $-0-         $-0-             $-0-           $-0-          $-0-
Executive
Officer
</TABLE>

The Company has no other Executive  Compensation  issues which would require the
inclusion of other mandated table disclosures.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the date of this Annual Report, the number
of  shares  of  Common  Stock  owned of record  and  beneficially  by  executive
officers,  directors and persons who hold 5% or more of the  outstanding  Common
Stock  of the  Company.  Also  included  are the  shares  held by all  executive
officers and directors as a group.

                                       20
<PAGE>
                                        Shares Beneficially Owned (1)
                                   ----------------------------------------
     Name and address (2)          Number of Shares          Percentage (3)
     --------------------          ----------------          --------------
     Glenn A. Little (4)              11,100,000               50.21%

     Directors and officers
      as a group (1 person)           11,100,000               50.21%

----------
(1)  On October  30,  2007,  there were  22,105,051  shares of our common  stock
     outstanding  and no shares of preferred  stock issued and  outstanding.  We
     have 500,000 outstanding stock warrants and no outstanding stock options.
(2)  Under applicable SEC rules, a person is deemed the "beneficial  owner" of a
     security  with regard to which the person  directly or  indirectly,  has or
     shares (a) the voting power, which includes the power to vote or direct the
     voting of the security,  or (b) the  investment  power,  which includes the
     power to dispose, or direct the disposition,  of the security, in each case
     irrespective of the person's economic  interest in the security.  Under SEC
     rules, a person is deemed to beneficially  own securities  which the person
     has the right to acquire  within 60 days through the exercise of any option
     or warrant or through the conversion of another security.
(3)  In  determining  the percent of voting stock owned by a person on September
     30,  2007 (a) the  numerator  is the  number  of  shares  of  common  stock
     beneficially owned by the person, including shares the beneficial ownership
     of which may be  acquired  within 60 days upon the  exercise  of options or
     warrants or conversion of convertible  securities,  and (b) the denominator
     is the total of (I) the  22,105,051  shares of common stock  outstanding on
     September  30,  2007,  and (ii) any shares of common stock which the person
     has the right to  acquire  within 60 days upon the  exercise  of options or
     warrants or conversion of convertible securities. Neither the numerator nor
     the  denominator  includes  shares which may be issued upon the exercise of
     any other options or warrants or the  conversion  of any other  convertible
     securities.
(4)  Mr. Little is our sole officer and director.  Mr.  Little's  address is 211
     West Wall Street, Midland, Texas 79701.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On September 18, 2006, the Company entered into a unit purchase  agreement (Unit
Purchase Agreement) with Glenn A. Little whereby the Company sold and Mr. Little
purchased  1,000 units,  with each unit  consisting  of 11,100  shares of common
stock and 500 common stock  purchase  warrants,  for an aggregate  cash offering
price of $125,000.  The common stock purchase warrants can be exercised from the
date the warrants are issued until the expiration  date to purchase common stock
at a price of $0.10  per  share  and  expire  five  (5)  years  from the date of
issuance.   There  were  no  commissions  or  underwriting   discounts  paid  in
conjunction  with this  transaction and the Company believes that the shares and
warrants were exempt from registration  under Section 4(2) of the Securities Act
of 1933 as amended.

The common  stock  purchase  warrants  can be  exercised  at any time from their
issuance on September 18, 2006 through  September 18, 2011 at an exercise  price
of $0.10 per share.  The  Company  assigned a value of $5,000 to these  warrants
from the $125,000 aggregate purchase price, which is equivalent to the par value
of the underlying common stock supporting the warrants.

On September 18, 2006,  connected with yet separate from the aforementioned Unit
Purchase  Agreement,  the Company  entered into a Share Purchase  Agreement with
Dominion, the Company's then-majority shareholder, whereby the Company purchased
from  Dominion  11,975,000  shares of common stock of the Company for a purchase
price of $1.00.  The shares  were  cancelled  upon  receipt by the  Company  and
returned to unissued status.

The  Company  currently  maintains  a mailing  address at 211 West Wall  Street,
Midland,  Texas 79701.  The Company's  telephone number there is (432) 682-1761.
Other than this mailing  address,  the Company does not  currently  maintain any
other office facilities, and does not anticipate the need for maintaining office
facilities at any time in the  foreseeable  future.  The Company pays no rent or
other  fees  for the use of the  mailing  address  as  these  offices  are  used
virtually  full- time by other  businesses  of the  Company's  sole  officer and
director.

ITEM 13 - EXHIBITS

31.1  Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1  Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

                (Remainder of this page left blank intentionally)

                                       21
<PAGE>
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company paid or accrued the  following  fees in each of the prior two fiscal
years to it's  principal  accountant,  S. W. Hatfield,  CPA of Dallas,  Texas or
Goff, Backa, Alfrea & Company, LLC of Pittsburgh, PA:

                                  Year ended           Year ended
                                 September 30,        September 30,
                                     2007                 2006
                                   -------              -------
     1.  Audit fees                $12,431              $13,000
     2.  Audit-related fees             --                   --
     3.  Tax fees                      780                   --
     4.  All other fees                 --                   --
                                   -------              -------

            Totals                 $13,211              $13,000
                                   =======              =======

We have considered whether the provision of any non-audit services, currently or
in  the  future,  is  compatible  with  S.  W.  Hatfield,  CPA  maintaining  its
independence  and have  determined  that these services do not compromise  their
independence.

Financial Information System Design and Implementation:  S. W. Hatfield, CPA did
not charge the  Company any fees for  financial  information  system  design and
implementation fees.

The  Company  has no  formal  audit  committee.  However,  the  entire  Board of
Directors (Board) is the Company's  defacto audit committee.  In discharging its
oversight  responsibility  as to the audit process,  the Board obtained from the
independent  auditors a formal written  statement  describing all  relationships
between  the  auditors  and  the  Company  that  might  bear  on  the  auditors'
independence  as  required  by  Independence  Standards  Board  Standard  No. 1,
"INDEPENDENCE  DISCUSSIONS WITH AUDIT  COMMITTEES." The Board discussed with the
auditors any  relationships  that may impact their objectivity and independence,
including fees for non-audit services,  and satisfied itself as to the auditors'
independence.  The Board also discussed with management,  the internal  auditors
and the independent  auditors the quality and adequacy of the Company's internal
controls.

The Company's  principal  accountant,  S. W.  Hatfield,  CPA, did not engage any
other  persons  or  firms  other  than  the  principal  accountant's  full-time,
permanent employees.


                (Remainder of this page left blank intentionally)

                    (Financial statements start on next page)

                                       22
<PAGE>
                                 DIASENSE, INC.

                                    CONTENTS

                                                                            Page
                                                                            ----

REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM           F-2

FINANCIAL STATEMENTS
   Balance Sheets
     as of September 30, 2007 and 2006                                      F-3

   Statements of Operations and Comprehensive Loss
     for the years ended September 30, 2007 and 2006
     and for the period from July 5, 1989 (date of inception)
     through September 30, 2007                                             F-4

   Statement of Changes in Stockholders' Equity
     for the period from July 5, 1989 (date of inception)
     through September 30, 2007                                             F-5

   Statements of Cash Flows
     for the years ended September 30, 2007 and 2006
     and for the period from July 5, 1989 (date of inception)
     through September 30, 2007                                             F-10

   Notes to Financial Statements                                            F-11

                                      F-1
<PAGE>
                        LETTERHEAD OF S. W. HATFIELD, CPA


        REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Diasense, Inc.

