U.S. 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 JUNE 30, 1999

[ ]      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.
                      ------------------------------------
                      (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)

                         3650 ANNAPOLIS LANE, SUITE 101
                          MINNEAPOLIS, MINNESOTA 55447
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (612) 509-9999
                           ---------------------------
                           (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 ___

The number of shares of the Registrant's common stock, par value $.25 per share,
outstanding on August 13, 1999 was 5,296,720.

Transitional Small Business Disclosure Format (Check one): Yes ___   No _X_


<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                                  JUNE 30, 1999



                                      INDEX
                                                                        PAGE NO.
                                                                        --------
PART I -- FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS (UNAUDITED)

  Balance Sheets                - June 30, 1999 and December 31, 1998          3

  Statements of Operations      - Three Months Ended June 30, 1999 and 1998    4
                                  Six Months Ended June 30, 1999 and 1998

  Statements of Cash Flows      - Six Months Ended June 30, 1999 and 1998      5

  Notes to Financial Statements - June 30, 1999                                6


ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS                                       6

PART II -- OTHER INFORMATION                                                   8

ITEM 1.        LEGAL PROCEEDINGS                                               8

ITEM 2.        CHANGES IN SECURITIES                                           8

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES                                 8

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             8

ITEM 5.        OTHER INFORMATION                                               9

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K                               10

SIGNATURES                                                                    11

EXHIBIT 10.1:  Second Amendment to Restated License Agreement between GV      12
               Medical and Massachusetts Institute of Technology, effective
               April 26, 1990.

EXHIBIT 10.2   Third Amendment of License Agreement between Massachusetts     13
               Institute of Technology and SpectraScience, Inc., effective
               October 15, 1993.

EXHIBIT 27:    Financial Data Schedule pursuant to Article 5 of               21
               Regulation S-X


                                       2
<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                                 BALANCE SHEETS

                                                June 30,          December 31,
                                                  1999              1998 (1)
                                              ------------        ------------
                                               (UNAUDITED)
ASSETS
Current assets:
    Cash and cash equivalents                 $  1,418,010        $    301,970
    Inventories                                    198,669             185,625
    Other current assets                            55,559              85,253
                                              ------------        ------------
Total current assets                             1,672,238             572,848

Net property and equipment                         232,594             247,531
                                              ------------        ------------

            TOTAL ASSETS                      $  1,904,832        $    820,379
                                              ============        ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                          $     74,872        $    281,986
    Accrued compensation and taxes                 149,763              99,263
    Accrued expenses                               188,317              56,990
    Accrued clinical research fees                  97,009             162,400
                                              ------------        ------------
Total current liabilities                          509,961             600,639

Commitments

SHAREHOLDERS' EQUITY
Common stock, $.25 par value:
    Authorized shares--10,000,000
    Issued and outstanding shares--
       5,296,720 on June 30, 1999 and
       4,737,804 on December 31, 1998            1,324,180           1,184,451
Additional paid-in capital                      47,626,744          45,586,659
Accumulated deficit                            (47,556,053)        (46,551,370)
                                              ------------        ------------
            TOTAL SHAREHOLDERS' EQUITY           1,394,871             219,740
                                              ------------        ------------
             TOTAL LIABILITIES AND
                   SHAREHOLDERS' EQUITY       $  1,904,832        $    820,379
                                              ============        ============

(1)   THE BALANCE SHEET ON DECEMBER 31, 1998 HAS BEEN DERIVED FROM THE AUDITED
      FINANCIAL STATEMENTS AT THAT DATE BUT DOES NOT INCLUDE ALL OF THE
      INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING
      PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS.

SEE NOTES TO FINANCIAL STATEMENTS.


