**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**








**FORM
      10 - QSB/A**


**Amendment
      No. 1**







**QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934.**




**For
      the quarterly period ended March 31, 2006**




*Commission
      File Number: 0-21284*





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


*(Exact
      name of registrant as specified in its charter)*





DELAWARE
            91-1549305(State
                or other jurisdiction)
            (IRS
                Employer Identification No.)of
                incorporation or organization)





1
      Clarks Hill Rd. Framingham, MA. 01702


(Address
      of principal executive offices and zip code) ****


(508)
      872-2625


( *Registrant’s
      telephone number, including area code)*




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


Yes x No o





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


Yes o No x





Transitional
      Small Business Disclosure Format (check one): Yes o No x





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Exchange Act).


Yes o No x





The
      number of shares outstanding of the Registrant's Common Stock as of May 13,
      2006
      was 33,394,491 shares.









**Explanatory
      Note**





As
      indicated in the Registrant’s Current Report on Form 8-K/A filed with the
      Securities and Exchange Commission on October 23, 2006, this amendment is being
      filed to correct errors to the financial statements contained in the
      Registrant’s Form 10QSB for the period ending March 31, 2006.





This
      Amendment No. 1 on Form 10-QSB/A to the Quarterly Report on Form 10-QSB of
      Statsure Diagnostic Systems, Inc. Formerly Saliva Diagnostic Systems Inc. (the
      Company) for the quarterly period ended March 31, 2006 is being filed to (i)
      restate the Company's Balance Sheet and Statements of Operations and Cash Flows
      (Unaudited) and (ii) revise related and other disclosures included in the
      quarterly report on Form 10-QSB.





The
      restatement as described more fully in Note 4, is being made to correct the
      following:





a)  to
      account for the beneficial conversion feature on certain convertible debentures
      issued using the effective interest method.


b)  to
      account for the cumulative effect of warrants issued for services rendered
      to
      the Company which was previously discounted in 2005.





The
      Statement of Cash Flows has been restated to reflect debt discount related
      to
      the debentures. Accordingly, Management's Discussion and Analysis has been
      revised to reflect the changes made.





This
      Amendment No. 1 amends Parts I and II of the Quarterly Report on Form 10-QSB
      for
      the quarterly period ended March 31, 2006. This Amendment No. 1 continues to
      reflect circumstances as of the date of the original filing of the Quarterly
      Report on Form 10-QSB and the Company has not updated the disclosures contained
      therein to reflect events that occurred at a later date, except for items
      relating to the restatement.





See
      Note
      4 to the Financial Statements regarding the restatement
      adjustments.









STATSURE
      DIAGNOSTIC SYSTEMS, INC.


FORM
      10-QSB


INDEX




PAGEPART
                I FINANCIAL INFORMATIONItem
                1.
            Financial
                StatementsBalance
                  sheets - March 31, 2006 (unaudited) andDecember
                  31, 2005
            3Statements
                  of Operations - Three Months EndedMarch
                  31, 2006 and 2005 (unaudited)
            4Statements
                  of Cash Flows- Three Months EndedMarch
                  31, 2006 and 2005 (unaudited)
            5Notes
                to Financial Statements (unaudited)
            6Item
                2.
            Management's
                Discussion and Analysis of And Plan of Operation Financial Condition
            15Item
                3.
            Controls
                and Procedures
            22PART
                II OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            23Item
                2.
            Changes
                in Securities
            23Item
                3.
            Defaults
                Upon Senior Securities
            23Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            23Item
                5.
            Other
                Information
            23Item
                6.
            Exhibits
                and Reports on Form 8-K
            24Signatures.
            25Certifications





2





**PART
      I FINANCIAL INFORMATION**


**Item
      1. FINANCIAL STATEMENTS**





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**BALANCE
      SHEETS**




**March
                31,**
              **2006**
            
            December 31,
              2005**(Unaudited)**
              (RESTATED)
            
            (RESTATED)**ASSETS**CURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            9,607
            
            $
            76,321Accounts
                receivable, net of allowance for doubtful accounts of $107,477 for
                both
                2006 and 2005
            
            
            3,950
            
            
            69,741Inventories
            
            
            82,183
            
            
            56,150Prepaids
            
            
            7,061
            
            
            11,669Total
                current assets
            
            
            102,801
            
            
            213,881Property
                and equipment, net of accumulated depreciation of $564,178 (2006)
                and
                $558,076 (2005)
            
            
            89,206
            
            
            95,308Equipment
                under construction
            
            
            664,401
            
            
            664,401Patents
                and trademarks, net of accumulated amortization of $128,846(2006)and
                $125,876 (2005)
            
            
            105,067
            
            
            73,223Deferred
                costs, less accumulated amortization of $317,469(2006)and
                $260,739(2005)
            
            
            154,531
            
            
            211,261Deposits
            
            
            13,500
            
            
            13,500TOTAL
                ASSETS
            
            $
            1,129,506
            
            $
            1,271,574**LIABILITIES
                AND SHAREHOLDERS’ DEFICIT**CURRENT
                LIABILITIES:Note
                payable - shareholders
            
            $
            2,384,928
            
            $
            172,055Debentures
                payable-net of discount
            
            
            244,209
            
            
            126,597Accounts
                payable
            
            
            145,115
            
            
            82,080Customer
                advances
            
            
            588
            
            
            2,000Accrued
                expenses
            
            
            233,125
            
            
            370,164Accrued
                payroll expense to officers
            
            
            257,250
            
            
            234,750Payroll
                and payroll taxes payable
            
            
            114,340
            
            
            102,441Total
                current liabilities
            
            
            3,379,555
            
            
            1,090,087LONG-TERM
                DEBTDeferred
                rent payable
            
            
            8,912
            
            
            6,190Note
                payable - shareholder
            
            
            —
            
            
            1,932,099TOTAL
                LIABILITIES
            
            
            3,388,467
            
            
            3,028,376COMMITMENTS
                AND CONTINGENCIESSHAREHOLDERS’
                DEFICIT:Series
                1998-B Convertible Preferred Stock: 1,645 shares authorized, none
                issued
                and outstanding
            
            
            —
            
            
            —Common
                stock, $.001 par value, 50,000,000 shares authorized, issued and
                outstanding: 33,394,491 (2006) and 31,769,491 (2005)
            
            
            33,394
            
            
            31,769Additional
                paid-in capital
            
            
            44,844,001
            
            
            44.545,318Less:
                deferred compensation
            
            
            —
            
            
            (2,927
            )Accumulated
                deficit
            
            
            (47,136,356
            )
            
            (46,330,962
            )TOTAL
                SHAREHOLDERS’ DEFICIT
            
            
            (2,258,961
            )
            
            (1,756,802
            )TOTAL
                LIABILITIES ANDSHAREHOLDERS’
                DEFICIT
            
            $
            1,129,506
            
            $
            1,271,574




The
      accompanying notes are an integral part of these statements.




