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

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

| DELAWARE                       | 84-1417774                           |
|--------------------------------|--------------------------------------|
| State or other jurisdiction of | (I.R.S. Employer Identification No.) |
| incorporation or organization  |                                 |

| 589 Fifth Avenue, Suite 401, New York, NY | 10017      |
|-------------------------------------------|------------|
| (Address of principal executive offices)  | (Zip Code) |

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| Large accelerated filer o                                             | Accelerated filer o         |
|-----------------------------------------------------------------------|-----------------------------|
| Non-accelerated filer o (do not check if a smaller reporting company) | Smaller reporting company x |

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|       |                                                                                                                      | PAGE   |
|------------|---------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                      |   |
| PART I.    | FINANCIAL INFORMATION                                                                                                     |   |
|       |                                                                                                                      |   |
| Item 1.    | Financial Statements                                                                                                      | 3      |
|       |                                                                                                                      |   |
|       | Condensed Consolidated Balance Sheet as of March 31, 2011 (unaudited) and December 31, 2010 (audited)                     | 3      |
|       |                                                                                                                      |   |
|       | Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended  March 31, 2011 and 2010 | 4      |
|       |                                                                                                                      |   |
|       | Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2011 and 2010            | 5      |
|       |                                                                                                                      |   |
|       | Notes to Consolidated Financial Statements                                                                                | 6      |
|       |                                                                                                                      |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                               | 8      |
|       |                                                                                                                      |   |
| Item 4.    | Controls and Procedures                                                                                                   | 11     |
|       |                                                                                                                      |   |
| PART II.   | OTHER INFORMATION                                                                                                         |   |
|       |                                                                                                                      |   |
| Item 1.    | Legal Proceedings                                                                                                         | 12     |
|       |                                                                                                                      |   |
| Item 6.    | Exhibits                                                                                                                  | 13     |
|       |                                                                                                                      |   |
| SIGNATURES | 14                                                                                                                        |

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| ITEM 1. | FINANCIAL STATEMENTS |
|---------|----------------------|

INKSURE 

|                                                                                                                                                      |   | MAR. 31,2011 |    |   | DEC. 31,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|                                                                                                                                                      |   | UNAUDITED    |    |   | AUDITED      |   |
| ASSETS                                                                                                                                                    |   |         |    |   |         |   |
|                                                                                                                                                      |   |         |    |   |         |   |
| CURRENT ASSETS:                                                                                                                                           |   |         |    |   |         |   |
| Cash and cash equivalents                                                                                                                                 |   | $            | 1,701   |   |         | $      | 1,909 |   |
| Restricted cash                                                                                                                                           |   |         | 272     |   |         |   | 266 |   |
| Trade receivables                                                                                                                                         |   |         | 434     |   |         |   | 219 |   |
| Other accounts receivable and prepaid expenses                                                                                                            |   |         | 29      |   |         |   | 43 |   |
| Inventories                                                                                                                                               |   |         | 261     |   |         |   | 229 |   |
| Assets related to discontinued operations                                                                                                                 |   |         | -       |   |         |   | 93 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTALCURRENT ASSETS                                                                                                                                       |   |         | 2,697   |   |         |   | 2,759 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| PROPERTY AND EQUIPMENT, NET                                                                                                                               |   |         | 63      |   |         |   | 67 |   |
| LONG TERM DEPOSIT                                                                                                                                         |   |         | 11      |   |         |   | 11 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTAL ASSETS                                                                                                                                              |   | $            | 2,771   |   |         | $      | 2,837 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                |   |         |    |   |         |   |   |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                      |   |         |    |   |         |   |   |   |
| Trade payables                                                                                                                                            |   | $            | 109     |   |         | $      | 147 |   |
| Employees and payroll accruals                                                                                                                            |   |         | 185     |   |         |   | 131 |   |
| Accrued expenses and other payables                                                                                                                       |   |         | 699     |   |         |   | 653 |   |
| Liabilities related to discontinued operations                                                                                                            |   |         | -       |   |         |   | 177 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTAL CURRENT LIABILITIES                                                                                                                                 |   |         | 993     |   |         |   | 1,108 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| Warrants to issue shares                                                                                                                                  |   |         | 287     |   |         |   | 183 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTAL LIABILITIES                                                                                                                                         |   | $            | 1,280   |   |         | $      | 1,291 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| STOCKHOLDERS’ EQUITY:                                                                                                                               |   |         |    |   |         |   |   |   |
| Capital Stock:                                                                                                                                            |   |         |    |   |         |   |   |   |
| Preferred stock of $ 0.01 par value - Authorized: 10,000,000 shares; Issued and outstanding: 0 shares as of March 31, 2011 and as of December 31, 2010    |   |         | -       |   |         |   | - |   |
| Common stock of $ 0.01 par value - Authorized: 75,000,000; Issued and outstanding: 42,312,088 as of March 31, 2011 and 41,493,449 as of December 31, 2010 |   |         | 423     |   |         |   | 415 |   |
| Additional paid-in capital                                                                                                                                |   |         | 17,253  |   |         |   | 17,068 |   |
| Accumulated other comprehensive income                                                                                                                    |   |         | 118     |   |         |   | 118 |   |
| Accumulated deficit                                                                                                                                       |   |         | (16,303 | )      |         |   | (16,055 | ) |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTALSTOCKHOLDERS’ EQUITY                                                                                                                           |   |         | 1,491   |   |         |   | 1,546 |   |
|                                                                                                                                                      |   |         |    |   |         |   |   |   |
| TOTALLIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                                                |   | $            | 2,771   |   |         | $      | 2,837 |   |