We have audited the  accompanying  balance  sheets of  Diasense,  Inc. (a Nevada
corporation  and a development  stage company) as of September 30, 2007 and 2006
and the related  statements of operations  and  comprehensive  loss,  changes in
stockholders'  equity (deficit) and cash flows for the years ended September 30,
2007 and 2006 and for the period  from  October 1, 2005  through  September  30,
2007.  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.

The financial  statements of Diasense,  Inc. (a development stage company) as of
September 30, 2005 and for the period from October 1, 1997 through September 30,
2005 and for the period from July 5, 1989 (date of inception)  through September
30, 1997 were audited by other auditors whose reports were dated January 4, 2006
and  December  30,  1997,  respectively,  both of  which  included  a  paragraph
expressing  substantial  doubt about  Diasense,  Inc.'s ability to continue as a
going  concern.   These  audit  opinions  accompanied  the  Company's  financial
statements in its Annual Report on Form 10-KSB for the year ended  September 30,
2006.  Neither auditor  performed any additional audit procedures  subsequent to
the date of their respective report.

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.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Diasense,  Inc. as of September
30, 2007 and 2006 and the results of its  operations and its cash flows for each
of the years ended  September  30, 2007 and 2006 and for the period from October
1, 2005 through September 30, 2007, respectively,  in conformity with accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note C to the
financial statements, the Company has no viable operations or significant assets
and is dependent upon  significant  stockholders to provide  sufficient  working
capital to maintain the integrity of the corporate entity.  These  circumstances
create  substantial  doubt  about the  Company's  ability to continue as a going
concern and are discussed in Note C. The financial statements do not contain any
adjustments that might result from the outcome of these uncertainties.


                                            /s/ S. W. Hatfield, CPA
                                            ------------------------------
                                            S. W. HATFIELD, CPA
Dallas, Texas
October 18, 2007

                                      F-2
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                                 BALANCE SHEETS
                           September 30, 2007 and 2006

<TABLE>
<CAPTION>
                                                                    September 30,          September 30,
                                                                        2007                   2006
                                                                    ------------           ------------
<S>                                                                 <C>                    <C>
                                     ASSETS
CURRENT ASSETS
   Cash on hand and in bank                                         $      2,208           $     24,984
                                                                    ------------           ------------

      TOTAL CURRENT ASSETS                                                 2,208                 24,984
                                                                    ------------           ------------

TOTAL ASSETS                                                        $      2,208           $     24,984
                                                                    ============           ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
CURRENT LIABILITIES
   Accounts payable - trade                                         $         --           $         --
   Accrued interest payable to controlling stockholder                     1,503                      7
                                                                    ------------           ------------

      TOTAL CURRENT LIABILITIES                                            1,503                      7
                                                                    ------------           ------------

LONG-TERM LIABILITIES
   Note payable to controlling stockholder                                35,000                 20,000
                                                                    ------------           ------------

      TOTAL LIABILITIES                                                   36,503                 20,007
                                                                    ------------           ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
   Preferred stock - $0.001 par value
     50,000,000 shares authorized
     None issued and outstanding                                              --                     --
   Common stock - $0.001 par value
     100,000,000 shares authorized
     22,105,051 shares issued and outstanding                             22,105                 22,105
   Additional paid-in capital                                         48,050,579             48,050,579
   Common stock warrants                                                   5,000                  5,000
   Deficit accumulated during the development stage                  (48,111,979)           (48,072,707)
                                                                    ------------           ------------

      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                               (34,295)                 4,977
                                                                    ------------           ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $      2,208           $     24,984
                                                                    ============           ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                            STATEMENTS OF OPERATIONS
                   Years ended September 30, 2007 and 2006 and
     Period from July 5, 1989 (date of inception) through September 30, 2007

<TABLE>
<CAPTION>
                                                                                                    Period from
                                                                                                   July 5, 1989
                                                                                                (date of inception)
                                                       Year ended             Year ended              through
                                                      September 30,          September 30,          September 30,
                                                          2007                   2006                   2007
                                                      ------------           ------------           ------------
<S>                                                   <C>                    <C>                    <C>
REVENUES                                              $         --           $         --           $         --
                                                      ------------           ------------           ------------
OPERATING EXPENSES
   General and administrative expenses                      38,003                208,012             17,101,615
   Depreciation expense                                         --                  1,448                 91,495
   Research and development expense                             --                     --             10,556,405
   Technology and patent rights acquired                        --                     --              2,650,000
   Expense related to warrant extensions                        --                     --             17,890,676
   Amortization of goodwill                                     --                     --                535,057
                                                      ------------           ------------           ------------
      TOTAL OPERATING EXPENSES                              38,003                209,460             48,825,248
                                                      ------------           ------------           ------------

LOSS FROM OPERATIONS                                       (38,003)              (209,460)           (48,825,248)

OTHER INCOME (EXPENSE)
   Interest expense                                         (1,496)              (159,953)              (338,108)
   Other income                                                227                     --              1,043,224
   Other expense                                                --                     --                (67,405)
   Equity in loss from unconsolidated subsidiaries              --                     --               (575,412)
   Impairment loss                                              --                     --               (690,124)
   Gain from sale of Diabecore stock                            --                     --                 57,242
   Gain from sale of MicroIslet stock                           --                     --              1,283,852
                                                      ------------           ------------           ------------
      TOTAL OTHER INCOME (EXPENSE)                         (39,272)              (159,953)               675,266
                                                      ------------           ------------           ------------

LOSS BEFORE PROVISION FOR INCOME TAXES                     (39,272)              (369,413)           (48,111,979)

PROVISION FOR INCOME TAXES                                      --                     --                     --
                                                      ------------           ------------           ------------

NET LOSS                                              $    (39,272)          $   (369,413)          $(48,111,979)
                                                      ============           ============           ============
Earnings per share of common stock
 outstanding computed on net loss -
 basic and fully diluted                                       nil           $      (0.02)
                                                      ============           ============
Weighted-average number of shares
 outstanding - basic and fully diluted                  22,105,051             23,332,996
                                                      ============           ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
     Period from July 5, 1989 (date of inception) through September 30, 2007

<TABLE>
<CAPTION>
                                                                                                          Deficit
                                                                                                        accumulated
                                               Common Stock        Common       Additional               during the
                                            ------------------      stock        paid-in                development
                                            Shares      Amount    subscribed     capital    Warrants       stage          Total
                                            ------      ------    ----------     -------    --------       -----          -----
<S>                                       <C>          <C>         <C>         <C>           <C>        <C>            <C>
July 10, 1989 issuance of common
 stock to BICO for License and
 Marketing agreement                      8,000,000    $ 80,000    $    --     $       --    $    --    $        --    $    80,000
August 21-December 31, 1989 sale
 of common stock pursuant to first
 Private Placement Memorandum               656,000       6,560         --        321,440         --             --        328,000
September 29, 1989 issuance of common
 stock in connection with patent rights
 acquired by BICO                         1,040,000       1,040         --        509,600         --             --        520,000
Net loss for the year                            --          --         --             --         --        (80,000)       (80,000)
                                         ----------    --------    -------     ----------    -------    -----------    -----------
Balances at December 31, 1989             9,696,000      96,960         --        831,040         --        (80,000)       848,000