3





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**STATEMENTS
      OF OPERATIONS**


**(Unaudited)**


**Three
                  Months Ended March 31,**2006
              
              2005(Restated)
              
              (Restated)REVENUES:Product
                  Sales
              
              $
              213,059
              
              $
              264,473Royalty
                  Income
              
              
              —
              
              
              546Total
                  revenues
              
              
              213,059
              
              
              265,019COSTS
                  OF PRODUCTS SOLD
              
              
              46,390
              
              
              94,346Gross
                  profit
              
              
              166,669
              
              
              170,673OPERATING
                  EXPENSES:Research
                  and development expenses
              
              
              69,149
              
              
              77,000Selling,
                  general and administrative expense
              
              
              661,340
              
              
              983,754Total
                  costs and expenses
              
              
              730,489
              
              
              1,060,754Loss
                  from operations
              
              
              (563,820
              )
              
              (890,081
              )OTHER
                  EXPENSES:Interest
                  expense - net
              
              
              (123,962
              )
              
              (79,985
              )Interest
                  expense on beneficial conversion feature
              
              
              (117,612
              )
              
              (6,378
              )Financing
                  costs
              
              
              -
              
              
              (21,300
              )Total
                  other expenses:
              
              
              (241,574
              )
              
              (107,663
              )NET
                  LOSS TO COMMON STOCKHOLDERS
              
              $
              (805,394
              )
              $
              (997,744
              )BASIC
                  AND DILUTED LOSS PER SHARE
              
              $
              (0.03
              )
              $
              (0.03
              )WEIGHTED
                  AVERAGE NUMBER OF SHARES USED IN BASIC AND DILUTED PER SHARE
                  CALCULATIONS
              
              
              32,192,408
              
              
              30,565,256




The
      accompanying notes are an integral part of these statements.




4




**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**STATEMENTS
      OF CASH FLOWS**


**(Unaudited)**


**Three
                  Months Ended March 31,****2006**
              
              2005(Restated)
              
              (Restated)OPERATING
                  ACTIVITIES:Net
                  loss
              
              $
              (805,394
              )
              $
              (997,744
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Depreciation
                  and amortization
              
              
              9,072
              
              
              12,499Amortization
                  of deferred costs
              
              
              56,730
              
              
              26,147Warrants
                  issued for recruiting services
              
              
              —
              
              
              399,622Options
                  granted to non-employee
              
              
              11,621Beneficial
                  conversion feature of convertible debentures
              
              
              117,612
              
              
              6,378Stock
                  issued for consulting services
              
              
              112,000Options
                  granted to employees as compensation
              
              
              164,614
              
              
              228,371Changes
                  in assets and liabilities:Accounts
                  receivable
              
              
              65,791
              
              
              (38,643
              )Inventories
              
              
              (26,033
              )
              
              18,017Prepaids
              
              
              4,608
              
              
              —Accounts
                  payable, accrued payroll expense to officers and accrued
                  expenses
              
              
              201,109
              
              
              (3,249
              )Net
                  cash used in operating activities
              
              
              (88,270
              )
              
              (348,602
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Acquisitions
                  of property and equipment
              
              
              —
              
              
              (111,475
              )Acquisitions
                  of patents and trademarks
              
              
              (34,814
              )
              
              —Deferred
                  finance cost
              
              
              —
              
              
              (160,000
              )Net
                  cash used in investing activities
              
              
              (34,814
              )
              
              (271,475
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Cash
                  overdraft
              
              
              —
              
              
              (26,953
              )Proceeds
                  from shareholder loans
              
              
              146,222
              
              
              30,000Proceeds
                  from issuance of debentures
              
              
              —
              
              
              1,100,000Repayments
                  of shareholder loans
              
              
              (104,852
              )
              
              (612,690
              )Proceeds
                  from issuance of common stock
              
              
              15,000
              
              
              2,000Net
                  cash provided by financing activities
              
              
              56,370
              
              
              492,357NET
                  DECREASE IN CASH AND CASH EQUIVALENTS
              
              
              (66,714
              )
              
              (127,720
              )CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD
              
              
              76,321
              
              
              148,630CASH
                  AND CASH EQUIVALENTS, END OF PERIOD
              
              $
              9,607
              
              $
              20,910SUPPLEMENTAL
                  DISCLOSURE OF NON-CASH FLOW FINANCING ACTIVITIES:During
                  the three month periods ended March 31, 2006 and 2005,the
                  previous years balance ofaccrued interest of $239,404 and $228,773, respectively, for a
                  shareholder’s loan was added to the loan balance as principal.
              
              $
              239,404
              
              $
              228,773During
                  the three month period ended March 31, 2005, 1,000,000 shares of
                  common
                  stock were issued for a warrant conversion at $.01 per share. Payment
                  due
                  of $10,000 was offset to a note payable to this stockholder.
              
              $
              —
              
              $
              10,000During
                  the three month period ended March 31, 2005, 550,000 options were
                  issued
                  to an employee as compensation .
              
              $
              —
              
              $
              791,250During
                  the three month period ended March 31, 2005, debentures in the
                  amount of
                  $1,100,000 were sold and resulted in beneficial conversion charge
                  of
                  $1,100,000.
              
              $$
              —
              
              $$
              1,100,000




The
      accompanying notes are an integral part of these statements.





5





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**NOTES
      TO FIANCIAL STATEMENTS (UNAUDITED)**


**March
      31, 2006**


**1.
      Description of Business**





StatSure
      Diagnostic Systems, Inc., (SDS), a Delaware corporation (the “Company”), is
      primarily engaged in the development and marketing of oral fluid collection
      devices for the drugs of abuse market, and rapid immunoassays for use in the
      detection of infectious diseases. The Company believes that its patented
      platform for rapid testing of infectious diseases offers significant advantages
      over the competition, including ease-of-use, lower costs, and significantly
      reduced risk of infection from collecting and handling specimens. In the oral
      fluid collection market, the Company’s platform has a patented internal quality
      control that indicates sufficient volume of the oral fluid (“volume adequacy
      indicator”).




At
      the
      beginning of business on January 24, 2006, the Company effected a name change
      from Saliva Diagnostic Systems, Inc. to StatSure Diagnostic Systems, Inc..
      The
      shares of the Company have been trading under the StatSure name, with the new
      symbol SSUR, since March 22, 2006. Coinciding with our corporate name change,
      the Company has changed the name of its Hema-Strip HIV test to StatSureTM
HIV.





In
      May
      2002, the Company received its Investigational Device Exemption (IDE) from
      the
      U.S. Food and Drug Administration (FDA) for its Rapid Stat-SureTM HIV Test [THE
      PRODUCT BRAND NAME WAS FORMERLY KNOWN AS HEMA-STRIP HIV; THIS PRODUCT LINE
      WILL
      HEREAFTER BE REFERRED TO AS THE STATSURETM PRODUCT LINE AND THIS PRODUCT WILL BE
      KNOWN AS STATSURETM HIV]. Upon termination of all business relationships with its
      then contract manufacturer, Chembio Diagnostic Systems, (CEMI.OB) the Company
      signed a Manufacturing / Research & Development Agreement with American Bio
      Medica Corporation, Nasdaq SC (ABMC), of Kinderhook, NY. Responsibilities of
      ABMC include the manufacture of the Company's StatSureTM HIV test and other
      products under appropriate and applicable regulatory, compliance standards.
      The
      Company filed a new IDE with the FDA naming ABMC as its contract manufacturer.
      This IDE submission to the FDA was made in October 2003. Thereafter, the Company
      conducted its clinical trials and submitted the modules of the Pre-Market
      Approval (PMA) to the FDA. The FDA requested certain additional testing and
      the
      Company completed this work in the summer of 2005 and a Supplemental Study
      to
      the PMA was submitted in October 2005 to satisfy this request. During the past
      year, the Company has received regulatory approval to markets its StatSureTM, HIV
      product in South Africa, Jordan and Guatemala and expects to receive similar
      approvals in several other countries in 2006. In March 2006, the Company
      received correspondence from the FDA stating that our Pre-Market Approval (PMA)
      submission is deficient and therefore will require additional clinical studies
      to amend the PMA.