                                       3
<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                      STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED                   SIX MONTHS ENDED
                                           JUNE 30                              JUNE 30
                                 -----------------------------       -----------------------------
                                     1999              1998              1999              1998
                                 -----------       -----------       -----------       -----------
<S>                              <C>               <C>               <C>               <C>
Revenue                          $        --       $        --       $        --       $        --

Cost of products sold                     --                --                --                --
                                 -----------       -----------       -----------       -----------
   Gross profit                           --                --                --                --

Operating expenses
   Research and development          261,423           604,978           543,447           942,907
   Selling, general and
     administrative                  306,843           220,782           500,350           439,922
                                 -----------       -----------       -----------       -----------
Total operating expenses             568,266           825,760         1,043,797         1,382,829

Interest and other
   income (expense)                   23,876            18,519            39,114            37,729
                                 -----------       -----------       -----------       -----------

Net loss                         $  (544,390)      $  (807,241)      $(1,004,683)      $(1,345,100)
                                 ===========       ===========       ===========       ===========

Net loss per share               $     (0.10)      $     (0.17)      $     (0.20)      $     (0.29)

Weighted average common
   shares outstanding              5,296,720         4,683,390         5,103,484         4,603,063
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.


                                       4
<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                       STATEMENTS OF CASH FLOW (UNAUDITED)
<TABLE>
<CAPTION>
                                                             SIX MONTHS ENDED
                                                                  JUNE 30
                                                       -----------------------------
                                                           1999              1998
                                                       -----------       -----------
<S>                                                    <C>               <C>
OPERATING ACTIVITIES
  Net loss                                             $(1,004,683)      $(1,345,100)
  Adjustments to reconcile net loss to cash
    used in operating activities:
    Depreciation                                            27,879           126,352
    Changes in operating assets
       and liabilities:
         Decrease in accounts receivable                        --                --
         Increase in inventories                           (13,044)         (120,821)
         Decrease in other current assets                   29,694             3,335
         Decrease in current liabilities                   (90,678)          (80,233)
                                                       -----------       -----------

         Net cash used in operating activities          (1,050,832)       (1,416,467)

INVESTING ACTIVITIES
  Purchase of property and equipment                       (12,942)          (13,240)
                                                       -----------       -----------

        Net cash used in investing activities              (12,942)          (13,240)

FINANCING ACTIVITIES
  Proceeds from issuance of common stock                 2,179,814           928,056
                                                       -----------       -----------
        Net cash provided by financing activities        2,179,814           928,056
                                                       -----------       -----------

  Net increase (decrease) in cash and cash
  equivalents                                            1,116,040          (501,651)

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF PERIOD                                   301,970         1,638,173
                                                       -----------       -----------

CASH AND CASH EQUIVALENTS
  AT END OF PERIOD                                     $ 1,418,010       $ 1,136,522
                                                       ===========       ===========
</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS.


                                       5
<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                                  JUNE 30, 1999

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this Form 10-QSB constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words or phrases such as "may," "expects," "will continue," "is anticipated,"
"management believes," "estimate," "projects," "hope" or expressions of a
similar nature or the negatives thereof identify forward-looking statements.
Such forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical, currently
anticipated or projected results. We caution you not to place undue reliance on
forward-looking statements. Please refer to Exhibit 99 of the Company's
Quarterly Report on Form 10-QSB for the quarter ended March 31, 1999 for certain
important cautionary factors, risks and uncertainties related to forward-looking
statements.


                          NOTES TO FINANCIAL STATEMENTS


NOTE A  BASIS OF PRESENTATION

      The accompanying unaudited financial statements of SPECTRASCIENCE, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three- and six-month periods ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999. 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, 1998.


NOTE B  NET LOSS PER SHARE

      Net loss per share is computed using the weighted average number of common
shares outstanding during the period. Common equivalent shares from stock
options and warrants are excluded from the computation, as their effect is
anti-dilutive. In February 1997, the Financial Accounting Standards Board (FASB)
issued FASB Statement No. 128, "EARNINGS PER SHARE." This Statement replaces the
presentation of primary earnings per share (EPS) with basic EPS and also
requires dual presentation of basic and diluted EPS for entities with complex
capital structures. This Statement was effective for the fiscal year ending
December 31, 1998. For the three- and six-month periods ended June 30, 1999,
there is no difference between basic loss per share under Statement No. 128 and
net loss per share as reported.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

(a)   BUSINESS

      SPECTRASCIENCE, Inc. develops and manufactures innovative,
minimally-invasive spectroscopic systems to facilitate real-time differentiation
and diagnosis of cancerous and diseased tissue by utilizing advanced
spectroscopy, fiber optics, computer hardware and software.

