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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549    FORM 10-QSB/A QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended
     
     June 30, 2006Commission File Number
     
     1-31070  Derma Sciences, Inc.(Exact name of small business issuer as specified in its charter) Pennsylvania
     23-2328753(State or other jurisdiction of
     incorporation or organization)
     (I.R.S. Employer Identification
     No.)  214 Carnegie Center, Suite 100Princeton, New Jersey
08540(609) 514-4744(Address including zip code and
telephonenumber, of principal executive offices)


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]    
No [  ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).

Yes [  ]    
No [X]

State the number of shares of each of the issuer's classes of
common equity, as of the latest practicable date.

|                    |        |                                       
|------------------- | ------ | --------------------------------------
|Date: July 31, 2006 | Class: | Common Stock, par value $.01 per share
|                    |        | Shares Outstanding: 22,906,160        

Transitional Small Business Disclosure Format (check one):
   Yes [  ]     No [X]

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Part IDERMA SCIENCES,
INC.FORM 10-QSB/AINDEX

|                                         |         |                                                                                                                  |   
|---------------------------------------- | ------- | ---------------------------------------------------------------------------------------------------------------- | --
|Description                              | Page   
|Part I - Condensed Financial Information
|                                         | Item 1. | Condensed Consolidated Financial Statements                                                                      |   
|                                         |         | Condensed Consolidated Balance
     Sheets - June 30, 2006 (Unaudited) and December 31, 2005                     | 3 
|                                         |         | Condensed Consolidated Statements of
     Operations - Three months ended June 30, 2006 and 2005 (Unaudited)     | 4 
|                                         |         | Condensed Consolidated Statements of
     Operations - Six months ended June 30, 2006 and 2005 (Unaudited)       | 5 
|                                         |         | Condensed Consolidated Statements of
     Cash Flows - Six months ended June 30, 2006, 2006 and 2005 (Unaudited) | 6 
|                                         |         | Notes to Condensed Consolidated Financial
     Statements (Unaudited)                                            | 7 
|                                         | Item 2. | Management's Discussion and
     Analysis or Plan of Operation                                                   | 20
|                                         | Item 3. | Controls and
     Procedures                                                                                     | 37
|(*)                                      | Item 4. | Submission of Matters to a
     Vote of Security Holders                                                         | 37
|Part II - Other Information             
|                                         | Item 1. | Legal
     Proceedings                                                                                           | 39
|                                         | Item 6. | Exhibits                                                                                                         | 39

Forward Looking Statements

This document includes certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on managements current
expectations and are subject to uncertainty and changes in circumstances. Actual results
may differ materially from these expectations due to changes in political, economic,
business, competitive, market and regulatory factors.

_________________

(*)    
          Item added by the present amendment.

1

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

The
annual meeting of shareholders of the Company was held on May 11, 2006. At the annual
meeting, the following matters were submitted to a vote of the Companys security
holders with the results indicated:

Proposal
1  Election of Directors

The
following director-nominees, consisting of all director-nominees, were elected directors
to serve as such for one year or until their successors have been elected and qualify:
Edward J. Quilty, Stephen T. Wills, CPA, MST, Srini Conjeevaram, James T. OBrien,
Richard J. Keim, C. Richard Stafford, Esq., Robert G. Moussa and Bruce F. Wesson.

Proposal
2  Amendment to Stock Option Plan

Shareholders
approved the amendment of the Companys stock option plan to increase the shares of
common stock reserved for issuance upon exercise of options granted under the plan from
3,500,000 to 5,000,000. Details concerning the vote on proposal 2 are set forth below:

| |                  |           | 
| | ---------------- | --------- | 
| | In favor         | 7,015,635 | 
| | Against          | 551,060   | 
| | Abstentions      | 11,630    | 
| | Broker non-votes | 2,319,383 | 

Proposal
3  Adoption of Restricted Stock Plan

Shareholders
approved the adoption of the Companys restricted stock plan and the reservation of
2,500,000 shares of common stock for issuance under the plan. Details concerning the vote
on proposal 3 are set forth below:

| |                  |           | 
| | ---------------- | --------- | 
| | In favor         | 7,034,371 | 
| | Against          | 577,312   | 
| | Abstentions      | 6,242     | 
| | Broker non-votes | 2,279,783 | 

Proposal
4  Increase in Authorized Common Stock

Shareholders
approved the amendment of the Companys articles of incorporation to increase the
number of shares of common stock the Company is authorized to issue from 30,000,000 to
50,000,000. Details concerning the vote on proposal 4 are set forth below:

| |                  |           | 
| | ---------------- | --------- | 
| | In favor         | 9,680,757 | 
| | Against          | 210,035   | 
| | Abstentions      | 6,916     | 
| | Broker non-votes | 0         | 

Proposal
5  Ratification of Appointment of Independent Registered Public Accounting Firm

Shareholders
ratified the appointment of J.H. Cohn LLP as the Companys independent registered
public accounting firm for the year ending December 31, 2006. Details concerning the vote
on proposal 5 are set forth below:

| |                  |           | 
| | ---------------- | --------- | 
| | In favor         | 9,809,512 | 
| | Against          | 76,270    | 
| | Abstentions      | 11,926    | 
| | Broker non-votes | 0         | 

37

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Index

The
Company solicited proxies relative to each of the foregoing proposals and, as to proposal
1, each director-nominee pursuant to Regulation 14A under the Securities Exchange Act of
1934. No proxies were solicited in opposition to any of the proposals.

38

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Index

Part II  Other
Information

Item 1. Legal Proceedings

None.

Item 6. Exhibits

All exhibits
required by Item 601 of Regulation S-B and required hereunder, as filed with the
Securities and Exchange Commission in Form 10-KSB on March 31, 2006, are incorporated
herein by reference.

| |         |                                                                                                                                                           
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit | Description                                                                                                                                               
| | 31.1    | Certification of the Principal Executive Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002                                           
| | 31.2    | Certification of the Principal Financial Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002                                           
| | 32.1    | Certification of the Principal Executive Officer pursuant to U.S.C.
     Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
| | 32.2    | Certification of the Principal Financial Officer pursuant to U.S.C.
     Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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

|                        |                                                                                              
|----------------------- | ---------------------------------------------------------------------------------------------
|                        | DERMA SCIENCES, INC.                                                                         
|                        |                                                                                              
|                        |                                                                                              
|Dated: October 20, 2006 | By:/s/ John E.
     Yetter
         John E. Yetter, CPA
         Chief Financial
     Officer

39

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Index

EXHIBIT INDEX

| |         |                                                                                                                                                           
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit | Description                                                                                                                                               
| | 31.1    | Certification of the Principal Executive Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002                                           
| | 31.2    | Certification of the Principal Financial Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002                                           
| | 32.1    | Certification of the Principal Executive Officer pursuant to U.S.C.
     Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
| | 32.2    | Certification of the Principal Financial Officer pursuant to U.S.C.
     Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002