January 1-December 31, 1990 sale of
 common stock pursuant to first
 Private Placement Memorandum             1,240,000      12,400         --        607,600         --             --        620,000
May 1-August 31, 1990 issuance of
 common stock in settlement of debt         136,000       1,360         --         66,640         --             --         68,000
Warrants issued to BICO                          --          --         --             --     27,500             --         27,500
Net loss for the year                            --          --         --             --         --       (497,628)      (497,628)
                                         ----------    --------    -------     ----------    -------    -----------    -----------
Balances at December 31, 1990            11,072,000     110,720         --      1,505,280     27,500       (577,628)     1,065,872

January 1-December 31, 1991 sale of
 common stock pursuant to
   first Private Placement Memorandum       768,000       7,680         --        376,320         --             --        384,000
   second Private Placement Memorandum    3,948,000      39,482         --      3,896,468         --             --      3,935,950
December 31, 1991 common stock
 subscription                                    --          --     62,500             --         --             --         62,500
Warrants issued to BICO                          --          --         --             --     19,085             --         19,085
Net loss for the year                            --          --         --             --         --     (3,650,203)    (3,650,203)
                                         ----------    --------    -------     ----------    -------    -----------    -----------
Balances at December 31, 1991            15,788,250    $157,882    $62,500     $5,778,068    $46,585    $(4,227,831)   $ 1,817,204
</TABLE>

                                  - CONTINUED -

   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - CONTINUED
    Period from July 5, 1989 (date of inception) through September 30, 2006

<TABLE>
<CAPTION>
                                                                                                           Deficit
                                                                                                         accumulated
                                               Common Stock        Common       Additional                during the
                                            ------------------      stock        paid-in                 development
                                            Shares      Amount    subscribed     capital     Warrants       stage          Total
                                            ------      ------    ----------     -------     --------       -----          -----
<S>                                       <C>          <C>         <C>         <C>            <C>        <C>            <C>
Balances at December 31, 1991             15,788,250   $ 157,882   $ 62,500    $ 5,778,068   $ 46,585   $ (4,227,831)  $ 1,817,204

January 1-December 31, 1992 sale of
 common stock pursuant to
   second Private Placement Memorandum       986,750       9,868         --        976,883         --             --       986,751
   third Private Placement Memorandum          7,212          72         --         25,170         --             --        25,242
   fourth Private Placement Memorandum       120,000       1,200         --        418,800         --             --       420,000
January 1992 issuance of common stock
 in settlement of debt                       235,000       2,350         --        232,650         --             --       235,000
January 1992 settlement of common
 stock subscriptions                          62,500         625    (62,500)        61,875         --             --            --
Net loss for the year                             --          --         --             --         --     (2,846,584)   (2,846,584)
                                         -----------   ---------   --------    -----------   --------   ------------   -----------
Balances at September 30, 1992            17,199,712     171,997         --      7,493,446     46,585     (7,074,415)      637,613

October 1992 sale of common stock
 pursuant to fourth Private Placement
 Memorandum                                  180,000       1,800         --        628,200         --             --       630,000
June-July, 1993 warrant exercise              25,000         250         --         28,520     (3,770)            --        25,000
Net loss for the year                             --          --         --             --         --     (3,763,101)   (3,763,101)
                                         -----------   ---------   --------    -----------   --------   ------------   -----------
Balances at September 30, 1993            17,404,712     174,047         --      8,150,166     41,815    (10,837,516)   (2,470,488)

October 1993-September 1994 sale
 of Registered common stock                  230,961       2,309         --        783,936         --             --       786,245
June 2003 Regulation S sale of common
 stock                                        91,667         917         --        287,834         --             --       288,751
Common stock issued for consulting fees        7,200          72         --         25,128         --             --        25,200
November 1993-August 1994 warrant
 exercise                                    105,000       1,050         --         38,950     (2,500)            --        37,500
Purchase of treasury stock                   (10,000)       (100)        --         (4,900)        --        (30,000)      (35,000)
Sale of treasury stock                        10,000         100         --         34,900         --             --        35,000
Net loss for the year                             --          --         --             --         --     (5,145,081)   (5,145,081)
                                         -----------   ---------   --------    -----------   --------   ------------   -----------
Balances at September 30, 1994            17,839,540   $ 178,395   $     --    $ 9,316,014   $ 40,315   $(16,012,597)  $(6,477,873)
</TABLE>

                                  - CONTINUED -

   The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - CONTINUED
    Period from July 5, 1989 (date of inception) through September 30, 2006

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      accumulated
                                            Common Stock        Common       Additional                during the
                                         ------------------      stock        paid-in                 development
                                         Shares      Amount    subscribed     capital     Warrants       stage          Total
                                         ------      ------    ----------     -------     --------       -----          -----
<S>                                    <C>          <C>         <C>         <C>            <C>        <C>            <C>
Balances at September 30, 1994        17,839,540    $178,395    $    --     $ 9,316,014   $    40,315  $(16,012,597)  $ (6,477,873)

October 1994-September 1994 sale of
 Registered common stock                 437,768       4,378         --       1,497,114            --            --      1,501,492
July 12, 1995 issuance of restricted
 common stock to BICO                  1,200,000      12,000         --       4,188,000            --            --      4,200,000
Common stock issued for consulting
 fees                                     17,500         175         --          61,075            --            --         61,250
May 1995 issuance of common stock in
 settlement of debt                    3,000,000      30,000         --      10,470,000            --            --     10,500,000
Warrant extensions                            --          --         --              --     4,625,000            --      4,625,000
October 1994-September 1995 warrant
 exercise                                 29,512         295         --           9,771            --            --         10,066
Net loss for the year                         --          --         --              --            --   (10,336,514)   (10,336,514)
                                      ----------    --------    -------     -----------   -----------  ------------   ------------
Balances at September 30, 1995        22,524,320     225,243         --      25,541,974     4,665,315   (26,349,111)     4,083,421

October 1995-September 1996 sale of
 Registered common stock                 410,731       4,108         --       1,361,047            --            --      1,365,155
Common stock issued for consulting
 fees
   Registered                             10,000         100         --          34,900            --            --         35,000
   Unregistered, restricted                5,000          50         --          17,450            --            --         17,500
Warrant extensions                            --          --         --              --     7,640,468            --      7,640,468
October 1995-September 1996 warrant
 exercise                                 56,000         560         --          27,440            --            --         28,000
Net loss for the year                         --          --         --              --            --    (9,018,258)    (9,018,258)
                                      ----------    --------    -------     -----------   -----------  ------------   ------------
Balances at September 30, 1996        23,006,051     230,061         --      26,982,811    12,305,783   (35,367,369)     4,151,286

October 1996-September 1997
 purchase of treasury stock              (27,000)       (270)        --         (94,230)           --            --        (94,500)
Warrant extensions                            --          --         --              --     5,593,875            --      5,593,875
Net loss for the year                         --          --         --              --            --    (6,564,837)    (6,564,837)
                                      ----------    --------    -------     -----------   -----------  ------------   ------------
Balances at September 30, 1997        22,979,051    $229,791    $    --     $26,888,581   $17,899,658  $(41,932,206)  $  3,085,824
</TABLE>

                                  - CONTINUED -

   The accompanying notes are an integral part of these financial statements.

