----

----

| Delaware                 |   | 98-0511645                     |
|--------------------------|--------|--------------------------------|
| (State of incorporation) |   |  (IRS Employer ID Number) |

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

----

|                                                                                                | Page             |
|-----------------------------------------------------------------------------------------------------|------------------|
| PART I                                                                                              |             |
| Item 1. Financial Statements                                                                        | F-1 – F-33 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1                |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                  | 8                |
| Item 4(T). Controls and Procedures                                                                  | 8                |
| PART II                                                                                             |             |
| Item 1. Legal Proceedings                                                                           | 9                |
| Item IA. Risk Factors                                                                               | 9                |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 9                |
| Item 3. Defaults Upon Senior Securities                                                             | 10               |
| Item 4. Removed and Reserved                                                                        | 10               |
| Item 5. Other Information                                                                           | 10               |
| Item 6. Exhibits                                                                                    | 10               |

----

|   | • |   | Part I, Item 1. Financial Statements |
|--------|---------|--------|--------------------------------------|

|   | • |   | Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------|

|   | • |   | Part I, Item 4T. Controls and Procedures |
|--------|---------|--------|------------------------------------------|

|   | • |   | Part II, Item 6. Exhibits |
|--------|---------|--------|---------------------------|

----

| Restated Consolidated Financial Statements- |                                                                                                                   |
|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                   |   |
|                                        | Consolidated Balance Sheets as of September 30, 2010 (unaudited) and December 31, 2009                                 | F-1 |
|                                        |                                                                                                                   |   |
|                                        | Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009 (unaudited) | F-3 |
|                                        |                                                                                                                   |   |
|                                        | Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2010 and 2009                                | F-4 |
|                                        |                                                                                                                   |   |
|                                        | Notes to Consolidated Financial Statements September 30, 2010 and 2009                                                 | F-6 |

----

----

| ASSETS                                 |   | September 30, |      |   | December 31, |   |
|----------------------------------------|--------|---------------|-----------|--------|--------------|--------|
|                                   |   | 2010          |      |   | 2009         |   |
|                                   |   | Unaudited     |      |   | Audited      |   |
|                                   |   | Restated      |      |   | Restated     |   |
| Current Assets:                        |   |          |      |   |         |   |
| Cash and cash equivalents              |   | $             | 537,110   |   |         | $      | 701,931 |   |
| Restricted cash                        |   |          | 115,827   |   |         |   | 15,827 |   |
| Accounts receivable                    |   |          | 22,364    |   |         |   | - |   |
| Inventory                              |   |          | 100,588   |   |         |   | 55,281 |   |
| Prepaid expenses and other receivables |   |          | 204,960   |   |         |   | 65,343 |   |
|    Total current assets |   |          | 980,849   |   |         |   | 838,382 |   |
|                                   |   |          |      |   |         |   |   |   |
| Property and Equipment:                |   |          |      |   |         |   |   |   |
| Computer and other equipment           |   |          | 59,046    |   |         |   | 30,034 |   |
| Less - Accumulated depreciation        |   |          | (23,592   | )      |         |   | (17,534 | ) |
| Property and equipment, net            |   |          | 35,454    |   |         |   | 12,500 |   |
|                                   |   |          |      |   |         |   |   |   |
| Other Assets:                          |   |          |      |   |         |   |   |   |
| Severance pay fund                     |   |          | 83,139    |   |         |   | 45,563 |   |
| Long term deposit                      |   |          | 13,102    |   |         |   | 10,578 |   |
| Goodwill                               |   |          | 1,333,214 |   |         |   | 1,333,214 |   |
|    Total other assets   |   |          | 1,429,455 |   |         |   | 1,389,355 |   |
| Total Assets                           |   | $             | 2,445,758 |   |         | $      | 2,240,237 |   |

----

----

| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                            |   | September 30, |       |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|------------|--------|--------------|--------|
|                                                                                                                                                                                                            |   | 2010          |       |   | 2009         |   |
|                                                                                                                                                                                                            |   | Unaudited     |       |   | Audited      |   |
|                                                                                                                                                                                                            |   | Restated      |       |   | Restated     |   |
| Current Liabilities:                                                                                                                                                                                            |   |          |       |   |         |   |
| Accounts payable - Trade                                                                                                                                                                                        |   | $             | 91,578     |   |         | $      | 9,175 |   |
| Accrued liabilities                                                                                                                                                                                             |   |          | 231,803    |   |         |   | 161,161 |   |
| Advances from customers                                                                                                                                                                                         |   |          | 706,870    |   |         |   | 919,400 |   |
| Deferred revenues                                                                                                                                                                                               |   |          | 169,742    |   |         |   | 55,631 |   |
| Due to related parties                                                                                                                                                                                          |   |          | 281,080    |   |         |   | 111,541 |   |
|    Total current liabilities                                                                                                                                                                     |   |          | 1,481,073  |   |         |   | 1,256,908 |   |
|                                                                                                                                                                                                            |   |          |       |   |         |   |   |   |
| Long-term Debt:                                                                                                                                                                                                 |   |          |       |   |         |   |   |   |
| Accrued severance pay                                                                                                                                                                                           |   |          | 82,139     |   |         |   | 84,315 |   |
|    Total liabilities                                                                                                                                                                             |   |          | 1,570,712  |   |         |   | 1,341,223 |   |
|                                                                                                                                                                                                            |   |          |       |   |         |   |   |   |
| Commitments and Contingencies                                                                                                                                                                                   |   |          |       |   |         |   |   |   |
|                                                                                                                                                                                                            |   |          |       |   |         |   |   |   |
| Stockholders' Equity:                                                                                                                                                                                           |   |          |       |   |         |   |   |   |
| Common stock, par value $0.0001 per share250,000,000 shares authorized; 74,055,493 and  71,822,893 shares issued and  outstanding at September 30, 2010 and December 31, 2009, respectively |   |          | 7,405      |   |         |   | 7,182 |   |
| Additional paid-in capital                                                                                                                                                                                      |   |          | 3,278,929  |   |         |   | 2,580,553 |   |
| Common stock subscribed                                                                                                                                                                                         |   |          | -          |   |         |   | 25,000 |   |
| Accumulated (deficit)                                                                                                                                                                                           |   |          | (2,531,602 | )      |         |   | (1,779,820 | ) |
|                                                                                                                                                                                                            |   |          | 754,732    |   |         |   | 832,895 |   |
| Less - Noncontrolling interest                                                                                                                                                                                  |   |          | 127,814    |   |         |   | 66,119 |   |
|    Total Stockholders' Equity                                                                                                                                                                    |   |          | 882,546    |   |         |   | 899,014 |   |
|                                                                                                                                                                                                            |   |          |       |   |         |   |   |   |
| Total Liabilities and Stockholders' Equity                                                                                                                                                                      |   | $             | 2,445,758  |   |         | $      | 2,240,237 |   |