      SPECTRASCIENCE, INC. was incorporated in the state of Minnesota on May 4,
1983 as GV Medical, Inc. and is located at 3650 Annapolis Lane, Suite 101,
Minneapolis, Minnesota 55447-5434. Our telephone number is (612) 509-9999, and
our fax number is (612) 509-9805. Our web-site can be


                                       6
<PAGE>


accessed at http://www.spectrascience.com, and our e-mail address is
spsi@spectrascience.com. The Company's common stock, par value $.25 per share
(the "Common Stock"), is traded on the Over-The-Counter Bulletin Board under the
symbol SPSI.


(b)   RESULTS OF OPERATIONS

      The Company recorded no revenue for the three and six months ended June
30, 1999 and June 30, 1998.

      Research and development expenses for the three and six months ended June
30, 1999 were $261,423 and $543,447, compared to $604,978 and $942,907 for the
same periods in 1998. The decrease of 56.8% for the three months ended June 30,
1999 was primarily due to lower design engineering, consulting, legal and salary
expenses. In addition, the Company had an inventory revaluation which
substantially increased research and development expenses during this same
period in 1998. The decrease was partially offset by increased expenses relating
to ISO certification and research and development contracts. The 42.4% decrease
for the six months ended June 30, 1999 was due to the same reasons stated above.

      Selling, general and administrative expenses for the three and six months
ended June 30, 1999 were $306,843 and $500,350, compared to $220,782 and
$439,922 for the same periods in 1998. The 39.0% increase for the three months
ended June 30, 1999 was primarily due to increased legal expenses related to
late billings, and to a lesser extent, increased consulting expenses. This was
partially offset by decreased salary expenses related to the vacant Chief
Financial Officer position and the assumption of Mr. McMahon's duties by Mr.
Sievert. The increase of 13.7% for the six months ended June 30, 1999 was
primarily due to increased legal expenses related to late billings, increased
consulting expenses and an increase in expenses related to the annual
shareholders' meeting. This increase was partially offset by decreases in salary
and investor relations expenses.

      Interest and other income for the three and six months ended June 30, 1999
were $23,876 and $39,114, compared to $18,519 and $37,729 for the same periods
in 1998. The increases were primarily due to higher balances in cash and cash
equivalents, even though interest rates during the same periods this year were
less favorable.

      As a result of the above, the net loss for the three and six months ended
June 30, 1999 was $544,390 and $1,004,683, compared to a net loss of $807,241
and $1,345,100 for the same periods in 1998. The net loss per share for the
three and six months ended June 30, 1999 was $0.10 and $0.20 compared to $0.17
and $0.29 for the same periods in 1998.


(c)   LIQUIDITY AND SOURCES OF CAPITAL

      Cash and cash equivalents on June 30, 1999 were $1,418,010, compared to
$301,970 on December 31, 1998. The increase in the cash position from December
31, 1998 to June 30, 1999 was primarily due to warrant exercises and a private
placement of the Company's Common Stock during the first quarter of 1999.

      The working capital of the Company on June 30, 1999 was $1,162,277,
compared to ($27,791) on December 31, 1998. The increase in working capital was
primarily due to an increase in the Company's cash position.

      Net cash used in operating activities for the six months ended June 30,
1999 was $1,050,832, compared to $1,416,467 for the same period in 1998. This
decrease was primarily due to the lower net loss for the six months ended June
30, 1999 compared to the same period in 1998. The Company also had a larger
inventory build-up during the six months ended June 30, 1998 than it did during
the same period in 1999.

      Net cash used in investing activities for the six months ended June 30,
1999 was $12,942, compared to $13,240 for the same period in 1998.


