x
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Delaware
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02-0563302
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(State
or Other Jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
No.)
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Page
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PART I
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FINANCIAL
INFORMATION
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4
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Item 1
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4
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Item 2
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8
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Item 3
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12
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PART II
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OTHER
INFORMATION
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12
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Item 1
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12
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Item 2
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12
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Item 3
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13
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Item 4
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13
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Item 5
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13
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Item 6
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13
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DIAGNOSTIC
CORP. OF AMERICA
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||||
(A
DEVELOPMENT STAGE COMPANY)
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||||
Balance
Sheet
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||||
As
of September 30, 2006
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||||
ASSETS
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||||
2006
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||||
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||||
CURRENT
ASSETS
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||||
Cash
and cash equivalents
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$
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933
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||
Prepaid
expenses and deposits
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650
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|||
TOTAL
CURRENT ASSETS
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1,583
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|||
TOTAL
ASSETS
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$
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1,583
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||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
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||||
CURRENT
LIABILITIES
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||||
Accounts
payable
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$
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19,937
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||
Accrued
interest payable
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12,184
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|||
TOTAL
CURRENT LIABILITIES
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32,121
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|||
STOCKHOLDERS'
DEFICIT
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||||
Common
stock - $.001 par value, 50,000,000 shares authorized:
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||||
1,427,328
shares issued and outstanding)
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1,427
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|||
Additional
paid-in-capital
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2,008,764
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|||
Deficit
accumulated during development stage
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(2,040,729
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)
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||
TOTAL
STOCKHOLDERS' DEFICIT
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(30,538
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)
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||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
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$
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1,583
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||
The
accompanying notes are an integral part of the financial
statements
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DIAGNOSTIC
CORP. OF AMERICA
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|||||||||||||
(A
DEVELOPMENT STAGE COMPANY)
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|||||||||||||
Statements
of Operations
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|||||||||||||
For
the three and nine months ended September 30, 2006 and 2005
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|||||||||||||
Three
months ended September
30,
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Nine
months ended September 30,
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||||||||||
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2006
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2005
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2006
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2005
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|||||
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||||||||||||
Revenues
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$
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-
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$
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-
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$
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-
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$
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-
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|||||
Expenses
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|||||||||||||
General
and administrative
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-
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1,767
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4,144
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7,559
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|||||||||
Insurance
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6,252
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4,267
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16,620
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12,931
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|||||||||
Interest
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-
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14,567
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8,994
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38,567
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|||||||||
Management
fees
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30,000
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30,000
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90,000
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90,000
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|||||||||
Marketing
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-
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-
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849
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25,915
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|||||||||
Payroll
taxes
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956
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956
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2,868
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2,954
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|||||||||
Professional
fees
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5,300
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32,223
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52,206
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61,289
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|||||||||
Consulting
fees
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210,000
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-
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210,000
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-
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|||||||||
Rent
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1,960
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1,960
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5,880
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4,898
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|||||||||
Salaries
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-
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50,001
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25,002
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75,003
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|||||||||
Telephone
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1,297
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1,079
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3,891
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3,597
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|||||||||
Transfer
agent fees
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397
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496
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1,869
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6,025
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|||||||||
Travel
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-
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-
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1,025
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603
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|||||||||
Total
expenses
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256,162
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137,316
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423,348
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329,341
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|||||||||
Loss
before other income and provisions for taxes
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(256,162
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)
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(137,316
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)
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(423,348
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)
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(329,341
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)
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|||||
Other
income
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|||||||||||||
Interest
income
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-
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22
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-
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163
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|||||||||
Other
income - debt forgiveness
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46,399
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-
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46,399
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-
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|||||||||
Loss
before provision for taxes
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$
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(209,763
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)
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(137,294
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)
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$
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(376,949
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)
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(329,178
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)
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|||
Provision
for taxes
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-
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-
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-
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-
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|||||||||
Net
loss for the period
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$
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(209,763
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)
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$
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(137,294
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)
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$
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(376,949
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)
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$
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(329,178
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)
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Weighted
average number of common
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742,749
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15,242,599
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613,542
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13,516,900
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|||||||||
shares
outstanding - basic
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|||||||||||||
Net
loss per common share - basic and diluted
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$
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(0.28
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)
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$
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(0.01
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)
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$