SDS
      is
      committed to and focused on the completion of the necessary requirements towards
      obtaining U.S. Food and Drug Administration (FDA), and other relevant regulatory
      approvals of our rapid HIV diagnostic tests technology. Although there is no
      assurance that we will receive such approval, we believe that the StatSureTM
format, if approved for detecting antibodies to HIV-1 in fingerstick and
      venipuncture whole blood, serum and plasma samples, will have certain
      competitive advantages in the market for rapid HIV testing both in the United
      States and internationally.




**2.**  **Substantial
      Doubt Regarding Ability To Continue As A Going Concern**





Significant
      operating losses - accumulated deficit:




Since
      July 1990, the Company has been engaged almost exclusively in research and
      development activities focused on developing proprietary saliva based collection
      devices and rapid assays for infectious diseases. Other than revenues derived
      from private label and OEM sales of the Company’s collection devices, the
      Company has not yet commenced any significant product commercialization. The
      Company has incurred significant operating losses since its inception, resulting
      in an accumulated deficit of $47,136,356 at March 31, 2006. Such losses are
      expected to continue for the foreseeable future and until such time, if ever,
      as
      the Company is able to attain revenue levels sufficient to support its
      operations. There can be no assurance that the Company will achieve or maintain
      profitability in the future. Substantial additional financing will be required
      in future periods.





6


**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**


The
      Company’s capital requirements have been and will continue to be significant.
      The Company’s capital base is smaller than that of many of its competitors, and
      there can be no assurance that the Company’s cash resources will be able to
      sustain its business. The Company is dependent upon its effort to raise capital
      to finance its future operations, including the cost of development,
      manufacturing and marketing of its products, to conduct clinical trials and
      submissions for FDA approval of its products and to continue the design and
      development of its new products. Marketing, manufacturing and clinical testing
      may require capital resources substantially greater than the resources available
      to the Company. The Company will continue to seek public or private placement
      of
      its equity securities as well as corporate partnerships to develop products.
      The
      Company’s future capital needs will depend upon numerous factors, including the
      progress of the approval for sale of the Company’s products in various
      countries, including the United States, the extent and timing of the acceptance
      of the Company’s products, the cost of marketing and manufacturing activities
      and the amount of revenues generated from operations, none of which can be
      predicted with much certainty. The accompanying financial statements have been
      prepared assuming that the Company will continue as a going concern. The
      Company’s significant operating losses and significant capital requirements,
      however, raise substantial doubt about the Company’s ability to continue as a
      going concern. The financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.





**3.
      Summary of Significant Accounting Policies**





***Basis
      of Presentation:***




The
      accompanying unaudited financial statements as of, and for the three month
      periods ended March 31, 2006 and 2005, have been prepared in conformity with
      accounting principles generally accepted in the United States of America. The
      financial information as of December 31, 2005, is derived from StatSure
      Diagnostic Systems, Inc. (the "Company") financial statements included in the
      Company's Annual Report on Form 10-KSB for the year ended December 31, 2005.
      Certain information or footnote disclosures in this filing that are normally
      included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States of America have been
      condensed or omitted, pursuant to the rules and regulations of the Securities
      and Exchange Commission for interim filings. In the opinion of management,
      the
      accompanying financial statements include all adjustments necessary (which
      are
      of a normal and recurring nature) for a fair presentation of the results of
      the
      interim periods presented. The accompanying financial statements should be
      read
      in conjunction with the Company's audited financial statements for the year
      ended December 31, 2005, as included in the Company's Annual Report on Form
      10-KSB for the year ended December 31, 2005. Operating results for the three
      month period ended March 31, 2006 are not necessarily indicative of the results
      that may be expected for the entire year ending December 31, 2006, or any other
      portion thereof.




***New
      Accounting Principles Adopted:***




*Stock-based
      Compensation:*




Effective
      January 1, 2006, the Company’s Stock Options are accounted for in accordance
      with the recognition and measurement provisions of Statement of Financial
      Accounting Standards ("FAS") No. 123 (revised 2004), Share-Based Payment ("FAS
      123(R)"). See Note 9 for further details.




*Significant
      Accounting Principles:*




For
      a
      summary of significant accounting principles (which have not changed from
      December 31, 2005) and additional financial information, see Company’s Annual
      Report on Form 10-KSB/A filed March
      7,
      2007 with the
      Securities and Exchange Commission.





7





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**NOTES
      TO FIANCIAL STATEMENTS (UNAUDITED)**


**March
      31, 2006**




**4.
      Restatements**




Subsequent
      to the filing of form 10-QSB for the three month period ended March 31, 2006,
      the Company determined that the filing did not reflect a beneficial conversion
      feature on 9% convertible debentures issued in 2005 as required under EITF
      98-5
“Accounting for Convertible Securities With Beneficial Conversion Features or
      Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27
“Application of Issue No. 98-5 to Certain Convertible Instruments”.





The
      Company recorded a $1,510,000 debenture debt discount from the beneficial
      conversion feature computation. This amount is limited to the proceeds of the
      convertible debt instrument in accordance with EITF 98-5. The debenture debt
      discount is being amortized over the life of the debentures with the unamortized
      discount of $1,205,791 being netted with the gross amount of the debentures
      payable of $1,450,000. The result of this restatement was to reflect the sale
      of
      the debentures as additional paid-in capital ($1,510,000), to record the
      cumulative effect of the prior year restatements of the beneficial conversion
      feature to beginning retained earnings ($186,597), and to amortize the
      beneficial conversion feature for the three month period ended March 31, 2006
      of
      $117,612.





Further,
      the Company also revalued warrants issued during 2005 as payment for services
      rendered for which the Company had used a 30% discount for various restriction.
      This revaluation increased related expense to $399,622 from $280,000. The
      Company accounts for warrants granted to its non-employee consultants using
      the
      fair value cost in accordance with SFAS 123 and EITF No. 96-18, “Accounting for
      Equity Instruments That Are Issued to Other Than Employees”. The fair value of
      warrants granted was estimated on the date of grant using the Black-Scholes
      option-pricing model with the following weighted-average assumptions: expected
      volatility of 200.4%, risk-free interest rate of 3.71% and expected life of
      4.93
      years for the year ended December 31, 2005. The effect of this prior year
      restatement was to adjust beginning retained earnings and additional paid-in
      capital of $119,622.




Certain
        typographical errors have been corrected in this filing for the Balance Sheets
        and Statements of Cash Flow.
 
