##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2006o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    fromto   Commission file number 000  51481
  ELECTRO-OPTICAL SCIENCES,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

13-3986004(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)3 West Main Street,
    Suite 201
    Irvington, New York

10533(Zip Code)(Address of Principal Executive
    offices)   Registrants Telephone Number, including area code:
 (914) 591-3783
     þ o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




---



##### 



Electro-Optical
    Sciences, Inc.
  Table of Contents
  PagePART I.
    FINANCIAL INFORMATIONITEM 1.


Financial
    StatementsCondensed Balance
    Sheets as of March 31, 2006 (unaudited) and
    December 31, 2005


2Condensed
    Statements of Operations (unaudited) for the three months ended
    March 31, 2006 and 2005


3Condensed
    Statements of Cash Flows (unaudited) for the three months ended
    March 31, 2006 and 2005


4Notes to Condensed
    Financial Statements (unaudited)


5ITEM 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


13ITEM 3.


Quantitative and
    Qualitative Disclosures about Market Risk


37ITEM 4.


Controls and
    Procedures


37 PART II.
    OTHER INFORMATIONITEM 1.


Legal
    Proceedings


38ITEM 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


38ITEM 3.


Defaults Upon
    Senior Securities


38ITEM 4.


Submission of
    Matters to a Vote of Security Holders


38ITEM 5.


Other
    Information


38ITEM 6.


Exhibits


39SIGNATURES


40EXHIBIT
    INDEX


41EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION   1




---



##### Table of Contents



PART
    I.  FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  ELECTRO-OPTICAL
    SCIENCES, INC.
 CONDENSED
    BALANCE SHEETS  March 31,


December 31,2006


2005(Unaudited)


*ASSETSCurrent Assets:Cash and cash equivalents

$
7,994,454


$
18,505,030Marketable securities


7,841,923



Prepaid expenses and other current
    assets


235,272



210,940Assets held for sale


156,677



156,677Total Current Assets


16,228,326



18,872,647Property and equipment, net


359,185



175,369Patents and trademarks, net


83,455



84,052Other assets


33,612



33,612Total Assets

$
16,704,578


$
19,165,680LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable (includes related
    parties of $11,263 as of December 31, 2005)

$
230,264


$
329,462Accrued expenses (includes related
    parties of $10,000 as of March 31, 2006 and $15,000 as of
    December 31, 2005)


800,121



570,052Other current liabilities


10,041



16,828Total Current
    Liabilities


1,040,426



916,342COMMITMENTS AND
    CONTINGENCIESStockholders
    EquityCommon
    stock  $.001 par value; authorized
    30,000,000 shares; issued and outstanding
    10,865,918 shares at March 31, 2006 and
    10,837,833 shares at December 31, 2005


10,866



10,838Additional paid-in capital


39,383,067



38,934,420Deferred compensation


(199,347
)


(62,610
)Other comprehensive loss


(8,256
)


Accumulated deficit


(23,522,178
)


(20,633,310
)Stockholders
    Equity


15,664,152



18,249,338Total Liabilities and
    Stockholders Equity

$
16,704,578


$
19,165,680       *
    
    Derived from the Audited Balance Sheet as of December 31,
    2005 2




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  CONDENSED STATEMENTS OF OPERATIONS
  Three Months EndedMarch 31,2006


2005(Unaudited)Operating expenses:Research and development

$
1,985,233


$
636,267General and administrative


1,083,687



504,211Operating loss from continuing
    operations


(3,068,920
)


(1,140,478
)Interest income


180,052



26,260Loss from continuing operations


(2,888,868
)


(1,114,218
)Loss from discontinued operations






(128,543
)Net loss


(2,888,868
)


(1,242,761
)Less:Preferred stock deemed dividends






362,039Preferred stock accretion






323,248Net Loss Attributable to Common
    Stockholders

$
(2,888,868
)

$
(1,928,048
)Net loss per common share, basic
    and diluted:Continuing operations


(0.27
)


(1.00
)Discontinued operations






(0.07
)Basic and diluted net loss per
    common share

$
(0.27
)