                                      F-7
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - CONTINUED
    Period from July 5, 1989 (date of inception) through September 30, 2006

<TABLE>
<CAPTION>
                                                                                                         Deficit
                                                                                                       accumulated
                                          Common Stock        Common       Additional                   during the
                                       ------------------      stock        paid-in                    development
                                       Shares      Amount    subscribed     capital       Warrants        stage           Total
                                       ------      ------    ----------     -------       --------        -----           -----
<S>                                    <C>          <C>         <C>         <C>            <C>        <C>            <C>
Balances at September 30, 1997        22,979,051   $229,791    $   --     $26,888,581   $ 17,899,658   $(41,932,206)   $ 3,085,824

October 1997-September 1998 sale
 of Registered common stock                1,000         10        --           3,490             --             --          3,500
Warrant extensions                            --         --        --              --         25,000             --         25,000
Warrant expirations                           --         --        --       2,400,000     (2,400,000)            --             --
Net loss for the year                         --         --        --              --             --     (2,914,329)    (2,914,329)
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 1998        22,980,051    229,801        --      29,292,071     15,524,658    (44,846,535)       199,995

Warrants issued for services                  --         --        --              --        228,538             --        228,538
Warrant extensions                            --         --        --              --          6,333             --          6,333
Warrant expirations                           --         --        --         377,625       (377,625)            --             --
Net loss for the year                         --         --        --              --             --       (487,756)      (487,756)
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 1999        22,980,051    229,801        --      29,669,696     15,381,904    (45,334,291)       (52,890)

Warrant extensions                            --         --        --              --        230,178             --        230,178
Warrant expirations                           --         --        --         291,250       (291,250)            --             --
Net loss for the year                         --         --        --              --             --       (695,438)      (695,438)
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 2000        22,980,051    229,801        --      29,960,946     15,320,832    (46,029,729)      (518,150)

Warrants issued for services                  --         --        --              --         55,199             --         55,199
Net loss for the year                         --         --        --              --             --     (1,755,563)    (1,755,563)
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 2001        22,980,051    229,801        --      29,960,946     15,376,031    (47,785,292)    (2,218,514)

Warrant expirations                           --         --        --          57,407        (57,407)            --             --
Net loss for the year                         --         --        --              --             --       (461,103)      (461,103)
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 2002        22,980,051    229,801        --      30,018,353     15,318,624    (48,246,395)    (2,679,617)

Warrant expirations                           --         --        --       3,309,422     (3,309,422)            --             --
Net loss for the year                         --         --        --              --             --        719,681        719,681
                                      ----------   --------    ------     -----------   ------------   ------------    -----------
Balances at September 30, 2003        22,980,051   $229,801    $   --     $33,327,775   $ 12,009,202   $(47,526,714)   $(1,959,936)
</TABLE>

                                  - CONTINUED -

   The accompanying notes are an integral part of these financial statements.

                                      F-8
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - CONTINUED
    Period from July 5, 1989 (date of inception) through September 30, 2006

<TABLE>
<CAPTION>
                                                                                                         Deficit
                                                                                                       accumulated
                                          Common Stock        Common       Additional                   during the
                                       ------------------      stock        paid-in                    development
                                       Shares      Amount    subscribed     capital       Warrants        stage           Total
                                       ------      ------    ----------     -------       --------        -----           -----
<S>                                    <C>          <C>         <C>         <C>            <C>        <C>            <C>
Balances at September 30, 2003      22,980,051    $ 229,801   $   --      $33,327,775    $12,009,202   $(47,526,714)  $(1,959,936)

Warrant expirations                         --           --       --        8,161,724     (8,161,724)            --            --
Net loss for the year                       --           --       --               --             --             --            --
                                    ----------    ---------   ------      -----------    -----------   ------------   -----------
Balances at September 30, 2004      22,980,051      229,801       --       41,509,499      3,827,478    (47,526,714)   (1,959,936)

Warrants issued for services                --           --       --               --          1,600             --         1,600
Warrant expirations                         --           --       --        3,103,396     (3,103,396)            --            --
Net loss for the year                       --           --       --               --             --       (206,580)     (206,580)
                                    ----------    ---------   ------      -----------    -----------   ------------   -----------
Balances at September 30, 2005      22,980,051      229,801       --       44,612,895        725,682    (47,733,294)   (2,164,916)

September 13, 2006 sale of
 1,000 Units consisting of
 11,100 shares of restricted,
 unregistered common stock
 and 500 common stock warrants
 each                               11,100,000      111,000       --            9,000          5,000             --       125,000
September 18, 2006 Warrant
 cancellation                               --           --       --          725,682       (725,682)            --            --
September 25, 2006 purchase and
 retirement of treasury stock       11,975,000)    (119,750)      --          119,749             --             --            (1)
Capital contributed to support
 operations                                 --           --       --           11,677             --             --        11,677
Related party cancellation of debt          --           --       --        2,402,630             --             --     2,402,630
Net income for the year                     --           --       --               --             --       (369,413)     (369,413)
                                    ----------    ---------   ------      -----------    -----------   ------------   -----------
Balances at September 30, 2006      22,105,151      221,051       --       47,881,633          5,000    (48,102,707)        4,977

Effect of redomicile to Nevada              --     (198,946)      --          198,946             --             --            --
Net loss for the year                       --           --       --               --             --        (39,272)      (39,272)
                                    ----------    ---------   ------      -----------    -----------   ------------   -----------
Balances at September 30, 2007      22,105,151    $  22,105   $   --      $48,050,579    $     5,000   $(48,141,979)  $   (34,295)
                                    ==========    =========   ======      ===========    ===========   ============   ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-9
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
                   Years ended September 30, 2007 and 2006 and
     Period from July 5, 1989 (date of inception) through September 30, 2007

