----

----

----

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

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

----

| Delaware                                 | 56-1581761          |
|------------------------------------------|---------------------|
| (State or other jurisdiction of          | (I.R.S. employer    |
| incorporation or organization)           | identification no.) |
|                                     |                |
| 111 Pencader Drive                       |                |
| Newark, Delaware                         |   19702        |
| (Address of principal executive offices) | (Zip Code)          |

----

| Yes: x | No: o |
|--------|-------|

| Yes: x | No: o |
|--------|-------|

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

| Yes: o | No: x |
|--------|-------|

----

|                                                                                                  | Item   |   |   | Page |
|-------------------------------------------------------------------------------------------------------|--------|--------|--------|------|
| PART I FINANCIAL INFORMATION                                                                          |   |   |
| ITEM 1. Financial Statements (Unaudited)                                                              |   |   |
| Consolidated Balance Sheets – September 30, 2011 and December 31, 2010                          |   | 2      |
| Consolidated Statements of Operations – Three and nine months ended September 30, 2011 and 2010 |   | 3      |
| Consolidated Statements of Cash Flows – Nine months ended September 30, 2011 and 2010           |   | 4      |
| Notes to Consolidated Interim Financial Statements                                                    |   | 5      |
| ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   |   | 12     |
| ITEM 3. Quantitative and Qualitative Disclosures About Market Risk                                    |   | 17     |
| ITEM 4. Controls and Procedures                                                                       |   | 17     |
| PART II OTHER INFORMATION                                                                             |   | 18     |
| ITEM 6. Exhibits                                                                                      |   | 18     |
| SIGNATURES                                                                                            |   | 19     |

----

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

|                                                                       |   | September 30, |    |   | December 31, |   |
|----------------------------------------------------------------------------|--------|---------------|---------|--------|--------------|--------|
|                                                                       |   | 2011          |    |   | 2010         |   |
|  ASSETS                                                               |   |          |    |   |         |   |
|  Current Assets :                                                     |   |          |    |   |         |   |
|  Cash and cash equivalents                                            |   | $             | 7,035   |   |         | $      | 8,056 |   |
|  Restricted cash                                                      |   |          | 400     |   |         |   | 700 |   |
|  Receivables, net                                                     |   |          | 4,436   |   |         |   | 4,376 |   |
|  Inventories                                                          |   |          | 3,376   |   |         |   | 3,333 |   |
|  Other current assets                                                 |   |          | 940     |   |         |   | 561 |   |
|  Total current assets                                                 |   |          | 16,187  |   |         |   | 17,026 |   |
|                                                                       |   |          |    |   |         |   |   |   |
|  Property and equipment, net                                          |   |          | 3,886   |   |         |   | 4,087 |   |
|  Other assets                                                         |   |          | 6       |   |         |   | 45 |   |
|  Deferred tax asset                                                   |   |          | 36      |   |         |   | 37 |   |
|  Intangible assets, net                                               |   |          | 1,235   |   |         |   | 1,321 |   |
|  Total assets                                                         |   | $             | 21,350  |   |         | $      | 22,516 |   |
|                                                                       |   |          |    |   |         |   |   |   |
|  LIABILITIES AND STOCKHOLDERS' EQUITY                                 |   |          |    |   |         |   |   |   |
|  Current Liabilities :                                                |   |          |    |   |         |   |   |   |
|  Current portion of long-term debt                                    |   | $             | 400     |   |         | $      | 400 |   |
|  Accounts payable                                                     |   |          | 449     |   |         |   | 491 |   |
|  Accrued expenses                                                     |   |          | 2,270   |   |         |   | 1,597 |   |
|  Deferred revenue                                                     |   |          | 87      |   |         |   | 24 |   |
|  Total current liabilities                                            |   |          | 3,206   |   |         |   | 2,512 |   |
|                                                                       |   |          |    |   |         |   |   |   |
|  Long-term debt                                                       |   |          | -       |   |         |   | 300 |   |
|                                                                       |   |          |    |   |         |   |   |   |
|  Stockholders' Equity:                                                |   |          |    |   |         |   |   |   |
|  Preferred stock, $.01 par value, 20,920,648 shares authorized,       |   |          |    |   |         |   |   |   |
|  no shares issued or outstanding                                      |   |          | -       |   |         |   | - |   |
| Common stock, $.01 par value, 50,000,000 and 35,000,000 shares authorized, |   |          |    |   |         |
|  at September 30, 2011 and December 31, 2010, respectively            |   |          |    |   |         |   |   |   |
|  20,997,587 and 20,916,433 issued                                     |   |          |    |   |         |   |   |   |
|  at September 30, 2011 and December 31, 2010, respectively            |   |          | 210     |   |         |   | 209 |   |
|  Additional paid-in capital                                           |   |          | 42,000  |   |         |   | 41,551 |   |
|  Treasury stock, 406,627 common shares at cost                        |   |          |    |   |         |   |   |   |
|  at September 30, 2011 and December 31, 2010                          |   |          | (555    | )      |         |   | (555 | ) |
|  Accumulated deficit                                                  |   |          | (23,248 | )      |         |   | (21,239 | ) |
|  Cumulative translation adjustments                                   |   |          | (263    | )      |         |   | (262 | ) |
|  Total stockholders' equity                                           |   |          | 18,144  |   |         |   | 19,704 |   |
|  Total liabilities and stockholders' equity                           |   | $             | 21,350  |   |         | $      | 22,516 |   |