$
(1.07
)Basic and diluted weighted average
    number of common shares outstanding


10,851,873



1,809,758    3




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  CONDENSED STATEMENTS OF CASH FLOWS
  Three Months EndedMarch 31,2006


2005(Unaudited)Cash flows from operating
    activities:Loss from continuing operations

$
(2,888,868
)

$
(1,114,218
)Loss from discontinued operations






(128,543
)Net loss


(2,888,868
)


(1,242,761
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


16,973



13,212Noncash compensation and
    amortization of deferred compensation


283,853



78,765Amortization of discount on
    marketable securities






(14,630
)Changes in operating assets and
    liabilities:Decrease in receivables






53Increase in inventories






(13,001
)(Increase) decrease in prepaid
    expenses and other current assets


(24,331
)


9,581Increase (decrease) in accounts
    payable and accrued expenses


130,871



(92,035
)Decrease in deferred revenues






(106,335
)(Decrease) increase in other
    current liabilities


(6,787
)


614Net cash used in operating
    activities


(2,488,289
)


(1,366,537
)Cash flows from investing
    activities:Patent costs


(1,889
)


(1,831
)Purchases of property and equipment


(198,304
)


(50,104
)(Purchase) redemption of
    marketable securities


(7,850,179
)


1,500,585Net cash (used in) provided by
    investing activities


(8,050,372
)


1,448,650Cash flows from financing
    activities:Proceeds from exercise of stock
    options


28,085



Net cash provided by financing
    activities


28,085



Net (decrease) increase in cash
    and cash equivalents


(10,510,576
)


82,113Cash and cash equivalents at
    beginning of period


18,505,030



108,705Cash and cash equivalents at
    end of period

$
7,994,454


$
190,818Supplemental Schedule of
    Noncash Financing Activities:Preferred stock accretion





$
323,248Reclassification of inventories
    and patents to assets held for sale





$
156,677    4




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL STATEMENTS
  (In thousands, except for share and per share data)
  (Unaudited)
  1.
    ORGANIZATION
    AND BASIS OF PRESENTATION  ® point-of-care ® ®
  ® ® ® ® ® ® ®
  Form 10-Q. Form 10-K
    2.
    MARKETABLE
    SECURITIES  available-for-sale, Available-for-sale other-than-temporary
  March 31, 2006Fair


UnrealizedMarketable Securities Consisted
    of:

Value


Gain (Loss)Corporate debt securities

$
2,370


$
(4
)Obligations of US government
    agencies


5,472



(4
)Total

$
7,842


$
(8
)  5




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
   available-for-sale other-than-temporary. other-than-temporary,
  held-to-maturity
  3.
    COMPREHENSIVE
    LOSS  available-for-sale available-for-sale available-for-sale
  4.
    USE OF
    ESTIMATES    5.
    RECENT
    ACCOUNTING DEVELOPMENTS  Share-Based Payment Accounting for Stock Issued to Employees Accounting for
    Stock-Based Compensation
     6




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Three Months EndedMarch 31, 2005(In thousands, exceptper share amounts)Net loss attributable to common
    stockholders, as reported

$
(1,928
)Add: Stock-based employee
    compensation expense included in reported net loss, net of
    related tax effect


79Deduct: Stock-based employee
    compensation expense determined under fair value based method,
    net of related tax effect


(82
)Pro forma net loss

$
(1,931
)Basic and diluted earnings per
    share:As reported

$
(1.07
)Pro forma

$
(1.07
)   6.
    NET LOSS
    PER COMMON SHARE  Earnings Per Share
  Three Months Ended
    March 31,2006


2005Common stock options


1,190,976



954,266Warrants


298,280



2,758,923Redeemable convertible preferred
    stock






3,398,105Total


1,489,256



7,111,294   7.
    STOCK-BASED
    COMPENSATION     7




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
       Three Months EndedMarch 31, 2006Expected life


5 yearsExpected volatility


60%Risk-free interest rate


4.8%       Weighted


WeightedAverage


AverageExercise


Remaining


AggregateNumber


Price per


Contractual


Intrinsicof Shares


Share


Term in Years


ValueOutstanding at December 31,
    2005


1,115,415



0.95







Granted


103,646



5.65







Exercised


(28,085
)


