**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB/A**




x
              QUARTERLY REPORT UNDER SECTION 13
                OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934For
                  the quarterly period ended**March
                  31, 2008**o
              TRANSITION REPORT UNDER SECTION 13
                OR 15(d)
                OF THE SECURITIES EXCHANGE ACT OF 1934For
                  the transition period from _______ to ________




Commission
      File No: **333-137210**





**DIET
      COFFEE, INC.**


(Exact
      name of issuer as specified in its charter)





**DELAWARE**
            **05-0630427**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                No.)**134
                Cedar Street**
              **Nutley,
                NJ 07110**
              **________________________________________________________________________**
              (Address
                of principal executive offices, including zip code)
              **(973)
                667-4026**


(Issuer’s
      telephone number)




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




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: As of May 21, 2008, the issuer had
      180,245,382 shares of its common stock issued and outstanding.




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









__________________Quarterly
                Report on Form 10-QSB/A for theQuarterly
                Period Ended March 31, 2008Table
                of ContentsPage**PART
                I. FINANCIAL INFORMATION**Item
                1. Financial StatementsCondensed
                Consolidated Balance Sheets as of March 31, 2008 (unaudited) and
                June 30,
                2007
            2Condensed
                Consolidated Statements of Losses for the Three and Nine Months Ended
                March 31, 2008 and 2007 (unaudited):
            3Condensed
                Consolidated Statement of Changes in Deficiency in Stockholders’ Equity
                for Period June 30, 2006 to March 31, 2008 (unaudited):
            4Condensed
                Consolidated Statements of Cash Flows for the Nine Months Ended March
                31,
                2008 and 2007 (unaudited):
            5Notes
                to Condensed Consolidated Financial Statements March 31, 2008:
                (unaudited)
            6Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            21Item
                3. Controls and Procedures
            26**PART
                II. OTHER INFORMATION**Item
                1. Legal Proceedings
            27Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            28Item
                3. Defaults upon Senior Securities
            28Item
                4. Submission of matters to a vote of security holders
            28Item
                5. Other information
            28Item
                6. Exhibits
            28CERTIFICATION
                PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
                PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
                PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
                PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002




**EXPLANATORY
      NOTE**





This
      quarterly report on Form 10-QSB/A is being filed to provide the financial
      statements required by Item 310 of Regulation S-B, management’s discussion and
      analysis required by Item 303 of Regulation S-B, disclosure controls and
      procedures required by Item 307 of Regulation S-B, internal control over
      financial reporting required by Item 308 of Regulation S-B, and certifications
      required under Rule 13a-14 of the Securities Exchange Act of 1934, as amended,
      and Section 1350 of the Sarbanes-Oxley Act of 2002.  These items were not
      available for filing with the annual report on Form 10-QSB filed by us on May
      20, 2008.




1




**PART
      I - FINANCIAL INFORMATION**


Item 1. **Financial
      Statements.**






**DIET
        COFFEE, INC.** **CONDENSED
          CONSOLIDATED BALANCE SHEETS**


**MARCH
        31, 2008 AND JUNE 30, 2007**




March
                31
              2008
            
            
            June
                30
              2007UnauditedASSETSCURRENT
                ASSETSCash
            
            $
            4,580
            
            $
            89Accounts
                receivable
            
            
            -
            
            
            822Other
                Receivables, net of allowances for doubtful accounts of $0and
                $27,761 as of March 31, 2008 and June 30, 2007,
                respectively.
            
            
            30,345
            
            
            13,373Total
                current assets
            
            
            34,925
            
            
            14,284Total
                Assets
            
            $
            34,925
            
            $
            14,284LIABILITIES
                AND DEFICIENCY IN STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESAccounts
                payable and accrued expenses
            
            $
            1,082,990
            
            $
            483,956Notes
                and loans payable-related parties
            
            
            299,000
            
            
            -Customer
                Deposits
            
            
            24,351
            
            
            13,895Total
                current liabilities
            
            
            1,406,341
            
            
            497,851Total
                liabilities
            
            
            1,406,341
            
            
            497,851COMMITMENTS
                AND CONTINGENCIESDEFICIENCY
                IN STOCKHOLDERS' EQUITYSeries
                A Preferred Stock, $0.001 par value, 10,000,000 shares
                authorized;
            
            
            50
            
            
            5050,000
                shares issued and outstanding atMarch
                31, 2008 and June 30, 2007,Common
                stock, $0.001 par value, 200,000,000 shares authorized;
            
            
            145,251
            
            
            71,513145,251,382
                and 71,513,000 shares issued and outstanding atMarch
                31, 2008 and June 30, 2007, respectivelyAdditional
                paid-in capital
            
            
            1,418,056
            
            
            743,286Accumulated
                (Deficit)
            
            
            (2,934,773
            )
            
            (1,298,416
            )Total
                deficiency in stockholders' equity
            
            
            (1,371,416
            )
            
            (483,567
            )Total
                Liabilities and Deficiency in Stockholders' Equity
            
            $
            34,925
            
            $
            14,284




The
        accompanying notes are an integral part of the unaudited condensed consolidated
        financial statements




2


**DIET
      COFFEE, INC.**


**CONDENSED
      CONSOLIDATED STATEMENT OF LOSSES**


**THREE
      AND NINE MONTHS ENDED MARCH 31, 2008 AND 2007**


**UNAUDITED**




Three
                Months Ending
            
            
            Nine
                Months EndingMarch
                31,
              2008
            
            
            March
                31,
              2007
            
            
            March
                31,
              2008
            
            
            March
                31,
              2007REVENUESSales
            
            $
            348,114
            
            $
            347,688
            
            $
            349,926
            
            $
            869,095Cost
                of sales
            
            
            197,977
            
            
            99,429
            
            
            198,577
            
            
            230,033Gross
                Profit
            
            
            150,137
            
            
            248,259
            
            
            151,349
            
            
            639,062OPERATING
                EXPENSESSelling,
                general and administrative expenses
            
            
            269,272
            
            
            396,028
            
            
            1,760,634
            
            
            1,203,958Total
                operating expenses
            
            
            269,272
            
            
            396,028
            
            
            1,760,634
            
            
            1,203,958Operating
                loss
            
            
            (119,135
            )
            
            (147,769
            )
            
            (1,609,285
            )
            
            (564,896
            )OTHER
                INCOME (EXPENSE)Interest
                income
            
            
            -
            
            
            800
            
            
            -
            
            
            1,864Interest
                expense
            
            
            (27,072
            )
            
            -
            
            
            (27,072
            )
            
            -Total
                other income (expense)
            
            
            (27,072
            )
            
            800
            
            
            (27,072
            )
            
            1,864Loss
                before provision for income taxes
            
            
            (146,207
            )
            
            (146,969
            )
            
            (1,636,357
            )
            
            (563,032
            )Income
                taxes
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                loss
            
            $
            (146,207
            )
            $
            (146,969
            )
            $
            (1,636,357
            )
            $
            (563,032
            )Net
                loss per common share, basic
            
            
            ($0.00
            )
            
            ($0.00
            )
            
            ($0.02
            )
            
            ($0.01
            )Weighted
                average number of common shares outstanding
            
            
            116,107,837
            
            
            71,513,000
            
            
            101,266,091
            
            
            71,183,394(basic
                & diluted)





The
      accompanying notes are an integral part of the unaudited condensed consolidated
      financial statements




3




**DIET
      COFFEE, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY**


**MARCH
      31, 2008 (UNAUDITED)**




Series
                A Preferred Stock
            
            
            Common
                Stock
            
            
            Common
            
            
            AdditionalShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Stock
                to Be Issued
            
            
            Paid-In
                Capital
            
            
            Accumulated
                Deficit
            
            
            TotalBALANCE,
                June 30, 2006
            
            
            50,000
            
            $
            50
            
            
            67,750,000
            
            $
            67,750
            
            $
            640,599
            
            $
            49,950
            
            
            ($447,186
            )
            $
            311,163Sales
                and issuance of common stock
            
            
            
            
            3,763,000
            
            
            3,763
            
            
            (640,599
            )
            
            693,336
            
            
            
            
            
            56,500Net
                loss-Year ending June 30, 2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (851,230
            )
            
            (851,230
            )BALANCE,
                June 30, 2007
            
            
            50,000
            
            
            50
            
            
            71,513,000
            
            
            71,513
            
            
            0
            
            
            743,286
            
            
            (1,298,416
            )
            
            (483,567
            )Common
                stock issued for services
            
            
            
            
            73,738,381
            
            
            73,738
            
            
            
            
            
            674,770
            
            
            
            
            
            748,508Net
                loss-Nine months endingMarch
                31, 2008
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,636,357
            )
            
            (1,636,357
            )BALANCE,
                March 31, 2008
            
            
            50,000
            
            $
            50
            
            
            145,251,381
            
            $
            145,251
            
            $
            -
            
            $
            1,418,056
            
            $
            (2,934,773
            )
            $
            (1,371,416
            )




The
      accompanying notes are an integral part of the unaudited condensed consolidated
      financial statements




4




**DIET
      COFFEE, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**FOR
      THE NINE MONTHS ENDED MARCH 31, 2008 AND 2007**


**(UNAUDITED)**




2008
            
            2007CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                (loss)
            
            $
            (1,636,357
            )
            $
            (563,032
            )Adjustments
                to reconcile net (loss) to net cash used byoperating
                activities:Other
                receivable allowances
            
            
            (27,761
            )
            
            18,000Common
                stock issued for services
            
            
            748,508
            
            
            -Changes
                in operating assets and liabilities:Decrease
                (increase) in accounts receivable
            
