**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**Form
      10-QSB**


(Mark
      One)





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


For
      the
      quarterly period ended **March
      31, 2006**





o       TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
                the transition period from
            
            to





Commission
      file number **0-13092**





**SPECTRASCIENCE,
      Inc.**


(a
      Development Stage Enterprise)


(Exact
      name of small business issuer


as
      specified in its charter)


**Minnesota**
            
            **41-1448837**(State
                or other jurisdiction
            
            (I.R.S.
                Employer Identification Number)of
                incorporation or organization)


**11568
                Sorrento Valley Rd., Suite 11****San
                Diego, California 92121**(Address
                of principal executive offices)


**(858)
                847-0200**(Issuer's
                telephone number)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities
      Exchange Act of 1934 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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes
o No
x





**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN**


**BANKRUPTCY
      PROCEEDINGS DURING THE**


**PRECEDING
      FIVE YEARS**


Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court.




Yes
x No
o





The
      number of shares of the Registrant’s common stock, par value $.01 per share,
      outstanding on May
      12,
      2006 was 37,600,762.




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


Page
          2




**SpectraScience,
      Inc.**


(Development
      Stage Enterprise)





**Index**


**Page****No.**PART
                  I
              FINANCIAL
                  INFORMATION:
              4Item
                  1.
              Financial
                  Statements (Unaudited)
              4Item
                  3.
              Controls
                  and Procedures
              14PART
                  IIOTHER
                  INFORMATION
              14Item
                  1.
              Legal
                  Proceedings
              14Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              14Item
                  3.
              Defaults
                  Upon Senior Securities
              14Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              14Item
                  5.
              Other
                  Information
              14Item
                  6.
              Exhibits
              14SIGNATURES
              16







Page
          3


**PART
      I** **FINANCIAL
      INFORMATION** **:**




**Item 1.**
            **Financial Statements
              (Unaudited)**




**SpectraScience,
      Inc.**


(Development
      Stage Enterprise)




**CONDENSED
      BALANCE SHEETS**


**March
                      31,**
                    **2006**
                  
                  **December
                      31,**
                    **2005**(Unaudited)
                  
                  (Audited)ASSETSCurrent
                      assets:Cash
                      and cash equivalents
                  
                  $
                  266,271
                  
                  $
                  441,025Inventories
                  
                  
                  139,343
                  
                  
                  140,072Prepaid
                      expenses and other current assets
                  
                  
                  30,330
                  
                  
                  42,310Total
                      current assets
                  
                  
                  435,944
                  
                  
                  623,407Fixed
                      assets, net
                  
                  
                  3,998
                  
                  
                  6,397Patents,
                      net
                  
                  
                  257,629
                  
                  
                  262,626TOTAL
                      ASSETS
                  
                  $
                  697,571
                  
                  $
                  892,430LIABILITIES
                      AND STOCKHOLDERS’ EQUITYCurrent
                      liabilities:Accounts
                      payable
                  
                  $
                  53,314
                  
                  $
                  17,498Accrued
                      compensation and taxes
                  
                  
                  14,568
                  
                  
                  15,205Total
                      liabilities
                  
                  
                  67,882
                  
                  
                  32,703STOCKHOLDERS’
                      EQUITYUndesignated
                      capital stock, undesignated par value, 25,000,000 shares authorized,
                      none
                      issuedCommon
                      stock, $.01 par value:Authorized--100,000,000
                      sharesIssued
                      and outstanding—37,600,762 shares at March 31, 2006 (37,572,262 shares at
                      December 31, 2005)
                  
                  
                  376,008
                  
                  
                  375,723Additional
                      paid-in capital
                  
                  
                  1,866,936
                  
                  
                  1,822,123Deferred
                      compensation
                  
                  
                  -
                  
                  
                  (48,140
                  )Deficit
                      accumulated during the development stage
                  
                  
                  (1,613,255
                  )
                  
                  (1,289,979
                  )TOTAL
                      STOCKHOLDERS’ EQUITY
                  
                  
                  629,689
                  
                  
                  859,727TOTAL
                      LIABILITIES AND
                    STOCKHOLDERS’
                      EQUITY
                  
                  $
                  697,571
                  
                  $
                  892,430





Note:
      The
      balance sheet at December 31, 2005 has been derived from the audited financial
      statements at that date but does not include all of the information required
      by
      accounting principles generally accepted in the United States of America for
      complete financial statements.