 The
        Balance Sheet as of March 31, 2006, the Statement of Operations, and the
        Statement of Cash flows for the three months then ended, are now being restated
        in this Form 10QSB/A filing to give effect to the correction of these errors
        and
        certain resulting reclassification adjustments. The table below details the
        items affected by the restatement:




Three
                  months ended
                March
                  31, 2006As
                  reported
              
              As
                  restatedBALANCE
                  SHEET:Debentures
                  payable, net of discount
              
              $
              1,450,000
              
              $
              244,209Total
                  current liabilities
              
              
              4,585,346
              
              
              3,379,555Additional
                  paid-in capital
              
              
              45,828,779
              
              
              44,844,001Accumulated
                  deficit
              
              
              (49,326,925
              )
              
              (47,136,356
              )STATEMENTS
                  OF OPERATIONS:Selling,
                  general and administrative expense
              
              $
              373,104
              
              $
              661,340Stock
                  based compensation and employment recruiting expense-non
                  cash
              
              
              288,236
              
              
              3,379,555Interest
                  expense on beneficial conversion feature
              
              
              -
              
              
              (117,612
              )Net
                  loss to common shareholders
              
              
              (687,782
              )
              
              (805,394
              )Basic
                  and diluted net loss per share
              
              
              (0.02
              )
              
              (0.03
              )STATEMENTS
                  OF CASH FLOWNet
                  loss
              
              
              (687,782
              )
              
              (805,394
              )Options
                  granted to non-employees
              
              
              -
              
              
              11,621Beneficial
                  conversion feature of convertible debentures
              
              
              -
              
              
              117,612Options
                  granted to employees as compensation
              
              
              176,235
              
              
              164,614


8


**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**


The
      restatement had no impact on the cash used in operating activities.





On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      ("FAS") No. 123 (revised 2004), Share-Based Payment ("FAS 123(R)"), which
      replaces FAS No. 123, Accounting for Stock-Based Compensation, and supersedes
      Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued
      to Employees, and related interpretations. FAS 123 (R) requires compensation
      costs related to share-based payment transactions, including employee stock
      options, to be recognized in the financial statements. In addition, the Company
      adheres to the guidance set forth within Securities and Exchange Commission
      ("SEC") Staff Accounting Bulletin ("SAB") No. 107, which provides the Staff's
      views regarding the interaction between FAS No. 123(R) and certain SEC rules
      and
      regulations and provides interpretations with respect to the valuation of
      share-based payments for public companies.





Prior
      to
      January 1, 2006, the Company accounted for similar transactions in accordance
      with APB No. 25 which employed the intrinsic value method of measuring
      compensation cost. Accordingly, compensation expense was not recognized for
      fixed stock options if the exercise price of the option equaled or exceeded
      the
      fair value of the underlying stock at the grant date. Entities electing to
      remain with the accounting as prescribed by APB 25 must make pro forma
      disclosures of net income and, if presented, earnings per share, as if the
      fair
      value based method of accounting defined in SFAS 123 had been
      adopted.





The
      Company has elected to account for its stock-based compensation plans using
      APB
      25. The Company has computed, for pro forma disclosure purposes, the value
      of
      options granted for the three months period ended March 31, 2005 using the
      Black-Scholes pricing model.





For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                Restated





Net
                loss to common shareholdersAs
                reported
            
            $
            (652,284
            )
            $
            (997,744
            )Add:
                Stock-based employee compensation expense included in reported net
                loss,
                net of related tax affects
            
            
            8,910
            
            
            228,371Deduct:
                Total stock-based employee compensation expense determined under
                fair
                value based method for all awards, net of related tax
                affects
            
            
            (8,512
            )
            
            (245,098
            )Pro
                forma
            
            $
            (651,886
            )
            $
            (1,014,471
            )Basic
                and diluted net loss per shareAs
                reported
            
            $
            (0.02
            )
            $
            (0.03
            )Pro
                forma
            
            
            (0.02
            )
            
            (0.03
            )




**5.
      Accounts Receivable**





In
      2005,
      the Company recorded a 100% allowance of $102,477 against a receivable of
      $102,477 from one customer. We have given this account over to attorneys for
      collection and we are uncertain at this time if this will result in the
      collection of this outstanding account.





9


**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**


**6.
      Equipment Under Construction**





In
      2004,
      the Company entered into agreements with vendors to have custom assembly
      machinery built to assemble the Company’s Statsure HIV test. We purchased this
      equipment to produce production quantities of our “barrel” technology based
      products in an automated and cost effective manner and expect to need it
      initially to satisfy the market demand of our first major barrel product—the
      HemaStripTM HIV test upon FDA approval. As of the Balance Sheet date, the
      machinery has not been completed or placed in service.





**7.
      Geographic Area Information**




Under
      the
      disclosure requirements of SFAS No. 131, “Segment Disclosures and Related
      Information,” we operate within one segment. Our products are sold principally
      in the United States and Europe. Segmentation of identifiable assets is not
      applicable since all of our revenues outside the United States are export
      sales.




The
      following table represents total product sales revenue by geographic
      area:




**Three
                months ended March 31,****2006**
            
            2005United
                States
            
            **$**
            **51,064**
            
            $
            147,608United
                Kingdom
            
            
            **158,936**
            
            
            80,948Africa
            
            
            **588**
            
            
            26,490Others
            
            
            **2,471**
            
            
            9,877**$**
            **213,059**
            
            $
            264,473




**8.
      Debentures Payable**




On
      January 19, 2005, the Company's board of directors authorized the issuance
      and
      sale and sale of up to three million dollars of convertible debentures. These
      debentures mature March 31, 2009 and carry an interest rate of 9% per year
      and
      are convertible into common stock at the lower of 66.6% of the valuation of
      the
      Company's next raise of equity or $1 per share. In accordance with EITF Issue
      98-5 "Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios", the Company had evaluated that
      the convertible debt had a beneficial conversion feature as the conversion
      price
      was less than the fair value of the Company's common stock on the measurement
      date. Accordingly, for the three month period ended March 31, 2006, the Company
      recognized this beneficial conversion feature by charging an interest expense
      of
      $117,612 . As of March 31, 2006, the Company had sold an aggregate of $1,510,000
      in convertible debentures. In September 2005, a debenture in the amount of
      $60,000 was converted into 60,000 shares of common stock, resulting in the
      balance of outstanding debentures payables to be reduced to $1,450,000. As
      of
      March 31, 2006, the Company was in default on payment of interest on the
      debentures. As a result, in accordance with the debenture agreements, these
      debentures become payable on demand unless the default is waived by the
      investors.





Debentures
      payable-net of discount in the amount of $244,209 is net of gross amount of
      debentures payable of $1,450,000 reduced by unamortized debt discount of
      $1,205,791.





10




**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


**NOTES
      TO FIANCIAL STATEMENTS (UNAUDITED)**


**March
      31, 2006**





**9.
      Financing From Shareholders**




As
      of
      March 31, 2006, the Company owes a shareholder, Helenka Bodner, $213,425. This
      shareholder loan is due on December 31, 2006 but may be repaid earlier. The
      Company agreed to pay interest at 12% per annum on this loan.




Per
      a
      promissory note dated February 2003, Jules Nordlicht, another shareholder,
      agreed to advance in total or in installments, up to the amount of $1,000,000
      to
      the Company. In November 2003 and August 2004, agreements were executed with
      this shareholder to cause additional advances in total or in installments up
      to
      the amount of $2,500,000 to advance the process of the FDA approval. In
      consideration for the financing, the Company agreed to repay such borrowed
      funds
      with accrued interest at 12% per annum and the shareholder reserves the right
      to
      demand payment in full or in part at anytime after December 31, 2006. As of
      March 31, 2006, the loan balance to this shareholder aggregated $2,171,503
      which
      is reflected as a short term liability. An additional amount of $64,253 of
      interest on this note has been accrued during 2006 and remains owed as of March
      31, 2006.The lender (J. Nordlicht) has filed a Uniform Commercial Code (UCC)
      Lien on the Company's equipment and patents as security for this
      loan.