                                       7
<PAGE>


      Net cash provided by financing activities for the six months ended June
30, 1999 was $2,179,814, compared to $928,056 for the same period in 1998. The
increase was primarily due to a private placement of the Company's Common Stock
and warrant exercises in the first quarter of 1999.

      Management believes that the amount of cash and cash equivalents is
adequate to fund operations at least through December 1999.


                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

      On or about September 4, 1998, the Company was served with a Complaint in
the case of Paul Gibson v. SpectraScience, Inc. (Minn. 4th Jud. Dist.), claiming
that the plaintiff, who was at one time a financial consultant to the Company,
was entitled to receive options for 50,000 shares of Common Stock at an exercise
price of $2.50 per share. Mr. Gibson was retained to successfully complete a
proposed private placement financing. The stock options were to vest upon the
successful closing of the proposed financing on or before December 31, 1994. The
proposed financing did not occur. The Company believes the claim to lack merit
and intends to defend itself vigorously.

ITEM 2.  CHANGES IN SECURITIES

      Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      Not applicable.

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

      Reference is made hereby to the Company's definitive proxy statement (Form
DEF 14A) for the Annual Meeting of Shareholders held on June 18, 1999, as filed
with the Securities and Exchange Commission on May 28, 1999, File No. 0-13092.

(a)   The Annual Meeting of Shareholders of SPECTRASCIENCE, Inc. (the "Meeting")
      was held on June 18, 1999.

      Shareholders of record at the close of business on May 27, 1999, (the
      "Record Date") were entitled to receive notice of and to vote at the
      Meeting and any adjournment thereof. On the Record Date, 5,296,720 shares
      of the Company's Common Stock (the "Shares"), were entitled to vote at the
      Meeting, of which a total of 2,817,646 Shares, or 53.2% of the total
      Shares outstanding, were represented at the Meeting.

(b)   The following individuals were elected to serve as directors of the
      Company:

            Chester E. Sievert, Jr.
            Henry M. Holterman
            Nathaniel S. Thayer
            Johan A.P.M de Hond


                                       8
<PAGE>


      The only item submitted to a vote of the shareholders was the proposal to
elect four (4) persons to serve as directors until the next annual meeting of
shareholders or until their respective successors shall be elected and
qualified. All of the nominees for directors were elected by the shareholders.
The final votes for each of the nominees were as follows:


                        No. of Votes  AS % OF TOTAL  No. of Votes  AS % OF TOTAL
Name                         FOR      SHARES VOTED     WITHHELD    SHARES VOTED
--------------------------------------------------------------------------------
Chester E. Sievert, Jr.   2,780,166       98.7%         37,480          1.3%
Henry M. Holterman        2,431,155       86.3%        386,491         13.7%
Nathaniel S. Thayer       2,781,766       98.7%         35,880          1.3%
Johan A.P.M. de Hond      2,782,166       98.7%         35,480          1.3%

      There were no broker non-votes for this item.

ITEM 5.  OTHER INFORMATION

(a)   EXECUTIVE VICE PRESIDENT

      Stephen M. Blinn joined the company on August 5, 1999 as Executive Vice
President. His primary duties are in the areas of new business development,
sales and marketing. Mr. Blinn has over 28 years of experience with companies
ranging in size from start-ups to large corporations, all of which have been
involved with medical product or medical device manufacturing and distribution.
Mr. Blinn has been a Director of Sight Resources Corporation since May of 1993.
He served as Executive Vice President and Chief Operating Officer from May 1993
to January 1998, and as President of their SightCare operations from January
1998 to August 1998. He has also served as President and Chief Executive Officer
of Silver Platter Education, Inc., a company providing continuing education
programs for medical providers, since January 1999. Mr. Blinn served as
Executive Vice President, Strategic Marketing Development of Summit Technology,
Inc. from 1991 to May 1993. He also was a co-founder and President of Source
Research, Inc., a distribution company for medical lasers and cardiac
pacemakers, from 1985 to 1987.