*See
      accompanying notes to unaudited condensed financial
      statements.*


Page
          4







**SpectraScience,
      Inc.**


(Development
      Stage Enterprise)




**CONDENSED
      STATEMENTS OF OPERATIONS**


**(Unaudited)**





**Three
                Months Ended**
              **March
                31,**
            
            **August
                  2, 2004****(Inception
                of**
              **Successor**
              **Company)
                to****2006**
            
            **2005**
            
            **March
                31, 2006**Gross
                revenue
            
            $
            --
            
            $
            --
            
            $
            --Operating
                expenses:Research
                and development
            
            
            36,900
            
            
            9,751
            
            
            90,022General
                and administrative
            
            
            289,596
            
            
            191,796
            
            
            1,553,439Total
                operating expenses
            
            
            326,496
            
            
            201,547
            
            
            1,643,461Operating
                loss
            
            
            (326,496
            )
            
            (201,547
            )
            
            (1,643,461
            )Other
                income, net
            
            
            3,220
            
            
            1,027
            
            
            30,206Net
                loss
            
            $
            (323,276
            )
            $
            (200,520
            )
            $
            (1,613,255
            )Basic
                and diluted net lossper
                share
            
            $
            (0.01
            )
            $
            (0.01
            )Weighted
                average number of common shares outstanding
            
            
            37,596,012
            
            
            37,550,762
















*See
      accompanying notes to unaudited condensed financial
      statements.*


Page
          5


**SpectraScience,
      Inc.**


(Development
      Stage Enterprise)




**CONDENSED
      STATEMENTS OF CASH FLOWS**


**(Unaudited** **)**




**Three
                Months Ended**
              **March
                31,**
            
            **August
                2, 2004**
              **(Inception
                of**
              **Successor**
              **Company)
                to****2006**
            
            **2005**
            
            **March
                31, 2006**OPERATING
                ACTIVITIES:Net
                loss
            
            $
            (323,276
            )
            $
            (200,520
            )
            $
            (1,613,255
            )Adjustments
                to reconcile net loss to cashused
                in operating activities:Depreciation
                and amortization
            
            
            7,396
            
            
            7,230
            
            
            47,564Amortization
                of deferred compensation
            
            
            19,779
            
            
            19,778
            
            
            208,220Amortization
                of options issued to consultants
            
            
            69,184
            
            
            5,224
            
            
            170,868Gain
                on disposal of fixed assets
            
            
            
            
            
            
            
            
            (9,139
            )Writeoff
                of obsolete inventories
            
            
            
            
            
            3,948
            
            
            9,097Changes
                in operating assetsand
                liabilities:Inventories
            
            
            729
            
            
            
            
            
            729Prepaid
                expenses and other current assets
            
            
            11,980
            
            
            17,547
            
            
            (6,580
            )Accounts
                payable
            
            
            35,816
            
            
            9,169
            
            
            (6,388
            )Accrued
                compensation and taxes
            
            
            (637
            )
            
            1,430
            
            
            (17,525
            )Net
                cash used in operating activities
            
            
            (179,029
            )
            
            (136,194
            )
            
            (1,216,409
            )INVESTING
                ACTIVITIES:
              Proceeds
                from the sale of fixed assets
            
            
            -
            
            
            -
            
            
            13,190FINANCING
                ACTIVITIES:
              Proceeds
                from issuance of common stock
            
            
            -
            
            
            -
            
            
            20,000Proceeds
                from exercise of stock options
            
            
            4,275
            
            
            -
            
            
            7,500Net
                cash provided by financing activities
            
            
            4,275
            
            
            -
            
            
            27,500Net
                decrease in cash and cash equivalents
            
            
            (174,754
            )
            