<TABLE>
<CAPTION>
                                                                                                           Period from
                                                                                                           July 5, 1989
                                                                                                       (date of inception)
                                                                  Year ended           Year ended            through
                                                                 September 30,        September 30,        September 30,
                                                                     2007                 2006                 2007
                                                                 ------------         ------------         ------------
<S>                                                              <C>                  <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss) for the period                               $    (39,272)        $   (369,413)        $(48,111,979)
  Adjustments to reconcile net loss to
   net cash provided by operating activities
     Depreciation and amortization                                         --                1,448              626,552
     Gain on sale of Diabecore stock                                       --                   --              (57,242)
     Warrants issued for services                                          --                   --              515,515
     Expense related to warrant extensions                                 --                   --           17,890,676
     Common stock issued for services                                      --                   --              138,950
     Common stock issued for License and Marketing agreement               --                   --               80,000
     Impairment loss                                                       --                   --              704,491
     Inventory deposit - BICO                                              --                   --           (1,000,000)
     Gain on MicroIslet stock                                              --                   --           (1,283,852)
     Equity in loss of unconsolidated subsidiaries                         --                   --              575,412
     Accrued interest contributed to equity                                --                   --              324,879
     Increase (Decrease) in
       Accounts payable                                                    --               (1,725)                  --
       Other accrued liabilities                                           --              (17,754)                  --
       Accrued interest payable                                         1,496              159,953                1,503
                                                                 ------------         ------------         ------------
  NET CASH USED IN OPERATING ACTIVITIES                               (37,776)            (227,491)         (29,595,095)
                                                                 ------------         ------------         ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                       --              (24,333)            (303,746)
  Proceeds from sale of property and equipment                             --                   --              175,000
  Cash paid for investment in MicroIslet                                   --                   --           (1,600,000)
  Proceeds from sale of MicroIslet stock                                   --                   --            2,070,726
  Cash paid for investment in Diabecore                                    --                   --             (987,468)
  Proceeds from sale of Diabecore stock                                    --               14,887               57,242
  Net activity on notes receivable from related parties                    --                   --             (138,538)
                                                                 ------------         ------------         ------------
  NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                      --               (9,446)            (726,784)
                                                                 ------------         ------------         ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Cash received from notes payable to
   Former majority shareholder and others                                  --               21,200              396,200
  Current majority shareholder                                         15,000               20,000               35,000
  Convertible notes                                                        --               95,000               95,000
  Cash paid on notes payable                                               --              (12,500)             (42,500)
  Cash received from sale of common stock                                  --              125,000           11,096,834
  Cash received on Regulation S sale of common stock                       --                   --              288,751
  Cash received on sale of common stock to BICO                            --                   --            4,200,000
  Cash received on warrant exercises                                       --                   --              118,066
  Net activity on cash advanced to/received from BICO                      --                   --           14,160,060
  Cash paid to acquire treasury stock                                      --                   (1)             (35,001)
  Cash contributed as capital to support operations                        --               11,677               11,677
                                                                 ------------         ------------         ------------
  NET CASH PROVIDED BY FINANCING ACTIVITIES                            15,000              260,376           30,324,086
                                                                 ------------         ------------         ------------

INCREASE (DECREASE) IN CASH                                           (22,776)              23,439                2,208
Cash at beginning of period                                            24,984                1,545                   --
                                                                 ------------         ------------         ------------
CASH AT END OF PERIOD                                            $      2,208         $     24,984         $      2,208
                                                                 ============         ============         ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-10
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                      STATEMENTS OF CASH FLOWS - CONTINUED
                   Years ended September 30, 2007 and 2006 and
     Period from July 5, 1989 (date of inception) through September 30, 2007

<TABLE>
<CAPTION>
                                                                                                           Period from
                                                                                                           July 5, 1989
                                                                                                       (date of inception)
                                                                  Year ended           Year ended            through
                                                                 September 30,        September 30,        September 30,
                                                                     2007                 2006                 2007
                                                                 ------------         ------------         ------------
<S>                                                              <C>                  <C>                  <C>
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID

  Interest paid for the year                                     $        --           $       --           $    11,725
                                                                 ===========           ==========           ===========
  Income taxes paid for the year                                 $        --           $       --           $        --
                                                                 ===========           ==========           ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES

  Issuance of 371,000 shares of common stock
   to satisfy $303,000 note payable                              $        --           $       --           $   303,000
                                                                 ===========           ==========           ===========
  Issuance of 3,000,000 shares of common stock
   to BICO in payment of intercompany debt                       $        --           $       --           $10,500,000
                                                                 ===========           ==========           ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-11
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2007 and 2006

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Diasense, Inc. (Company) was incorporated on July 5, 1989 in accordance with the
Laws of the  Commonwealth of Pennsylvania as a wholly-owned  subsidiary of BICO,
Inc. (BICO) (formerly Biocontrol Technology, Inc.).

On January 22,  2007,  the Company  filed  Articles of Merger and Plan of Merger
with the  Commonwealth  of  Pennsylvania  and the State of Nevada to change  the
Company's  domicile  from  Pennsylvania  to Nevada by means of a merger with and
into a Nevada  corporation  formed on November 3, 2006 solely for the purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation.  Such Articles of Incorporation  maintained the Company's corporate
name of Diasense, Inc. and modified the Company's capital structure to allow for
the issuance of up to 100,000,000 shares of $0.001 par value common stock and up
to 50,000,000  shares of $0.001 par value preferred  stock.  Although the merger
documents  were filed in both  Pennsylvania  and Nevada on January 22, 2007, the
Commonwealth of Pennsylvania  required  completion of certain documents in order
to issue a tax clearance  certificate  to complete the merger.  The required tax
clearance  was not issued until March 22,,  2007 which  formally  completed  the
domicile  relocation  to Nevada.  The effect of this action is  reflected in the
accompanying  financial  statements  as of the  first  day of the  first  period
presented.

The  Company was  approximately  52% owned by BICO until July 23, 2004 when BICO
sold its entire ownership interest to Dominion Assets, LLC (Dominion). On August
29, 2006, the Company entered into a Voluntary Surrender Agreement with Dominion
whereby  all of the  Company's  assets,  which had  previously  been  pledged as
collateral to secure loan agreements by and between the Company and Dominion and
under which the Company was then in default, were repossessed.  Dominion was, at
that time,  the majority  shareholder  of the  Company.  Keith R. Keeling owns a
majority  interest in  Dominion  and was also a former  member of the  Company's
Board of Directors and the Company's former Chief Executive Officer (CEO) of the
Company through his resignation from both positions on August 4, 2006.

Thorough the date of the Voluntary Surrender  Agreement,  the Company's business
efforts were focused on developing a noninvasive  glucose sensor  (Sensor).  The
Sensor  was  proposed  to  use   electromagnetic   technology   to  measure  the
concentration  of glucose in human tissue  without  requiring the user to take a
blood sample.

The Company's current principal  business activity is to seek a suitable reverse
acquisition  candidate  through  acquisition,  merger or other suitable business
combination method.

The Company has never fully  implemented any business plan(s) and,  accordingly,
is considered to be in the development stage.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of September 30.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented.

                                      F-12
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE C - GOING CONCERN UNCERTAINTY

On August 29, 2006,  the Company  entered into a Voluntary  Surrender  Agreement
(Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all
of the  Company's  assets,  which had  previously  been pledged as collateral to
secure  loan  agreements  under  which the  Company  was then in  default,  were
repossessed.  Dominion  was,  at that  time,  the  majority  shareholder  of the
Company.