----

----

|                                                                     |   | Three months endedSeptember 30, |       |   | Nine months ended September 30, |   |
|--------------------------------------------------------------------------|--------|-------------------------------------------|------------|--------|-------------------------------------------|--------|
|                                                                     |   | 2010                                      |       |   | 2009                                      |   |   | 2010 |   |   | 2009 |   |
|                                                                     |   | Restated                                  |       |   | Restated                                  |   |   | Restated |   |   | Restated |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |
| Revenues, net                                                            |   | $                                         | 259,080    |   |                                      | $      | 401,512 |   |   | $ | 1,596,682 |   |   | $ | 825,253 |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Cost of Goods Sold                                                       |   |                                      | 72,384     |   |                                      |   | 34,264 |   |   |   | 142,132 |   |   |   | 86,450 |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Gross Profit                                                             |   |                                      | 186,696    |   |                                      |   | 367,248 |   |   |   | 1,454,550 |   |   |   | 738,803 |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Research and development                                                 |   |                                      | 107,666    |   |                                      |   | 48,293 |   |   |   | 317,532 |   |   |   | 120,723 |   |
| Selling, general and administrative                                      |   |                                      | 349,348    |   |                                      |   | 628,598 |   |   |   | 1,807,889 |   |   |   | 1,540,738 |   |
| Total operating expenses                                                 |   |                                      | 457,014    |   |                                      |   | 676,891 |   |   |   | 2,125,421 |   |   |   | 1,661,461 |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) from Operations                                                   |   |                                      | (270,318   | )      |                                      |   | (309,643 | ) |   |   | (670,871 | ) |   |   | (922,658 | ) |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest (expense), net                                                  |   |                                      | (876       | )      |                                      |   | (16,158 | ) |   |   | (19,216 | ) |   |   | (9,117 | ) |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss)                                                               |   |                                      | (271,194   | )      |                                      |   | (325,801 | ) |   |   | (690,087 | ) |   |   | (931,775 | ) |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (income) Attributable to Noncontrolling Interest                |   |                                      | 44,971     |   |                                      |   | 38,378 |   |   |   | (61,695 | ) |   |   | 122,440 |   |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) attributable to Suspect Detection Systems Inc.                |   | $                                         | (226,223   | )      |                                      | $      | (287,423 | ) |   | $ | (751,782 | ) |   | $ | (809,335 | ) |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) Per Common Share:                                                 |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) per common share - Basic and Diluted                              |   | $                                         | (0.00      | )      |                                      | $      | (0.00 | ) |   | $ | (0.01 | ) |   | $ | (0.01 | ) |
|                                                                     |   |                                      |       |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Number of Common Shares Outstanding - Basic and Diluted |   |                                      | 68,895,810 |   |                                      |   | 63,534,225 |   |   |   | 66,978,382 |   |   |   | 61,081,038 |   |

----

----

|                                                |   | Nine months endedSeptember 30, |     |
|-----------------------------------------------------|--------|------------------------------------------|----------|
|                                                |   | 2010                                     |     |   | 2009 |   |
|                                                |   | Restated                                 |     |   | Restated |   |
| Operating Activities:                               |   |                                     |     |   |   |   |
| Net (loss)                                          |   | $                                        | (690,087 | ) |   | $ | (931,776 | ) |
| Adjustments to reconcile net (loss) to net cash     |   |                                     |     |   |   |   |   |   |
| (used in) operating activities:                     |   |                                     |     |   |   |   |   |   |
| Common stock issued for officers' compensation      |   |                                     | 25,500   |   |   |   | 25,500 |   |
| Stock options issued to directors                   |   |                                     | 160,095  |   |   |   | - |   |
| Stock options issued to agents                      |   |                                     | 194,135  |   |   |   | 50,446 |   |
| Stock warrants issued to a consultant               |   |                                     | 49,888   |   |   |   | 63,407 |   |
| Common stock issued for consulting services         |   |                                     | 149,000  |   |   |   | 146,250 |   |
| Depreciation                                        |   |                                     | 6,058    |   |   |   | 2,223 |   |
| Changes in Assets and Liabilities-                  |   |                                     |     |   |   |   |   |   |
| Inventory                                           |   |                                     | (45,307  | ) |   |   | 23,822 |   |
| Prepaid expenses and other receivables              |   |                                     | (139,617 | ) |   |   | 112,144 |   |
| Accounts payable - Trade                            |   |                                     | 82,403   |   |   |   | 13,420 |   |
| Accrued liabilities                                 |   |                                     | 70,643   |   |   |   | 111,229 |   |
| Advances from customers                             |   |                                     | (234,894 | ) |   |   | (130,973 | ) |
| Deferred revenues                                   |   |                                     | 114,111  |   |   |   | - |   |
| Due to related parties                              |   |                                     | 169,539  |   |   |   | 104,318 |   |
| Accrued severance pay                               |   |                                     | (38,752  | ) |   |   | (6,975 | ) |
| Net Cash (Used in) Operating Activities             |   |                                     | (127,285 | ) |   |   | (416,965 | ) |
|                                                |   |                                     |     |   |   |   |   |   |
| Investing Activities:                               |   |                                     |     |   |   |   |   |   |
| Cash acquired in business combination (b)           |   |                                     | -        |   |   |   | 702,147 |   |
| Increase in restricted cash                         |   |                                     | (100,000 | ) |   |   | - |   |
| Long term deposit                                   |   |                                     | (2,524   | ) |   |   | 15,341 |   |
| Increase in severance pay fund                      |   |                                     | (1,000   | ) |   |   | - |   |
| Purchases of Property and Equipment                 |   |                                     | (29,012  | ) |   |   | (4,063 | ) |
| Net Cash Provided by (Used in) Investing Activities |   |                                     | (132,536 | ) |   |   | 713,425 |   |
|                                                |   |                                     |     |   |   |   |   |   |
| Financing Activities:                               |   |                                     |     |   |   |   |   |   |
| Issuance of common stock for cash                   |   |                                     | 95,000   |   |   |   | 257,000 |   |
| Net Cash Provided by Financing Activities           |   |                                     | 95,000   |   |   |   | 257,000 |   |

----

----

|                                            |   | Nine months endedSeptember 30, |     |
|-------------------------------------------------|--------|------------------------------------------|----------|
|                                            |   | 2010                                     |     |   | 2009 |   |
|                                            |   | Restated                                 |     |   | Restated |   |
|                                            |   |                                     |     |   |   |   |
| Net Increase (Decrease) in Cash                 |   |                                     | (164,821 | ) |   |   | 553,460 |   |
| Cash and Cash Equivalents - Beginning of Period |   |                                     | 701,931  |   |   |   | 179,565 |   |
| Cash and Cash Equivalents - End of Period       |   | $                                        | 537,110  |   |   | $ | 733,025 |   |
|                                            |   |                                     |     |   |   |   |   |   |

| Supplemental Disclosure of Cash Flow Information: |   |   |   |   |   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash paid during the period for:                  |   |   |   |   |   |   |
| Interest                                          |   | $      | -      |   |   | $      | - |   |
|                                              |   |   |   |   |   |   |   |   |
| Income taxes                                      |   | $      | -      |   |   | $      | - |   |

| (a) Non cash transactions:                                                                |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                      |   |   |   |   |   |   |
| Common stock issued for purchase of  additional 7% interest inSDS - Israel Ltd. |   | $      | -      |   |   | $      | 1,859 |   |

| (b) Cash acquired in acquisition of 51% interest in SDS - Israel Ltd.: |   |   |   |   |   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                   |   |   |   |   |   |   |
| Working capital deficiency, excluding cash and cash equivalents        |   | $      | -      |   |   | $      | 541,442 |   |
| Property and equipment, net                                            |   |   | -      |   |   |   | (16,019 | ) |
| Accrued severance pay, net                                             |   |   | -      |   |   |   | 6,975 |   |
| Long term prepaid expenses                                             |   |   | -      |   |   |   | (28,360 | ) |
| Deferred acquisition costs                                             |   |   | -      |   |   |   | 1,135,000 |   |
| Goodwill                                                               |   |   | -      |   |   |   | (1,333,214 | ) |
| Noncontrolling Interest                                                |   |   | -      |   |   |   | 396,323 |   |
|                                                                   |   | $      | -      |   |   | $      | 702,147 |   |