            (136,194
            )
            
            (1,175,719
            )CASH
                AND CASH EQUIVALENTSAT
                BEGINNING OF PERIOD
            
            
            441,025
            
            
            1,132,505
            
            
            1,441,990CASH
                AND CASH EQUIVALENTSAT
                END OF PERIOD
            
            $
            266,271
            
            $
            996,311
            
            $
            266,271Supplemental
                disclosure of non-cash investing and financing activities:Conversion
                of notes payable and accruedinterest
                to common stock
            
            
            
            
            
            
            
            $
            565,000Issuance
                of common stock in settlementof
                bankruptcy debt
            
            
            
            
            
            
            
            $
            60,000Fresh
                start adjustment to fixed assets andpatents
            
            
            
            
            
            
            
            $
            255,379




*See
      accompanying notes to unaudited condensed financial
      statements.*


Page
          6




**SpectraScience,
      Inc.**


(Development
      Stage Enterprise)





**Notes
      to Unaudited Condensed Financial Statements**


**March
      31, 2006**





**1.**
            **Nature
                of Business and Basis of
                Presentation**





**Description
      of Business**





SpectraScience,
      Inc. (the “Company”) filed for bankruptcy protection on September 13, 2002 (U.S.
      Bankruptcy Court, District of Minnesota, Case No. 02-42904). The case was
      converted from liquidation under Chapter 7 to Chapter 11 reorganization in
      early
      2003. The Company’s Plan of Reorganization was confirmed on July 7, 2004 and
      became effective on August 23, 2004. The Company received funding and commenced
      operations effective August 2, 2004. As of August 2, 2004 (for purposes of
      this
      Report, the “Effective Date”), the Company became the “Successor Company” and
      the Company as it existed prior to August 2, 2004 is referred to as the
“Predecessor Company.” During the bankruptcy, the Company was under the control
      of a court appointed trustee and had no management (all officers and directors
      had resigned), no legal counsel, no outside auditors, no transfer agent, and
      no
      operations.





The
      Company was incorporated in the State of Minnesota on May 4, 1983 as GV Medical,
      Inc. In October 1992, GV Medical discontinued its prior business, refocused
      its
      development efforts and changed its name to SpectraScience, Inc. From 1996
      until
      filing for bankruptcy reorganization in 2002, the Company primarily focused
      on
      developing the WavSTATTM Optical Biopsy System (“WavSTATTM System”). The WavSTATTM
System is a proprietary, minimally invasive technology that optically scans
      tissue in real-time to distinguish between normal and pre-cancerous or cancerous
      tissue, without the need to physically remove tissue from the body. We are
      currently in a clinical study at three institutions to determine if we can
      expand our indications for use to include detection of pre-esophageal cancer.
      We
      are currently FDA approved for pre-colon cancer detection.





**Basis
      of Presentation**





The
      accompanying unaudited condensed financial statements of SpectraScience, Inc.
      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 and Item 310 of Regulation S-B. Accordingly, they
      do
      not include all of the information and footnotes required by accounting
      principles generally accepted in the United States of America for complete
      financial statements. In the opinion of management, all adjustments (consisting
      of normal recurring accruals) considered necessary to make the financial
      statements not misleading have been included. Operating results for the three
      month period ended March 31, 2006 are not necessarily indicative of the results
      that may be expected for the year ended December 31, 2006. These statements
      should be read in conjunction with the financial statements and related notes
      which are included in the Company’s Annual Report on Form 10-KSB for the year
      ended December 31, 2005.