1.00







Forfeited or expired


0







Outstanding at March 31, 2006


1,190,976



1.35



4.8


$
5,413Vested and exercisable at
    March 31, 2006


596,274



1.47



5.0


$
2,640       No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services.
 8




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
   8.
    COMMITMENTS
    AND CONTINGENCIES    ® ® ®
        9.
    INITIAL
    PUBLIC OFFERING    10.
    WARRANTS     9




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    11.
    STOCK
    OPTIONS AND DEFERRED COMPENSATION  Stock
    Options
    ® ®
    Deferred
    Compensation
    ®
 10




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
   12.
    RELATED
    PARTY CONSULTING AGREEMENTS    Consulting
    Agreement with Breaux Castleman
  ®
  Consulting
    Agreement with Marek Elbaum, Ph.D.
    Consulting
    Agreement with Robert Friedman, M.D.
  ®
  Consulting
    Agreement with Gerald Wagner, Ph.D.
  ®
  13.
    DISCONTINUED
    OPERATIONS AND ASSETS HELD FOR SALE  ®
 11




---



##### Table of Contents



ELECTRO-OPTICAL
    SCIENCES, INC.
  NOTES TO CONDENSED FINANCIAL
    STATEMENTS  (Continued)
   ® ® ® ®
  ®
  ®
  14.
    SUBSEQUENT
    EVENT         12




---



##### Table of Contents



Item 2.



ELECTRO-OPTICAL
    SCIENCES, INC.
    MANAGEMENTS DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    Form 10-Q, Form 10-Q.
  Overview
  point-of-care ® ® ® ® ® ®
  ® period-to-period
  ® ®
 13




---



##### Table of Contents



®
    ® ®
  ® ® ®
  Critical
    Accounting Policies and Significant Judgments and
    Estimates
      Revenue
    Recognition
  ® ® ®
    Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock Issued to Employees
 14




---



##### Table of Contents



Accounting for
    Stock-Based Compensation
    ®
  Accrued
    Expenses
    
    professional service fees;
    contract clinical service fees;
    fees paid to contract manufacturers in conjunction with the
    production of clinical components or materials; and
    fees paid to third party data collection organizations and
    investigators in conjunction with the clinical trials.    Results
    of Operations (in thousands)
  Three
    Months Ended March 31, 2006 Compared to Three Months Ended
    March 31, 2005
  Research and Development Expense. ®
   15




---



##### Table of Contents



General and Administrative Expense.
  Interest Income
  Liquidity
    and Capital Resources (in thousands)
      Cash Flows from Operating Activities.
  Cash Flows from Investing Activities.
  Cash Flows from Financing Activities.
  Operating
    Capital and Capital Expenditure Requirements
  ® ® ® ® ®
 16




---



##### Table of Contents



®
  
    The schedule, costs, and results of our clinical trials;
    The success of our research and development efforts;
    The costs and timing of regulatory approval;
    Reimbursement amounts for the use of
    MelaFind®
    that we are able to obtain from Medicare and third party payors,
    or the amount of direct payments we are able to obtain from
    patients
    and/or
    physicians utilizing
    MelaFind®;
    The cost of commercialization activities, including product
    marketing and building a domestic direct sales force;
    The emergence of competing or complementary technological
    developments;
    The costs of filing, prosecuting, defending and enforcing any
    patent claims and other rights, including litigation costs and
    the results of such litigation;
    The costs involved in defending any patent infringement actions
    brought against us by third parties; and
    Our ability to establish and maintain any collaborative,
    licensing or other arrangements, and the terms and timing of any
    such arrangements.  Contractual
    Obligations
    Less than








More thanTotal


1 Year


1-3 Years


4-5 Years


5 Years(Dollars in thousands)Operating Leases

$
859


$
207


$
573


$
79



Total

$
859


$
207


$
573


$
79


$
     Related
    Party Transactions
    Off-Balance
    Sheet Arrangements
   17