The Company's current principal  business activity is to seek a suitable reverse
acquisition  candidate  through  acquisition,  merger or other suitable business
combination method.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The Company  anticipates  future sales of equity securities to facilitate either
the  consummation  of a business  combination  transaction  or to raise  working
capital to support and preserve the integrity of the corporate entity.  However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional  equity  securities  or, that such  funding,  if
available, will be obtained on terms favorable to or affordable by the Company.

If no additional  operating  capital is received  during the next twelve months,
the  Company  will be  forced  to rely on  existing  cash in the  bank  and upon
additional  funds  loaned  by  management  and/or  significant  stockholders  to
preserve the integrity of the corporate  entity at this time. In the event,  the
Company  is  unable to  acquire  advances  from  management  and/or  significant
stockholders, the Company's ongoing operations would be negatively impacted.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Cash and cash equivalents

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  certificates  of  deposit  and  other  highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

2. Property and Equipment

     Property and equipment were recorded at historical  cost.  These costs were
     depreciated over the estimated useful lives of the individual  assets using
     the straight-line method, generally seven to thirty-nine years.

     Gains and losses from  disposition of property and equipment are recognized
     as incurred and are included in operations.

     In accordance  with  Statement of Financial  Accounting  Standards No. 144,
     "Accounting  for the  Impairment  or Disposal of  Long-Lived  Assets",  the
     Company  follows the policy of evaluating  all property and equipment as of
     the end of each reporting  quarter.  At September 30, 2006, the Company had
     no assets subject to this accounting prononcement.

                                      F-13
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

3. Income Taxes

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At September 30, 2007 and 2006, respectively, the deferred tax asset
     and deferred  tax  liability  accounts,  as recorded  when  material to the
     financial  statements,  are entirely  the result of temporary  differences.
     Temporary  differences  represent  differences in the recognition of assets
     and  liabilities  for  tax  and  financial  reporting  purposes,  generally
     consisting of  accumulated  depreciation  and  amortization,  allowance for
     doubtful accounts and vacation accruals.

     As of September  30, 2007 and 2006,  the deferred tax asset  related to the
     Company's net operating loss  carryforward  is fully  reserved.  Due to the
     provisions  of Internal  Revenue  Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax  return  taxable  income in future  periods  as a result of a change in
     control   involving  50  percentage  points  or  more  of  the  issued  and
     outstanding securities of the Company.

4. Earnings (loss) per share

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) available to common stockholders by the  weighted-average  number of
     common shares  outstanding  during the respective  period  presented in our
     accompanying financial statements.

     Fully diluted earnings (loss) per share is computed similar to basic income
     (loss) per share  except that the  denominator  is increased to include the
     number of common  stock  equivalents  (primarily  outstanding  options  and
     warrants).

     Common  stock  equivalents  represent  the  dilutive  effect of the assumed
     exercise of the outstanding stock options and warrants,  using the treasury
     stock method, at either the beginning of the respective period presented or
     the date of  issuance,  whichever  is later,  and only if the common  stock
     equivalents  are  considered  dilutive  based upon the Company's net income
     (loss) position at the calculation date.

     At September 30, 2007 and 2006, and subsequent thereto,  the Company had no
     outstanding common stock equivalents.  All issued and outstanding  warrants
     are  considered  anti-dilutive  due to the  Company's  net  operating  loss
     position.

5. Treasury Stock

     The Company accounts for treasury stock  acquisitions and sales pursuant to
     the tenets of Accounting Principles Board Opinion 6, whereby treasury stock
     acquisitions  are first charged  against par value and any excess  purchase
     price is first charged to additional  paid-in  capital and then to retained
     earnings.  Any  subsequent  sale of treasury stock is first credited to par
     value and any excess is credited to additional paid-in capital.

6. Research and development costs

     Research and  development  expenses were charged to operations as incurred.
     Patents,  Licenses and  Marketing  Agreements  acquired from BICO were also
     charged to operations as acquired.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

                                      F-14
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE F - CALCULATION OF COMPREHENSIVE INCOME (LOSS)

<TABLE>
<CAPTION>
                                                                                  Period from
                                                                                 July 5, 1989
                                                                              (date of inception)
                                         Year ended           Year ended            through
                                        September 30,        September 30,        September 30,
                                            2007                 2006                 2007
                                        ------------         ------------         ------------
<S>                                     <C>                  <C>                  <C>
Net Loss                                $    (39,272)        $   (269,413)        $(48,111,979)

Comprehensive Income items: None                  --                   --                   --
                                        ------------         ------------         ------------

Comprehensive Loss                      $    (39,272)        $   (269,413)        $(48,111,979)
                                        ============         ============         ============
</TABLE>

NOTE G - NOTE PAYABLE TO OFFICER/DIRECTOR

On September 29, 2006, the Company and it's sole officer and director,  Glenn A.
Little,  acknowledged  that outside funds are necessary to support the corporate
entity and comply with the periodic  reporting  requirements  of the  Securities
Exchange Act of 1934,  as amended.  To this end, Mr.  Little  agreed to lend the
Company up to$50,000 with a maturity period not to exceed two (2) years from the
initial  funding date at an interest rate of 6.0% per annum.  Through  September
30, 2007, Mr. Little has advanced approximately $35,000 under this agreement.

NOTE H - INCOME TAXES

The  components  of income tax  (benefit)  expense  for each of the years  ended
September  30,  2007 and 2006 and for the  period  from  July 5,  1989  (date of
inception) through September 30, 2007, are as follows:

                                                                 Period from
                                                                July 5, 1989
                                                             (date of inception)
                         Year ended          Year ended           through
                        September 30,       September 30,       September 30,
                            2007                2006                2007
                          -------             -------             -------
Federal:
  Current                 $    --             $    --             $    --
  Deferred                     --                  --                  --
                          -------             -------             -------
                               --                  --                  --
                          -------             -------             -------
State:
  Current                      --                  --                  --
  Deferred                     --                  --                  --
                          -------             -------             -------
                               --                  --                  --
                          -------             -------             -------

  Total                   $    --             $    --             $    --
                          =======             =======             =======


                                      F-15
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE H - INCOME TAXES - CONTINUED

Concurrent  with a  September  2006  change in  control,  the  Company has a net
operating loss  carryforward  for future periods of approximately  $39,000.  The
ultimate amount and availability of any future net operating loss  carryforwards
may be subject to limitations  set forth by the Internal  Revenue Code.  Factors
such as the number of shares  ultimately  issued  within a three year  look-back
period;  whether there is a deemed more than 50 percent  change in control;  the
applicable  long-term tax exempt bond rate;  continuity of historical  business;
and  subsequent  income of the Company all enter into the annual  computation of
allowable annual utilization of the carryforwards.