----

INKSURE 

|                                                                                          |   | THREE MONTHS ENDED MARCH 31, |       |
|-----------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                          |   | 2011                         |       |   | 2010 |   |
|                                                                                          |   |                         |       |   |   |   |
| Revenues                                                                                      |   | $                            | 868        |   |   | $ | 628 |   |
| Cost of revenues                                                                              |   |                         | 164        |   |   |   | 114 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Gross profit                                                                                  |   |                         | 704        |   |   |   | 514 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Operating expenses:                                                                           |   |                         |       |   |   |   |   |   |
| Research and development, net                                                                 |   |                         | 124        |   |   |   | 91 |   |
| Selling and marketing                                                                         |   |                         | 281        |   |   |   | 151 |   |
| General and administrative                                                                    |   |                         | 372        |   |   |   | 276 |   |
| Total operating expenses                                                                      |   |                         | 777        |   |   |   | 518 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Operating loss                                                                                |   |                         | (73        | ) |   |   | (4 | ) |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Gain from extinguishment of convertible debt                                                  |   |                         | -          |   |   |   | 5,881 |   |
| Financial income, net                                                                         |   |                         | 2          |   |   |   | 101 |   |
| Financial expenses related to convertible notes and warrants, net                             |   |                         | (104       | ) |   |   | (318 | ) |
| Total financial income (expenses), net                                                        |   |                         | (102       | ) |   |   | 5,664 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net profit (loss) before taxes                                                                |   |                         | (175       | ) |   |   | 5,660 |   |
| Taxes on income                                                                               |   |                         | 9          |   |   |   | – |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net profit (loss) from continued operations                                                   |   |                         | (184       | ) |   |   | 5,660 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net loss from discontinued operations (Note 3)                                                |   |                         | 64         |   |   |   | 322 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net profit (loss)                                                                             |   | $                            | (248       | ) |   | $ | 5,338 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net profit (loss) per share from continuing operations:                                       |   |                         |       |   |   |   |   |   |
| Basic                                                                                         |   | $                            | (0.01      | ) |   | $ | 0.26 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Diluted                                                                                       |   | $                            | (0.01      | ) |   | $ | 0.22 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net loss per share from discontinued operations:                                              |   |                         |       |   |   |   |   |   |
| Basic                                                                                         |   | $                            | (0.00      | ) |   | $ | (0.02 | ) |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Net profit (loss) per share:                                                                  |   |                         |       |   |   |   |   |   |
| Basic                                                                                         |   | $                            | (0.01      | ) |   | $ | 0.24 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Diluted                                                                                       |   | $                            | (0.01      | ) |   | $ | 0.21 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Weighted average number of common stock used in computing basic net profit (loss) per share   |   |                         | 41,797,931 |   |   |   | 22,306,301 |   |
|                                                                                          |   |                         |       |   |   |   |   |   |
| Weighted average number of common stock used in computing diluted net profit (loss) per share |   |                         | 41,797,931 |   |   |   | 25,878,315 |   |