----

----

----

|                       |   | Fair Value Measurements at September 30, 2010 |    |
|----------------------------|--------|----------------------------------------------------|---------|
|                       |   |                                               |    |   | Quoted Prices in Active |   |   | Significant Other |   |   | Significant |   |
|                       |   |                                               |    |   | Markets for Identical Assets |   |   | Observable Inputs |   |   | Unobservable Inputs |   |
|                       |   | Total                                              |    |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                       |   |                                               |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents  |   | $                                                  | 537,110 |   |   | $ | 537,110 |   |   | $ | - |   |   | $ | - |   |
| Restricted Cash            |   |                                               | 115,827 |   |   |   | 115,827 |   |   |   | - |   |   |   | - |   |
| Total assets at fair value |   | $                                                  | 652,937 |   |   | $ | 652,937 |   |   | $ | - |   |   | $ | - |   |

|                       |   | Fair Value Measurements at December 31, 2009 |    |
|----------------------------|--------|---------------------------------------------------|---------|
|                       |   |                                              |    |   | Quoted Prices in Active |   |   | Significant Other |   |   | Significant |   |
|                       |   |                                              |    |   | Markets for Identical Assets |   |   | ObservableInputs |   |   | Unobservable Inputs |   |
|                       |   | Total                                             |    |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                       |   |                                              |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents  |   | $                                                 | 701,931 |   |   | $ | 701,931 |   |   | $ | - |   |   | $ | - |   |
| Restricted Cash            |   |                                              | 15,827  |   |   |   | 15,827 |   |   |   | - |   |   |   | - |   |
| Total assets at fair value |   | $                                                 | 717,758 |   |   | $ | 717,758 |   |   | $ | - |   |   | $ | - |   |

----

----

| Balance sheet:                                                         |   |   |    |
|------------------------------------------------------------------------|--------|--------|---------|
| Decrease in cash and cash equivalents                                  |   | $      | 100,000 |   |
| Increase in restricted cash                                            |   |   | 100,000 |   |
| Increase in accounts receivables                                       |   |   | 22,364  |   |
| Increase in prepaid expenses and other receivables                     |   |   | 8,386   |   |
| Decrease in prepaid expenses, non current                              |   |   | 26,405  |   |
| Increase in Goodwill                                                   |   |   | 7,560   |   |
| Increase in account payables                                           |   |   | 1,700   |   |
| Decrease in accrued liabilities                                        |   |   | 10,428  |   |
| Increase in due to related parties                                     |   |   | 125,967 |   |
| Increase in the additional paid-in capital                             |   |   | 219,558 |   |
| Decrease in accumulated deficit                                        |   |   | 815,158 |   |
| Increase in noncontrolling interest                                    |   |   | 483,725 |   |
| Statement of operations for the three months ended September 30, 2010: |   |   |    |   |
| Decrease in Research and development                                   |   | $      | (1,026  | ) |
| Increase in general and administrative expenses                        |   |   | 123,190 |   |
| Increase in interest expenses                                          |   |   | 18,340  |   |
| Increase in net loss attributable to Suspect Detection Systems Inc.    |   | $      | 140,504 |   |
| Statement of operations for the nine months ended September 30, 2010:  |   |   |    |   |
| Decrease in Research and development                                   |   | $      | (1,021  | ) |
| Increase in general and administrative expenses                        |   |   | 462,287 |   |
| Increase in net loss attributable to Suspect Detection Systems Inc.    |   | $      | 461,292 |   |

----

| Balance sheet:                                     |   |   |    |
|----------------------------------------------------|--------|--------|---------|
| Increase in prepaid expenses and other receivables |   | $      | 5,000   |   |
| Increase in goodwill                               |   |   | 7,560   |   |
| Increase in due to related parties                 |   |   | 12,000  |   |
| Decrease in additional paid-in capital             |   |   | 136,840 |   |
| Decrease in accumulated deficit                    |   |   | 346,325 |   |
| Increase in noncontrolling interest                |   |   | 483,725 |   |

| Statement of operations for the three months ended September 30, 2009:         |   |   |    |
|--------------------------------------------------------------------------------|--------|--------|---------|
| Increase in general and administrative expenses                                |   | $      | 18,603  |   |
| Increase in Net loss attributable to Noncontrolling Interest                   |   |   | (26,501 | ) |
| Decrease in  net loss attributable to Suspect Detection Systems Inc. |   | $      | (7,898  | ) |
| Statement of operations for the nine months ended September 30, 2009:          |   |   |    |   |
| Increase in general and administrative expenses                                |   | $      | 153,603 |   |
| Increase in Net loss attributable to Noncontrolling Interest                   |   |   | (26,499 | ) |
| Increase in  net loss attributable to Suspect Detection Systems Inc. |   | $      | 127,104 |   |

----

|                                          |   | Previously |      |   | Net Change |   |     |   |   |   | Restated |   |
|-----------------------------------------------|--------|------------|-----------|--------|------------|--------|----------|--------|--------|--------|----------|--------|
|                                          |   | reported   |      |   |       |   |     |   |   |   |     |   |
| Current Assets:                               |   |       |      |   |       |   |     |   |   |   |     |   |
| Cash and cash equivalents                     |   | $          | 637,110   |   |       | $      | (100,000 | )      |   |   | a        |   |   | $ | 537,110 |   |
| Restricted cash                               |   |       | 15,827    |   |       |   | 100,000  |   |   |   | a        |   |   |   | 115,827 |   |
| Accounts receivables                          |   |       | -         |   |       |   | 22,364   |   |   |   | b        |   |   |   | 22,364 |   |
| Inventory                                     |   |       | 100,588   |   |       |   |     |   |   |   |     |   |   |   | 100,588 |   |
| Prepaid expenses and other receivables        |   |       | 196,574   |   |       |   | 8,386    |   |   |   | b,c,d    |   |   |   | 204,960 |   |
|    Total current assets        |   |       | 950,099   |   |       |   |     |   |   |   |     |   |   |   | 980,849 |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Property and Equipment:                       |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Computer and other equipment                  |   |       | 59,046    |   |       |   |     |   |   |   |     |   |   |   | 59,046 |   |
| Less - Accumulated depreciation               |   |       | (23,592   | )      |       |   |     |   |   |   |     |   |   |   | (23,592 | ) |
|    Property and equipment, net |   |       | 35,454    |   |       |   |     |   |   |   |     |   |   |   | 35,454 |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Other Assets:                                 |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Severance pay fund                            |   |       | 82,139    |   |       |   | 1,000    |   |   |   | e        |   |   |   | 83,139 |   |
| Prepaid expenses, non-current                 |   |       | 39,507    |   |       |   | (26,405  | )      |   |   | f        |   |   |   | 13,102 |   |
| Goodwill                                      |   |       | 1,325,654 |   |       |   | 7,560    |   |   |   | g,h      |   |   |   | 1,333,214 |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
|    Total other assets          |   |       | 1,447,300 |   |       |   |     |   |   |   |     |   |   |   | 1,429,455 |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Total Assets                                  |   | $          | 2,432,853 |   |       |   |     |   |   |   |     |   |   | $ | 2,445,558 |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
|                                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Current Liabilities:                          |   |       |      |   |       |   |     |   |   |   |     |   |   |   |   |   |
| Accounts payable - Trade                      |   | $          | 89,878    |   |       | $      | 1,700    |   |   |   | I,       |   |   | $ | 91,578 |   |
| Accrued liabilities                           |   |       | 242,231   |   |       |   | (10,428  | )      |   |   | i,j,k    |   |   |   | 231,803 |   |
| Advances from customers                       |   |       | 706,870   |   |       |   |     |   |   |   |     |   |   |   | 706,870 |   |
| Deferred revenues                             |   |       | 169,742   |   |       |   |     |   |   |   |     |   |   |   | 169,742 |   |
| Due to related parties                        |   |       | 115,113   |   |       |   | 125,967  |   |   |   | j,l, m,  |   |   |   | 281,080 |   |
|    Total current liabilities   |   |       | 1,363,834 |   |       |   |     |   |   |   |     |   |   |   | 1,481,073 |   |