----

|                             |                                |   | Three Months        |       |   | Nine Months         |   |
|----------------------------------|-------------------------------------|--------|---------------------|------------|--------|---------------------|--------|
|                             |                                |   | Ended September 30, |       |   | Ended September 30, |   |
|                             |                                |   | 2011                |       |   | 2010                |   |   | 2011 |   |   | 2010 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |
| Revenues                         |                                | $      | 6,915               |       |   | $                   | 7,473  |   |   | $ | 21,462 |   |   | $ | 20,960 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Cost of sales                    |                                |   | 2,864               |       |   |                | 3,015  |   |   |   | 9,137 |   |   |   | 8,534 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             | Gross profit                        |   |                | 4,051      |   |                |   | 4,458 |   |   |   | 12,325 |   |   |   | 12,426 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES:              |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             | Research and development            |   |                | 1,056      |   |                |   | 767 |   |   |   | 2,761 |   |   |   | 2,207 |   |
|                             | Selling, general and administrative |   |                | 3,652      |   |                |   | 3,711 |   |   |   | 11,517 |   |   |   | 10,895 |   |
|                             | Gain on disposal of assets          |   |                | -          |   |                |   | - |   |   |   | - |   |   |   | (8 | ) |
|                             |  Total operating expenses      |   |                | 4,708      |   |                |   | 4,478 |   |   |   | 14,278 |   |   |   | 13,094 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Operating loss                   |                                |   | (657                | )          |   |                | (20    | ) |   |   | (1,953 | ) |   |   | (668 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net            |                                |   | (10                 | )          |   |                | (9     | ) |   |   | (27 | ) |   |   | (35 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Loss before taxes                |                                |   | (667                | )          |   |                | (29    | ) |   |   | (1,980 | ) |   |   | (703 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Income tax expense               |                                |   | 27                  |       |   |                | -      |   |   |   | 29 |   |   |   | - |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Net loss                         |                                |   | (694                | )          |   |                | (29    | ) |   |   | (2,009 | ) |   |   | (703 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Basic loss per share             |                                | $      | (0.03               | )          |   | $                   | (0.00  | ) |   | $ | (0.10 | ) |   | $ | (0.03 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Shares used in computing basic   |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             | loss per share                      |   |                | 20,467,245 |   |                |   | 20,289,602 |   |   |   | 20,423,521 |   |   |   | 20,236,462 |   |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Diluted loss per share           |                                | $      | (0.03               | )          |   | $                   | (0.00  | ) |   | $ | (0.10 | ) |   | $ | (0.03 | ) |
|                             |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
| Shares used in computing diluted |                                |   |                |       |   |                |   |   |   |   |   |   |   |   |   |   |
|                             | loss per share                      |   |                | 20,467,245 |   |                |   | 20,289,602 |   |   |   | 20,423,521 |   |   |   | 20,236,462 |   |