**Liquidity
      and Development Stage Enterprise**





The
      Company is a development stage enterprise. Since August 2, 2004, it has not
      generated any revenue from the sale of its products and, through March 31,
      2006,
      its efforts have been principally devoted to restarting the Company as it
      emerged from bankruptcy. During the first quarter of 2006, the Company did
      not
      receive the proceeds of an earlier Regulation S placement of its shares. As
      a
      result, the Company had working capital of $368,062 and cash and cash
      equivalents of $266,271 at March 31, 2006. The Company expects to complete
      its
      Regulation S restricted placement of common stock with a consortium of European
      banks in the second quarter of 2006. However, if we do not receive these funds
      in a timely manner, the Company could be in jeopardy as a going concern. We
      may
      not be able to find alternative capital or raise capital or debt on terms that
      are acceptable. The Company believes that if the proceeds from the 2006 private
      placement arrive in the second quarter of 2006, such proceeds will be sufficient
      to allow the Company to sustain operations until it attains profitability and
      positive cash flows from operations. However, we may incur unknown expenses,
      or
      we may not be able to meet our revenue forecast that will require us to seek
      additional capital. In such an event, the Company may not be able to find such
      capital or raise capital or debt on terms that are acceptable.


Page
          7





**2.**
            **Summary
                of Significant Accounting
                Policies**





The
      Company adopted fresh-start reporting as of August 2, 2004 in accordance with
      the American Institute of Certified Public Accountants Statement of Position
      90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy
      Code” (“SOP 90-7”). Under fresh-start reporting, a new entity has been deemed
      created for financial reporting purposes.





Use
      of
      Estimates





The
      Company prepares its financial statements in conformity with accounting
      principles generally accepted in the United States of America, which require
      management to make estimates and assumptions that affect the amounts reported
      in
      the financial statements and disclosures made in the accompanying notes to
      the
      financial statements. Significant estimates made by management include, among
      others, realization of long-lived assets. Actual results could differ from
      those
      estimates.





Stock-Based
      Compensation


In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards (“SFAS”), SFAS No. 123(R), “Share-Based Payment”,
        (“SFAS 123(R)”) which establishes standards for transactions in which an entity
        exchanges its equity instruments for goods or services. SFAS 123(R) requires
        an
        issuer to measure the cost of employee services received in exchange for
        an
        award of equity instruments based on the grant-date fair value of the award.
        SFAS 123(R) became effective for the Company commencing January 1, 2006 using
        the modified prospective method. The Company’s first quarter 2006 results of
        operations reflects a portion of share-based awards earned during the three
        months ended March 31, 2006 for previously granted stock options. In accordance
        with the provisions of SFAS No. 123 “Accounting for Stock-Based Compensation”,
        (“SFAS 123”) and Emerging Issues Task Force (“EITF”) No. 96-18, “Accounting for
        Equity Instruments That are Issued to Other Than Employees for Acquiring
        or in
        Conjunction with Selling Goods of Services,” all other issuances of common
        stock, stock options or other equity instruments to non-employees as the
        consideration for goods or services received by the Company are accounted
        for
        based on the fair value of the equity instruments issued (unless the fair
        value
        of the consideration received can be more reliably measured). Any options
        issued
        to non-employees are recorded in expense and additional paid-in capital in
        stockholders’ equity over the applicable service periods using variable
        accounting through the vesting date based on the fair value of the options
        at
        the end of each period. The intrinsic value of the options granted are assumed
        to be zero because the exercise price of options granted equaled the fair
        market
        value of the underlying stock at the date of grant.





For
      the
      three months ended March 31, 2006, stock-based compensation approximated
      $89,000. Stock-based compensation expense was included in general and
      administrative expenses in the statement of operations for the first three
      months of fiscal 2006. We previously adopted the fair value recognition
      provisions of SFAS 123 prospectively for all employee and consultant awards
      granted, modified, or settled by the Successor Company on August 2, 2004.
      Accordingly we believe SFAS 123(R) will not have a material impact on our
      financial statements.


Page
          8


As
        of
        March 31, 2006, the Company has one stock-based employee compensation plan
        (the
“Option Plan"). The Option Plan provides for the grant of incentive stock
        options (“ISOs") to our full-time employees (who may also be Directors) and
        nonqualified stock options ("NSOs") to non-employee directors, consultants,
        customers, vendors or providers of services and expires on January 30, 2011.
        The
        exercise price of any ISO may not be less than the fair market value of the
        common stock on the date of grant and the term shall not exceed ten years.
        The
        amount reserved under the Option Plan shall equal 15% of the outstanding
        shares
        of the Company totaling 5,640,114 at March 31, 2006. At March 31, 2006, the
        Company had outstanding 1,950,000 options under the Option Plan representing
        approximately 5.2% of the outstanding shares (1,208,333 of which were
        exercisable), with 3,640,114 available for future issuance. Awards under
        the
        Company’s Option Plan vest over three years.
 