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INKSURE 

|                                                                                 |   | THREE MONTHS ENDED ONMARCH 31, |    |
|--------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                 |   | 2011                           |    |   | 2010 |   |
|                                                                                 |   |                           |    |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                |   |                           |    |   |   |   |
| Net profit (loss)                                                                    |   | $                              | (248    | ) |   | $ | 5,338 |   |
| Adjustments required to reconcile net loss to net cash used in operating activities: |   |                           |    |   |   |   |   |   |
| Depreciation and amortization                                                        |   |                           | 6       |   |   |   | 7 |   |
| Increase in restricted cash balances                                                 |   |                           | (6      | ) |   |   | – |   |
| Decrease (increase) in trade receivables                                             |   |                           | (215    | ) |   |   | 103 |   |
| Non cash financial expenses related to convertible notes, net                        |   |                           | – |   |   |   | (5,881 | ) |
| Decrease (increase) in other accounts receivable and prepaid expenses                |   |                           | 14      |   |   |   | (34 | ) |
| Decrease (increase) in inventories                                                   |   |                           | (32     | ) |   |   | 9 |   |
| Decrease in Assets related to discontinued operations                                |   |                           | 93      |   |   |   | 98 |   |
| Increase (decrease) in trade payables                                                |   |                           | (38     | ) |   |   | 37 |   |
| Increase in employees and payroll accruals                                           |   |                           | 54      |   |   |   | 56 |   |
| Changes in warrants to issue shares                                                  |   |                           | 104     |   |   |   | 318 |   |
| Share based compensation                                                             |   |                           | 63      |   |   |   | 249 |   |
| Expenses related to issuance of shares                                               |   |                           | 5       |   |   |   | - |   |
| Increase (decrease) in accrued expenses and other payables                           |   |                           | 138     |   |   |   | (164 | ) |
| Decrease in liabilities related to discontinued operations                           |   |                           | (177    | ) |   |   | (111 | ) |
|                                                                                 |   |                           |    |   |   |   |   |   |
| NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES                                  |   |                           | (239    | ) |   |   | 25 |   |
|                                                                                 |   |                           |    |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                |   |                           |    |   |   |   |   |   |
| Purchase of property and equipment                                                   |   |                           | (2      | ) |   |   | – |   |
| Long-term lease deposits made                                                        |   |                           | – |   |   |   | (8 | ) |
|                                                                                 |   |                           |    |   |   |   |   |   |
| NET CASH USED BY INVESTING ACTIVITIES                                                |   |                           | (2      | ) |   |   | (8 | ) |
|                                                                                 |   |                           |    |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                |   |                           |    |   |   |   |   |   |
| Changes in restricted cash                                                           |   |                           | – |   |   |   | 500 |   |
| Proceeds from option exercises, net                                                  |   |                           | 33      |   |   |   | – |   |
| Proceeds from private placement, net                                                 |   |                           | – |   |   |   | 1,055 |   |
|                                                                                 |   |                           |    |   |   |   |   |   |
| NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES                                  |   |                           | 33      |   |   |   | 1,555 |   |
|                                                                                 |   |                           |    |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                     |   |                           | (208    | ) |   |   | 1,572 |   |
| Cash and cash equivalents at the beginning of the year                               |   |                           | 1,909   |   |   |   | 1,283 |   |
|                                                                                 |   |                           |    |   |   |   |   |   |
| Cash and cash equivalents at the end of the period                                   |   | $                              | 1,701   |   |   | $ | 2,855 |   |
|                                                                                 |   |                           |    |   |   |   |   |   |
| NON-CASH TRANSACTIONS                                                                |   |                           |    |   |   |   |   |   |

| Expenses related to issuance of shares                       |   | $ | 92      |   |   | $ | – |   |
|--------------------------------------------------------------|--------|---|---------|--------|--------|---|---------|--------|
| Conversion of debt to shares                                 |   | $ | – |   |   | $ | 2,000   |   |
| Repayment as part of debt restructuring from restricted cash |   | $ | – |   |   | $ | 1,000   |   |