----

|                                                    |   | Nine Months         |
|---------------------------------------------------------|--------|---------------------|
|                                                    |   | Ended September 30, |   |
|                                                    |   | 2011                |   |   | 2010 |   |
|                                                    |   |                |   |   |   |   |
| Cash Flows from Operating Activities :                  |   |                |   |   |   |   |
| Net loss                                                |   | $                   | (2,009 | ) |   | $ | (703 | ) |
|  Adjustments to reconcile net loss to net          |   |                |   |   |   |   |   |   |
|  cash provided by (used in) operating activities : |   |                |   |   |   |   |   |   |
|  Depreciation and amortization                     |   |                | 928 |   |   |   | 875 |   |
|  Share-based compensation expense                  |   |                | 376 |   |   |   | 375 |   |
|  Deferred income tax provision                     |   |                | 1 |   |   |   | - |   |
|  Gain on disposal of fixed assets                  |   |                | - |   |   |   | (8 | ) |
| (Increase) decrease in :                                |   |                |   |   |   |   |   |   |
|  Receivables                                       |   |                | (60 | ) |   |   | (525 | ) |
|  Inventories                                       |   |                | (43 | ) |   |   | 142 |   |
|  Other current assets                              |   |                | (379 | ) |   |   | (44 | ) |
|  Other assets                                      |   |                | 36 |   |   |   | (48 | ) |
| Increase (decrease) in :                                |   |                |   |   |   |   |   |   |
|  Accounts payable                                  |   |                | (42 | ) |   |   | (56 | ) |
|  Accrued expenses                                  |   |                | 673 |   |   |   | 784 |   |
|  Deferred revenue                                  |   |                | 63 |   |   |   | (66 | ) |
| Net cash provided by (used in) operating activities     |   |                | (456 | ) |   |   | 726 |   |
|                                                    |   |                |   |   |   |   |   |   |
| Cash Flows from Investing Activities :                  |   |                |   |   |   |   |   |   |
|  Purchase of property and equipment                |   |                | (641 | ) |   |   | (460 | ) |
|  Proceeds from sale of assets                      |   |                | - |   |   |   | 10 |   |
| Net cash used in investing activities                   |   |                | (641 | ) |   |   | (450 | ) |
|                                                    |   |                |   |   |   |   |   |   |
| Cash Flows from Financing Activities :                  |   |                |   |   |   |   |   |   |
|  Proceeds from employee stock purchase plan        |   |                | 13 |   |   |   | 19 |   |
|  Proceeds from stock option exercises              |   |                | 64 |   |   |   | 64 |   |
|  Restricted cash requirement                       |   |                | 300 |   |   |   | 450 |   |
|  Repayments on financing obligations               |   |                | (300 | ) |   |   | (300 | ) |
| Net cash provided by financing activities               |   |                | 77 |   |   |   | 233 |   |
|                                                    |   |                |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                 |   |                | (1 | ) |   |   | (8 | ) |
|                                                    |   |                |   |   |   |   |   |   |
| Net increase (decrease) in Cash and Cash Equivalents    |   |                | (1,021 | ) |   |   | 501 |   |
|                                                    |   |                |   |   |   |   |   |   |
| Cash and Cash Equivalents, Beginning of Period          |   |                | 8,056 |   |   |   | 7,937 |   |
|                                                    |   |                |   |   |   |   |   |   |
| Cash and Cash Equivalents, End of Period                |   | $                   | 7,035 |   |   | $ | 8,438 |   |
|                                                    |   |                |   |   |   |   |   |   |
| Supplemental Cash Flow Disclosure :                     |   |                |   |   |   |   |   |   |
|                                                    |   |                |   |   |   |   |   |   |
|  Cash paid for taxes, net of tax refunds           |   |                | 32 |   |   |   | (107 | ) |
|                                                    |   |                |   |   |   |   |   |   |
|  Cash paid for interest                            |   |                | 39 |   |   |   | 56 |   |

----

| 1. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|------------------------------------------------------------------------|