 The
        fair
        value of options granted were estimated at the date of grant using a
        Black-Scholes option-pricing model which includes several variables including
        expected life, risk free interest rate, expected stock price volatility,
        stock
        option exercise patterns and expected dividend yield. The Company also must
        estimate forfeitures. These models and assumptions are emerging and may change
        future expenses by increasing or decreasing stock-based compensation expense.
        Management used the following assumptions in each of the past two
        years:


2005
            
            2004Expected
                life
            5
                years
            
            5
                yearsRisk-free
                interest rate
            4.25%
            
            3.89%Expected
                volatility
            219%
            
            141%Expected
                dividend yield
            0%
            
            0%




In
        addition to the above, we estimated the forfeitures under the Option Plan
        would
        have negligible effects because such forfeitures would be a very small
        percentage. Management believes that options granted have been to a group
        of
        individuals that have a high desire to see the Company succeed and have aligned
        themselves to that end.
 
 The
        expected life used in the calculation was selected by management based on
        past
        experience, forward looking profit forecasts and estimates of what the trading
        price of the Company’s stock might be at different future dates.
 
 The
        risk-free interest rate is the 5-year U.S. Treasury rate as published at
        the
        time of making the calculations.
 
 Volatility
        is a calculation based on the Company’s stock price since the beginning of the
        Successor Company. If the volatility calculation had been higher, the expense
        for stock-based compensation would not have changed materially. A much lower
        volatility calculation would materially affect the expenses for stock-based
        compensation. Management tested this volatility calculation for reasonableness
        and found it to be acceptable based on a number of factors including the
        Company’s current market capitalization, comparables to other companies in our
        area of interest, the current stage of the Company considering it has only
        recently emerged from bankruptcy and management’s estimate of the net present
        value of forward looking profits that has been compiled (for which there
        is no
        assurance).
 
 A
        summary
        of option activity under the Option Plan as of March 31, 2006 and changes
        during
        the quarter ended March 31, 2006 is presented below:




Page
          9




Options
            
            Shares
            
            Weighted-Average
                Exercise Price
            
            Weighted-Average
                Remaining Contractual Term
            
            Aggregate
                Intrinsic Value ($000)Outstanding
                at January 1, 2006
            
            
            1,978,500
            
            $
            0.27Granted
            
            
            -
            
            
            -Exercised
            
            
            (28,500
            )
            
            0.15Forfeited
                or expired
            
            
            -
            
            
            -Outstanding
                at March 31, 2006
            
            
            1,950,000
            
            $
            0.27
            
            
            8.51
            
            $
            2,496Exercisable
                at March 31, 2006
            
            
            1,208,333
            
            $
            0.24
            
            
            8.51
            
            $
            1,586





No
        options were granted during the three months ended March 31, 2006 or 2005.
        The
        total intrinsic value of options exercised during the quarter ended March
        31,
        2006 and 2005 was $48,175 and $0, respectively .
        At
        March 31, 2006, total unrecognized estimated employee compensation cost related
        to non-vested stock options granted prior to that date was $28,361 which
        is
        expected to be recognized over the next two quarters.
  We
        registered the shares in our Option Plan with the SEC on September 9, 2005
        with
        a registration statement on Form S-8





Inventories





Inventories
      are valued at the lower of cost, determined on the first-in, first-out (FIFO)
      basis, or market value. Cost includes direct material, labor and overhead.
      Inventories consist of the following:





March
                31, 2006
            
            December
                31,
              2005Raw
                materials
            
            $
            60,188
            
            $
            60,917Work
                in process
            
            
            -
            
            
            -Finished
                goods
            
            
            79,155
            
            
            79,155Totals
            
            $
            139,343
            
            $
            140,072





Earnings
      (Loss) Per Share


Basic
        earnings (loss) per share is computed by dividing net income (loss) available
        to
        common stockholders by the weighted average number of common shares outstanding
        during the period of computation. Diluted earnings (loss) per share is computed
        similar to basic earnings per share except that the denominator is increased
        to
        include the number of additional common shares that would have been outstanding
        if the potential common shares had been issued and only if the additional
        common
        shares would be dilutive. Basic and diluted loss per share are the same for
        all
        periods presented, since any additional common stock equivalents would be
        antidilutive. Potentially dilutive shares of common stock that have been
        excluded from the calculation of the weighted average number of dilutive
        common
        shares for the three months ended March 31, 2006 are options to purchase
        1,950,000 shares of common stock. Potentially dilutive shares of common stock
        that have been excluded from the calculation of the weighted average number
        of
        dilutive common shares for the three months ended March 31, 2005 are options
        to
        purchase 1,775,000 shares of common stock.




**3.**
            **Subsequent
                Events**





In
      October 2005, the Company accepted a proposal from a consortium of European
      banks to sell them approximately 9,000,000 shares of the Company’s common stock
      discounted 33% from the listed quoted price on the acceptance date
      (approximately $6,000,000), in reliance upon Regulation S under the Securities
      Act of 1933. On October 20, 2005, shares of the Company’s common stock were
      transferred to an escrow account awaiting completion of the transaction. As
      of
      the date this report was filed, the funds had not been received. Funding is
      expected in the second quarter of 2006.




Page
            10


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





**Safe
      Harbor Statement Under the Private Securities Litigation Reform Act of
      1995**





This
      Report on Form 10-QSB contains forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
      Securities Exchange Act of 1934, as amended. When used in this Report, or in
      our
      future filings with the SEC, in our press releases and in oral statements made
      with the approval of an authorized executive officer, the words or phrases
      “anticipates,” “estimates,” “expects,” “will likely result,” “projects,”
“believes,” “intends,” or similar expressions are intended to identify such
      forward-looking statements, but are not the exclusive means of identifying
      such
      statements. These forward-looking statements involve risks and uncertainties
      that may cause our actual results to differ materially from the results
      discussed in the forward-looking statements.





We
      caution you not to place undue reliance on these forward-looking statements,
      which speak only as of the date made. We undertake no obligation to revise
      any
      forward-looking statements in order to reflect events or circumstances after
      the
      date of such statements. Readers are urged to carefully review and consider
      the
      various disclosures made by us in this Report and other reports we file with
      the
      SEC that attempt to advise interested parties of the risks and factors that
      may
      affect our business. Such forward-looking statements are qualified in their
      entirety by the cautions and risk factors set forth in our Annual Report on
      Form
      10-KSB covering the year ended December 31, 2005.


Page
          11





**Business**





SpectraScience,
      Inc. develops and manufactures innovative Laser Induced Fluorescence
      spectrophotometry systems capable of determining whether tissue is normal,
      pre-cancerous or cancerous without removing tissue from the body. The
      Wav Stat ’ Optical Biopsy
      System (“Wav Stat ’ ”) is
      SpectraScience's first fully developed product to incorporate its proprietary
      Laser Induced Fluorescence technology for worldwide clinical use. It is approved
      by the FDA for use during endoscopy of the colon when screening for colon
      cancer. The
      Company’s second application of this technology for detecting pre-esophageal
      cancer is undergoing a clinical trial at three institutions. Upon completion
      of
      the trial, the Company plans to file with the FDA a supplement to its existing
      PMA permission to begin marketing for that indication for use. SpectraScience
      believes its core technology is a platform technology that can be developed
      for
      use in many areas of the human body.





Our
      principal executive offices are located at 11568 Sorrento Valley Rd., Suite
      11,
      San Diego, CA 92121. We can be reached by telephone at (858) 847-0200; by fax
      at
      (858) 847-0880; or by email at info@spectrascience.com. We have a web-site at
      http://www.spectrascience.com. The information contained on our web site shall
      not be deemed to be a part of this Report.