The Company's income tax expense (benefit) for each of the years ended September
30,  2007 and 2006 and for the  period  from  July 5, 1989  (date of  inception)
through  September 30, 2007,  respectively,  differed from the statutory federal
rate of 34 percent as follows:

<TABLE>
<CAPTION>
                                                                                              Period from
                                                                                             July 5, 1989
                                                                                          (date of inception)
                                                          Year ended        Year ended          through
                                                         September 30,     September 30,      September 30,
                                                             2007              2006               2007
                                                         ------------      ------------       ------------
<S>                                                      <C>               <C>                <C>
Statutory rate applied to income before income taxes     $    (13,000)     $    (125,600)     $(16,358,000)
Increase (decrease) in income taxes resulting from:
 State income taxes                                                --                --                 --
 Other, including reserve for deferred tax asset
  and application of net operating loss carryforward           13,000            125,600        16,358,000
                                                         ------------      ------------      -------------

     Income tax expense                                  $         --      $         --      $          --
                                                         ============      ============      =============
</TABLE>

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs,  statutory differences in the  depreciable/amortizable
lives for  property and  equipment  and patents and the  recognition  of expense
charges  related to the issuance of warrants,  between the  financial  statement
carrying  amounts and tax bases of assets and liabilities  give rise to deferred
tax assets and/or liabilities.  As of September 30, 2007 and 2006, respectively,
after taking the September 2006 change in control into consideration:

                                            September 30,        September 30,
                                                2007                 2006
                                              --------             --------
Deferred tax assets
  Net operating loss carryforwards            $ 13,000             $     --
  Less valuation allowance                     (13,000)                  --
                                              --------             --------

  Net Deferred Tax Asset                      $     --             $     --
                                              ========             ========

NOTE I - COMMON STOCK TRANSACTIONS

On September 18, 2006, the Company entered into a unit purchase  agreement (Unit
Purchase Agreement) to sell 1,000 Units to Glenn A. Little (Little) for $125,000
cash.  Each Unit consisted of 11,100 shares of common stock and 500 common stock
purchase  warrants or an  aggregate  of  11,100,000  shares of common  stock and
500,000   common  stock  purchase   warrants.   There  were  no  commissions  or
underwriting discounts paid in conjunction with this transaction and the Company
believes  that the shares and  warrants  were  exempt  from  registration  under
Section 4(2) of the Securities Act of 1933 as amended.

The common  stock  purchase  warrants  can be  exercised  at any time from their
issuance on September 18, 2006 through  September 18, 2011 at an exercise  price
of $0.10 per share.  The  Company  assigned a value of $5,000 to these  warrants
from the $125,000 aggregate purchase price, which is equivalent to the par value
of the underlying common stock supporting the warrants.

                                      F-16
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE I - COMMON STOCK TRANSACTIONS - CONTINUED

On September 18, 2006,  connected with yet separate from the aforementioned Unit
Purchase  Agreement,  the Company  entered into a Share Purchase  Agreement with
Dominion, the Company's then-majority shareholder, whereby the Company purchased
from  Dominion  11,975,000  shares of common stock of the Company for a purchase
price of $1.00.  The shares  were  cancelled  upon  receipt by the  Company  and
returned to unissued status.

On November 14, 2006, the Company filed a Definitive  Schedule 14C - Information
Statement Pursuant to Section 14C of the Securities  Exchange Act of 1934 noting
actions to be taken without a meeting upon the written consent of the holders of
a majority of the outstanding shares of the voting capital stock of the Company.
The actions at this meeting  included 1) to reverse split the  currently  issued
and outstanding  common stock (Reverse Split) of the Company on a 100,000 shares
for one (1) share basis, with no stockholder being reversed to less than a round
lot of 100 shares;  and 2) to change the Company's state of  incorporation  from
Pennsylvania to Nevada. On January 19, 2006,  shareholders holding a majority of
the  Company's  common stock voted to rescind the reverse  stock  portion of the
previous approval.

On  March  16,  2007,  the  Company  filed  a  new  Preliminary  Schedule  14C -
Information  Statement Pursuant to Section 14C of the Securities Exchange Act of
1934 noting  actions to be taken  without a meeting upon the written  consent of
the holders of a majority of the outstanding  shares of the voting capital stock
of the Company.  The actions at this meeting include a 12,500 shares for 1 share
reverse  stock  split of the  currently  issued  and  outstanding  common  stock
(Reverse Split) of the Company,  with fractional  shares being paid in cash at a
rate of $0.05 for each fractional share.

On  June  20,  2007,  the  Company  filed  another  Preliminary  Schedule  14C -
Information  Statement Pursuant to Section 14C of the Securities Exchange Act of
1934  noting  the  following  actions  to be  taken  by the  Company's  Board of
Directors  pursuant  to actions  taken by a written  consent  of a  majority  of
stockholders  without  meeting  "1. To reverse  split the  currently  issued and
outstanding  common stock (the "Common Stock") of the Company on a 12,500 shares
for 1 share  basis,  with  fractional  shares paid in cash at the rate of ($.05)
cents for each  fractional  share and 2. To  increase  the  number of shares the
Company is authorized to issue to  100,000,000  shares of common stock par value
$.001 and 50,000,000  shares of preferred  stock par value $.001 to be issued in
such services and  designations  as determined from time to time by the Board of
Directors.  The Company's Board of Directors initially approved Item No. 1 above
on February 28, 2008 and  recommended  that the Company effect the reverse split
of its currently  issued and  outstanding  Common Stock.  The Board of Directors
approved Item No. 2 above on December 1, 2006 in  connection  with the Company's
change of  domicile  from  Pennsylvania  to Nevada at which  time the  Company's
authorized  capital stock was increased from  40,000,000  shares of common stock
par value  $0.01 to  100,000,000  shares of Common  Stock par value  $0.001  and
50,000,000  shares of  Preferred  Stock  par  value  $0.001 to be issued in such
series and  designations  as may be determined  by the Board of Directors.  That
approval was adopted at the same time as a proposed  100,000 to 1 reverse  split
with fractional  shares rounded up to the nearest whole share and no shareholder
rounded to less than a round lot of 100 shares. The Company's Board of Directors
decided not to proceed  with that  reverse  split as  announced  in its Form 8 K
filed on January 19, 2007. The change in domicile, however, from Pennsylvania to
Nevada  was  completed  and as a result the  Company's  authorized  capital  was
increased as stated above.

The  Company's  Preliminary  Schedule 14C -  Information  Statement  Pursuant to
Section 14C of the Securities  Exchange Act of 1934 with respect to the proposed
reverse  stock split  remains in the  regulatory  review phase and no definitive
actions have been commenced.


                (Remainder of this page left blank intentionally)

                                      F-17
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE J - STOCK WARRANTS

During August 2006, the Company reached termination  agreements with all holders
of the Company's Common Stock Warrants and terminated all issued and outstanding
warrants. As of September 30, 2007 and 2006, respectively,  the only outstanding
warrants relate to the aforementioned  September 18, 2006 transaction with Glenn
A. Little.

                                            Number of           Weighted
                                             Warrant             Average
                                              Shares              Price
                                              ------              -----

Balance at September 30, 2005                 700,000
  Issued                                      500,000             $0.10
  Exercised                                        --                --
  Expired                                    (700,000)
                                            ---------

Balance at September 30, 2006                 500,000             $0.10
  Issued                                           --
  Exercised                                        --
  Expired                                          --
                                            ---------

Balance at September 30, 2007                 500,000             $0.10
                                            =========

NOTE K - ASSET SURRENDER

On August 29, 2006,  the Company  entered into a Voluntary  Surrender  Agreement
(Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all
of the Company's  assets,  pledged as collateral to secure loan agreements under
which the Company is in default, were repossessed.