---



##### Table of Contents



Risk
    factors
  Investing in our common stock involves a high degree of risk.
    You should carefully consider the following risk factors, as
    well as the other information contained in this report. If any
    of the following risks actually occur, our business, financial
    condition and results of operations would suffer. In that case,
    the trading price of our common stock would likely decline and
    you might lose all or part of your investment in our common
    stock.
  Risks
    Relating to Our Business
  We
    currently do not have, and may never develop, any commercialized
    products.
  ® ®
  
    we may not be able to obtain regulatory approvals for
    MelaFind®,
    or the approved indication may be narrower than we seek;
    MelaFind®
    may not prove to be safe and effective in clinical trials;
    physicians may not receive any reimbursement from third-party
    payors, or the level of reimbursement may be insufficient to
    support widespread adoption of
    MelaFind®;
    we may experience delays in our development program;
    any products that are approved may not be accepted in the
    marketplace by physicians or patients;
    we may not have adequate financial or other resources to
    complete the development or to commence the commercialization of
    MelaFind®
    and we will not have adequate financial or other resources to
    achieve significant commercialization of
    MelaFind®;
    we may not be able to manufacture our products in commercial
    quantities or at an acceptable cost; and
    rapid technological change may make our technology and products
    obsolete.  ® ®
  We
    have not received, and may never receive, FDA approval to market
    MelaFind®.
  ® ® ® ® ®
  
    MelaFind®
    may not be safe or effective to the FDAs satisfaction;
    the data from our pre-clinical studies and clinical trials may
    be insufficient to support approval;
    the manufacturing process or facilities we use may not meet
    applicable requirements; and
    Changes in FDA approval policies or adoption of new regulations
    may require additional data. 18




---



##### Table of Contents



® ® ® ® ®
  If
    MelaFind®
    is approved by the FDA, it may be approved only for narrow
    indications.
  ® ® ® ® ® ® ®
  ® ® ® ®
  MelaFind®
    may not be commercially viable if we fail to obtain an adequate
    level of reimbursement by Medicare and other third party payors.
    The markets for
    MelaFind®
    may also be limited by the indications for which its use may be
    reimbursed.   19




---



##### Table of Contents



® ® ® ®
  ® ®
    Any
    adverse results in our clinical trials, or difficulties in
    conducting our clinical trials, could have a material adverse
    effect on our business.
  ®
 20




---



##### Table of Contents



Risk
    of delay in product development.
  ®
    ®
  We
    have incurred losses for a number of years, and anticipate that
    we will incur continued losses for the foreseeable
    future.
  ® ® ®
  We
    expect to operate in a highly competitive market, we may face
    competition from large, well-established medical device
    manufacturers with significant resources, and we may not be able
    to compete effectively.
  ®
 21




---



##### Table of Contents



®
  
    significantly greater name recognition;
    established relations with healthcare professionals, customers
    and third-party payors;
    established distribution networks;
    additional lines of products, and the ability to offer rebates,
    higher discounts or incentives to gain a competitive advantage;
    greater experience in conducting research and development,
    manufacturing, clinical trials, obtaining regulatory approval
    for products, and marketing approved products; and
    greater financial and human resources for product development,
    sales and marketing, and patent litigation.    Technological
    breakthroughs in the diagnosis or treatment of melanoma could
    render
    MelaFind®
    obsolete.
  ® ® 3-dimensional ® ® ® ® ®
  We
    depend on clinical investigators and clinical sites to enroll
    patients in our clinical trials and other third parties to
    manage the trials and to perform related data collection and
    analysis, and, as a result, we may face costs and delays that
    are outside of our control.
   22




---



##### Table of Contents



® ®
    
    the FDA, an IRB, or other regulatory authorities place our
    clinical trial on hold;
    patients do not enroll in clinical trials at the rate we expect;
    patient
    follow-up is
    not at the rate we expect;
    IRBs and third-party clinical investigators delay or reject our
    trial protocol;
    third-party organizations do not perform data collection and
    analysis in a timely or accurate manner;
    regulatory inspections of our clinical trials or manufacturing
    facilities, among other things, require us to undertake
    corrective action or suspend or terminate our clinical trials,
    or invalidate our clinical trials;
    changes in governmental regulations or administrative
    actions; and
    the interim or final results of the clinical trial are
    inconclusive or unfavorable as to safety or effectiveness.  If
    MelaFind®
    is approved for reimbursement, we anticipate experiencing
    significant pressures on pricing.
  ® ®
  ® ®
  MelaFind®
    may never achieve market acceptance even if we obtain regulatory
    approvals.
  ® ®
 23