            
            822
            
            
            (93,467
            )Decrease
                (increase) in inventory
            
            
            -
            
            
            (30,868
            )Decrease
                (increase) in other assets
            
            
            10,789
            
            
            (35,357
            )Increase
                in accounts payable and accrued expenses
            
            
            599,034
            
            
            318,685Increase
                in customer deposits
            
            
            10,456
            
            
            13,829Net
                cash provided (used) by operating activities
            
            
            (294,509
            )
            
            (372,210
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Net
                cash provided by investing activities
            
            
            -
            
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIES:Common
                stock issued for cash
            
            
            -
            
            
            56,500Proceeds
                from related party loans
            
            
            299,000
            
            
            -Net
                cash provided by financing activities
            
            
            299,000
            
            
            56,500Net
                increase (decrease) in cash
            
            
            4,491
            
            
            (315,710
            )CASH,
                beginning of period
            
            
            89
            
            
            328,401CASH,
                end of period
            
            $
            4,580
            
            $
            12,691SUPPLEMENTAL
                DISCLOSURE OF CASH FLOWINFORMATION:Payment
                of interest in cash
            
            $
            -
            
            $
            -Payment
                of taxes in cash
            
            $
            -
            
            $
            -Common
                stock issued for services rendered
            
            $
            748,508
            
            $
            56,500




The
        accompanying notes are an integral part of the unaudited condensed consolidated
        financial statements




5


**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**




**NOTE
      A - SUMMARY OF ACCOUNTING POLICIES**





A
      summary
      of the significant accounting policies applied in the preparation of the
      accompanying unaudited condensed consolidated financial statements
      follows.





Business
      and Basis of Presentation





Diet
      Coffee, Inc. (“Company” or “Registrant”) was organized on December 19, 2005
      under the state laws of Delaware with an original name of “The Diet Coffee
      Company”. On March 1, 2006, the Company changed its name to the current existing
      name.





Diet
      Coffee, through its wholly owned subsidiary, Zevotek, Inc. plans to market
      and
      sell a range of home care and household products. In May 2007, the company
      entered into a license agreement to sell an energy saving compact fluorescent
      light bulb named the Ionic Bulb. The company plans to market the Ionic Bulb
      through TV infomercials, catalogs, magazines and major U.S. retail and specialty
      stores and the website www.ionic-bulb.com.





General





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and with the
      instructions to Form 10-QSB. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements.




In
      the
      opinion of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. Accordingly,
      the results from operations for the three and nine month periods ended March
      31,
      2008 are not necessarily indicative of the results that may be expected for
      the
      year ending June 30, 2008. The unaudited condensed consolidated financial
      statements should be read in conjunction with the June 30, 2007 audited
      financial statements and footnotes thereto.




The
      consolidated financial statements include the accounts of the Registrant and
      its
      wholly-owned subsidiary, Zevotek, Inc. (“Zevotek”). The Registrant formed its
      Zevotek, Inc. subsidiary on August 21, 2007 and started its operations during
      the fiscal year ending June 30, 2008.   All significant inter-company
      transactions and balances have been eliminated in consolidation.





The
      Company has adopted a fiscal year end of June 30.





Revenue
      Recognition





For
      revenue from product sales, the Company recognizes revenue in accordance with
      Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB104"), which
      superseded Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
      Statements ("SAB101"). SAB 101 requires that four basic criteria must be met
      before revenue can be recognized: (1) persuasive evidence of an arrangement
      exists; (2) delivery has occurred; (3) the selling price is fixed and
      determinable; and (4) collectibility is reasonably assured. Determination of
      criteria (3) and (4) are based on management's judgments regarding the fixed
      nature of the selling prices of the products delivered and the collectibility
      of
      those amounts. Provisions for discounts and rebates to customers, estimated
      returns and allowances, and other adjustments are provided for in the same
      period the related sales are recorded. The Company defers any revenue for which
      the product was not delivered or is subject to refund until such time that
      the
      Company and the customer jointly determine that the product has been delivered
      or no refund will be required.




6




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


SAB
      104
      incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
      Multiple-deliverable Revenue Arrangements. EITF 00-21 addresses accounting
      for
      arrangements that may involve the delivery or performance of multiple products,
      services and/or rights to use assets. The effect of implementing EITF 00-21
      on
      the Company's consolidated financial position and results of operations was
      not
      significant.




Consideration
      Paid to Customers




We
      offer
      our customers certain incentives in the form of cooperative advertising
      arrangements, product markdown allowances, trade discounts, cash discounts,
      and
      slotting fees. We account for these incentives in accordance with Emerging
      Issues Task Force Issue No. 01-9, Accounting for Consideration Given by a Vendor
      to a Customer, ("EITF 01-9"). Markdown allowances, trade discounts, cooperative
      advertising program participation and cash discounts are all recorded as
      reductions of net sales. No customer incentives are included in sales for the
      three and nine month periods ended March 31, 2008 and 2007.





Use
      of
      Estimates





The
      preparation of the financial statement in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect certain reported amounts and disclosures. Accordingly, actual results
      could differ from those estimates.





Foreign
      Currency Translation





The
      Company translates the foreign currency financial statements in accordance
      with
      the requirements of Statement of Financial Accounting Standards No. 52, "Foreign
      Currency Translation." Assets and liabilities are translated at current exchange
      rates, and related revenue and expenses are translated at average exchange
      rates
      in effect during the period. Resulting translation adjustments are recorded
      as a
      separate component in stockholders' equity. Foreign currency translation gains
      and losses are included in the statement of operations.





Cash
      and Cash Equivalents





For
      the
      purpose of the accompanying financial statements, all highly liquid investments
      with a maturity of three months or less are considered to be cash
      equivalents.




Inventories
      / Cost of Goods Sold





The
      Company has adopted a policy to record inventory at the lower of cost or market
      determined by the first-in-first-out method. The elements of cost that comprise
      inventory and cost good sold are FOB shipping point costs, freight and
      destination charges, customs and importation fees and taxes, customer broker
      fees (if any) and other related costs. Warehousing costs are changed to cost
      of
      goods in the period the costs are incurred. The Company provides inventory
      allowances based on estimates of obsolete inventories.




Inventories
      consist of finished products available for sale to distributors and customers.
      At March 31, 2008, Finished Goods inventory was $0.





Allowance
      for doubtful accounts





The
      Company maintains an allowance for doubt accounts to reduce amounts to their
      estimated realizable value, including reserves for customer and other receivable
      allowances and incentives. In estimating the provision for doubtful accounts,
      the company considers a number of factors including age of the accounts
      receivable, trends and ratios involving the age of the accounts receivable
      and
      the customer mix of each aging categories. As of March 31, 2008, the allowance
      for doubtful accounts was $0.




7




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


Property
      and Equipment





Property
      and equipment are stated at cost. When retired or otherwise disposed, the
      related carrying value and accumulated depreciation are removed from the
      respective accounts and the net difference less any amount realized from
      disposition, is reflected in earnings. For financial statement purposes,
      property and equipment would be recorded at cost and depreciated using the
      straight-line method over their estimated useful lives.





Impairment
      of Long-Lived Assets





The
      Company has adopted Statement of Financial Accounting Standards No. 144 (SFAS
      144). The Statement requires that long-lived assets and certain identifiable
      intangibles held and used by the Company be reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount of an
      asset
      may not be recoverable. Events relating to recoverability may include
      significant unfavorable changes in business conditions, recurring losses, or
      a
      forecasted inability to achieve break-even operating results over an extended
      period. The Company evaluates the recoverability of long-lived assets based
      upon
      forecasted discounted cash flows. Should impairment in value be indicated,
      the
      carrying value of intangible assets will be adjusted, based on estimates of
      future discounted cash flows resulting from the use and ultimate disposition
      of
      the asset. SFAS No. 144 also requires assets to be disposed of be reported
      at
      the lower of the carrying amount or the fair value less disposal
      costs.





Income
      Taxes





The
      Company has adopted Financial Accounting Standards No. 109 ("SFAS 109") which
      requires the recognition of deferred tax liabilities and assets for the expected
      future tax consequences of events that have been included in the financial
      statement or tax returns. Under this method, deferred tax liabilities and assets
      are determined based on the difference between financial statements and the
      tax
      basis of assets and liabilities using enacted tax rates in effect for the year
      in which the differences are expected to reverse. Temporary differences between
      taxable income reported for financial reporting purposes and income tax purposes
      are insignificant.




Research
      and Development





The
      Company accounts for research and development costs in accordance with the
      Financial Accounting Standards Board's Statement of Financial Accounting
      Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs".
      Under SFAS 2, all research and development costs must be charged to expense
      as
      incurred. Accordingly, internal research and development costs are expensed
      as
      incurred. Third-party research and developments costs are expensed when the
      contracted work has been performed or as milestone results have been achieved.
      Company-sponsored research and development costs related to both present and
      future products are expensed in the period incurred. The Company had no
      expenditures on research and product development for the three and nine months
      ended March 31, 2008 and, 2007, respectively.




Advertising





The
      Company follows SOP 93-7 whereby charging the costs of advertising to expenses
      as incurred. The Company charged to operations $0 and $1,738, as advertising
      costs for the three and nine month periods ended March 31, 2008, respectively
      The Company charged to operations $48,934 and $357,994, as advertising costs
      for
      the three and nine month periods ended March 31, 2007,
      respectively.




8




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


Comprehensive
      Income





Statement
      of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
      Income," establishes standards for reporting and displaying of comprehensive
      income, its components and accumulated balances. Comprehensive income is defined
      to include all changes in equity except those resulting from investments by
      owners and distributions to owners. Among other disclosures, SFAS 130 requires
      that all items that are required to be recognized under current accounting
      standards as components of comprehensive income be reported in a financial
      statement that is displayed with the same prominence as other financial
      statements. The Company does not have any items of comprehensive income in
      the
      period presented.