|                                               |   | Previously |       |   | Net Change |   |     |   | Restated               |   |
|----------------------------------------------------|--------|------------|------------|--------|------------|--------|----------|--------|------------------------|--------|
|                                               |   | reported   |       |   |       |   |     |   |                   |   |
| Long-term Debt:                                    |   |       |       |   |       |   |     |   |                   |   |
| Accrued severance pay                              |   |       | 82,139     |   |       |   |     |   |                   |   | 82,139 |   |
|    Total liabilities                |   |       | 1,445,973  |   |       |   |     |   |                   |   | 1,481,073 |   |
|                                               |   |       |       |   |       |   |     |   |                   |   |   |   |
| Commitments and Contingencies                      |   |       |       |   |       |   |     |   |                   |   |   |   |
|                                               |   |       |       |   |       |   |     |   |                   |   |   |   |
| Stockholders' Equity:                              |   |       |       |   |       |   |     |   |                   |   |   |   |
| Common stock                                       |   |       | 7,405      |   |       |   |     |   |                   |   | 7,405 |   |
| Additional paid-in capital                         |   |       | 3,059,371  |   |       |   | 219,558  |   | l,m, o,p,q,            |   |   | 3,278,929 |   |
| Common stock subscribed                            |   |       | -          |   |       |   |     |   |                   |   |   | - |   |
| Accumulated (deficit)                              |   |       | (1,723,985 | )      |       |   | (815,158 | )      | c,e,f,g,h,k,l,m,o,p,q, |   |   | (2,531,602 | ) |
|    Total stockholders’ equity |   |       | 1,342,791  |   |       |   |     |   |                   |   |   | 754,732 |   |
|                                               |   |       | (355,911   | )      |       |   |     |   |                   |   |   | 127,814 |   |
| Less – Noncontrolling interest               |   |       | 986,880    |   |       |   | 483,725  |   | g,h                    |   |   | 882,546 |   |
|    Total stockholders' equity, Net  |   |       |       |   |       |   |     |   |                   |   |   |   |   |
| Total Liabilities and Stockholders' Equity         |   | $          | 2,432,853  |   |       |   |     |   |                   |   | $ | 2,445,558 |   |

----

|                                                      |   | Previously |       |   | Net Change |   |       |   |   |                | Restated |   |
|-----------------------------------------------------------|--------|------------|------------|--------|------------|--------|------------|--------|--------|---------------------|----------|--------|
|                                                      |   | reported   |       |   |       |   |       |   |   |                |     |   |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |
| Revenues, net                                             |   | $          | 1,596,682  |   |       |   |       |   |   |                |     | $      | 1,596,682 |   |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |
| Cost of Goods Sold                                        |   |       | 142,132    |   |       |   |       |   |   |                |     |   | 142,132 |   |
|    Gross Profit                            |   |       | 1,454,550  |   |       |   |       |   |   |                |     |   | 1,454,550 |   |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |
| Expenses:                                                 |   |       |       |   |       |   |       |   |   |                |     |   |   |   |
| Research and development                                  |   |       | 318,553    |   |       |   | (1,021     | )      |   |                | r        |   |   |   | 317,532 |   |
| Selling, general and administrative                       |   |       | 1,345,576  |   |       |   | 462,313    |   |   | c,e,f,k,l,m,o,p,q,r |     |   |   | 1,807,889 |   |
|    Total operating expenses                |   |       | 1,664,129  |   |       |   |       |   |   |                |     |   |   |   | 2,125,421 |   |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| (Loss) from Operations                                    |   |       | (209,579   | )      |       |   |       |   |   |                |     |   |   |   | (670,871 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Interest expense                                          |   |       | (19,216    | )      |       |   |       |   |   |                |     |   |   |   | (19,216 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Net (loss)                                                |   |       | (228,795   | )      |       |   |       |   |   |                |     |   |   |   | (690,087 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Net (loss) Attributable to Noncontrolling Interest        |   |       | (61,695    | )      |       |   |       |   |   |                |     |   |   |   | (61,695 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Net (loss) attributable to Suspect Detection Systems Inc. |   | $          | (290,490   | )      |       |   |       |   |   |                |     |   |   | $ | (751,782 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| (Loss) Per Common Share:                                  |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| (Loss) per common share - Basic and Diluted               |   | $          | (0.01      | )      |       |   |       |   |   |                |     |   |   | $ | (0.01 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Weighted Average Number of Common Shares                  |   |       |       |   |       |   |       |   |   |                |     |   |   |   |   |   |
| Outstanding - Basic and Diluted                           |   |       | 73,676,117 |   |       |   | (6,697,735 | )      |   |                | s        |   |   |   | 66,978,382 |   |

----

----

----

|                                                      |   | Previously |       |   | Net Change |   |       |   |   |              | Restated |   |
|-----------------------------------------------------------|--------|------------|------------|--------|------------|--------|------------|--------|--------|-------------------|----------|--------|
|                                                      |   | reported   |       |   |       |   |       |   |   |              |     |   |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |
| Revenues, net                                             |   | $          | 259,080    |   |       |   |       |   |   |              |     | $      | 259,080 |   |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |
| Cost of Goods Sold                                        |   |       | 72,384     |   |       |   |       |   |   |              |     |   | 72,384 |   |
|    Gross Profit                            |   |       | 186,696    |   |       |   |       |   |   |              |     |   | 186,696 |   |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |
| Expenses:                                                 |   |       |       |   |       |   |       |   |   |              |     |   |   |   |
| Research and development                                  |   |       | 108,692    |   |       |   | (1,026     | )      |   |              | r        |   |   |   | 107,666 |   |
| Selling, general and administrative                       |   |       | 226,158    |   |       |   | 123,190    |   |   | c,e,f,k,l,m,o,p,r |     |   |   | 349,348 |   |
|    Total operating expenses                |   |       | 334,850    |   |       |   |       |   |   |              |     |   |   |   | 457,014 |   |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| (Loss) from Operations                                    |   |       | (148,154   | )      |       |   |       |   |   |              |     |   |   |   | (270,318 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| Interest expense                                          |   |       | (19,216    | )      |       |   | (18,340    | )      |   |              |     |   |   |   | (876 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| Net (loss)                                                |   |       | (167,370   | )      |       |   |       |   |   |              |     |   |   |   | (271,194 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| Net (loss) Attributable to Noncontrolling Interest        |   |       | (44,971    | )      |       |   |       |   |   |              |     |   |   |   | (44,971 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| Net (loss) attributable to Suspect Detection Systems Inc. |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
|                                                      |   | $          | (122,399   | )      |       |   |       |   |   |              |     |   |   | $ | (226,223 | ) |
| (Loss) Per Common Share:                                  |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| (Loss) per common share - Basic and Diluted               |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
|                                                      |   | $          | (0.01      | )      |       |   |       |   |   |              |     |   |   | $ | (0.01 | ) |
| Weighted Average Number of Common Shares                  |   |       |       |   |       |   |       |   |   |              |     |   |   |   |   |   |
| Outstanding - Basic and Diluted                           |   |       | 74,055,493 |   |       |   | (5,159,683 | )      |   |              | s        |   |   |   | 68,895,810 |   |