---



##### Table of Contents



® ® ® ® ®
  
    perceived effectiveness of
    MelaFind®;
    convenience of use;
    cost of the use of
    MelaFind®;
    availability and adequacy of third-party coverage or
    reimbursement;
    approved indications and product labeling;
    publicity concerning
    MelaFind®
    or competitive products;
    potential advantages over alternative diagnostic methodologies;
    introduction and acceptance of competing products or
    technologies; and
    extent and success of our sales, marketing and distribution
    efforts.  ® ® ® ® ® ® ® ® ® ® ®
  We may
    be unable to complete the development and commence
    commercialization of
    MelaFind®
    or other products without additional funding and we will not be
    able to achieve significant commercialization without additional
    funding.
  ® ®
 24




---



##### Table of Contents



® ®
  
    the schedule, costs, and results of our clinical trials;
    the success of our research and development efforts;
    the costs and timing of regulatory approval;
    reimbursement amounts for the use of
    MelaFind®
    that we are able to obtain from Medicare and third party payors,
    or the amount of direct payments we are able to obtain from
    patients
    and/or
    physicians utilizing
    MelaFind®;
    the cost of commercialization activities, including product
    marketing and building a domestic direct sales force;
    the emergence of competing or complementary technological
    developments;
    the costs of filing, prosecuting, defending and enforcing any
    patent claims and other rights, including litigation costs and
    the results of such litigation;
    the costs involved in defending any patent infringement actions
    brought against us by third parties; and
    our ability to establish and maintain any collaborative,
    licensing or other arrangements, and the terms and timing of any
    such arrangements.    If we
    are unable to establish sales, marketing and distribution
    capabilities or enter into and maintain arrangements with third
    parties to sell, market and distribute
    MelaFind®,
    our business may be harmed.
  ® ® ®
  ®
 25




---



##### Table of Contents



We
    have limited manufacturing capabilities and manufacturing
    personnel, and if our manufacturing capabilities are
    insufficient to produce an adequate supply of
    MelaFind®,
    our growth could be limited and our business could be
    harmed.
  ® ® ® ®
  ® ®
  ® ®
  ®
  Our
    manufacturing operations are dependent upon third-party
    suppliers, making us vulnerable to supply problems and price
    fluctuations, which could harm our business. We anticipate
    contracting for final device assembly and integration, but no
    contract for such services on a commercial basis has yet been
    procured.
  ®
 26




---



##### Table of Contents




    suppliers may make errors in manufacturing components that could
    negatively affect the effectiveness or safety of our products,
    or cause delays in shipment of our products;
    we may not be able to obtain adequate supply in a timely manner
    or on commercially reasonable terms;
    we may have difficulty locating and qualifying alternative
    suppliers for our sole-source suppliers;
    switching components may require product redesign and submission
    to the FDA of a PMA supplement or possibly a separate PMA,
    either of which could significantly delay production;
    our suppliers manufacture products for a range of customers, and
    fluctuations in demand for the products these suppliers
    manufacture for others may affect their ability to deliver
    components to us in a timely manner; and
    our suppliers may encounter financial hardships unrelated to our
    demand for components, which could inhibit their ability to
    fulfill our orders and meet our requirements.    ® and/or ® ®
  We
    will not be able to sell
    MelaFind ®unless and until its design is verified and validated in
    accordance with current good manufacturing practices as set
    forth in the US medical device Quality System Regulation.
  ® ® ®
 27




---



##### Table of Contents



® ® ® ®
  Assuming
    that
    MelaFind®
    is approved by regulatory authorities, if we or our suppliers
    fail to comply with ongoing regulatory requirements, or if we
    experience unanticipated problems with
    MelaFind®,
    it could be subject to restrictions or withdrawal from the
    market.
  ® ® ® ® ® ® ®
  