At the time of the  repossession,  Dominion was the majority  shareholder of the
Company. Keith R. Keeling owns a majority 75% interest in Dominion, was a former
member the Company's  Board of Directors and the former CEO of the Company until
resigning from both such positions with the Company on August 4, 2006.

The  foreclosed  and  surrendered  assets  included the  Company's  intellectual
property  related to it non invasive glucose monitor and equipment and equipment
acquired during Fiscal 2006.

In consideration of its surrender of all of its assets to Dominion,  the Company
received  releases from  approximately  $2,415,263 of its debt obligations which
had  been  secured  by  such  assets  under  certain  agreements,  as  described
immediately below. The Company's assets had been pledged as collateral to secure
(I) that certain Demand Note in a principal amount of $1,954,936, dated July 23,
2004,  issued  by the  Company  to BICO and  assigned  by BICO to  Dominion,  as
amended,  effective  September 28, 2004,  which accrued interest at a rate of 8%
per annum (Demand Note), (ii) the additional loans totaling $50,700 in principal
amount and accruing  interest at a rate of 8% per annum which had been  extended
by Dominion to the Company under that certain Note and Security Agreement, dated
October 29, 2004, by and between the Company and Dominion,  as amended (Note and
Security  Agreement) and (iii) six secured convertible notes (Convertible Notes)
in an aggregate  principal amount of $95,000,  accruing interest at a rate of 6%
per annum,  that the Company  issued to various  creditors on various dates from
November 15, 2005 through July 1, 2006.  The sum of the  principal  and interest
due under the Demand Note, the Note and Security  Agreement and the  Convertible
Notes as of August 15,  2006 was  approximately  $2,415,263.  The Company was in
default under the Demand Note and under the Note and Security  Agreement and had
no  ability  to repay  the loans  underlying  such  obligations.  As a result of
Dominion's  demand  for  payment  under the  Demand  Note and under the Note and
Security  Agreement  and in order to avoid legal action by Dominion to repossess
the assets, which would have likely resulted in continuing financial obligations
to Dominion,  the Company  entered  into the  Voluntary  Surrender  Agreement to
convey the Company's  assets to Dominion in exchange for Dominion's  agreeing to
(I) release the Company of its  obligations  under the Demand Note and under the
Note and Security Agreement,  and (ii) assume the Company's  obligation to repay
the Convertible Notes.

                                      F-18
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           September 30, 2007 and 2006

NOTE K - ASSET SURRENDER - CONTINUED

At the date of  repossession,  the  Company's  equipment had a net book value of
approximately  $$22,885  and the  Company's  intellectual  property  had no book
value.  Due to the  uncertainty of whether a marketable  product could have ever
been developed from the Company's  intellectual  property  without a significant
additional  investment  by the  Company,  if ever,  the  immediate  sale of such
intellectual  property would have been difficult or impossible,  and, therefore,
at the time of its repossession, it had little or no market value.

The Company  recognized  contributed  capital of  approximately  $2,595,000 as a
result of this net debt forgiveness from a related party.

NOTE L - COMMITMENTS AND CONTINGENCIES

INDEPENDENT CONSULTANT AGREEMENTS

On August 31, 2006, the Company and Michael Pitsakis  (Pitsakis) mutually agreed
to terminate  the  Independent  Consultant  Agreement,  dated May 19,  2005,  as
amended  November  11,  2005,  by and  between the  Company  and  Pitsakis  (the
"Pitsakis Consulting Agreement"). In connection with its entry into the Pitsakis
Consulting Agreement,  the Company had issued a warrant certificate to Pitsakis,
granting Pitsakis warrants to purchase  4,000,000 shares of the Company's common
stock. As of the termination of the Pitsakis Consulting Agreement,  only 100,000
of such warrants had vested.  Pitsakis has agreed to waive his right to exercise
the vested warrants.  In consideration  for such waiver of exercise rights,  the
Company  waived  any  restrictions  imposed  upon  Pitsakis  under the  Pitsakis
Consulting  Agreement  preventing  Pitsakis  from being engaged in a competitive
capacity with any entity  engaged in the research and  development of technology
similar to the Company's  technology.  The Company and Pitsakis  terminated  the
Pitsakis  Consulting  Agreement  due to the fact that the  Company  is no longer
developing its technology.

On August 31, 2006, the Company and Jeremy Grata (Grata) mutually  terminated an
Independent  Consultant  Agreement,  dated May 19, 2005, as amended November 11,
2005,  by and between the Company and Grata  (Grata  Consulting  Agreement).  In
connection with its entry into the Grata Consulting  Agreement,  the Company had
issued a warrant  certificate  to Grata,  granting  Grata  warrants  to purchase
4,000,000  shares of the Company's  common stock.  As of the  termination of the
Grata Consulting Agreement,  only 100,000 of such warrants had vested. Grata has
agreed to waive his right to exercise the vested warrants.  In consideration for
such waiver of exercise rights, the Company waived any restrictions imposed upon
Grata under the Grata Consulting  Agreement  preventing Grata from being engaged
in  a  competitive  capacity  with  any  entity  engaged  in  the  research  and
development of technology similar to the Company's  technology.  The Company and
Grata terminated the Grata Consulting Agreement due to the fact that the Company
is no longer developing its technology.

On August 31, 2006, the Company and Stuart Fine, MD (Fine)  mutually  terminated
an Independent Consultant Agreement, dated November 14, 2005, by and between the
Company and Fine (Fine Consulting Agreement).  In connection with its entry into
the Fine Consulting  Agreement,  the Company had issued a warrant certificate to
Fine,  granting Fine warrants to purchase 150,000 shares of the Company's common
stock. As of the termination of the Fine  Consulting  Agreement,  only 35,000 of
such  warrants  had vested.  Fine has agreed to waive his right to exercise  the
vested  warrants.  In  consideration  for such  waiver of exercise  rights,  the
Company  waived any  restrictions  imposed  upon Fine under the Fine  Consulting
Agreement  preventing Fine from being engaged in a competitive capacity with any
entity  engaged in the research and  development  of  technology  similar to the
Company's  technology.  The  Company  and Fine  terminated  the Fine  Consulting
Agreement  due  to the  fact  that  the  Company  is no  longer  developing  its
technology.

                (Remainder of this page left blank intentionally)

                        (Signatures follow on next page)

                                      F-19
<PAGE>
                                   SIGNATURES

In accord with Section 13 or 15(d) of the  Securities  Act of 1933,  as amended,
the Company  caused  this report to be signed on its behalf by the  undersigned,
thereto duly authorized.

                                            DIASENSE, INC.


Dated: October 30, 2007                     /s/ Glenn A. Little
       ----------------                     ------------------------------------
                                                                 Glenn A. Little
                                              President, Chief Executive Officer
                                            Chief Financial Officer and Director

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


Dated: October 30, 2007                     /s/ Glenn A. Little
       ----------------                     ------------------------------------
                                                                 Glenn A. Little
                                              President, Chief Executive Officer
                                            Chief Financial Officer and Director

                                       23