----

----

|                                                |   | Previously |     |   | Net Change |   |     | Restated |   |
|-----------------------------------------------------|--------|------------|----------|--------|------------|--------|----------|----------|--------|
|                                                |   | reported   |     |   |       |   |     |     |   |
| Operating Activities:                               |   |       |     |   |       |   |     |     |   |
| Net (loss)                                          |   | $          | (228,795 | )      |       | $      | (461,292 | )        |   | $ | (690,087 | ) |
| Adjustments to reconcile net (loss) to net cash     |   |       |     |   |       |   |     |     |   |   |   |   |
| Common stock issued for officers' compensation      |   |       | 18,000   |   |       |   | 7,500    |     |   |   | 25,500 |   |
| Stock options issued to directors                   |   |       | 55,221   |   |       |   | 104,874  |     |   |   | 160,095 |   |
| Stock options issued to agents                      |   |       | -        |   |       |   | 194,135  |     |   |   | 194,135 |   |
| Stock warrants issued to a consultant               |   |       | -        |   |       |   | 49,888   |     |   |   | 49,888 |   |
| Common stock issued for consulting services         |   |       | 149,000  |   |       |   | -        |     |   |   | 149,000 |   |
| Depreciation                                        |   |       | 6,058    |   |       |   | -        |     |   |   | 6,058 |   |
| Changes in Assets and Liabilities-                  |   |       |     |   |       |   |     |     |   |   |   |   |
| Inventory                                           |   |       | (45,307  | )      |       |   | -        |     |   |   | (45,307 | ) |
| Prepaid expenses and other receivables              |   |       | (165,160 | )      |       |   | 25,543   |     |   |   | (139,617 | ) |
| Accounts payable - Trade                            |   |       | 80,703   |   |       |   | 1,700    |     |   |   | 82,403 |   |
| Accrued liabilities                                 |   |       | 81,070   |   |       |   | (10,427  | )        |   |   | 70,643 |   |
| Advances from customers, net                        |   |       | (212,530 | )      |       |   | (22,364  | )        |   |   | (234,894 | ) |
| Deferred revenues                                   |   |       | 114,111  |   |       |   | -        |     |   |   | 114,111 |   |
| Due to related parties                              |   |       | -        |   |       |   | 169,539  |     |   |   | 169,539 |   |
| Accrued severance pay                               |   |       | (2,176   | )      |       |   | 36,576   |     |   |   | (38,752 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Net Cash (Used in) Operating Activities             |   |       | (149,805 | )      |       |   | 22,520   |     |   |   | (127,285 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Investing Activities:                               |   |       |     |   |       |   |     |     |   |   |   |   |
| Cash acquired in business combination (b)           |   |       | -        |   |       |   | -        |     |   |   | - |   |
| Increase in restricted cash                         |   |       | -        |   |       |   | (100,000 | )        |   |   | (100,000 | ) |
| Prepaid expenses, non-current                       |   |       | -        |   |       |   | (2,524   | )        |   |   | (2,524 | ) |
| Increase in severance pay fund                      |   |       | (36,576  | )      |       |   | 35,576   |     |   |   | (1,000 | ) |
| Purchases of Property and Equipment                 |   |       | (29,012  | )      |       |   | -        |     |   |   | (29,012 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Net Cash Provided by (Used in) Investing Activities |   |       | (65,588  | )      |       |   | (66,948  | )        |   |   | (132,536 | ) |

----

|                                              |   | Previously |    |   | Net Change |   |    | Restated |   |
|---------------------------------------------------|--------|------------|---------|--------|------------|--------|---------|----------|--------|
|                                              |   | reported   |    |   |       |   |    |     |   |
| Financing Activities:                             |   |       |    |   |       |   |    |     |   |
| Issuance of common stock for cash                 |   |       | 95,000  |   |       |   | -       |     |   |   | 95,000 |   |
| Due to related party                              |   |       | 55,572  |   |       |   | (55,572 | )        |   |   | - |   |
| Net Cash Provided by Financing Activities         |   |       | 150,572 |   |       |   | (55,572 | )        |   |   | 95,000 |   |
|                                              |   |       |    |   |       |   |    |     |   |   |   |   |
| Net Increase (Decrease) in Cash                   |   |       | (64,821 | )      |       |   | -       |     |   |   | (164,821 | ) |
| Cash and Cash Equivalents - Beginning of Period   |   |       | 717,758 |   |       |   |    |     |   |   | 701,931 |   |
| Cash and Cash Equivalents - End of Period         |   | $          | 652,937 |   |       |   | (15,827 | )        |   | $ | 537,110 |   |
| Cash and Cash Equivalents - End of Period:        |   |       |    |   |       |   |    |     |   |   |   |   |
| Cash in bank                                      |   | $          | 701,931 |   |       |   |    |     |   | $ | 701,931 |   |
| Restricted cash                                   |   |       | 15,827  |   |       |   | (15,827 | )        |   |   | - |   |
| Total                                             |   | $          | 717,758 |   |       |   |    |     |   | $ | 701,931 |   |
| Supplemental Disclosure of Cash Flow Information: |   |       |    |   |       |   |    |     |   |   |   |   |
| Cash paid during the period for:                  |   |       |    |   |       |   |    |     |   |   |   |   |
| Interest                                          |   | $          | -       |   |       |   |    |     |   | $ | - |   |
| Income taxes                                      |   | $          | -       |   |       |   |    |     |   | $ | - |   |