Segment
      Information





The
      Company has adopted Statement of Financial Accounting Standards No. 131,
      Disclosures about Segments of an Enterprise and Related Information ("SFAS
      131")
      in the years ended December 31, 2001 and subsequent years. SFAS 131 establishes
      standards for reporting information regarding operating segments in annual
      financial statements and requires selected information for those segments to
      be
      presented in interim financial reports issued to stockholders. SFAS 131 also
      establishes standards for related disclosures about products and services and
      geographic areas. Operating segments are identified as components of an
      enterprise about which separate discrete financial information is available
      for
      evaluation by the chief operating decision maker, or decision making group,
      in
      making decisions on how to allocate resources and assess
      performance.





Stock
      Based Compensation





In
      December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based
      Compensation-Transition and Disclosure-an amendment of SFAS 123.” This statement
      amended SFAS 123, “Accounting for Stock-Based Compensation,” to provide
      alternative methods of transition for a voluntary charge to the fair value
      based
      method of accounting for stock-based employee compensation. In addition, this
      statement amended the disclosure requirements of SFAS No. 123 to require
      prominent disclosures in both annual and interim financial statements about
      the
      method of accounting for stock-based employee compensation and the effect of
      the
      method used on reported results. Effective for the period ended June 30, 2006
      the Company has adopted SFAS 123 (R) which supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees” and eliminates the intrinsic value
      method that was provided in SFAS 123 for accounting of stock-based compensation
      to employees. The Company made no employee stock-based compensation grants
      before June 30, 2007 and during the nine months ended March 31, 2008 and
      therefore has no unrecognized stock compensation related liabilities or expense
      unvested or vested.





Loss
      per Share





The
      Company follows Statement of Financial Accounting Standards No. 128 (“SFAS No.
      128”) “Earnings per Share”. Basic and diluted earnings (loss) per share amounts
      are computed based on net income (loss) divided by the weighted average number
      of common shares outstanding. The assumed exercise of warrants into 3,763,000
      common shares and exercise of 3,760,000 of stock options were not included
      in
      the computation of diluted loss per share because the assumed exercises would
      be
      anti-dilutive for the periods presented.





Liquidity





As
      shown
      in the accompanying financial statements, the Company incurred a net loss of
      $1,636,357 for the nine months ended March 31, 2008 on revenues of $349,926
      and
      used $294,509 in cash flows for operations during the nine months ended March
      31, 2008. As of March 31, 2008, the Company had a working capital deficit of
      $1,371,416.




9




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


Concentration
      of Credit Risk




Financial
      instruments and related items, which potentially subject the Company to
      concentrations of credit risk, consist primarily of cash, cash equivalents
      and
      trade receivables. The Company places its cash and temporary cash investments
      with high credit quality institutions. At times, such investments may be in
      excess of the FDIC insurance limit.





New
      Accounting Pronouncements





In
      December 2007, the FASB issued FASB Statement No. 141 (revised 2007), Business
      Combinations. This Statement replaces FASB Statement No. 141, Business
      Combinations. This Statement retains the fundamental requirements in
      Statement 141 that the acquisition method of accounting (which Statement
      141 called the purchase method) be used for all business combinations and for
      an
      acquirer to be identified for each business combination. This Statement defines
      the acquirer as the entity that obtains control of one or more businesses in
      the
      business combination and establishes the acquisition date as the date that
      the
      acquirer achieves control. This Statement’s scope is broader than that of
      Statement 141, which applied only to business combinations in which control
      was
      obtained by transferring consideration. By applying the same method of
      accounting—the acquisition method—to all transactions and other events in which
      one entity obtains control over one or more other businesses, this Statement
      improves the comparability of the information about business combinations
      provided in financial reports.




This
      Statement requires an acquirer to recognize the assets acquired, the liabilities
      assumed, and any noncontrolling interest in the acquiree at the acquisition
      date, measured at their fair values as of that date, with limited exceptions
      specified in the Statement. That replaces Statement 141’s cost-allocation
      process, which required the cost of an acquisition to be allocated to the
      individual assets acquired and liabilities assumed based on their estimated
      fair
      values.




10




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose
      to measure many financial instruments, and certain other items, at fair value.
      SFAS 159 applies to reporting periods beginning after November 15, 2007.
      The adoption of SFAS 159 is not expected to have a material impact on our
      financial condition or results of operations.





In
      December 2007, the FASB issued FASB Statement No. 160 - Noncontrolling Interests
      in Consolidated Financial Statements - an amendment of ARB No. 51. This
      Statement applies to all entities that prepare consolidated financial
      statements, except not-for-profit organizations, but will affect only those
      entities that have an outstanding noncontrolling interest in one or more
      subsidiaries or that deconsolidate a subsidiary. Not-for-profit organizations
      should continue to apply the guidance in Accounting Research Bulletin No. 51,
      Consolidated Financial Statements, before the amendments made by this Statement,
      and any other applicable standards, until the Board issues interpretative
      guidance.




This
      Statement amends ARB 51 to establish accounting and reporting standards for
      the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
      an
      ownership interest in the consolidated entity that should be reported as equity
      in the consolidated financial statements. Before this Statement was issued,
      limited guidance existed for reporting noncontrolling interests. As a result,
      considerable diversity in practice existed. So-called minority interests were
      reported in the consolidated statement of financial position as liabilities
      or
      in the mezzanine section between liabilities and equity. This Statement improves
      comparability by eliminating that diversity.




A
      noncontrolling interest, sometimes called a minority interest, is the portion
      of
      equity in a subsidiary not attributable, directly or indirectly, to a parent.
      The objective of this Statement is to improve the relevance, comparability,
      and
      transparency of the financial information that a reporting entity provides
      in
      its consolidated financial statements by establishing accounting and reporting
      standards that require: (a) The ownership interests in subsidiaries held by
      parties other than the parent be clearly identified, labeled, and presented
      in
      the consolidated statement of financial position within equity, but separate
      from the parent’s equity, (b) The amount of consolidated net income attributable
      to the parent and to the noncontrolling interest be clearly identified and
      presented on the face of the consolidated statement of income, (c) Changes
      in a
      parent’s ownership interest while the parent retains its controlling financial
      interest in its subsidiary be accounted for consistently. A parent’s ownership
      interest in a subsidiary changes if the parent purchases additional ownership
      interests in its subsidiary or if the parent sells some of its ownership
      interests in its subsidiary. It also changes if the subsidiary reacquires some
      of its ownership interests or the subsidiary issues additional ownership
      interests. All of those transactions are economically similar, and this
      Statement requires that they be accounted for similarly, as equity transactions,
      (d) When a subsidiary is deconsolidated, any retained noncontrolling equity
      investment in the former subsidiary be initially measured at fair value. The
      gain or loss on the deconsolidation of the subsidiary is measured using the
      fair
      value of any noncontrolling equity investment rather than the carrying amount
      of
      that retained investment, (e) Entities provide sufficient disclosures that
      clearly identify and distinguish between the interests of the parent and the
      interests of the noncontrolling owners.




11




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


This
      Statement is effective for fiscal years, and interim periods within those fiscal
      years, beginning on or after December 15, 2008 (that is, January 1, 2009, for
      entities with calendar year-ends). Earlier adoption is prohibited. This
      Statement shall be applied prospectively as of the beginning of the fiscal
      year
      in which this Statement is initially applied, except for the presentation and
      disclosure requirements. The presentation and disclosure requirements shall
      be
      applied retrospectively for all periods presented. Management believes this
      Statement will have no impact on the financial statements of the Company once
      adopted.





In
      December 2006, the FASB issued FSP EITF 00-19-2, Accounting for
      Registration Payment Arrangements ("FSP 00-19-2") which addresses accounting
      for
      registration payment arrangements. FSP 00-19-2 specifies that the contingent
      obligation to make future payments or otherwise transfer consideration under
      a
      registration payment arrangement, whether issued as a separate agreement or
      included as a provision of a financial instrument or other agreement, should
      be
      separately recognized and measured in accordance with FASB Statement No. 5,
      Accounting for Contingencies. FSP 00-19-2 further clarifies that a financial
      instrument subject to a registration payment arrangement.





**NOTE B
      - OTHER RECEIVABLES**




Other
      receivables at March 31, 2008 consisted of a $30,345 credit card holdback by
      a
      merchant bank that processes payment due for product sales. The merchant bank
      holdback account is based on the dollar amount of sales and is designed to
      allow
      the Company to receive the credit card holdback cash, including interest for
      the
      Company, after customer refunds and charge-backs are cleared. The credit card
      holdback is carried net of a $0 allowance for doubtful accounts as of March
      31,
      2008.




12




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


**NOTE C
      - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**





Accounts
      payable and accrued liabilities at March 31, 2008 are as follows:




Accounts
                payable
            
            $
            168,927Accrued
                professional fees
            
            
            274,000Accrued
                payroll and payroll taxes
            
            
            600,340Other
                accrued liabilities
            
            
            39,723Total
            
            $
            1,082,990





**NOTE D
      - LOAN PAYABLE**




Loan
      payable represents an interest bearing loan, at 10%, from an unrelated third
      party that is repayable on demand. As of March 31, 2008 the balance outstanding
      was approximately $299,000 (See Note K).





**NOTE E
      - STOCKHOLDERS' EQUITY**





Series
      A - Preferred stock





The
      Company has authorized 10,000,000 shares of Preferred stock, par value $0.001,
      within the limitations and restrictions stated in the Certificate of
      Incorporation of the Company.