----

|                            |   | Three Months Ended |   |   | Nine Months Ended |   |
|---------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                            |   | September 30,      |   |   | September 30,     |   |
|                            |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                            |   |               |   |   |              |   |   |   |   |   |   |   |
| Net loss                        |   | $                  | (694   | )      |              | $      | (29 | ) |   | $ | (2,009 | ) |   | $ | (703 | ) |
|                            |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Currency translation adjustment |   |               | (17    | )      |              |   | 29 |   |   |   | (1 | ) |   |   | (8 | ) |
|                            |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive loss        |   | $                  | (711   | )      |              | $      | - |   |   | $ | (2,010 | ) |   | $ | (711 | ) |

----

| 2. | BASIC AND DILUTED LOSS PER SHARE |
|----|----------------------------------|

|                                            |   | Three Months Ended |       |   | Nine Months Ended |   |
|-------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                            |   | September 30,      |       |   | September 30,     |   |
|                                            |   | 2011               |       |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                                            |   |               |       |   |              |   |   |   |   |   |   |   |
| Weighted average common shares outstanding      |   |               | 20,467,245 |   |              |   | 20,289,602 |   |   |   | 20,423,521 |   |   |   | 20,236,462 |   |
|                                            |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computing basic loss per share   |   |               | 20,467,245 |   |              |   | 20,289,602 |   |   |   | 20,423,521 |   |   |   | 20,236,462 |   |
|                                            |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive effect of stock options and            |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| unvested restricted stock units                 |   |               | -          |   |              |   | - |   |   |   | - |   |   |   | - |   |
|                                            |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computing diluted loss per share |   |               | 20,467,245 |   |              |   | 20,289,602 |   |   |   | 20,423,521 |   |   |   | 20,236,462 |   |

| 3. | SHARE-BASED COMPENSATION |
|----|--------------------------|

----

|                                   |                         |   | Three Months Ended |   |   | Nine Months Ended |   |
|----------------------------------------|------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                   |                         |   | September 30,      |   |   | September 30,     |   |
|                                   |                         |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                                   |                         |   |               |   |   |              |   |   |   |   |   |   |   |
|                                   |                         |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                   | Stock options                |   | $                  | 98     |   |              | $      | 78 |   |   | $ | 285 |   |   | $ | 234 |   |
|                                   | Employee stock purchase plan |   |               | -      |   |              |   | - |   |   |   | 2 |   |   |   | 7 |   |
|                                   | Restricted stock awards      |   |               | 28     |   |              |   | 43 |   |   |   | 89 |   |   |   | 134 |   |
|                                   |                         |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total share-based compensation expense |                         | $      | 126                |   |   | $                 | 121    |   |   | $ | 376 |   |   | $ | 375 |   |

|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |
|-----------------------------|--------|-----------|-----------|--------|-------------|--------|------------------|--------|--------|-------------------|--------|------------|-----------------|
|                        |   |      |      |   |        |   |             |   |   | Weighted          |   | Aggregate  |            |
|                        |   | Number    |      |   |        |   |             |   |   | Average Remaining |   | Instrinsic |            |
|                        |   | of Shares |      |   | Price Range |   | Contractual term |   | Value  |              |
|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |
| Balance, January 1, 2011    |   |      | 2,158,906 |   |        | $      | 1.10             | -      |   | $                 | 5.17   |       |            |   |   |   |
|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |
| Granted                     |   |      | 760,400   |   |        | $      | 1.85             | -      |   | $                 | 2.25   |       |            |   |   |   |
| Exercised                   |   |      | (40,000   | )      |        | $      | 1.50             | -      |   | $                 | 2.09   |       |            |   |   |   |
| Cancelled / Forfeited       |   |      | (323,500  | )      |        | $      | 1.10             | -      |   | $                 | 4.55   |       |            |   |   |   |
|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |
| Balance, September 30, 2011 |   |      | 2,555,806 |   |        | $      | 1.49             | -      |   | $                 | 5.17   |       |  7.1 years |   | $ | 167 |   |
|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |   |
| Vested and excercisable at  |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |   |
| September 30, 2011          |   |      | 1,154,271 |   |        | $      | 1.49             | -      |   | $                 | 5.17   |       |  5.3 years |   | $ | 79 |   |
|                        |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |   |
| Expected to vest as of      |   |      |      |   |        |   |             |   |   |              |   |       |            |   |   |   |   |
| September 30, 2011          |   |      | 2,427,801 |   |        | $      | 1.49             | -      |   | $                 | 5.17   |       |  7.0 years |   | $ | 158 |   |