----

|                                          |   | Previously |      |   | Net Change |   |   |   |   |   | Restated |   |
|-----------------------------------------------|--------|------------|-----------|--------|------------|--------|--------|--------|--------|--------|----------|--------|
|                                          |   | reported   |      |   |       |   |   |   |   |   |     |   |
| Current Assets:                               |   |       |      |   |       |   |   |   |   |   |     |   |
| Cash and cash equivalents                     |   | $          | 701,931   |   |       |   |   |   |   |   |     | $      | 701,931 |   |
| Restricted cash                               |   |       | 15,827    |   |       |   |   |   |   |   |     |   | 15,827 |   |
| Accounts receivables                          |   |       | -         |   |       |   |   |   |   |   |     |   | - |   |
| Inventory                                     |   |       | 55,281    |   |       |   |   |   |   |   |     |   | 55,281 |   |
| Prepaid expenses and other receivables        |   |       | 60,343    |   |       |   | 5,000  |   |   |   | d        |   |   |   | 65,343 |   |
|    Total current assets        |   |       | 833,382   |   |       |   |   |   |   |   |     |   |   |   | 838,382 |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Property and Equipment:                       |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Computer and other equipment                  |   |       | 30,034    |   |       |   |   |   |   |   |     |   |   |   | 30,034 |   |
| Less - Accumulated depreciation               |   |       | (17,534   | )      |       |   |   |   |   |   |     |   |   |   | (17,534 | ) |
|    Property and equipment, net |   |       | 12,500    |   |       |   |   |   |   |   |     |   |   |   | 12,500 |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Other Assets:                                 |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Severance pay fund                            |   |       | 45,563    |   |       |   |   |   |   |   |     |   |   |   | 45,563 |   |
| Prepaid expenses, non-current                 |   |       | 10,578    |   |       |   |   |   |   |   |     |   |   |   | 10,578 |   |
| Goodwill                                      |   |       | 1,325,654 |   |       |   | 7,560  |   |   |   | a,b      |   |   |   | 1,333,214 |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
|    Total other assets          |   |       | 1,381,795 |   |       |   |   |   |   |   |     |   |   |   | 1,389,355 |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Total Assets                                  |   | $          | 2,227,677 |   |       |   |   |   |   |   |     |   |   | $ | 2,240,237 |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
|                                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Current Liabilities:                          |   |       |      |   |       |   |   |   |   |   |     |   |   |   |   |   |
| Accounts payable - Trade                      |   | $          | 9,175     |   |       |   |   |   |   |   |     |   |   | $ | 9,175 |   |
| Accrued liabilities                           |   |       | 161,161   |   |       |   |   |   |   |   |     |   |   |   | 161,161 |   |
| Advances from customers                       |   |       | 919,400   |   |       |   |   |   |   |   |     |   |   |   | 919,400 |   |
| Deferred revenues                             |   |       | 55,631    |   |       |   |   |   |   |   |     |   |   |   | 55,631 |   |
| Due to related parties                        |   |       | 99,541    |   |       |   | 12,000 |   |   |   | e        |   |   |   | 111,541 |   |
|    Total current liabilities   |   |       | 1,244,908 |   |       |   |   |   |   |   |     |   |   |   | 1,256,908 |   |

----

|                                              |   | Previously |       |   | Net Change |   |     |   | Restated    |   |
|---------------------------------------------------|--------|------------|------------|--------|------------|--------|----------|--------|-------------|--------|
|                                              |   | reported   |       |   |       |   |     |   |        |   |
| Long-term Debt:                                   |   |       |       |   |       |   |     |   |        |   |
| Accrued severance pay                             |   |       | 84,315     |   |       |   |     |   |        |   | 84,315 |   |
|    Total liabilities               |   |       | 1,329,223  |   |       |   |     |   |        |   | 1,341,223 |   |
|                                              |   |       |       |   |       |   |     |   |        |   |   |   |
| Commitments and Contingencies                     |   |       |       |   |       |   |     |   |        |   |   |   |
|                                              |   |       |       |   |       |   |     |   |        |   |   |   |
| Stockholders' Equity:                             |   |       |       |   |       |   |     |   |        |   |   |   |
| Common stock                                      |   |       | 7,182      |   |       |   |     |   |        |   | 7,182 |   |
| Additional paid-in capital                        |   |       | 2,717,373  |   |       |   | (136,840 | )      | b,c,d,f,g   |   |   | 2,580,533 |   |
| Common stock subscribed                           |   |       | 25,000     |   |       |   |     |   |        |   |   | 25,000 |   |
| Accumulated (deficit)                             |   |       | (1,433,495 | )      |       |   | (346,325 | )      | b,c,d,e,f,g |   |   | (1,779,820 | ) |
|    Total stockholders' equity      |   |       | 1,316,060  |   |       |   |     |   |        |   |   | 832,895 |   |
|                                              |   |       |       |   |       |   |     |   |        |   |   |   |   |
| Less - Noncontrolling interest                    |   |       | (417,606   | )      |       |   | 483,725  |   | a,b         |   |   | 66,119 |   |
|    Total stockholders' equity, Net |   |       | 898,454    |   |       |   |     |   |        |   |   | 899,014 |   |
| Total Liabilities and Stockholders' Equity        |   | $          | 2,227,677  |   |       |   |     |   |        |   | $ | 2,240,237 |   |

----

----

|                                                      |   | Previously |       |   | Net Change |   |       |   |   |   | Restated |   |
|-----------------------------------------------------------|--------|------------|------------|--------|------------|--------|------------|--------|--------|--------|----------|--------|
|                                                      |   | reported   |       |   |       |   |       |   |   |   |     |   |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |
| Revenues, net                                             |   | $          | 825,253    |   |       |   |       |   |   |   |     | $      | 825,253 |   |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |
| Cost of Goods Sold                                        |   |       | 86,450     |   |       |   |       |   |   |   |     |   | 86,450 |   |
|    Gross Profit                            |   |       |       |   |       |   |       |   |   |   |     |   |   |   |
|                                                      |   |       | 738,803    |   |       |   |       |   |   |   |     |   | 738,803 |   |
| Expenses:                                                 |   |       |       |   |       |   |       |   |   |   |     |   |   |   |
| Research and development                                  |   |       | 120,723    |   |       |   |       |   |   |   |     |   | 120,723 |   |
| Selling, general and administrative                       |   |       | 1,387,136  |   |       |   | 150,603    |   |   |   | b,c,d,e  |   |   |   | 1,540,738 |   |
|    Total operating expenses                |   |       | 1,507,859  |   |       |   |       |   |   |   |     |   |   |   | 1,661,461 |   |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| (Loss) from Operations                                    |   |       | (769,056   | )      |       |   |       |   |   |   |     |   |   |   | (922,658 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Interest expense                                          |   |       | (9,117     | )      |       |   |       |   |   |   |     |   |   |   | (9,117 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Net (loss)                                                |   |       | (778,173   | )      |       |   |       |   |   |   |     |   |   |   | (931,775 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Net (loss) Attributable to Noncontrolling Interest        |   |       | (95,941    | )      |       |   | (26,499    | )      |   |   | a        |   |   |   | (122,440 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Net (loss) attributable to Suspect Detection Systems Inc. |   | $          | (682,232   | )      |       |   |       |   |   |   |     |   |   | $ | (809,335 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| (Loss) Per Common Share:                                  |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| (Loss) per common share - Basic and Diluted               |   | $          | (0.01      | )      |       |   |       |   |   |   |     |   |   | $ | (0.01 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Weighted Average Number of Common Shares                  |   |       |       |   |       |   |       |   |   |   |     |   |   |   |   |   |
| Outstanding - Basic and Diluted                           |   |       | 67,465,952 |   |       |   | (6,375,914 | )      |   |   | f        |   |   |   | 61,081,038 |   |