The
      Company designated and issued of 50,000 shares of Series A - Preferred stock;
      non convertible. Each share of the Series A- Preferred stock is entitled to
      10,000 votes on all matters submitted to the stockholders of the Company. The
      holders of the Series A-Preferred stock are not granted any preference upon
      the
      liquidation, dissolution or winding up of the business of the
      Company.





Common
      stock





The
      Company has authorized 200,000,000 shares of Common stock, par value
      $0.001, of which 145,251,381 shares were issued and outstanding at March 31,
      2008.




During the
      nine months ended March 31, 2008, the Company issued 73,738,381 shares of common
      stock, valued at $748,508 for services and expenses.




13




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


Warrants




As
      part
      of the sale of Common stock the Company issued 285,000 warrants to purchase
      its
      Common stock at a price of $0.50 per share expiring 2 years from the date of
      issuance during July 2006.





The
      Company issued 3,478,000 warrants to purchase Common stock at a purchase price
      of $0.50 per share expiring two years from the date of their issuance in
      2006.




**NOTE F
      - INCOME TAXES**





The
      Company has adopted Financial Accounting Standards No. 109, which requires
      the
      recognition of deferred tax liabilities and assets for the expected future
      tax
      consequences of events that have been included in the financial statement or
      tax
      returns.





Under
      this method, deferred tax liabilities and assets are determined based on the
      difference between financial statements and tax basis of assets and liabilities
      using enacted tax rates in effect for the year in which the differences are
      expected to reverse. Temporary differences between taxable income reported
      for
      financial reporting purposes and income tax purposes are insignificant. A
      management estimate that at March 31, 2008, the Company has available for
      federal income tax purposes a net operating loss carry forward of approximately
      $1,134,000 expiring beginning in the year 2023, that may be used to offset
      future taxable income. Due to significant changes in the Company's ownership,
      the future use of its existing net operating losses may be limited.





The
      Company has provided a valuation reserve against the full amount of the net
      operating loss benefit, since in the opinion of management based upon the
      earnings history of the Company; it is more likely than not that the benefits
      will not be realized. Components of deferred tax assets as of March 31, 2008
      are
      as follows:





Non
      current:





Net
                operating loss carry forward
            
            $
            1,134,000Valuation
                allowance
            
            
            (1,134,000
            )Net
                deferred tax asset
            
            
            -




The
      Company has not filed their federal or state income tax returns for fiscal
      years
      ended June 30, 2006 and 2007.




14




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


**NOTE G
      - STOCK OPTIONS AND WARRANTS**




The
      following table summarizes the changes in warrants outstanding and the related
      prices for the shares of the Company's common stock issued to shareholders
      at
      March 31, 2008.




Warrants
                Outstanding
            
            
            
            
            
            Warrants
              ExercisableExercise
                Prices
            
            
            Number
              Outstanding
            
            
            Weighted
              Average
              Remaining
              Contractual
                Life
              (years)
            
            
            Weighted
              Average
              Exercise
              Price
            
            
            Number
              Exercisable
            
            
            Weighted
              Average
              Exercise
              Price$0.50
            
            
            3,763,000
            
            
            0.44
            
            $
            0.50
            
            
            3,763,000
            
            $
            0.50





Transactions
      involving the Company's warrant issuance are summarized as follows:




Number
                of Shares
            
            
            Weighted
                Average
              Price
                Per ShareOutstanding
                at June 30, 2007
            
            
            3,763,000
            
            $
            0.50Granted
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Canceled
                or expired
            
            
            -
            
            
            -Outstanding
                at March 31, 2008
            
            
            3,763,000
            
            $
            0.50




During
      the fiscal year ended June 30, 2006, the Company completed a private placement
      in which we subsequently issued 3,478,000 shares of common stock and warrants
      to
      acquire 3,478,000 shares of common stock. The warrants are exercisable until
      two
      years after the date of issuance at a purchase price of $0.50 per share on
      3,478,000 warrants and include registration rights. The warrants were issued
      subsequent to June 30, 2006.




In
      July
      2006, the Company sold 285,000 shares of its Common stock at a net average
      of
      $0.185 per share.





On
      September 11, 2007, the Company adopted its 2007 Stock Incentive Plan (the
“2007
      Plan”). The Company is permitted to issue up to 21,450,000 shares of common
      stock under the Plan in the form of stock options, restricted stock awards,
      and
      stock awards to employees, non-employee directors, and outside consultants.
      As
      of March 31, 2008, 21,450,000 shares have been issued under the 2007 Plan and
      no
      options have been granted.





On
      December 13, 2007, the Company adopted its 2007 Stock Incentive Plan No. 2
      of
      Diet Coffee, Inc. (the “2007 Plan #2”). The Company is permitted to issue up to
      17,994,000 shares of common stock under the Plan in the form of stock options,
      restricted stock awards, and stock awards to employees, non-employee directors,
      and outside consultants. As of March 31, 2008, 17,994,000 shares have been
      issued under the 2007 Plan.




15


**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


On
      December 13, 2007, the Company agreed to grant Mr. Engel options to purchase
      3,600,000 shares of common stock, which options would vest at a rate of 100,000
      shares per month. These options have not yet been granted.





On
      February 15, 2008, the Company adopted its 2008 Stock Incentive Plan (the “2008
      Plan”). The Company is permitted to issue up to 33,000,,000 shares of common
      stock under the Plan in the form of stock options, restricted stock awards,
      and
      stock awards to employees, non-employee directors, and outside consultants.
      As
      of March 31, 2008, no shares have been issued under the 2007 Plan and no options
      have been granted.





On
      February 21, 2008, the Company adopted its 2008 California Stock Incentive
      Plan
      (the “California Plan”). The Company is permitted to issue up to 33,000,000
      shares of common stock under the Plan in the form of stock options, restricted
      stock awards, and stock awards to employees, non-employee directors, and outside
      consultants. As of March 31, 2008, 12,562,563 shares have been issued under
      the
      2007 Plan and no options have been granted.




**NOTE H
      - COMMITMENTS AND CONTINGENCIES**





Employment
      agreement





On
      October 5, 2007, we increased the number of authorized directors to three and
      appointed Adam J. Engel as a director. Mr. Engel was also appointed to the
      officer positions of President, Chief Executive Officer, Chief Financial
      Officer, Secretary effective upon the resignations of Messrs. Stocknoff and
      Attarian, as discussed below.





On
      December 13, 2007, the Company entered into an employment agreement with Adam
      Engel pursuant to which the Company employs Mr. Engel as President, Chief
      Executive Officer, Chief Financial Officer, Treasurer and Secretary. The
      agreement is for an initial term of three years and provides for an annual
      base
      salary during the term of the agreement of $120,000, payable either in cash
      or
      stock. The Company also agreed to grant Mr. Engel options to purchase 3,600,000
      shares of Company common stock with an exercise price of $0.01 per share (which
      price shall not be less than 85% of the “fair market value” of the Company’s
      common stock on the date of grant), which options would vest at a rate of
      100,000 shares per month. These options have not yet been granted. In
      addition to salary and benefit provisions, the agreements include defined
      commitments should we terminate his employment without cause and 24 month
      non-compete/non solicitation terms.





Resignation
      of Messrs. Stocknoff and Attarian




The
      Company had employment agreements with David Stocknoff, the Company's former
      President and Chief Executive Officer, as well as David Attarian, the Company’s
      Secretary. In addition to salary and benefit provisions, the agreements include
      defined commitments should Messrs. Stocknoff and Attarian terminate their
      employment with or without cause. On October 5, 2007, each of Mr. Stocknoff
      and
      Mr. Attarian resigned from all of their respective employment positions with
      us,
      which resignations were to be effective dated October 12, 2007. In connection
      with their resignations, we entered into Separation and Consulting Agreements
      with each of them.




16




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


In
      connection with Messrs. Stocknoff and Attarian’s resignation from their officer
      and director positions with the Company, we entered into a letter agreement
      dated October 5, 2007 with each of Messrs Stocknoff and Attarian setting forth
      the terms of the mutual separation. Under the terms of these Agreements (which
      contained the same terms), Each of Mr. Stocknoff and Mr. Attarian and the
      Company agreed to waive any and all continuing rights and obligations under
      Mr.
      Stocknoff’s and Mr. Attarian’s respective employment agreements dated June 14,
      2006. In consideration thereof and to enter into the Letter Agreements, the
      Company agreed to pay Messrs. Stocknoff and Attarian each $90,000 as follows:
      $20,000 on the Effective Date (as defined) and thereafter in equal semi-monthly
      installments of $2,500 until January 2008 at which time the installment payments
      shall increase to $5,000. Beginning January 2008, the Company may pay all or
      part of the installments in share of our common stock. In addition, the Company
      agreed to issue 5,000,000 shares of Company common stock on the Effective Date
      to each of Messrs. Stocknoff and Attarian. Messrs. Stocknoff and Attarian also
      agreed to a 1 year
      non-compete/non solicitation provisions as well as confidentiality and
      non-disparagement clauses. Each party to this agreement granted mutual releases.
      As of March 31, 2008, the Company has issued 2,750,000 shares to Mr. Attarian
      and 1,842,858 to Mr. Stocknoff and paid $10,000 to each.