**10.
      Shareholders’ Equity Transactions**




In
      January 2006, the Company granted options to its two outside directors, Richard
      Woodrich and Joseph Levi, to purchase in the aggregate 100,000 shares of the
      Company's common stock. The options vest quarterly in equal amounts over a
      period of three years, and are exercisable for seven years from the vesting
      date
      at an exercise price equal to the lower of $1.00 or two-thirds of the price
      of
      common stock established in any offering and sale occurring prior to April
      30,
      2006.





In
      February 2006, the Company engaged Chardan Capital Markets LLC. as its
      investment bankers. The agreement is for a period of 12 months. For the advisory
      services, the Company has agreed to issue a total of 300,000 shares of its
      common stock of which 100,000 shares were issued on signing of the agreement
      and
      the remaining 200,000 shares are to be issued in eight equal installments of
      25,000 shares on 1st day of each month following the date of the agreement.
      As
      of March 31, 2006, the first installment has been earned. In addition, the
      advisor is entitled to a cash fee of 9% of total gross proceeds for any equity
      financing introduced by them and accepted by the Company and warrants to
      purchase shares of common stock as shall equal 9% of the shares of the Common
      Stock so issued, of which the shares of common stock are to be calculated as
      specified in the agreement. All fees due for advisory services are
      non-refundable and non-cancelable.




In
      March
      2006, previously issued warrants, exercisable into 1,500,000 shares at $.01
      per
      share for total proceeds of $15,000 were converted into common stock, resulting
      in the issuance of 1,500,000 common shares.




**11.
      Stock Options**





**Accounting
      for Employee Awards:**




On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      ("FAS") No. 123 (revised 2004), Share-Based Payment ("FAS 123(R)"), which
      replaces FAS No. 123, Accounting for Stock-Based Compensation, and supersedes
      Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued
      to Employees, and related interpretations. FAS 123 (R) requires compensation
      costs related to share-based payment transactions, including employee stock
      options, to be recognized in the financial statements. In addition, the Company
      adheres to the guidance set forth within Securities and Exchange Commission
      ("SEC") Staff Accounting Bulletin ("SAB") No. 107, which provides the Staff's
      views regarding the interaction between FAS No. 123(R) and certain SEC rules
      and
      regulations and provides interpretations with respect to the valuation of
      share-based payments for public companies.





Prior
      to
      January 1, 2006, the Company accounted for similar transactions in accordance
      with APB No. 25 which employed the intrinsic value method of measuring
      compensation cost. Accordingly, compensation expense was not recognized for
      fixed stock options if the exercise price of the option equaled or exceeded
      the
      fair value of the underlying stock at the grant date.




11




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**


While
      FAS
      No. 123 encouraged recognition of the fair value of all stock-based awards
      on
      the date of grant as expense over the vesting period, companies were permitted
      to continue to apply the intrinsic value-based method of accounting prescribed
      by APB No. 25 and disclose certain pro-forma amounts as if the fair value
      approach of SFAS No. 123 had been applied. In December 2002, FAS No. 148,
      Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment
      of SFAS No. 123, was issued, which, in addition to providing alternative methods
      of transition for a voluntary change to the fair value method of accounting
      for
      stock-based employee compensation, required more prominent pro-forma disclosures
      in both the annual and interim financial statements. The Company complied with
      these disclosure requirements for all applicable periods prior to January 1,
      2006.





In
      adopting FAS 123(R), the Company applied the modified prospective approach
      to
      transition. Under the modified prospective approach, the provisions of FAS
      123
      (R) are to be applied to new awards and to awards modified, repurchased, or
      cancelled after the required effective date. Additionally, compensation cost
      for
      the portion of awards for which the requisite service has not been rendered
      that
      are outstanding as of the required effective date shall be recognized as the
      requisite service is rendered on or after the required effective date. The
      compensation cost for that portion of awards shall be based on the grant-date
      fair value of those awards as calculated for either recognition or pro-forma
      disclosures under FAS 123.





As
      a
      result of the adoption of FAS 123 (R), the Company's results for the three
      month
      period ended March 31, 2006 include share-based compensation expense totaling
      approximately $276,615 which pertains to selling, general and administrative
      expenses and has been presented as a separate line item in the Statement of
      Operations. No income tax benefit has been recognized in the income statement
      for share-based compensation arrangements as the Company has provided 100%
      valuation allowance on net deferred tax asset. Stock compensation expense for
      employee options recorded under APB No. 25 in the Statement of Operations for
      the three months ended March 31, 2005 totaled 228,371.





Stock
      option compensation expense in fiscal 2006 is the estimated fair value of
      options granted amortized on a straight-line basis over the requisite service
      period for the entire portion of the award. The Company has not adjusted the
      expense by estimated forfeitures, as required by FAS 123(R) for employee
      options, since the forfeiture rate based upon historical data was determined
      to
      be immaterial.





**Accounting
      for Non-employee Awards:**




The
      Company previously accounted for options granted to its non-employee consultants
      using the fair value cost in accordance with FAS 123 and EITF No. 96-18. The
      adoption of FAS 123(R ) and SAB 107 as of January 1, 2006, had no material
      impact on the accounting for non-employee awards. The Company continues to
      consider the additional guidance set forth in EITF Issue No. 96-18, “Accounting
      for Equity Instruments That Are Issued to Other Than Employees” (“EITF 96-18”).





Stock
      compensation expense related to non-employee options was approximately $11,621
      and $0 for the three month periods ended March 31, 2006 and 2005, respectively.
      These amounts are included in Statement of Operations within “Stock based
      compensation and employment recruiting expense-non cash” line item.





12




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**





**Pro
      Forma Information under SFAS No. 123 for Periods Prior to Adoption of FAS 123
      (
      R):**





The
      following table illustrates the effect on net income and earnings per share
      as
      if the fair value recognition provisions of FAS No. 123 had been applied to
      all
      outstanding and unvested awards in the prior year comparable period.





Three
                Month Period Ended March 31, 2005
              (Pro
                forma)Net
                loss as reported
            
            $
            (997,744
            )Add:
                Stock-based employeecompensation
                expenseincluded
                in reported net loss, net of related taxaffects
            
            
            228,371Deduct:
                Total stock-based employee compensationexpensedetermined
                under fair value based method forall
                awards, net of related tax affects
            
            
            (245,958
            )Pro
                forma net loss
            
            $
            (1,014,471
            )Basic
                and diluted net loss per share:As
                reported
            
            
            (0.03
            )Pro
                forma
            
            
            (0.03
            )




The
      fair
      value for stock awards was estimated using the Black-Scholes option pricing
      model with the following weighted average assumptions for the three months
      ended
      March 31, 2006 and 2005, respectively:




Three
                Month Periods Ended March 312006
            
            2005(Pro
                forma)Expected
                term (in years)
            
            
            5
            
            
            5Expected
                stock price volatility
            
            
            182
            %
            
            206
            %Risk-free
                interest rate
            
            
            4.35
            %
            
            4.27
            %Expected
                dividend yield
            
            
            0
            %
            
            0
            %Estimated
                fair value per option granted
            
            
            1.395
            
            
            2.25





The
      Company granted 100,000 and 550,000 employee stock options in the three months
      ended March 31, 2006 and 2005. The following table represents our stock
      options granted, exercised, and forfeited during the first quarter of 2006.