----

|   |            |       |   |      |   |   |             |   |     | Options Outstanding |   |      |             |   |     |   | Options Exercisable |        |
|--------|-----------------|------------|--------|-----------|--------|--------|------------------|--------|----------|---------------------|--------|-----------|------------------|--------|----------|--------|---------------------|-------------|
|   |            |       |   |      |   |   |             |   |     |                |   |      | Weighted Average |   |     |   |                |        |   |   | Wtd. Average |   |
|   | Range of        |       |   | Number of |   |   | Remaining        |   | Exercise |                |   | Number of |             |   | Exercise |   |
|   | Exercise Prices |       |   | Shares    |   |   | Contractual Life |   | Price    |                |   | Shares    |             |   | Price    |   |
|   |            |       |   |      |   |   |             |   |     |                |   |      |             |   |     |   |                |        |   |   |   |   |   |   |
|   | $     | 1.49       |   | -         |   |   | $                | 2.51   |     |                |   | 1,904,302 |             |   |     | 8.2    |                |  Years |   | $ | 1.88 |   |   |   | 502,767 |   |   | $ | 1.68 |   |
|   | $          |  3.05 |   | -         |   |   | $                | 3.57   |     |                |   | 206,400   |             |   |     | 1.9    |                |  Years |   | $ | 3.32 |   |   |   | 206,400 |   |   | $ | 3.32 |   |
|   | $          |  3.69 |   | -         |   |   | $                | 5.17   |     |                |   | 445,104   |             |   |     | 4.9    |                |  Years |   | $ | 4.18 |   |   |   | 445,104 |   |   | $ | 4.18 |   |
|   | $     | 1.49       |   | -         |   |   | $                | 5.17   |     |                |   | 2,555,806 |             |   |     | 7.1    |                |  Years |   | $ | 2.40 |   |   |   | 1,154,271 |   |   | $ | 2.93 |   |
|   |            |       |   |      |   |   |             |   |     |                |   |      |             |   |     |   |                |        |   |   |   |   |   |   |   |   |   |   |   |   |

|                                   |   |   |    |   | Weighted Average |   |   |            |   |
|----------------------------------------|--------|--------|---------|--------|------------------|--------|--------|-----------------|--------|
|                                   |   |   |    |   | Grant Date       |   |   | Aggregate       |   |
|                                   |   | Shares |    |   | Fair Value       |   |   | Intrinsic Value |   |
|                                   |   |   |    |   |             |   |   |            |   |
|                                   |   |   |    |   |             |   |   |            |   |
| Non-vested RSA's at January 1, 2011    |   |   | 135,750 |   |             | $      | 1.95   |            |   |   |   |
| Granted                                |   |   | 42,500  |   |             | $      | 2.17   |            |   |   |   |
| Vested                                 |   |   | (49,500 | )      |             | $      | 2.26   |            |   |   |   |
| Cancelled / forfeited                  |   |   | (7,500  | )      |             | $      | 1.49   |            |   |   |   |
|                                   |   |   |    |   |             |   |   |            |   |   |   |
| Non-vested RSA's at September 30, 2011 |   |   | 121,250 |   |             | $      | 1.92   |            |   | $ | 233 |   |
|                                   |   |   |    |   |             |   |   |            |   |   |   |   |
| Expected to vest at September 30, 2011 |   |   | 111,750 |   |             | $      | 1.93   |            |   | $ | 215 |   |

----

| 4. | INVENTORIES |
|----|-------------|

|             |   | September 30, |   |   | December 31, |   |
|------------------|--------|---------------|--------|--------|--------------|--------|
|             |   | 2011          |   |   | 2010         |   |
|             |   |          |   |   |         |   |
| Raw materials    |   | $             | 697    |   |         | $      | 794 |   |
| Work in progress |   |          | 1,058  |   |         |   | 1,214 |   |
| Finished goods   |   |          | 1,621  |   |         |   | 1,325 |   |
| Inventories      |   | $             | 3,376  |   |         | $      | 3,333 |   |
|             |   |          |   |   |         |   |   |   |