**Plan
      of Operation**





We
      are a
      development stage medical device company that has not yet engaged in significant
      commercial activities. During 2006 we intend to complete a Phase II clinical
      trial with our WavSTATTM system for the detection of Barrett’s syndrome, thought
      to be a pre-cancerous condition of the esophagus. The progression toward
      esophageal cancer begins with several pre-cancerous stages. It is critical
      for
      the physician to be able to identify these various stages of the disease in
      order to deliver the most appropriate treatment. As with colorectal cancer,
      early and accurate detection of esophageal cancer results in less invasive,
      more
      cost effective treatments with a greater chance for long term patient
      survival.





Barrett’s
      esophagus is a condition of the lining of the lower esophagus thought to be
      caused primarily by Gastro Esophageal Reflux Disease (“GERD”), more commonly
      known as chronic heartburn. Physicians typically recommend that persons with
      chronic heartburn should have an endoscopy to look for Barrett’s esophagus. Some
      Barrett’s patients will advance further to a stage where additional abnormal
      tissue called dysplasia is present. Dysplasia is known to be the next
      progressive step toward esophageal cancer and is categorized in stages of low
      grade and high grade. Barrett’s esophagus, dysplasia and esophageal cancer
      patients are currently diagnosed by an endoscopy of the esophagus with multiple
      physical biopsies of the inner lining.





High-grade
      dysplasia is a critical stage to correctly diagnose because physicians
      frequently recommend surgical resection or removal of the esophagus if Barrett's
      esophagus with high-grade dysplasia is present. Unfortunately for the patient,
      dysplasia is not easily visible to the physician during standard endoscopy.
      Because early diagnosis is critical, multiple biopsies may be performed either
      randomly or in a geometric pattern in the esophagus in the hope of finding
      the
      most appropriate tissue to biopsy.





If
      the
      results of our Phase II clinical trial are successful, we will apply for FDA
      approval (by supplement to our existing approval for colon cancer detection)
      for
      use of the WavSTATTM system in pre-esophageal cancer detection.


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          12





In
      addition, we may (if funding permits) seek to heighten market acceptance of
      our
      colon cancer detection technology by demonstrating to managed care organizations
      that using our optical biopsy technique is faster, more accurate and less
      expensive than the current technique of removing all suspicious
      polyps.





During
      the first quarter of 2006, the Company did not receive the proceeds of an
      earlier Regulation S placement of its shares and as a result, the Company had
      working capital of $368,062 and cash and cash equivalents of $266,271 at March
      31, 2006. The Company has not completed a Regulation S restricted placement
      of
      its common stock with a consortium of European banks, but expects to do so
      in
      the second quarter of 2006. However, if we do not receive these funds in a
      timely manner, the Company could be in jeopardy as a going concern. We may
      not
      be able to find alternative capital or raise capital or debt on terms that
      are
      acceptable. The Company believes that if the proceeds from the 2006 private
      placement arrive in the second quarter of 2006, such proceeds will be sufficient
      to allow the Company to sustain operations until it attains profitability and
      positive cash flows from operations. However, we may incur unknown expenses,
      or
      we may not be able to meet our revenue forecast that will require us to seek
      additional capital. In such an event, the Company may not be able to find such
      capital or raise capital or debt on terms that are acceptable.





**Results
      of Operations**





The
      Company adopted fresh-start reporting as of August 2, 2004 in accordance with
      the American Institute of Certified Public Accountants Statement Of Position
      90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy
      Code” (“SOP 90-7”). Under fresh-start reporting, a new entity has been deemed
      created for financial reporting purposes.





The
      Company had no revenue for the three months ended March 31, 2006 and 2005.





Overall
      research and development expenses for the three months ended March 31, 2006
      and
      2005 were $36,900 and $9,751, respectively. Research and development expenses
      related specifically to new product and application development while conducting
      a clinical trial.