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INKSURE 

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | MAR. 31,2011 |   |   | DEC. 31,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | UNAUDITED    |   |   | AUDITED      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |   |         |   |
| Property and equipment, net                                                                     |   | $            | -      |   |         | $      | 89 |   |
| Long term deposit                                                                               |   |         | -      |   |         |   | 4 |   |
| Total assets related to discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                     |   | $            | -      |   |         | $      | 93 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | MAR. 31,2011 |   |   | DEC. 31,2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | UNAUDITED    |   |   | AUDITED      |   |
| Trade payables                                                                                          |   | $            | -      |   |         | $      | 17 |   |
| Employees and payroll accruals                                                                          |   |         | -      |   |         |   | 55 |   |
| Accrued expenses and other payables                                                                     |   |         | -      |   |         |   | 105 |   |
| Total liabilities related to discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                        |   | $            | -      |   |         | $      | 177 |   |

|                                  |   | THREE MONTHS ENDEDMARCH 31, |   |
|---------------------------------------|--------|-----------------------------|--------|
|                                  |   | 2011                        |   |   | 2010 |   |
|                                  |   |                        |   |   |   |   |
| Operating expenses:                   |   |                        |   |   |   |   |
| Research and development, net         |   | $                           | 64     |   |   | $ | 265 |   |
| Selling and marketing                 |   |                        | -      |   |   |   | 29 |   |
| General and administrative            |   |                        | -      |   |   |   | 28 |   |
| Total operating expenses              |   |                        | 64     |   |   |   | 322 |   |
|                                  |   |                        |   |   |   |   |   |   |
| Net loss from discontinued operations |   | $                           | 64     |   |   | $ | 322 |   |

| A. | On July 25, 2010, InkSure Ltd. entered into a settlement and release agreement, or the Settlement Agreement, with Vuance Ltd. (previously known as SuperCom Ltd., and the former owner of InkSure, referred to as SuperCom, and collectively with InkSure, as the Defendants) and with Secu-System Ltd., an Israeli company, or Secu-System or Plaintiff, in order to settle all claims and disputes that had arisen between the parties more than 10 years ago, in connection with certain claims filed by Secu-System claiming that the printing method applied to certain products that have been developed by InkSure Ltd. constitutes, inter alia: (1) breach of a confidentiality agreement between the Plaintiff and Supercom; (2) unjust enrichment of Defendants; (3) a breach of fiduciary duties owed to the Plaintiff; and (4) a tort of misappropriation of trade secret and damage to Plaintiff’s property. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | On March 3, 2011, the Company was served with an action initiated by Tzlil Peker, its former chief financial officer. The action that was filed with the Tel Aviv Regional Labor Court, includes various claims regarding alleged events surrounding the termination of Mr. Peker's employment, including, amongst others: alleged wrongful termination, as well as alleged failure to pay over-time, travel expenses, various employee benefits, and failure to pay alleged gains from the exercise of employee stock options. The total damages amount, which Mr. Peker claims is owed to him is NIS 177 (approximately $49 in accordance with the official Bank of Israel exchange rate as of March 3, 2011.) |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 2.  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------------|---------------------------------------------------------------------------------------------|

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| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

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| PART II. | OTHER INFORMATION |
|----------|-------------------|

| ITEM 1.  | LEGAL PROCEEDINGS |
|---------------|-------------------|

| C. | On March 3, 2011, the Company was served with an action initiated by Tzlil Peker, its former chief financial officer. The action that was filed with the Tel Aviv Regional Labor Court, includes various claims regarding alleged events surrounding the termination of Mr. Peker's employment, including, amongst others: alleged wrongful termination, as well as alleged failure to pay over-time, travel expenses, various employee benefits, and failure to pay alleged gains from the exercise of employee stock options. The total damages amount, which Mr. Peker claims is owed to him is NIS 177 (approximately $49 in accordance with the official Bank of Israel exchange rate as of March 3, 2011.) |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 6. | EXHIBITS |
|---------|----------|

| EXHIBITNUMBER |   | DESCRIPTION                                                                                                                                    |
|---------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                           |
| 31.1          |   | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.* |
|          |   |                                                                                                                                           |
| 31.2          |   | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.* |
|          |   |                                                                                                                                           |
| 32.1          |   | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.**                             |

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SIGNATURES

|                | INKSURE TECHNOLOGIES INC.             |   |
|---------------------|---------------------------------------|--------|
|                |                                  |   |
| Dated: May 16, 2011 | By: /s/ Tal Gilat                     |   |
|                | Tal Gilat                             |   |
|                | President and Chief Executive Officer |   |
|                | (Principal Executive Officer)         |   |
|                |                                  |   |
| Dated: May 16, 2011 | By: /s/ David (Dadi) Avner            |   |
|                | David (Dadi) Avner                    |   |
|                | Chief Financial Officer,              |   |
|                | (Principal Financial Officer)         |   |

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