Stock
                Options
            
            Number
                of Shares
            
            Weighted
                Average Exercise Price per Share ($)
            
            Weighted
                Average Remaining Contractual Term (years)
            
            Aggregate
                Intrinsic Value ($)Outstanding
                at January 1, 2006
            
            
            1,151,000
            
            
            1.65
            
            
            8.88
            
            
            664,000Granted
            
            
            100,000
            
            
            1.00
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Forfeited/expired
            
            
            (51,000
            )
            
            19.23
            
            
            -
            
            
            -Outstanding
                at March 31, 2006
            
            
            1,200,000
            
            
            0.85
            
            
            8.85
            
            
            660,000Exercisable
                at March 31, 2006
            
            
            508,333
            
            
            0.65
            
            
            9.00
            
            
            383,333





As
      of
      March 31, 2006, there was $ 585,758 of unrecognized compensation cost, net
      of
      estimated forfeitures, related to non-vested stock options, which is expected
      to
      be recognized over a weighted average period of approximately 1 year.





13




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **NOTES
        TO FIANCIAL STATEMENTS (UNAUDITED)**
 **March
        31, 2006**




**12.
      Contingencies** ****





*Legal
      Matters:*




In
      March
      2004, Chembio Diagnostic Systems, Inc. (the Company's former contract
      manufacturer) commenced an action in Federal Court, Eastern District of New
      York, seeking a declaration that the Company's US Patent No. 5,935,864 was
      invalid and did not infringe the Company’s Patent. The Company had filed
      counterclaims for patent infringement seeking an injunction and damages. Some
      initial discovery took place, and the remainder of discovery had been stayed
      pending the Court's ruling interpreting the patent claims.




On
      September 27, 2005 the Hon. Joanna Seybert, issued her Claim Construction Ruling
      on the interpretation of the patent claims in the suit. The Court ruled that
      the
      Company's broader interpretation of its patent claims was correct, and rejected
      Chembio's arguments seeking to narrow coverage afforded by the Company's '864
      patent.




With
      the
      broad scope of the '864 patent now established, the Company will seek an
      expedited Court schedule for remaining proceedings to recover damages and to
      enjoin Chembio from selling or offering for sale the Chembio Sure Check device.




Other
      than that set forth above, to the best knowledge of the Company, no other
      material legal proceedings are pending.





*Economic
      Dependency:*





For
      the
      three months ended March 31, 2006, sales to two customers were in excess of
      10%
      of the Company's total sales. Sales to these customers were approximately
      $159,000 and $51,000 and accounts receivable from these customers as of March
      31, 2006, aggregated $0 and $0, respectively. The loss of either of these
      customers could have a material adverse effect on the Company. The Company
      is
      continuing to seek new markets and sales opportunities for its
      products.





For
      the
      three months ended March 31, 2006, purchases from five suppliers were in excess
      of 10% of the Company's total purchases. The purchases from these suppliers
      for
      the first quarter 2006 ranged from $6,000 to $13,000. The corresponding accounts
      payable at March 31, 2006, to these suppliers, was $0.





14




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





The
      following discussion of the Company's financial condition and the results of
      operations should be read in conjunction with the Financial Statements and
      Notes
      thereto appearing elsewhere in this document.





The
      Private Securities Litigation Reform Act of 1995 provides a safe harbor for
      forward-looking statements. In order to comply with the terms of the safe
      harbor, the Company notes that in addition to the description of historical
      facts contained herein, this report contains certain forward-looking statements
      that involve risks and uncertainties as detailed herein and from time to time
      in
      the Company's other filings with the Securities and Exchange Commission and
      elsewhere. Such statements are based on management's current expectations and
      are subject to a number of factors and uncertainties, which could cause actual
      results to differ materially from those, described in the forward-looking
      statements. These factors include, among others: (a) the Company's fluctuations
      in sales and operating results; (b) risks associated with international
      operations; (c) regulatory, competitive and contractual risks; (d) product
      development risks; (e) the ability to achieve strategic initiatives, including
      but not limited to the ability to achieve sales growth across the business
      segments through a combination of enhanced sales force, new products, and
      customer service; and (f) pending litigation.





GENERAL




Since
      July 1990, the Company has been engaged almost exclusively in research and
      development activities focused on developing proprietary rapid assays for
      infectious diseases and to a lesser degree saliva based collection devices.
      During the years 2005 and 2004, the Company's products have been purchased
      by
      foreign governments, distributors, laboratories, as well as the U.S. Center
      for
      Disease Control (CDC), an agency of the United States government.




In
      July
      of 2003, the Company signed a Manufacturing/Research & Development Agreement
      with American Bio Medica Corporation (ABMC) of Kinderhook, NY. Responsibilities
      of ABMC include manufacturing and regulatory compliance of the Company's HIV
      test devices. The Company is seeking a PMA for its HIV rapid test from the
      FDA
      and submitted all modules of the PMA by the end of November 2004. At the request
      of the FDA, the Company has completed a small supplemental study of 249 samples
      and its submission to the FDA, in October of 2005. In March 2006, the Company
      received correspondence from the FDA stating that our Pre-Market Approval (PMA)
      submission is deficient and therefore will require additional clinical studies
      to amend the PMA. The FDA is requesting additional data.




In
      addition to the US, the Company intends to submit the appropriate regulatory
      submissions, import/export documentation and any other requirement for a number
      of countries, including but not limited to, Russia, Brazil, Canada, Vietnam,
      India, Mexico, Australia, Philippines, Thailand, and a number of African
      countries.




Finally,
      if and when the Company receives a PMA from the FDA for its HIV product, the
      Company will file for a waiver of CLIA, which if received, will allow sales
      of
      this product to a large number of markets (e.g. doctors' offices, public health
      clinics) that do not operate under the standards of the CLIA.




The
      IDE,
      clinical trials, and application modules are only part of a difficult and
      financially costly process to receive U.S. marketing approval. There is no
      assurance that the Company will have the financial resources, expertise, or
      ability to complete the approval process.




A
      Certificate of Exportability was issued by the FDA in October 2003 allowing
      the
      resumption of the Company's HIV diagnostics export sales.




In
      November 2002, the U.S. Food and Drug Administration approved the sale in the
      United States of the Oraquick Rapid HIV test, a competing product to the
      Company's StatSureTM HIV test. Subsequent to receiving FDA approval, Orasure
      received a CLIA waiver for their product.




During
      2003, the U.S. Food and Drug Administration approved for sale in the United
      States of the Med Mira HIV test and the Uni-Gold Recombigen HIV test, competing
      products to the Company's StatSure(TM) HIV test.




15


**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**




We
      believe that the potential market for rapid tests in the United States and
      foreign countries will continue to grow as the benefits of rapid testing are
      better understood by the appropriate government agencies, by practitioners,
      and
      by the general population. The need for and availability of rapid tests to
      screen large populations for HIV has been the subject of the medical, scientific
      and lay press, including the New York Times and the New England Journal of
      Medicine's Editorial pages. Recently, the FDA has decided to conduct hearings
      to
      discuss the potential need, requirements, and issues of Over The Counter (OTC)
      marketing of HIV tests. The first of these hearings was held in November 2005
      and the second was held in March 2006.




We
      are
      committed to and focused on the completion of the necessary requirements towards
      obtaining U.S. Food and Drug Administration (FDA) and other relevant regulatory
      approvals for our rapid StatSure(TM) HIV diagnostic technology. Although there
      is no assurance that we will receive such approval, we believe that the
      StatSure(TM) HIV device format, if approved for detecting antibodies to HIV-1
      in
      fingerstick, serum and plasma samples, will have a significant competitive
      advantage in the market for rapid HIV testing in the United States and
      internationally. However, there can be no assurance that we will achieve or
      sustain significant revenues from sales of HIV diagnostic tests, internationally
      or domestically, or from other new products we may develop or
      introduce.