General
      and administrative expenses for the three months ended March 31, 2006 and 2005
      were $289,596 and $191,796, respectively. The increase for the three months
      ended March 31, 2006 compared to the three months ended March 31, 2005 was
      primarily due to stock option expense, professional fees and insurance required
      to re-start the Company.





Other
      income, net for the three months ended March 31, 2006 and 2005 was $3,220 and
      $1,027, respectively. The increase was primarily from interest income in 2006
      compared to interest income offset by a write off of inventory in
      2005.





As
      a
      result of the above, the net loss for the three months ended March 31, 2006
      and
      2005 was $323,276 and $200,520, respectively. The increase in losses was
      primarily due to general and administrative expenses to re-start the Company.
      The net loss per share for the three months ended March 31, 2006 and 2005 was
      $0.01 in each period.


**Liquidity
        and Capital Resources**
 
 In
        October 2005, the Company accepted a proposal from a consortium of European
        banks to sell them approximately 9,000,000 shares of the Company’s common stock
        discounted 33% from the listed quoted price on the acceptance date
        (approximately $6,000,000), in reliance upon Regulation S under the Securities
        Act of 1933. On October 20, 2005, shares of the Company’s common stock were
        transferred to an escrow account awaiting completion of the transaction.
        As of
        the date this report was filed, the funds had not been received. Funding
        is
        expected in the second quarter of 2006.


On
      March
      31, 2006, the Company had cash of $266,271 compared to $441,025 at December
      31,
      2005 representing a decrease of $174,754. The cash decreased principally due
      to
      salaries, professional fees and payments associated with conducting a clinical
      trial. The Company has incurred losses and negative cash flows from operating
      activities from its inception. As of the date this report was filed, the Company
      had not secured additional funding in order to continue and complete its
      clinical trial to determine if the Company’s WavSTATTM
      can be used to detect Barrett’s
      esophagus. Funding for this activity is expected in the second quarter of 2006.
      There have been no capital equipment expenditures and none are
      foreseen.


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          13





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





Evaluation
      of Disclosure Controls





As
      required by Rule 13a-15 under the Exchange Act, as of the end of the period
      covered by this Report the Company carried out an evaluation of the
      effectiveness of the design and operation of the Company's disclosure controls
      and procedures. This included a thorough investigation of accounting controls
      and presentation. This evaluation was carried out under the supervision and
      with
      the participation of the Company's management, including the Company's
      President, Chief Executive Officer and Chief Financial Officer. Based upon
      that
      evaluation, the Company's President, Chief Executive Officer and Chief Financial
      Officer concluded that the Company's disclosure controls and procedures are
      effective in timely alerting the Company’s management to material information
      relating to the Company and required to be included in its periodic SEC
      filings.


.


Changes
      in Internal Controls over Financial Reporting





There
      were no changes in the Company's internal controls over financial reporting
      during the three months ended March 31, 2006 which has materially affected
      or is
      reasonably likely to materially affect the Company’s internal controls over
      financial reporting.




**PART
                II**
            **OTHER
                INFORMATION****Item
                1.**
            **Legal
                Proceedings**None**Item
                2.**
            **Unregistered
                Sales of Equity Securities and Use of Proceeds**None**Item
                3.**
            **Defaults
                Upon Senior Securities**None**Item
                4.**
            **Submission
                of Matters to a Vote of Security Holders**None**Item
                5.**
            **Other
                Information**None**Item
                6.**
            **Exhibits**




Page
          14





Exhibit
                31
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                302 of the Sarbanes-Oxley Act of 2002.Exhibit
                32
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002.







Page
          15


**SpectraScience,
      Inc.**




**FORM
      10-QSB**





**March
      31, 2006**







**SIGNATURES**










Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.





**SpectraScience,
                Inc.**(Registrant)**May
                11, 2006**Date
              
              /s/
                James
                Hitchin**James
                Hitchin**President,
                  Chief Executive Officer and Chief Financial Officer
                (Principal
                  executive officer, principal financial officer, and principal accounting
                  officer)









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