(b)   YEAR 2000 ISSUE

      Many currently installed computer systems and software are coded to accept
only two-digit entries in the date code fields. These date code fields will need
to accept four-digit entries to distinguish 21st century dates from 20th century
dates. This problem could result in system failures or miscalculations causing
disruptions of business operations. As a result, many companies' computer
systems and software will need to be upgraded or replaced in order to comply
with Year 2000 ("Y2K") requirements. The potential global impact of the Y2K
problem is not known, and if not corrected in a timely manner, could affect the
Company in particular and the U.S. and world economy generally.

      Our product development process currently contains steps to include Y2K
compliance verification for all current and future products. Our existing
products are Y2K compliant. In addition, we are requesting assurances from our
major and sole or limited source suppliers that they are addressing the Y2K
issue. These actions are intended to help mitigate the possible external impact
of the Y2K problem. The Y2K efforts of third parties are not within our control;
however, their failure to resolve Y2K issues successfully could result in
business disruption and increased costs to the Company. At the present time, it
is not possible to determine whether any such events are likely to occur, or
quantify any potential negative impact they may have on our future results of
operations and financial condition.

      We are currently analyzing internal and external Y2K issues. Our internal
and other computer systems are being reviewed to assess and minimize Y2K issues;
this assessment includes our information technology ("IT") and non-IT systems.
Our Y2K compliance program includes the following phases: identifying systems
that may need to be modified or replaced; carrying out modifications to existing


                                       9
<PAGE>


systems or converting to new systems; and conducting validation testing of
various systems and applications to determine their readiness. All internal IT
computer systems and software have been assessed and appear to be Y2K compliant,
with the exception of the accounting software. Computer equipment that we
purchased in 1997 for the purpose of satisfying operational needs is Y2K
compliant. Our accounting software will be replaced during third quarter of
1999. To date, the assessment of our external IT systems has not revealed any
Y2K compliance issues. We believe the assessment of our non-IT systems to be
complete. We estimate that we will complete our Y2K compliance program for all
of our significant internal systems by September 30, 1999.

      We estimate the total cost for resolving our Y2K issues will probably be
less than $15,000, of which approximately $1,400 has been spent through August
12, 1999. The estimate of Y2K costs is based on numerous assumptions, and there
can be no assurance that the estimate is correct or that actual costs will not
be materially greater than anticipated.

      Although we use computer software and hardware for various operations,
including financial reporting, certain manufacturing and assembly functions, and
in our products, we believe that the Y2K issue will not cause any material
disruptions to our operations. However, if certain critical third-party
providers, such as those that supply electricity, water or telephone service,
experience difficulties resulting in disruption of the services they provide us,
a shutdown of our facility could occur for the duration of the disruption. We
plan to continuously monitor the status of completion of our Y2K plan and, based
upon such information, will develop a contingency plan as necessary.

      The most reasonably likely worst-case scenario of failure by the Company
or our suppliers or customers to resolve Y2K issues could potentially be a
temporary slowdown or cessation of operations at our facility, and/or a
temporary inability on our part to timely process orders and to deliver finished
products to customers. Unresolved Y2K issues by the Company, suppliers or
customers could potentially delay the timing of payments from or to the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBIT 10.1      Second Amendment to Restated License Agreement between GV
                  Medical and Massachusetts Institute of Technology, effective
                  April 26, 1990.

EXHIBIT 10.2      Third Amendment of License Agreement between Massachusetts
                  Institute of Technology and SpectraScience, Inc., effective
                  October 15, 1993.

EXHIBIT 27:       Financial Data Schedule pursuant to Article 5 of Regulation
                  S-X.

FORM 8-K:         No reports on Form 8-K were filed by the Company during the
                  quarter covered by this report.


                                       10
<PAGE>


                              SPECTRASCIENCE, INC.

                                   FORM 10-QSB

                                  JUNE 30, 1999

                                   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)



   AUGUST 13, 1999              /s/ CHESTER E. SIEVERT, JR.
---------------------           --------------------------------------
        Date                    CHESTER E. SIEVERT, JR.
                                Chairman, Chief Executive Officer, and President
                                (Principal Executive Officer,
                                Principal Financial and Accounting Officer)


                                       11