The
      Company has limited marketing, sales and distribution resources. Achieving
      market acceptance will require substantial efforts and capabilities in these
      areas. The Company relies in large part on forming partnerships for marketing,
      sales and distribution of its products. The Company has entered into a number
      of
      agreements with distributors who are now in breech of the contractual terms.
      However the Company is continuing to work with certain of these distributors
      who
      commit time and resources towards obtaining regulatory approvals.




Concerning
      long-term growth of the StatSureTM HIV test, industry observers believe that
      sales of HIV rapid tests will eventually be approved in certain markets for
      over-the-counter (OTC) sales, and that self-testing will become as easy to
      purchase as home pregnancy tests. If this were to occur, we believe the
      Company’s HIV product’s performance, design, and ease of use could have a
      competitive advantage over many of the existing technologies and platforms.
      There can be no assurance that any of the Company's products not yet approved
      or
      cleared, will be approved or cleared for marketing by the FDA or that if
      approved it would be allowed for sale as an OTC product. We believe growth
      of
      revenues from our Saliva Sampler®oral fluid collectors could result from our two
      major customers who have both indicated a positive outlook for 2006. In
      addition, the company is beginning to explore new commercial applications of
      these collectors.




We
      continue to distribute our StatSureTM HIV test and Saliva Sampler® oral fluid
      collection product through our current distribution networks. We will also
      seek
      new distribution relationships for our current and future test products.




The
      Company has discontinued selling its FDA approved Stat-SimpleTM H. pylori test
      since 2000 but may elect to resume sales if market conditions so
      warrant.




The
      Company believes that its current cash position will not be sufficient to
      maintain the Company's operations through 2006. The Company will need to raise
      additional capital to fund its aggressive growth and marketing efforts and
      to
      capitalize on its IP portfolio to design, develop, test, gain regulatory
      approval and launch new products as well as to meet its debt obligations.
      Development, marketing, manufacturing and clinical testing may require capital
      resources substantially
      greater than the resources, which may be available to the Company. The Company
      is reviewing its options, including the selling of common stock or considering
      other strategic alternatives, as a means to fund the Company's future growth
      plans. (See Item 6- Management's Discussion And Analysis Of Financial Condition
      And Results Of Operations; Subsequent Events) There can be no assurance that
      the
      Company will be able to obtain the additional capital resources necessary to
      fund its growth plans, or that such financing will be available on commercially
      reasonable terms.





**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**





The
      preparation of financial statements and related disclosures in conformity with
      accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the amounts reported
      in
      the unaudited Financial Statements and accompanying notes. Estimates are used
      for, but not limited to, the accounting for the allowance for doubtful accounts,
      inventories, income taxes and loss contingencies. Management bases its estimates
      on historical experience and on various other assumptions that are believed
      to
      be reasonable under the circumstances. Actual results could differ from these
      estimates under different assumptions or conditions.




16




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**


The
      Company has adopted Statement of Financial Accounting Standards (“FAS”) No. 123
      (Revised 2004), Share-Based Payment [“FAS 123(R)], effective January 1, 2006, to
      account for its employee options. Other than this adoption, the Company believes
      there have been no other significant changes, during the quarterly period ended
      March 31, 2006, to the items disclosed as critical accounting policies and
      estimates in Management's Discussion and Analysis of Financial Condition and
      Results of Operations in the Company's Annual Report on Form 10-KSB for the
      year
      ended December 31, 2005.





*Restatement*





Subsequent
      to the filing of Form 10-QSB for the period ended March 31, 2006, the Company
      determined that the quarterly filing did not accurately reflect a beneficial
      conversion feature on 9% convertible debentures issued in 2005 as required
      under
      EITF 98-5 "Accounting for Convertible Securities With Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios", as amended by EITF
      00-27
      "Application of Issue No. 98-5 to Certain Convertible Instruments".





The
      Company also restated its quarterly filings of 10-QSB for the periods ended
      March 31, June 30, and September 30, 2005 and annual filing of 10-KSB for the
      year ended 2005. As a result, the equity section of the financial statements
      are
      also restated to account for the cumulative effects of the changes. See
      respective amendments for detail of restatements.


Certain
        typographical errors have been corrected in this filing for the Balance Sheets
        and Statements of Cash Flow.
 
 The
        Balance Sheet as of March 31, 2006, the Statement of Operations, and the
        Statement of Cash flows for the three months then ended, are now being restated
        in this Form 10QSB/A filing to give effect to the correction of these errors
        and
        certain resulting reclassification adjustments. The table below details the
        items affected by the restatement:
 
 Three
                  months ended March 31, 2006As
                  reported
              
              As
                  restatedBALANCE
                  SHEET:Debentures
                  payable, net of discount
              
              $
              1,450,000
              
              $
              244,209Total
                  current liabilities
              
              
              4,585,346
              
              
              3,379,555Additional
                  paid-in capital
              
              
              45,828,779
              
              
              44,844,001Accumulated
                  deficit
              
              
              (49,326,925
              )
              
              (47,136,356
              )STATEMENTS
                  OF OPERATIONS:Selling,
                  general and administrative expense
              
              $
              373,104
              
              $
              661,340Stock
                  based compensation and employment recruiting expense-non
                  cash
              
              
              288,236
              
              
              3,379,555Interest
                  expense on beneficial conversion feature
              
              
              -
              
              
              (117,612
              )Net
                  loss to common shareholders
              
              
              (687,782
              )
              
              (805,394
              )Basic
                  and diluted net loss per share
              
              
              (0.02
              )
              
              (0.03
              )STATEMENTS
                  OF CASH FLOWNet
                  loss
              
              
              (687,782
              )
              
              (805,394
              )Options
                  granted to non-employees
              
              
              -
              
              
              11,621Beneficial
                  conversion feature of convertible debentures
              
              
              -
              
              
              117,612Options
                  granted to employees as compensation
              
              
              176,235
              
              
              164,614


The
      restatement had no impact on the cash used in operating activities.





On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      ("FAS") No. 123 (revised 2004), Share-Based Payment ("FAS 123(R)"), which
      replaces FAS No. 123, Accounting for Stock-Based Compensation, and supersedes
      Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued
      to Employees, and related interpretations. FAS 123 (R) requires compensation
      costs related to share-based payment transactions, including employee stock
      options, to be recognized in the financial statements. In addition, the Company
      adheres to the guidance set forth within Securities and Exchange Commission
      ("SEC") Staff Accounting Bulletin ("SAB") No. 107, which provides the Staff's
      views regarding the interaction between FAS No. 123(R) and certain SEC rules
      and
      regulations and provides interpretations with respect to the valuation of
      share-based payments for public companies.




17


**STATSURE
          DIAGNOSTIC SYSTEMS, INC.**
 **March
          31, 2006**


Prior
      to
      January 1, 2006, the Company accounted for similar transactions in accordance
      with APB No. 25 which employed the intrinsic value method of measuring
      compensation cost. Accordingly, compensation expense was not recognized for
      fixed stock options if the exercise price of the option equaled or exceeded
      the
      fair value of the underlying stock at the grant date. Entities electing to
      remain with the accounting as prescribed by APB 25 must make pro forma
      disclosures of net income and, if presented, earnings per share, as if the
      fair
      value based method of accounting defined in SFAS 123 had been
      adopted.