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(0.61
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)
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$
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(0.02
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)
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The
accompanying notes are an integral part of the financial
statements
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DIAGNOSTIC
CORP. OF AMERICA
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||||||||||||||||
STATEMENTS
OF STOCKHOLDERS' DEFICIT
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||||||||||||||||
As
of Sep. 30, 2006
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||||||||||||||||
Number
of
Shares
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Common
Stock
($.001
Par Value)
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Additional
paid-in capital
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Deficit
Accumulated During Development Stage
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Total
Stockholders' Deficit
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||||||||
Balances
- December 31, 2004
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13,267,871
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$
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13,268
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$
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841,597
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$
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(1,264,521
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)
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$
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(409,656
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)
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|||||
Conversion
of notes payable in exchange of stock
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145,000
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145
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15,681
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-
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15,826
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|||||||||||
Shares
issued for services rendered
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200,000
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200
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9,800
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-
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10,000
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|||||||||||
Common
shares issued for cash
-private
placement (Diagostic)
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-
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-
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50,000
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-
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50,000
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|||||||||||
Common
shares issued for cash and accrued
interest
payable-private placement (Diagostic)
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1,725,000
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1,725
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34,525
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-
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36,250
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|||||||||||
Shares
issued for services rendered
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1,185,000
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1,185
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58,065
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-
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59,250
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|||||||||||
Net
loss
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-
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-
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-
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(399,259
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)
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(399,259
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)
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|||||||||
Balances
- December 31, 2005
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16,522,871
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$
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16,523
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$
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1,009,668
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$
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(1,663,780
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)
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$
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(637,589
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)
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|||||
Conversion
of notes payable in exchange for stock
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4,000,000
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4,000
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396,000
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-
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$
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400,000
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||||||||||
Shares
issued for services rendered
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300,000
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300
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23,700
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24,000
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||||||||||||
Common
shares issued for cash and certain other
expenses
- private placement (Diagostic)
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29,100,000
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29,100
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530,900
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-
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560,000
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|||||||||||
Common
shares retired due to reverse split
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(48,495,543
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)
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(48,496
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)
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48,496
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-
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-
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|||||||||
Net
loss for the period (unaudited)
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-
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-
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-
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(376,949
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)
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(376,949
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)
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|||||||||
Balances
- September 30, 2006
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1,427,328
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1,427
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2,008,764
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(2,040,729
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)
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(30,538
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)
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|||||||||
The
accompanying notes are an integral part of the financial
statements
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DIAGNOSTIC
CORP. OF AMERICA
|
|||||||
(A
DEVELOPMENT STAGE COMPANY)
|
|||||||
Statements
of Cash Flows
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|||||||
For
the nine months ended September 30, 2006 and
2005
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|||||||
2006
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2005
|
|||||
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|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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|||||||
Net
income (loss)
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$
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(376,949
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)
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$
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(329,178
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)
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Adjustments
to reconcile net loss to net
|
|||||||
cash
used in operating activities:
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|||||||
Common
stock issued for services rendered
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24,000
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69,250
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|||||
Changes
in assets and liabilities
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|||||||
Prepaid
expenses and deposits
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-
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25,100
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|||||
Accounts
payabe
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(34,694
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)
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7,266
|
||||
Accrued
interest payable
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184
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14,567
|
|||||
Accrued
payroll
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(49,342
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)
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(56
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)
|
|||
Due
to stockholders
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(124,196
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)
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65,000
|
||||
NET
CASH FLOWS FROM OPERATING ACTIVITIES
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(560,997
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)
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(148,051
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)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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|||||||
Proceeds
from sales of common stock
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560,000
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-
|
|||||
Proceeds
from the issuance of common stock
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-
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50,000
|
|||||
NET
CASH FLOWS FROM FINANCING ACTIVITIES
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560,000
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50,000
|
|||||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
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(997
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)
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(98,051
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)
|
|||
CASH
AND CASH EQUIVALENTS:
|
|||||||
Beginning
of period
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1,930
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106,924
|
|||||
End
of period
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$
|
933
|
$
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8,873
|
|||
SUPPLEMENTAL
DISCLOSURES
|
|||||||
Interest
paid
|
$
|
-
|
$
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24,000
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
|||
NON-CASH
INVESTING AND FINANCING ACTIVITIES
|
|||||||
Conversion
of convertible notes payable and accrued interest
|
$
|
-
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$
|
-
|
|||
payable
in exchange for stock
|
|||||||
Conversion
of notes payable and accrued interest payable
in exchange for stock
|
$
|
400,000
|
$
|
15,826
|
|||
The
accompanying notes are an integral part of the financial
statements
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September
30,
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December
31,
|
|||||
|
2006
|
2005
|
|||||
Deferred
tax assets:
|
|||||||
Net
operating loss carry-forward
|
$
|
2,023,949
|
1,647,000
|
||||
|
2,203,949
|
1,647,000
|
|||||
Less:
valuation allowance
|
(2,203,949
|
)
|
(1,647,000
|
)
|
|||
Net
deferred tax assets
|
$
|
--
|
$
|
--
|
|
September
30,
|
December
31,
|
|||||
|
2006
|
2005
|
|||||
Statutory
federal tax (benefit) rate
|
(34.0)
|
%
|
(34.0)
|
%
|
|||
Statutory
state tax (benefit) rate
|
(5.5)
|
%
|
(5.5)
|
%
|
|||
Effective
tax rate
|
(39.5)
|
%
|
(39.5)
|
%
|
|||
Valuation
allowance
|
39.5
|
%
|
39.5
|
%
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Exhibit
No.
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Description
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31.1
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31.2
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32.1
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32.2
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(1)
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On
September 1, 2006, the Company filed an 8-K report under Item 1.02,
Termination of a Material Definitive Agreement reporting
the termination of a proposed reverse merger transaction with WiFiMed,
Inc.
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(2)
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On
September 18, 2006, the Company filed an 8-K report to announce the
private sale of 29,100,000 shares of the Company and the changes
in the
Company’s management.
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(3)
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On
October 27, 2006, the Company filed an 8-K report to announce the
appointment of a new director of the
Company.
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DIAGNOSTIC CORPORATION OF AMERICA | ||
Date:
November 11, 2006
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/s/
Li, Gang
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Li,
Gang
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President,
Chief Executive Officer
and
Chairman of the Board of Directors
|