U.S.
      Federal Trade Commission Settlement





On
      March
      26, 2007, Diet Coffee, Inc. (the “Company”) received a letter from the U.S.
      Federal Trade Commission (“FTC”) whereby the Company was informed that the FTC
      is conducting an investigation into advertising claims made for the Company’s
      weight loss product known as “Slim Coffee”. The purpose of the investigation was
      to determine whether the Company, in connection with its sales of Slim Coffee,
      engaged in unfair or deceptive acts or practices and false advertising. The
      FTC
      threatened to file a complaint in the United States District Court, Southern
      District of New York, alleging False Advertising, unless the Company and the
      FTC
      could reach a satisfactory resolution to the matter. A negotiated settlement
      has
      been reached with the FTC under which the Company, its officers and directors
      did not admit any wrongdoing. On October 5, 2007, the Company executed a
      stipulation to a final order and judgment in the amount of $923,910. The full
      amount of the judgment, and payment of any portion of it is suspended and cannot
      be reinstated so long as the Company abides by the reporting and monitoring
      requirements of the judgment; does not make false advertising claims in
      connection with any of its products in the future; and its past financial
      disclosures to the FTC were materially accurate. The Company expects stipulation
      will be executed by the FTC and filed with the United States District Court,
      Southern District of New York. The Company expects to comply with terms of
      the
      stipulation and does not anticipate incurring a liability for the
      judgment.





Royalty
      commitment





On
      May
      18, 2007, Diet Coffee, Inc. (the "Company") entered into a License and Supply
      Agreement with Jason Ryu, pursuant to which the Company licensed the right
      to
      market and sell a fluorescent light bulb that contains an air purifying
      microchip ion emitter from Mr. Ryu. In exchange for this license the Company
      agrees to pay Mr. Ryu a royalty of $0.20 per unit for the first 1.5 million
      units sold by the Company and the lesser of $0.15 per unit or 5% of
      manufacturing costs for all additional units. The initial term of this agreement
      shall be two years and shall automatically be renewed for subsequent two year
      periods if at lease 5 million units are sold by the Company during each period.
      Within ninety days from the date of this Agreement, the Company was required
      to
      place an order not less than 100,000 units and at least 600,000 units each
      quarter thereafter. As of the date of this filing, the Company placed an order
      for units and the Company has issued 7,181,819 shares of its common stock as
      prepayment of royalties under the agreement. Mr. Ryu has sent notice to the
      Company that license agreement shall continue on a non-exclusive
      basis.




17




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


Payroll
      Taxes





At
      March
      31, 2008, the Company is delinquent with filing and remitting payroll taxes
      of
      approximately $100,000, including estimated penalties and interest related
      to
      payroll taxes withheld since April 2007. The Company has recorded the delinquent
      payroll taxes, which are included in accrued expenses on the balance sheet.
      Although the Company has not entered into any formal repayment agreements with
      the respective tax authorities, management plans to make payment as funds become
      available. Penalties and interest amounts are subject to increase based on
      a
      number of factors that can cause the estimated liability to increase further.
      Interest and penalties were accrued in an amount estimated to cover the ultimate
      liability.




Sales
      Taxes





At
      March
      31, 2008, the Company is delinquent with remitting sales taxes of approximately
      $13,211, including related estimated penalties and interest related to sales
      taxes withheld since 2006 in the state of New York. The Company has recorded
      the
      delinquent sales taxes, which are included in accrued expenses on the balance
      sheet. Although the Company has not entered into any formal repayment agreements
      with the respective tax authorities, management plans to make payment as funds
      become available. Penalties and interest amounts are subject to increase based
      on a number of factors that can cause the estimated liability to increase
      further. Interest and penalties were accrued in an amount estimated to cover
      the
      ultimate liability.





Corporate
      Income Taxes





At
      March
      31, 2008, the Company has not filed their federal or state income tax returns
      for fiscal years ended June 30, 2006 and 2007. The Company believes that no
      tax
      is due as a result of losses incurred and plans to file the tax returns as
      funds
      become available for their preparation.





Financing
      Agreements





On
      October 23, 2007, Zevotek entered into a Supply Agreement with Star Funding,
      Inc. pursuant to which Star Funding will provide, on a discretionary basis,
      purchase order financing up to $2.5 million to facilitate Zevotek’s sale of its
      Ionic Bulb product. This purchase order financing may be made via direct payment
      to Zevotek’s suppliers, issue or cause the issuance of letters of credit, and/or
      advances to Zevotek. Zevotek will be required to pay Star Funding an amount
      equal to 2.5% of all “Expenses” (as defined) associated with the purchase of any
      Goods under the Agreement, including letter of credit fees, if any, which will
      equal 0.25% of the face amount of any letter of credit. As collateral security
      for all of Zevotek’s obligations under the Supply Agreement, Zevotek granted
      Star Funding a security interest in all of Zevotek’s personal property and
      fixtures. The Supply Agreement is for an initial term of two years, and will
      be
      automatically extended for additional 1 year terms unless terminated by either
      party with 60 days’ prior written notice before the end of the initial or any
      renewal period.




On
      October 23, 2007, Zevotek also entered into a Factoring Agreement with Star
      Funding pursuant to which Star Funding has agreed to purchase certain accounts
      receivables of Zevotek under the Supply Agreement. Zevotek has agreed to pay
      Star Funding a factoring commission of 1.5% of the gross amount of each
      receivable under the Factoring Agreement provided, however, that Zevotek has
      agreed that Star Funding will receive $15,000 in fees under the Supply Agreement
      and the Factoring Agreement in the first 12 months and Zevotek has agreed to
      pay
      Star Funding the shortfall by which all fees and commissions are less than
      $15,000. As collateral security for all of Zevotek’s obligations under the
      Supply Agreement, Zevotek granted Star Funding a security interest in all of
      Zevotek’s personal property and fixtures. The Supply Agreement is for an initial
      term of two years, and will be automatically extended for additional 1 year
      terms unless terminated by Zevotek upon 60 days’ prior written notice before the
      end of the initial or any renewal period or by Star Funding upon 30 days prior
      written notice.




18




**DIET
          COFFEE, INC.**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
          31, 2008**
 **(UNAUDITED)**


To
      further secure Zevotek’s obligations under the Supply Agreement and the
      Factoring Agreement (as discussed below), Diet Coffee has executed (i) a
      guarantee and (ii) an assignment of that certain License and Supply Agreement
      under which is obtained its distribution rights for the Ionic Bulb. In addition,
      Mr. Engel, President of Zevotek and Diet Coffee, executed an Anti Fraud and
      Performance Agreement under which Mr. Engel guaranteed Zevotek’s representations
      and warranties under the Supply and Factoring Agreements. Mr. Engel explicitly
      agrees that if any receivable purchased by Star Funding is not paid when due
      (subject to certain exceptions), such non-payment shall be presumed to be the
      result of a breach of Zevotek’s representations and warranties under the Supply
      Agreement and/or the Factoring Agreement at which time Star Funding may be
      able
      to execute on the (i) collateral pledged under the Supply and Factoring
      Agreements and (ii) license for distribution of the Ionic bulb
      product.





**NOTE
      I - CASH FLOWS**





In
      a
      series of non-cash transactions during the nine months ended March 31, 2007,
      the
      Company issued 3,763,000 shares of common stock in exchange for services and
      satisfaction of contractual obligations valued at $56,500.





In
      a
      series of non-cash transactions during the nine months ended March 31, 2008,
      the
      Company issued 73,738,381 shares of common stock in exchange for services and
      satisfaction of contractual obligations valued at $748,508 .





**NOTE J
      - GOING CONCERN MATTERS**




The
      accompanying statements have been prepared on a going concern basis, which
      contemplates the realization of assets and the satisfaction of liabilities
      in
      the normal course of business. As shown in the accompanying financial statements
      and for the nine months then ended March 31, 2008 the Company had sales of
      $349,926 incurred losses of $1,636,357, and used $294,509 in cash for
      operations. As of March 31, 2008, the Company had a working capital deficit
      of
      $1,371,416, and accumulated losses of $2,934,773. These factors among others
      may
      indicate that the Company will be unable to continue as a going concern for
      a
      reasonable period of time.




The
      Company is actively pursuing additional equity financing through discussions
      with investment bankers and private investors. There can be no assurance the
      Company will be successful in its effort to secure additional equity
      financing.




If
      operations and cash flows improve through these efforts, management believes
      that the Company can continue to operate. However, no assurance can be given
      that management's actions will result in profitable operations or the resolution
      of its liquidity problems.





The
      Company's existence is dependent upon management's ability to develop profitable
      operations and resolve its liquidity problems. Management anticipates the
      Company will attain profitable status and improve its liquidity through the
      continued developing, marketing and selling of its services and additional
      equity investment in the Company. The accompanying financial statements do
      not
      include any adjustments that might result should the Company be unable to
      continue as a going concern.





**NOTE
      K - SUBSEQUENT EVENTS**





On
      May
      14, 2008, the Company issued promissory notes in the amount of $134,759.45
      and
      $21,027.40 to a single accredited investor. These notes were issued in exchange
      for certain evidences of indebtedness in the aggregate amount of $147,000 with
      accrued interest on such indebtedness of $8,786,85. The $134,759.45 promissory
      note bears interest at a rate of 10% per annum and is convertible into the
      Company’s common stock at a rate of $0.001 per share; provided, however that
      holder may not convert the note if such conversion would result in holder
      beneficially owning more than 4.99% of the Company’s outstanding stock. This
      note has a maturity date of May 14, 2010. The $21,027.40 promissory note bears
      interest at a rate of 10% per annum and is payable on demand.