    Warning letters;
    fines and civil penalties;
    unanticipated expenditures;
    delays in approving or refusal to approve
    MelaFind®;
    withdrawal of approval by the FDA or other regulatory bodies;
    Product recall or seizure;
    interruption of production; 28




---



##### Table of Contents




    operating restrictions;
    injunctions; and
    Criminal prosecution.    We are
    involved in a heavily regulated sector, and our ability to
    remain viable will depend on favorable government decisions at
    various points by various agencies.
  ®
      
    billing for services;
    quality of medical equipment and services;
    confidentiality, maintenance and security issues associated with
    medical records and individually identifiable health information;
    false claims; and
    labeling products.   29




---



##### Table of Contents



We
    must comply with complex statutes prohibiting fraud and abuse,
    and both we and physicians utilizing
    MelaFind®
    could be subject to significant penalties for
    noncompliance.
    ® ® ®
  The
    application of the privacy provisions of HIPAA is
    uncertain.
  ®
  We may
    become subject to claims of infringement or misappropriation of
    the intellectual property rights of others, which could prohibit
    us from shipping affected products, require us to obtain
    licenses from third parties or to develop non-infringing
    alternatives, and subject us to substantial monetary damages and
    injunctive relief. Our patents may also be subject to challenge
    on validity grounds, and our patent applications may be
    rejected.
  ® ® ®
 30




---



##### Table of Contents



®
  ® and/or
  and/or
  New
    product development in the medical device industry is both
    costly and labor intensive with very low success rates for
    successful commercialization; if we cannot successfully develop
    or obtain future products, our growth would be
    delayed.
  ® ®
  We
    face the risk of product liability claims and may not be able to
    obtain or maintain adequate insurance.
  ® ® ® ® ® ®
 31




---



##### Table of Contents



® ®
    We may
    be adversely affected by a data center failure.
  ® ® ®
  We may
    be adversely affected by breaches of online
    security.
  ®
  We are
    dependent upon telecommunications and the
    internet.
  ®
   32




---



##### Table of Contents



We
    will be obligated to comply with Federal Communications
    Commission regulations for radio transmissions used by our
    products.
  ® ®
  All of
    our operations are conducted at a single location. Any
    disruption at our facility could increase our
    expenses.
    We may
    be liable for contamination or other harm caused by materials
    that we handle, and changes in environmental regulations could
    cause us to incur additional expense.
    Failure
    to obtain and maintain regulatory approval in foreign
    jurisdictions will prevent us from marketing
    abroad.
  ® ®
  ®
 33




---



##### Table of Contents



Our
    success will depend on our ability to attract and retain our
    personnel.
  ®
    Our
    financial results for future periods may be adversely affected
    by changes required by financial and accounting regulatory
    agencies.
    Our
    financial results for future periods will be affected by the
    attainment of milestones.
    If we
    fail to maintain the adequacy of our internal controls, our
    ability to provide accurate financial statements could be
    impaired and any failure to maintain our internal controls and
    provide accurate financial statements could cause our stock
    price to decrease substantially.
   34




---



##### Table of Contents



Risks
    Relating to our Common Stock
  An
    active trading market for our common stock may not
    develop.
    Our
    stock price will be volatile, meaning purchasers of our common
    stock could incur substantial losses.
    
    results of our research and development efforts and our clinical
    trials;
    the timing of regulatory approval for our products;
    failure of any of our products, if approved, to achieve
    commercial success;
    the announcement of new products or product enhancements by us
    or our competitors;
    regulatory developments in the US and foreign countries;
    ability to manufacture our products to commercial standards;
    developments concerning our clinical collaborators, suppliers or
    marketing partners;
    changes in financial estimates or recommendations by securities
    analysts;
    public concern over our products;
    developments or disputes concerning patents or other
    intellectual property rights;
    product liability claims and litigation against us or our
    competitors;
    the departure of key personnel;
    the strength of our balance sheet;
    variations in our financial results or those of companies that
    are perceived to be similar to us;
    changes in the structure of and third-party reimbursement in the
    US and other countries; 35