----

----

|                                                      |   | Previously |       |   | Net Change |   |       |   |   |      | Restated |   |
|-----------------------------------------------------------|--------|------------|------------|--------|------------|--------|------------|--------|--------|-----------|----------|--------|
|                                                      |   | reported   |       |   |       |   |       |   |   |      |     |   |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |
| Revenues, net                                             |   | $          | 401,512    |   |       |   |       |   |   |      |     | $      | 401,512 |   |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |
| Cost of Goods Sold                                        |   |       | 34,264     |   |       |   |       |   |   |      |     |   | 34,264 |   |
|    Gross Profit                            |   |       |       |   |       |   |       |   |   |      |     |   |   |   |
|                                                      |   |       | 367,248    |   |       |   |       |   |   |      |     |   | 367,248 |   |
| Expenses:                                                 |   |       |       |   |       |   |       |   |   |      |     |   |   |   |
| Research and development                                  |   |       | 48,293     |   |       |   |       |   |   |      |     |   | 48,293 |   |
| Selling, general and administrative                       |   |       | 609,996    |   |       |   | 18,603     |   |   | b,c,d,e,g |     |   |   | 628,598 |   |
|    Total operating expenses                |   |       | 658,289    |   |       |   |       |   |   |      |     |   |   | 676,891 |   |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |
| (Loss) from Operations                                    |   |       | (291,041   | )      |       |   |       |   |   |      |     |   |   | (309,643 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |
| Interest expense                                          |   |       | (16,158    | )      |       |   |       |   |   |      |     |   |   | (16,158 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |
| Net (loss)                                                |   |       | (307,199   | )      |       |   |       |   |   |      |     |   |   | (325,801 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |
| Net (loss) Attributable to Noncontrolling Interest        |   |       | (11,879    | )      |       |   | 26,499     |   |   |      | a        |   |   |   | (38,378 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |   |
| Net (loss) attributable to Suspect Detection Systems Inc. |   | $          | (295,320   | )      |       |   |       |   |   |      |     |   |   | $ | (287,423 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |   |
| (Loss) Per Common Share:                                  |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |   |
| (Loss) per common share - Basic and Diluted               |   | $          | (0.00      | )      |       |   |       |   |   |      |     |   |   | $ | (0.00 | ) |
|                                                      |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |   |
| Weighted Average Number of Common Shares                  |   |       |       |   |       |   |       |   |   |      |     |   |   |   |   |   |
| Outstanding - Basic and Diluted                           |   |       | 66,002,708 |   |       |   | (2,468,483 | )      |   |      | f        |   |   |   | 63,534,225 |   |

----

----

|                                                |   | Previously |     |   | Net Change |   |     | Restated |   |
|-----------------------------------------------------|--------|------------|----------|--------|------------|--------|----------|----------|--------|
|                                                |   | reported   |     |   |       |   |     |     |   |
| Operating Activities:                               |   |       |     |   |       |   |     |     |   |
| Net (loss)                                          |   | $          | (228,795 | )      |       | $      | (461,292 | )        |   | $ | (690,087 | ) |
| Adjustments to reconcile net (loss) to net cash     |   |       |     |   |       |   |     |     |   |   |   |   |
| Common stock issued for officers' compensation      |   |       | 18,000   |   |       |   | 7,500    |     |   |   | 25,500 |   |
| Stock options issued to directors                   |   |       | 55,221   |   |       |   | 104,874  |     |   |   | 160,095 |   |
| Stock options issued to agents                      |   |       | -        |   |       |   | 194,135  |     |   |   | 194,135 |   |
| Stock warrants issued to a consultant               |   |       | -        |   |       |   | 49,888   |     |   |   | 49,888 |   |
| Common stock issued for consulting services         |   |       | 149,000  |   |       |   | -        |     |   |   | 149,000 |   |
| Depreciation                                        |   |       | 6,058    |   |       |   | -        |     |   |   | 6,058 |   |
| Changes in Assets and Liabilities-                  |   |       |     |   |       |   |     |     |   |   |   |   |
| Inventory                                           |   |       | (45,307  | )      |       |   | -        |     |   |   | (45,307 | ) |
| Prepaid expenses and other receivables              |   |       | (165,160 | )      |       |   | 25,543   |     |   |   | (139,617 | ) |
| Accounts payable - Trade                            |   |       | 80,703   |   |       |   | 1,700    |     |   |   | 82,403 |   |
| Accrued liabilities                                 |   |       | 81,070   |   |       |   | (10,427  | )        |   |   | 70,643 |   |
| Advances from customers, net                        |   |       | (212,530 | )      |       |   | (22,364  | )        |   |   | (234,894 | ) |
| Deferred revenues                                   |   |       | 114,111  |   |       |   | -        |     |   |   | 114,111 |   |
| Due to related parties                              |   |       | -        |   |       |   | 169,539  |     |   |   | 169,539 |   |
| Accrued severance pay                               |   |       | (2,176   | )      |       |   | 36,576   |     |   |   | (38,752 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Net Cash (Used in) Operating Activities             |   |       | (149,805 | )      |       |   | 22,520   |     |   |   | (127,285 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Investing Activities:                               |   |       |     |   |       |   |     |     |   |   |   |   |
| Cash acquired in business combination (b)           |   |       | -        |   |       |   | -        |     |   |   | - |   |
| Increase in restricted cash                         |   |       | -        |   |       |   | (100,000 | )        |   |   | (100,000 | ) |
| Prepaid expenses, non-current                       |   |       | -        |   |       |   | (2,524   | )        |   |   | (2,524 | ) |
| Increase in severance pay fund                      |   |       | (36,576  | )      |       |   | 35,576   |     |   |   | (1,000 | ) |
| Purchases of Property and Equipment                 |   |       | (29,012  | )      |       |   | -        |     |   |   | (29,012 | ) |
|                                                |   |       |     |   |       |   |     |     |   |   |   |   |
| Net Cash Provided by (Used in) Investing Activities |   |       | (65,588  | )      |       |   | (66,948  | )        |   |   | (132,536 | ) |

----

|                                              |   | Previously |    |   | Net Change |   |    | Restated |   |
|---------------------------------------------------|--------|------------|---------|--------|------------|--------|---------|----------|--------|
|                                              |   | reported   |    |   |       |   |    |     |   |
| Financing Activities:                             |   |       |    |   |       |   |    |     |   |
| Issuance of common stock for cash                 |   |       | 95,000  |   |       |   | -       |     |   |   | 95,000 |   |
| Due to related party                              |   |       | 55,572  |   |       |   | (55,572 | )        |   |   | - |   |
| Net Cash Provided by Financing Activities         |   |       | 150,572 |   |       |   | (55,572 | )        |   |   | 95,000 |   |
|                                              |   |       |    |   |       |   |    |     |   |   |   |   |
| Net Increase (Decrease) in Cash                   |   |       | (64,821 | )      |       |   | -       |     |   |   | (164,821 | ) |
| Cash and Cash Equivalents - Beginning of Period   |   |       | 717,758 |   |       |   |    |     |   |   | 701,931 |   |
| Cash and Cash Equivalents - End of Period         |   | $          | 652,937 |   |       |   | (15,827 | )        |   | $ | 537,110 |   |
| Cash and Cash Equivalents - End of Period:        |   |       |    |   |       |   |    |     |   |   |   |   |
| Cash in bank                                      |   | $          | 701,931 |   |       |   |    |     |   | $ | 701,931 |   |
| Restricted cash                                   |   |       | 15,827  |   |       |   | (15,827 | )        |   |   | - |   |
| Total                                             |   | $          | 717,758 |   |       |   |    |     |   | $ | 701,931 |   |
| Supplemental Disclosure of Cash Flow Information: |   |       |    |   |       |   |    |     |   |   |   |   |
| Cash paid during the period for:                  |   |       |    |   |       |   |    |     |   |   |   |   |
| Interest                                          |   | $          | -       |   |       |   |    |     |   | $ | - |   |
| Income taxes                                      |   | $          | -       |   |       |   |    |     |   | $ | - |   |