19




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


On
      May
      27, 2008, the Company issued a 10% convertible promissory note in the amount
      of
      $155,789.59 to a single accredited investor. This note was issued in exchange
      for certain evidences of indebtedness in the aggregate amount of $144,500 with
      accrued interest on such indebtedness of $11,289.59. The note has a maturity
      date of May 27, 2010 and is convertible into the Company’s common stock at a
      rate of $0.001 per share; provided, however that holder may not convert the
      note
      if such conversion would result in holder beneficially owning more than 4.99%
      of
      the Company’s outstanding stock.





On
      May
      28, 2008, the Company filed a Certificate of Designations, Powers, Preferences
      and Rights of Series B Preferred Stock with the Delaware Secretary of State
      designating 1,000,000 shares of Series B Preferred Stock. Each holder of Series
      B Preferred Stock is entitled to vote on all matters submitted to shareholders
      of Diet Coffee and shall be entitled to five thousand (5,000) votes per share
      for each share of Series B Preferred Stock held by such holder. There are no
      liquidation preferences or conversion rights associated with the Series B
      Preferred Stock





On
      May
      28, 2008, the Company issued 1,000,000 shares of our Series B Preferred Stock
      to
      a single investor in exchange for the assignment and transfer of a demand
      promissory note of Diet Coffee held by such investor in the amount of
      $21,027.40.




20




**DIET
        COFFEE, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008**
 **(UNAUDITED)**


**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation.**





The
      following discussion and analysis should be read in conjunction with our audited
      consolidated financial statements and related notes included in this report.
      This report contains “forward-looking statements” within the meaning of the
      Private Securities Litigation Reform Act of 1995. The statements contained
      in
      this report that are not historic in nature, particularly those that utilize
      terminology such as “may,” “will,” “should,” “expects,” “anticipates,”
“estimates,” “believes,” or “plans” or comparable terminology are
      forward-looking statements based on current expectations and
      assumptions.





Various
      risks and uncertainties could cause actual results to differ materially from
      those expressed in forward-looking statements. Factors that could cause actual
      results to differ from expectations include, but are not limited to, those
      set
      forth under the section “Risk Factors” set forth in this report.





The
      forward-looking events discussed in this annual report, the documents to which
      we refer you and other statements made from time to time by us or our
      representatives, may not occur, and actual events and results may differ
      materially and are subject to risks, uncertainties and assumptions about us.
      For
      these statements, we claim the protection of the “bespeaks caution” doctrine.
      All forward-looking statements in this document are based on information
      currently available to us as of the date of this report, and we assume no
      obligation to update any forward-looking statements. Forward-looking statements
      involve known and unknown risks, uncertainties and other factors that may cause
      the actual results to differ materially from any future results, performance
      or
      achievements expressed or implied by such forward-looking
      statements.





***General***




The
      following discussion and analysis is provided to increase the understanding
      of,
      and should be read in conjunction with, our unaudited financial statements
      and
      related notes included elsewhere in this Report. Historical results and
      percentage relationships among any amounts in these financial statements are
      not
      necessarily indicative of trends in operating results for any future period.
      This report contains “forward looking statements” within the meaning of the
      Private Securities Litigation Reform Act of 1995. The statements, which are
      not
      historical facts contained in this Report, including this Management’s
      discussion and analysis of financial condition and results of operation, and
      notes to our unaudited financial statements, particularly those that utilize
      terminology such as “may” “will,” “should,” “expects,” “anticipates,”
“estimates,” “believes,” or “plans” or comparable terminology are
      forward-looking statements. Such statements are based on currently available
      operating, financial and competitive information, and are subject to various
      risks and uncertainties. Future events and our actual results may differ
      materially from the results reflected in these forward-looking statements.
      Factors that might cause such a difference include, but are not limited to,
      dependence on existing and future key strategic and strategic end-user
      customers, limited ability to establish new strategic relationships, ability
      to
      sustain and manage growth, variability of operating results, our expansion
      and
      development of new service lines, marketing and other business development
      initiatives, the commencement of new engagements, competition in the industry,
      general economic conditions, dependence on key personnel, the ability to
      attract, hire and retain personnel who possess the technical skills and
      experience necessary to meet the service requirements of our clients, the
      potential liability with respect to actions taken by our existing and past
      employees, risks associated with international sales, and other risks described
      herein and in our other filings with the Securities and Exchange
      Commission.





The
      safe
      harbor for forward-looking statements provided by Section 21E of the Securities
      Exchange Act of 1934 excludes issuers of “penny stock” (as defined under Rule
      3a51-1 of the Securities Exchange Act of 1934). Our common stock currently
      falls
      within that definition





All
      forward-looking statements in this document are based on information currently
      available to us as of the date of this report, and we assume no obligation
      to
      update any forward-looking statements. Forward-looking statements involve known
      and unknown risks, uncertainties and other factors that may cause the actual
      results to differ materially from any future results, performance or
      achievements expressed or implied by such forward looking
      statements.





The
      following discussion of our financial condition and results of operations should
      be read in conjunction with our unaudited financial statements and related
      notes
      appearing elsewhere in this report.




21




**Company
      History**





We
      were
      incorporated in the State of Delaware on December 19, 2005 and amended our
      Certificate of Incorporation on March 1, 2006. On March 1, 2006, we changed
      our
      name from The Diet Coffee Company, Inc. to Diet Coffee, Inc. Our principal
      executive offices are located at 134 Cedar Street, Nutley, NJ 07110. Our
      telephone number is (973) 667-4026.




We
      are
      engaged in the direct marketing and distribution of consumer products. Our
      first
      offering was the Slim Coffee product line, which featured coffee beverages.
      We
      no longer sell or market Slim Coffee products and do not anticipate selling
      Slim
      Coffee products in the fiscal year ended June 30, 2008. In May 2007, we entered
      into a license agreement to sell an energy saving compact fluorescent light
      bulb
      named the Ionic Bulb. We plan to market the Ionic Bulb through TV infomercials,
      catalogs, magazines and major U.S. retail and specialty stores and our website
      www.ionicbulb.com.




**Comparison
      of Three Months Ended March 31, 2008 To March 31, 2007**




*Results
      of Operations*





*Revenues*





Our
      sales
      were $348,114 for the three months ended March 31, 2008, consisting of
      Ionic Bulb product sales which we primarily began marketing in this three month
      period. Our sales were $347,688 for the three months ended March 31, 2007 from
      sales of products under the Slim Coffee product line, which we generated
      primarily from customer responses to our advertisements and their placing orders
      with us through our www.slimcoffee.com website or calling one of our toll-free
      telephone numbers. We no longer sell or market Slim Coffee products and do
      not
      anticipate actively selling Slim Coffee products in the future.





*Gross
      Profit*




Our
      gross
      profit was $150,137 for the three months ended March 31, 2008 versus our gross
      profit of $248,259 for the three months ended March 31, 2007, a decrease of
      $98,122 or 40 %. The decrease is attributable to our discontinuance of sales
      under the Slim Coffee product line and out recent entry into the Ionic Bulb
      market.




Our
      gross
      profit percentage for quarter ended March 31, 2008 was 43%, as compared to
      71%
      for the quarter ended March 31, 2007. Our gross profit percentage is generally
      higher for sales we make through direct response marketing as compared to sales
      we make to mass market and specialty retailers. We did not generate any sales
      from direct marketing in the quarter ended March 31, 2008 for our Ionic Bulb
      product in contrast to the quarter ended March 31, 2007, when the majority
      of
      our net sales were generated from direct marketing of our Slim Coffee
      products.




*Operating
      expenses*




Operating
      expenses for the three months ended March 31, 2008 were $269,272 and consisted
      primarily of personnel costs, stock based compensation costs and licensing
      royalties in accordance with the Ionic Bulb Licensing and Supply Agreement
      as
      well as consulting agreements. Operating expenses for the three months ended
      March 31, 2007 were $396,028 and consisted primarily of product advertising,
      sales and marketing consulting fees, personnel costs and customer order
      fulfillment costs.




22




Net
      Income and Loss




Our
      net
      loss for the three months ended March 31, 2008 was $146,207 in contrast to
      a net
      loss of $146,969 for the three months ended March 31, 2007. We recently began
      operating in a new business segment, including efforts to market and sell our
      Ionic Bulb products, and revenues generated were not sufficient to cover our
      operating costs in both three-month periods then ended. We terminated our Slim
      Coffee sales and marketing activities and reducing overhead costs but we also
      reduced our revenues as a result. The majority of our expenses in the three
      month period ended March 31, 2008 were associated with entry into this new
      market. We expect to decrease our net loss once in future periods as sales
      of
      our Ionic Bulb product increase. We are continuing our efforts to market and
      sell our Ionic Bulb products in order to generate a higher sales volume and
      unless and until such time as we generate substantially higher sales volume,
      we
      will continue realize net losses.





Our
      net
      loss per common share was $0.00 (basic and diluted) for the three months ended
      March 31, 2008 as compared to our net loss per common shares of $0.00 (basic
      and
      diluted) for the three months ended March 31, 2007.





**Comparison
      of Nine Months Ended March 31, 2008 To March 31, 2007**




*Results
      of Operations*





*Revenues*





Our
      sales
      were $349,926 for the nine months ended March 31, 2008, consisting of Ionic
      Bulb sales. Our sales were $869,095 for the nine months ended March 31, 2007
      from sales of products under the Slim Coffee product line, which we generated
      primarily from customer responses to our advertisements and their placing orders
      with us through our www.slimcoffee.com website or calling one of our toll-free
      telephone numbers. We no longer sell or market Slim Coffee products and do
      not
      anticipate actively selling Slim Coffee products in the future.





*Gross
      Profit*




Our
      gross
      profit was $151,349 for the nine months ended March 31, 2008 versus our gross
      profit of $639,062 for the nine months, ended March 31, 2007, a decrease of
      $487,713 or 76%. The decrease is attributable to our discontinuance of sales
      under the Slim Coffee product line and our recent entry into the Ionic Bulb
      market.