---



##### Table of Contents




    changes in accounting principles or practices;
    general economic, industry and market conditions; and
    future sales of our common stock.    If our
    directors, executive officers, and principal stockholders choose
    to act together, they may have the ability to influence all
    matters submitted to stockholders for approval.
    If
    there are substantial sales of our common stock, our stock price
    could decline.
  lock-up lock-up lock-up
  lock-up
 36




---



##### Table of Contents



Our
    charter documents and Delaware law may inhibit a takeover that
    stockholders consider favorable and could also limit the market
    price of our stock.
    
    set limitations on the removal of directors;
    limit who may call a special meeting of stockholders;
    establish advance notice requirements for nominations for
    election to our board of directors or for proposing matters that
    can be acted upon at stockholder meetings;
    do not permit cumulative voting in the election of our
    directors, which would otherwise permit less than a majority of
    stockholders to elect directors;
    prohibit stockholder action by written consent, thereby
    requiring all stockholder actions to be taken at a meeting of
    our stockholders; and
    provide our board of directors the ability to designate the
    terms of and issue a new series of preferred stock without
    stockholder approval.       Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk     Item 4.
    Controls
    and Procedures  Evaluation
    of disclosure controls and procedures
  Rules 13a-15(e) 15d-15(e) Form 10-Q Form 10-Q.
  Change in
    internal control over financial reporting
    Limitations
    on the effectiveness of controls
   37




---



##### Table of Contents



PART II.  OTHER
    INFORMATION  Item 1.
    Legal
    Proceedings.    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information.     38




---



##### Table of Contents



Item 6.
    Exhibits  3
.1

Fourth Amended and Restated
    Certificate of Incorporation.(1)3
.2

By-laws.(2)4
.1

Specimen Common Stock
    Certificate.(2)4
.2

Specimen Warrant Certificate
    (incorporated by reference from Exhibit 4.3).(3)4
.3

Form of Warrant Agreement entered
    into by and between the Registrant, ThinkEquity Partners LLC and
    Stanford Group Company.(3)10
.1

Production Agreement between the
    Registrant and Askion GmbH dated as of January 25, 2006.(4)10
.2

Amended and Restated Consulting
    Agreement effective as of April 1, 2006 between the
    Registrant and Gerald Wagner.(5)10
.3

Resignation Agreement, dated
    April 24, 2006, between the Registrant and Karen
    Krumeich.(6)10
.4

Employment Offer Letter, dated
    April 24, 2006, between the Registrant and Richard I.
    Steinhart.(6)31
.1

Certification by the Chief
    Executive Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.31
.2

Certification by the Principal
    Financial Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.32
.1

Certification Pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Previously filed in connection with Amendment No. 1 to
    Electro-Optical Sciences, Inc. Registration Statement on
    Form S-1
    (File
    No. 333-125517)
    filed on July 15, 2005.(2)
    
    Previously filed in connection with Amendment No. 2 to
    Electro-Optical Sciences, Inc. Registration Statement on
    Form S-1
    (File
    No. 333-125517)
    filed on August 8, 2005.(3)
    
    Previously filed in connection with Amendment No. 4 to
    Electro-Optical Sciences, Inc. Registration Statement on
    Form S-1
    (File
    333-125517)
    filed on September 27, 2005, as an exhibit to the Form of
    Underwriting Agreement.(4)
    
    Previously filed in connection with Registrants
    Form 8-K
    filed in January 31, 2006.(5)
    
    Previously filed in connection with the Registrants Annual
    Report on
    Form 10-K
    filed on March 29, 2006 as Exhibit 10.17 thereto.(6)
    
    Previously filed in connection with the Registrants
    Form 8-K
    filed on April 27, 2006. 39




---



##### Table of Contents



SIGNATURES    ELECTRO-OPTICAL SCIENCES, INC.
  By:
    /s/  Richard I. Steinhart        40




---



##### Table of Contents



EXHIBIT INDEX  Exhibit Number

Description31
.1

Certification by the Chief
    Executive Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 193431
.2

Certification by the Principal
    Financial Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 193432
.1

Certification Pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002  41