----

----

|                                                       |   | For the nine months ended |       |
|------------------------------------------------------------|--------|---------------------------|------------|
|                                                       |   | September 30, 2010        |       |
|                                                       |   | Numberof warrants         |       |   | Weighted Average Exercise Price |   |
|                                                       |   |                      |       |   |   |   |
| Outstanding and exercisable at the beginning of the period |   |                      | 16,669,667 |   |   | $ | 0.317 |   |
| Granted                                                    |   |                      | 2,050,000  |   |   |   | 0.277 |   |
| Exercised                                                  |   |                      | -          |   |   |   | - |   |
| Forfeited                                                  |   |                      | (1,713,334 | ) |   |   | 0.25 |   |
| Outstanding and exercisable at the end of the period       |   |                      | 17,036,334 |   |   |   | 0.319 |   |

|                                                       |   | For the nine months ended |       |
|------------------------------------------------------------|--------|---------------------------|------------|
|                                                       |   | September 30, 2009        |       |
|                                                       |   | Numberof warrants         |       |   | Weighted Average Exercise Price |   |
|                                                       |   |                      |       |   |   |   |
| Outstanding and exercisable at the beginning of the period |   |                      | 9,522,999  |   |   | $ | 0.375 |   |
| Granted                                                    |   |                      | 6,756,668  |   |   |   | 0.235 |   |
| Exercised                                                  |   |                      | -          |   |   |   | - |   |
| Forfeited                                                  |   |                      | -          |   |   |   | - |   |
| Outstanding and exercisable at the end of the period       |   |                      | 16,099,667 |   |   | $ | 0.318 |   |

----

|                                |   |                                                        |          |
|-------------------------------------|--------|-------------------------------------------------------------|---------------|
|                                |   | Options granted under 2009 Global Stock Incentive Plan |          |
| annual dividends of                 |   | $                                                           | 0.00          |   |
| expected volatility of              |   |                                                        | 114.78-158.87 | % |
| risk-free interest rate of          |   |                                                        | 2.3-2.77      | % |
| expected average options expiration |   |                                                        | 3-5.32        |   |

|                                                       |   | For the nine months ended |      |
|------------------------------------------------------------|--------|---------------------------|-----------|
|                                                       |   | September 30, 2010        |      |
|                                                       |   | Numberof options          |      |   | Weighted Average Exercise Price |   |
|                                                       |   |                      |      |   |   |   |
| Outstanding and exercisable at the beginning of the period |   |                      | 1,550,000 |   |   | $ | 0.15 |   |
| Granted                                                    |   |                      | 2,000,000 |   |   |   | 0.15 |   |
| Exercised                                                  |   |                      | -         |   |   |   | - |   |
| Forfeited                                                  |   |                      | -         |   |   |   | - |   |
| Outstanding and exercisable at the end of the period       |   |                      | 3,550,000 |   |   | $ | 0.15 |   |

----

|                                                       |   | For the nine months ended |      |
|------------------------------------------------------------|--------|---------------------------|-----------|
|                                                       |   | September 30, 2009        |      |
|                                                       |   | Numberof options          |      |   | Weighted Average Exercise Price |   |
|                                                       |   |                      |      |   |   |   |
| Outstanding and exercisable at the beginning of the period |   |                      | -         |   |   |   | - |   |
| Granted                                                    |   |                      | 1,500,000 |   |   |   | 0.15 |   |
| Exercised                                                  |   |                      | -         |   |   |   | - |   |
| Forfeited                                                  |   |                      | -         |   |   |   | - |   |
| Outstanding and exercisable at the end of the period       |   |                      | 1,500,000 |   |   | $ | 0.15 |   |

----

|            |   | Nine months ended September 30, 2010 |      |
|-----------------|--------|--------------------------------------|-----------|
|            |   | Revenues                             |      |   | % of total revenues |   |
| Customer A      |   | $                                    | 1,052,134 |   |   |   | 66 | % |
| Customer B      |   |                                 | 313,624   |   |   |   | 20 |   |
| Customer C      |   |                                 | 163,375   |   |   |   | 10 |   |
| Other customers |   |                                 | 67,549    |   |   |   | 4 |   |
| Total Revenues  |   | $                                    | 1,596,682 |   |   |   | 100 | % |

|            |   | Nine months ended September 30, 2009 |    |
|-----------------|--------|--------------------------------------|---------|
|            |   | Revenues                             |    |   | % of total revenues |   |
| Customer C      |   | $                                    | 554,247 |   |   |   | 67 | % |
| Customer D      |   |                                 | 149,919 |   |   |   | 18 |   |
| Customer E      |   |                                 | 77,222  |   |   |   | 9 |   |
| Customer F      |   |                                 | 29,975  |   |   |   | 4 |   |
| Other customers |   |                                 | 13,890  |   |   |   | 2 |   |
| Total Revenues  |   | $                                    | 825,253 |   |   |   | 100 | % |

----

----

----

----

----

----

|            |   | Nine months ended September 30, 2010 |      |
|-----------------|--------|--------------------------------------|-----------|
|            |   | Revenues                             |      |   | % of total revenues |   |
| Customer A      |   | $                                    | 1,052,134 |   |   |   | 66 | % |
| Customer B      |   |                                 | 313,624   |   |   |   | 20 |   |
| Customer C      |   |                                 | 163,375   |   |   |   | 10 |   |
| Other customers |   |                                 | 67,549    |   |   |   | 4 |   |
| Total Revenues  |   | $                                    | 1,596,682 |   |   |   | 100 | % |

|            |   | Nine months ended September 30, 2009 |    |
|-----------------|--------|--------------------------------------|---------|
|            |   | Revenues                             |    |   | % of total revenues |   |
| Customer C      |   | $                                    | 554,247 |   |   |   | 67 | % |
| Customer D      |   |                                 | 149,919 |   |   |   | 18 |   |
| Customer E      |   |                                 | 77,222  |   |   |   | 9 |   |
| Customer F      |   |                                 | 29,975  |   |   |   | 4 |   |
| Other customers |   |                                 | 13,890  |   |   |   | 2 |   |
| Total Revenues  |   | $                                    | 825,253 |   |   |   | 100 | % |

----

----

----

----

| Exhibit No. |   | Description                                                                                           |
|-------------|--------|-------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                  |
| 31.1        |   | Rule 13a-14(a)/15d14(a) Certification of Principal Executive Officer (attached hereto)                |
|        |   |                                                                                                  |
| 31.2        |   | Rule 13a-14(a)/15d14(a) Certification of Principal Financial and Accounting Officer (attached hereto) |
|        |   |                                                                                                  |
| 32.1        |   | Section 1350 Certification of Principal Executive Officer (attached hereto)                           |
|        |   |                                                                                                  |
| 32.1        |   | Section 1350 Certification of Principal Financial and Accounting Officer (attached hereto)            |

----

|                      | SUSPECT DETECTION SYSTEMS, INC. |                                                                                  |
|---------------------------|---------------------------------|---------------------------------------------------------------------------------------|
| Dated: May 13, 2011  |                            |                                                                                  |   |
|                      | By:                             | /s/ Gil Boosidan                                                                 |   |
|                      |                            | Name: Gil Boosidan                                                               |   |
|                      |                            | Title :  Chief Executive Officer and Director (Principal Executive Officer) |   |

| Dated: May 13, 2011  | By:    | /s/ Ran Daniel                                                                   |   |
|---------------------------|--------|----------------------------------------------------------------------------------|--------|
|                      |   | Name: Ran Daniel                                                            |   |
|                      |   | Title:  Chief Financial Officer (Principal Financial and Accounting Officer |   |

----