Our
      gross
      profit percentage for nine months ended March 31, 2008 was 43% for the Ionic
      Bulb product line, as compared to 74% for the nine months ended March 31, 2007
      for our Slim Coffee product line.




*Operating
      expenses*




Operating
      expenses for the nine months ended March 31, 2008 were $1,760,634 and consisted
      primarily of personnel costs, stock based consulting costs and licensing
      royalties in accordance with the Ionic Bulb Licensing and Supply Agreement
      as
      well as consulting agreements. Operating expenses for the nine months ended
      March 31, 2007 were $1,203,958 and consisted of product advertising, sales
      and
      marketing consulting fees, personnel costs and customer order fulfillment costs.
      The total operating expense increase of $556,676 for the nine months ended
      March
      31, 2008 is primarily attributable to costs associated with our change in
      management and recent entry into the Ionic Bulb market.




23




*Net
      Income and Loss*





Our
      net
      loss for the nine months ended March 31, 2008 was $1,636,357 is in contrast
      to a
      net loss of  $563,032 for the nine months ended March 31, 2007, an increase
      of $1,073,325 or 191%. We recently began operating in a new business segment,
      Ionic Bulb products, and revenues generated were not sufficient to cover our
      operating costs in nine-month period. We terminated our Slim Coffee sales and
      marketing activities and concurrently reduced related overhead costs. The
      majority our expenses in the nine month period ended March 31, 2008 were
      associated with entry into the new market. We expect to decrease our net loss
      once we expand sales of the Ionic Bulb product. We are continuing our efforts
      to
      market and sell our Ionic Bulb products in order to generate a higher sales
      volume and unless and until such time as we generate substantially higher sales
      volume, we will continue realize net losses.





Our
      net
      loss per common share was ($0.02) (basic and diluted) for the nine months ended
      March 31, 2008 as compared to our net loss per common share of ($0.01) (basic
      and diluted) for the nine months ended March 31, 2007.




**Liquidity
      and Capital Resources**




Overview





As
      of
      March 31, 2008, we had a working capital deficit $1,371,416. As of June 30,
      2007, we had a working capital deficit $483,567. Our cash position at March
      31,
      2008 was $4,580 as compared to $89 as of June 30, 2007.





For
      the
      nine months ended March 31, 2008,  net cash flow used in operating
      activities of $294,509 consisting primarily of a net loss of $1,636,357 adjusted
      primarily for $748,508 in non-cash expenses for services and licensing royalties
      that were satisfied by issuance of our common stock and a $599,034 increase
      in
      payables and accrued expenses , largely payroll and related taxes.





We
      expect
      capital expenditures to be nominal for the year ending June 30, 2008. These
      anticipated expenditures are for continued investments in property and equipment
      used in our business and software for our accounting and information
      systems.




24




Financing




As
      of
      March 31, 2008, we raised an aggregate of $814,849 in initial financing through
      the issuance 50,000 Series A preferred stock and 67,750,000 shares of common
      stock to founders and 3,763,000 shares issued in a private offering of common
      stock and warrants totaling $50,000, $67,750 and $697,099, respectively. In
      addition, the Company borrowed approximately $299,000 from an unrelated third
      party.





Plan
      of
      Operation and Financing Needs





Since
      our
      inception, we have generated insufficient revenues and gross profits and have
      incurred net losses. We acquired the rights to sell the Ionic BulbTM, an energy
      saving compact fluorescent light bulb that we plan to market through TV
      infomercials, catalogs, magazines and major U.S. retail and specialty stores
      and
      our website www.ionicbulb.com. It is hoped that we will begin to achieve
      sustainable revenues within the next 12 months, of which there can be no
      guarantee. Our ability to achieve profitability is dependent on several factors,
      including but not limited to, our ability to: generate liquidity from operations
      and satisfy our ongoing operating costs on a timely basis. We still need
      additional investments in order to continue operations to cash flow break even.
      Additional investments are being sought, but we cannot guarantee that we will
      be
      able to obtain such investments. Financing transactions may include the issuance
      of equity or debt securities, obtaining credit facilities, or other financing
      mechanisms. However, the trading price of our common stock and conditions in
      the
      U.S. stock and debt markets make it more difficult to obtain financing through
      the issuance of equity or debt securities. Even if we are able to raise the
      funds required, it is possible that we could incur unexpected costs and
      expenses, fail to collect significant amounts owed to us, or experience
      unexpected cash requirements that would force us to seek alternative financing.
      Further, if we issue additional equity or debt securities, stockholders may
      experience additional dilution or the new equity securities may have rights,
      preferences or privileges senior to those of existing holders of our common
      stock. If additional financing is not available or is not available on
      acceptable terms, we will have to curtail our operations again, attempt to
      further restructure financial obligations and/or seek a strategic merger,
      acquisition or a sale of assets.





The
      independent auditor's report on our June 30, 2007 financial statements states
      that our recurring losses raise substantial doubts about our ability to continue
      as a going concern.





The
      effect of inflation on our revenue and operating results was not significant.
      Our operations are located in North America and there are no seasonal aspects
      that would have a material effect on our financial condition or results of
      operations.





**CRITICAL
      ACCOUNTING POLICIES AND USE OF ESTIMATES**





Financial
      Reporting Release No. 60, recently released by the Securities and Exchange
      Commission, requires all companies to include a discussion of critical
      accounting policies or methods used in the preparation of financial statements.
      The notes to the consolidated financial statements include a summary of
      significant accounting policies and methods used in the preparation of our
      Consolidated Financial Statements. In addition, Financial Reporting Release
      No.
      61 was recently released by the SEC requires all companies to include a
      discussion which addresses, among other things, liquidity, off-balance sheet
      arrangements, contractual obligations and commercial commitments. The following
      is a brief discussion of the more significant accounting policies and methods
      used by us.





The
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      The preparation of financial statements in accordance with generally accepted
      accounting principles in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities,
      including the recoverability of tangible and intangible assets, disclosure
      of
      contingent assets and liabilities as of the date of the financial statements
      and
      the reported amounts of revenues and expenses during the reported
      period.




25




On
      an
      on-going basis, we evaluate our estimates. The most significant estimates relate
      to our recognition of revenue, the allowance for doubtful accounts receivable
      and inventory valuation reserves.





We
      believe the following critical accounting policies affect our more significant
      judgments and estimates used in the preparation of our consolidated financial
      statements:





***Revenue
      Recognition***





We
      recognize revenue when we ship our product to customers. Customers at times
      request credits for returned product or in connection with incentives such
      as
      cooperative advertising agreements. We reduce sales or increase selling,
      general, and administrative expenses, depending on the nature of the credits,
      for estimated future credits to customers. Management bases such estimates
      either on historical information about credits issued, relative to total sales,
      or on specific knowledge of incentives offered to retailers.





***Valuation
      of Accounts Receivable***





Our
      allowance for doubtful accounts reflects our best estimate of probable losses,
      determined principally on the basis of historical experience and specific
      allowances for known troubled accounts.





***Inventories***





Inventories
      consist almost entirely of finished goods. We account for inventory using a
      first-in-first-out system in which we record inventory on our balance sheets
      at
      the lower of our cost or net realizable value. A product’s cost is comprised of
      the amount that we pay our manufacturer for product, tariffs and duties
      associated with transporting product across national borders and freight costs
      associated with transporting the product from our manufacturers to our warehouse
      locations. When circumstances dictate that we use net realizable value in lieu
      of cost, we base our estimates on expected future selling prices less expected
      disposal costs. The Cost of goods sold line item on the Statements of Operations
      is comprised of the book value (lower of cost or net realizable value) of
      inventory sold to customers during the reporting period.




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet arrangements.





**Item
      3.**  **Controls
      and Procedures.**




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed by us in the reports that
      we
      file or submit under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission's rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed by us in the reports that we file under the Exchange
      Act is accumulated and communicated to our management, including our principal
      executive and financial officers, as appropriate to allow timely decisions
      regarding required disclosure.




**Evaluation
      of Disclosure Controls and Procedures**





As
      of
      March 31, 2008, our President, Chief Financial Officer and Director carried
      out
      an evaluation, of the effectiveness of the design and operation of our system
      of
      disclosure controls and procedures pursuant to Rule 13a-15(d) and 15d-15(d)
      promulgated under the Exchange Act.  Based on this evaluation, our
      President, Chief Financial Officer and Director concluded that our controls
      and
      procedures were not effective in ensuring that information required to be
      disclosed by us in our periodic reports is recorded, processed, summarized
      and
      reported, within the time periods specified for each report and that such
      information is accumulated and communicated to our management, including our
      principal executive and principal financial officer, or persons performing
      similar functions, as appropriate to allow timely decisions regarding required
      disclosure.




26




During
      the course of the preparation of our March 31, 2008 financial statements, we
      identified certain material weaknesses relating to our internal controls and
      procedures within the areas of revenue recognition and inventory accounting.
      Some of these internal control deficiencies may also constitute deficiencies
      in
      our disclosure controls.





In
      addition, we have a limited number of employees and is not able to have proper
      segregation of duties based on the cost benefit of hiring additional employees
      solely to address the segregation of duties issue. We determined the risks
      associated with the lack of segregation of duties are insignificant based on
      the
      close involvement of management in day-to-day operations (i.e. tone at the
      top,
      corporate governance, officer oversight and involvement with daily activities,
      and other company level controls). We limited resources available and the
      limited amount of transactions and activities allow for compensating
      controls.