| 5. | INTANGIBLE ASSETS |
|----|-------------------|

|                     |   | September 30, |   |   | December 31, |   |   |   |   |
|--------------------------|--------|---------------|--------|--------|--------------|--------|--------|--------|--------|
|                     |   | 2011          |   |   | 2010         |   |   | Lives  |   |
| Intangible assets        |   |          | 2,614  |   |         |   | 2,614  |   |   | 2-20 |   |
| Accumulated amortization |   |          | (1,379 | )      |         |   | (1,293 | )      |   |   |   |   |
| Net intangible assets    |   | $             | 1,235  |   |         | $      | 1,321  |   |   |   |   |   |

| 6. | DEBT |
|----|------|

| 7. | INCOME TAXES |
|----|--------------|

----

|  8. | SUBSEQUENT EVENTS |
|----------|-------------------|

----

----

|          |   | Three Months Ended                 |   |   |     |   |   |       |   |
|---------------|--------|------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|          |   | September 30,                      |   |   | Increase |   |   | Percent    |   |
|          |   | 2011                               |   |   | 2010     |   |   | (Decrease) |   |   | Change |   |
|          |   | (in thousands, except percentages) |   |   |     |   |
| Life Sciences |   | $                                  | 4,085  |   |     | $      | 3,718  |       |   | $ | 367 |   |   |   | 10 | % |
| Kit Products  |   |                               | 2,830  |   |     |   | 3,755  |       |   |   | (925 | ) |   |   | (25 | )% |
| Revenues      |   | $                                  | 6,915  |   |     | $      | 7,473  |       |   | $ | (558 | ) |   |   | (7 | )% |

----

|          |   | Nine Months Ended                  |   |   |     |   |   |       |   |
|---------------|--------|------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|          |   | September 30,                      |   |   | Increase |   |   | Percent    |   |
|          |   | 2011                               |   |   | 2010     |   |   | (Decrease) |   |   | Change |   |
|          |   | (in thousands, except percentages) |   |   |     |   |
| Life Sciences |   | $                                  | 12,736 |   |     | $      | 11,254 |       |   | $ | 1,482 |   |   |   | 13 | % |
| Kit Products  |   |                               | 8,726  |   |     |   | 9,706  |       |   |   | (980 | ) |   |   | (10 | )% |
| Revenues      |   | $                                  | 21,462 |   |     | $      | 20,960 |       |   | $ | 502 |   |   |   | 2 | % |

----

----

----

| (a) | Evaluation of Disclosure Controls and Procedures |
|-----|--------------------------------------------------|

| (b) | Change in Internal Control over Financial Reporting |
|-----|-----------------------------------------------------|

----

| 31.1    | Certifications of the Chief Executive Officer of Strategic Diagnostics Inc. required by Rule 13a-14(a) under the Securities Exchange Act of 1934                                      |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                  |
| 31.2    | Certifications of the Chief Financial Officer of Strategic Diagnostics Inc. required by Rule 13a-14(a) under the Securities Exchange Act of 1934                                      |
|    |                                                                                                                                                                                  |
| 32.1    | Certification of the Chief Executive Officer of Strategic Diagnostics Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002       |
|    |                                                                                                                                                                                  |
| 32.2    | Certification of the Chief Financial Officer of Strategic Diagnostics Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002  |
| 101.INS | XBRL Instance document                                                                                                                                                           |
| 101.SCH | XBRL Taxonomy Extension Schema Document                                                                                                                                          |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                            |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                             |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                                  |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                                |
|    |                                                                                                                                                                                  |

----

|                          |   | STRATEGIC DIAGNOSTICS INC.                                                        |
|-------------------------------|--------|-----------------------------------------------------------------------------------|
|  Date: November 14, 2011 |   |  /s/ Francis M. DiNuzzo                                                      |
|                          |   | Francis M. DiNuzzoPresident, Chief Executive Officer(Principal Executive Officer) |

|  Date: November 14, 2011 |   |  /s/ Kevin J. Bratton                                                                                             |
|-------------------------------|--------|------------------------------------------------------------------------------------------------------------------------|
|                          |   | Kevin J. BrattonVice President – Finance and Chief Financial Officer(Principal Financial and Accounting Officer) |