It
      should
      be noted that any system of controls, however well designed and operated, can
      provide only reasonable, and not absolute, assurance that the objectives of
      the
      system will be met. In addition, the design of any control system is based
      in
      part upon certain assumptions about the likelihood of future
      events.





In
      addition, our President, Chief Financial Officer and Director has determined
      that no change in our internal control over financial reporting occurred during
      the nine months ended March 31, 2008 that has materially affected, or is (as
      that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities
      Exchange Act of 1934) reasonably likely to materially affect, our internal
      control over financial reporting.





Our
      President, Chief Financial Officer and Director is in the process of
      implementing a more effective system of controls, procedures and other changes
      in the areas of revenue recognition and inventory accounting to insure that
      information required to be disclosed in this quarterly report on Form 10-QSB
      has
      been recorded, processed, summarized and reported accurately. Our management
      acknowledges the existence of this problem, and intends to developed procedures
      to address them to the extent possible given limitations in financial and
      manpower resources.





The
      Company is required to be in compliance with the certification requirements
      of
      Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control
      for
      the year ending June 30, 2008. Since inception, the Company has experienced
      severe cash flow problems and as a result has not had the resources to address
      fully the certification requirements of Section 404 of the Sarbanes-Oxley Act
      of
      2002. While management is working on a plan, no assurance can be made at this
      point that the implementation of such controls and procedures will be completed
      in a timely manner or that they will be adequate once implemented. Failure
      to
      develop adequate internal control and hiring of qualified accounting personnel
      may result in a “material weakness” in the Company’s internal control relating
      to the above activities.




**PART
      II - OTHER INFORMATION**





**Item
      1.**  **Legal
      Proceedings.**




On
      March
      26, 2007, Diet Coffee, Inc. (the “Company”) received a letter from the U.S.
      Federal Trade Commission (“FTC”) whereby the Company was informed that the FTC
      is conducting an investigation into advertising claims made for the Company’s
      weight loss product known as “Slim Coffee”. The purpose of the investigation was
      to determine whether the Company, in connection with its sales of Slim Coffee,
      engaged in unfair or deceptive acts or practices and false advertising. The
      FTC
      threatened to file a complaint in the United States District Court, Southern
      District of New York, alleging False Advertising, unless the Company and the
      FTC
      could reach a satisfactory resolution to the matter. A negotiated settlement
      has
      been reached with the FTC under which the Company, its officers and directors
      did not admit any wrongdoing. On October 5, 2007, the Company executed a
      stipulation to a final order and judgment in the amount of $923,910. The full
      amount of the judgment, and payment of any portion of it is suspended and cannot
      be reinstated so long as the Company abides by the reporting and monitoring
      requirements of the judgment; does not make false advertising claims in
      connection with any of its products in the future; and its past financial
      disclosures to the FTC were materially accurate. The Company expects stipulation
      will be executed by the FTC and filed with the United States District Court,
      Southern District of New York. The Company expects to comply with terms of
      the
      stipulation and does not anticipate incurring a liability for the
      judgment.




27




**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds.**




1.  On
      May
      14, 2008, we issued promissory notes in the amount of $134,759.45 and $21,027.40
      to a single accredited investor. These notes were issued in exchange for certain
      evidences of indebtedness in the aggregate amount of $147,000 with accrued
      interest on such indebtedness of $8,786,85. The $134,759.45 promissory note
      bears interest at a rate of 10% per annum and is convertible into our common
      stock at a rate of $0.001 per share; provided, however that holder may not
      convert the note if such conversion would result in holder beneficially owning
      more than 4.99% of our outstanding stock. This note has a maturity date of
      May
      14, 2010. The $21,027.40 promissory note bears interest at a rate of 10% per
      annum and is payable on demand. The issuances of these notes were exempt under
      Section 3(a)(9) and/or 4(2) of the Securities Act of 1933, as
      amended.





2.  On
      May
      27, 2008, we issued a 10% convertible promissory note in the amount of
      $155,789.59 to a single accredited investor. This note was issued in exchange
      for certain evidences of indebtedness in the aggregate amount of $144,500 with
      accrued interest on such indebtedness of $11,289.59. The note has a maturity
      date of May 27, 2010 and is convertible into our common stock at a rate of
      $0.001 per share; provided, however that holder may not convert the note if
      such
      conversion would result in holder beneficially owning more than 4.99% of our
      outstanding stock. The issuance was exempt under Section 3(a)(9) and/or 4(2)
      of
      the Securities Act of 1933, as amended.





3.  On
      May
      28, 2008, we issued 1,000,000 shares of our Series B Preferred Stock to a single
      investor in exchange for the assignment and transfer of a demand promissory
      note
      of Diet Coffee held by such investor in the amount of $21,027.40. The issuance
      was exempt under Section 3(a)(9) and /or 4(2) of the Securities Act of 1933,
      as
      amended.




**Item
      3.**  **Defaults
      Upon Senior Securities.**




None.





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders.**




None.





**Item
      5.**  **Other
      Information.**




On
      May
      28, 2008, we filed a Certificate of Designations, Powers, Preferences and Rights
      of Series B Preferred Stock with the Delaware Secretary of State designating
      1,000,000 shares of Series B Preferred Stock. Each holder of Series B Preferred
      Stock is entitled to vote on all matters submitted to shareholders of Diet
      Coffee and shall be entitled to five thousand (5,000) votes per share for each
      share of Series B Preferred Stock held by such holder. There are no liquidation
      preferences or conversion rights associated with the Series B Preferred
      Stock




**Item
      6.**  **Exhibits.**




3.1
            Registrant’s
                Certificate of Incorporation.(1)3.2
            Certificate
                of Amendment to Registrant’s Certificate of
                Incorporation.(1)3.3
            Certificate
                of Designation, Powers, Preferences and Rights of Series A Preferred
                Stock.(1)3.4
            Registrant’s
                By-Laws.(1)3.5
            Certificate
                of Designations, Powers, Preferences and Rights of Series B Preferred
                Stock (10)4.1
            Form
                of Warrant.(1)4.2
            2007
                Stock Incentive Plan (2)4.3
            2007
                Stock Incentive Plan No. 2 (7)4.4
            2008
                Stock Incentive Plan (8)4.5
            2008
                California Stock Incentive Plan (9)4.6
            Form
                of Convertible Note (10)10.1
            Employment
                Agreement by and between David Stocknoff and Diet Coffee, Inc., dated
                as
                of July 16, 2006.(1)




28




10.2
            Employment
                Agreement by and between David Attarian and Diet Coffee, Inc., dated
                as of
                July 16, 2006.(1)10.3
            Form
                of Subscription Agreement.(1)10.4
            License
                and Supply Agreement dated as of May 18, 2007 by and among Diet Coffee,
                Inc. and Jason Ryu. (3)10.5
            Letter
                Agreement dated October 5, 2007 between Diet Coffee, Inc. and David
                Stocknoff (4)10.6
            Letter
                Agreement dated October 5, 2007 between Diet Coffee, Inc. and David
                Attarian (4)10.7
            Consulting
                Agreement dated October 12, 2007 between Diet Coffee, Inc. and David
                Stocknoff (4)10.8
            Consulting
                Agreement dated October 12, 2007 between Diet Coffee, Inc. and David
                Attarian (4)10.9
            Employment
                Agreement with Adam Engel (5)10.10
            Supply
                Agreement (6)10.11
            Factoring
                Agreement (6)10.12
            Assignment
                of License and Supply Agreement (6)10.13
            Guarantee
                (6)10.14
            Anti-Fraud
                Agreement (6)31.1
            Certification
                of Adam J. Engel, President and Chief Financial Officer of Diet Coffee,
                Inc., pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.302
                of
                the Sarbanes-Oxley Act of 2002. (10)32.1
            Certification
                of Adam J. Engel, President and Chief Financial Officer of Diet Coffee,
                Inc., pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906
                of
                the Sarbanes-Oxley Act of 2002 (10)


________





(1)
            Filed
                as an exhibit to our Registration Statement on Form SB-2 (File No.
                333-137210), as amended, originally filed with the SEC on September
                8,
                2006 and incorporated herein by
                reference.


(2)
            Filed
                as an exhibit to our Registration Statement on Form S-8 (File No.
                333-145985) filed with the SEC on September 11, 2007 and incorporated
                herein by reference.


(3)
            Filed
                as an exhibit to our Current Report on Form 8-K dated May 18, 2007and
                incorporated herein by reference.


(4)
            Filed
                as an exhibit to our Annual Report on Form 10KSB for the year ended
                June
                30, 2007 and incorporated herein by
                reference.


(5)
            Filed
                as an exhibit to our Current Report on Form 8-K (filed with the SEC
                on
                December 14, 2007 and incorporated herein by
                reference.


(6)
            Filed
                as an exhibit to our Current Report on Form 8-K filed with the SEC
                on
                December 21, 2007 and incorporated herein by
                reference.


(7)
            Filed
                as an exhibit to our Registration Statement on Form S-8 (File No.
                333-148050) filed with the SEC on December 13, 2007 and incorporated
                herein by reference.


(8)
            Filed
                as an exhibit to our Registration Statement on Form S-8 (File No.
                333-149334) filed with the SEC on February 21, 2008 and incorporated
                herein by reference


(9)
            Filed
                as an exhibit to our Registration Statement on Form S-8 (File No.
                333-149335) filed with the SEC on February 21, 2008 and incorporated
                herein by reference


(10)
            Filed
                herewith.




29




**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Small business issuer
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.




DIET
                COFFEE,
                INC.Dated: June 12, 2008By:
              /s/ Adam
                EngelAdam Engel
                President and Chief Executive Officer




30