The
      Company has elected to account for its stock-based compensation plans using
      APB
      25. The Company has computed, for pro forma disclosure purposes, the value
      of
      options granted for the three months period ended March 31, 2005 using the
      Black-Scholes pricing model.





For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                Restated





Net
                loss to common shareholdersAs
                reported
            
            $
            (652,284
            )
            $
            (997,744
            )Add:
                Stock-based employee compensation expense included in reported net
                loss,
                net of related tax affects
            
            
            8,910
            
            
            228,371Deduct:
                Total stock-based employee compensation expense determined under
                fair
                value based method for all awards, net of related tax
                affects
            
            
            (8,512
            )
            
            (245,098
            )Pro
                forma
            
            $
            (651,886
            )
            $
            (1,014,471
            )Basic
                and diluted net loss per shareAs
                reported
            
            $
            (0.02
            )
            $
            (0.03
            )Pro
                forma
            
            
            (0.02
            )
            
            (0.03
            )





**RESULTS
      OF OPERATIONS**





First
      Quarter of 2006 Compared to First Quarter of 2005





REVENUES.
      The Company’s revenues consist of product sales and royalties. Revenues
      decreased 20% to **$** 213,059 **** in
      the
      first quarter of 20066 yielding a gross margin of $166,669 or 78% from the
      revenues of the first quarter of 2005 of **$** 265,019,
      yielding a gross margin of $170,673 or 64%. In the previous fiscal year (2005)
      the Company had high scrap rates due to validating new machinery in conformity
      with Good Manufacturing Practices (GMP). This involved running machinery while
      consuming materials as if it were a normal production cycle. However the product
      produced was used only for evaluation and was thereafter scrapped. The margins
      achieved during the first quarter of 2006, are consistent with with the
      Company’s present financial objectives.




18


**STATSURE
          DIAGNOSTIC SYSTEMS, INC.**
 **March
          31, 2006**




The
      Company's revenues are primarily generated from sales of its patented saliva
      collection devices. Specimens collected with the device are sent to and
      processed at laboratories. For the first quarter of December 31, 2006, sales
      to
      two customers were in excess of 10% of the Company's total sales. Sales to
      these
      customers were approximately $159,000 and $51,000. The Company is continuing
      to
      seek new markets and sales opportunities for its products.





COST
      OF
      PRODUCTS SOLD. Costs of products sold decreased to $ 46,390 (22% of product
      sales) in the first quarter of 20066 from $ 94,346 (36% of product sales) in
      the
      first quarter of 2005. SEE REVENUES FOR EXPLANATION





RESEARCH
      AND DEVELOPMENT EXPENSES *.* Research
      and development expenses decreased to $69,149 in the first quarter of 2006
      from
      $77,000 in the first quarter of 2005. The decrease is due to fewer consulting
      expenses incurred with our HIV test. R&D costs for our HIV test are expected
      to continue in 2006 until such time that we receive FDA approval to market
      the
      test in the U.S.





SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES *.* Selling,
      general and administrative expenses decreased 33% to $661,340 in the first
      quarter of 2006, from $983,754 in the first quarter of 2005. During the first
      quarter of 2005 the Company incurred recruiting expenses of approximately
      $399,000. No similar expense was incurred in the first quarter of 2006. This
      savings was offset by legal and accounting expenses in the first quarter of
      2006
      which were approximately $124,000 greater than in the first quarter of 2005.





LOSS
      FROM
      OPERATIONS *.* The loss
      from operations for the first quarter of 2006 of $563,820 reflects a 37%
      decrease from the $890,081 loss reported for the first quarter of 2005. Improved
      gross margins and a reduction of non cash expenses in the first quarter of
      2006,
      despite lower sales, contributed to the Company’s decreased loss.





OTHER
      EXPENSES **:** Interest
      expense increased to $123,962 in the first quarter of 2006 from $79,985 in
      the
      first quarter of 2005. Interest expense for the beneficial conversion feature
      on
      the convertible debentures amounted to $117,612 for the first quarter of 2006
      from $6,378 in the first quarter of 2005. Financing costs amounted to $21,300
      for the first quarter of 2005. No similar expense was incurred in the first
      quarter of 2006.





INCOME
      TAXES *.* The
      Company is in a net deferred tax asset position and has generated net operating
      losses to date. No provision for or benefit from income taxes has been recorded
      in the accompanying statements of operations. The Company will continue to
      provide a valuation allowance for its deferred tax assets until it becomes
      more
      likely than not, in management’s assessment, that the Company’s deferred tax
      assets will be realized. The Company has a net operating loss carryforward
      of
      approximately $47 million, which is available to offset future taxable income,
      if any, expiring in various years through the year 2025. The Internal Revenue
      Code rules under Section 382 could limit the future use of these losses based
      on
      ownership changes and the value of the Company’s stock.





**LIQUIDITY
      AND CAPITAL RESOURCES**





**March
                31, 2006**
            
            December
                31, 2005Cash
                and cash equivalents
            
            **$**
            **9,607**
            
            $
            76,321Working
                capital deficit
            
            
            **3,276,754**
            
            
            (876,206
            )




Net
      cash
      used by operating activities in the first quarter 2006 was $88,270. Net cash
      used in the first quarter 2005 was $348,602. In 2006, the decrease in cash
      used
      by operations was primarily due to the decrease of the net loss of $805,394
      (2006) and $997,744 (2005). The following expenses showed significant changes
      between the first quarter of 2006 when compared to the first quarter of
      2005:





·
            Legal
                and accounting costs (increased in
                2006)


·
            Expenses
                recorded for beneficial conversion features of convertible debt,
                and stock
                and warrant issuance costs(decreased in 2006)






19


**STATSURE
          DIAGNOSTIC SYSTEMS, INC.**
 **March
          31, 2006**




·
            Consulting
                expenses (decreased in 2006)





Net
      cash
      used in operating activities was not impacted by the restatement.





Cash
      used
      in investing activities in the first quarter 2005 was $34,814 as compared to
      $271,475 in the first quarter 2005. The 2005 amount includes equipment costs
      and
      deferred finance costs. The Company did not incur similar costs in 2006





Cash
      provided by financing activities in the first quarter 2006 was $56,370 and
      in
      the first quarter 2005 was $492,357. During 2005 the Company received $1,100,000
      from the sale of debentures. This amount was offset by approximately $580,000
      in
      net repayments of shareholder loans. In 2006 cash increased due to net
      shareholder loans which was approximately $40,000 and issuances of common stock
      which resulted in $15,000.





Our
      cash
      requirements depend on numerous factors, including product development
      activities, penetration of the direct sales market, market acceptance of our
      products, and effective management of accounts receivable. We expect to devote
      capital resources to improve our sales and marketing efforts, continue our
      product development, expand manufacturing capacity and continue research and
      development activities. We will examine other growth opportunities, including
      strategic alliances, and we expect any such activities will be funded from
      funds
      provided by debenture offerings and or stock subscription sales in 2006.





Since
      inception, the Company has financed its capital requirements through the
      proceeds from its public offering of common stock in March 1993 and the exercise
      of common stock purchase warrants pursuant to such offering, proceeds from
      sales
      of convertible debentures, proceeds from private placements of common stock
      and
      preferred stock, the exercise of common stock purchase warrants and stock
      options and loans.




On
      January 19, 2005, the Company's board of directors authorized the issuance
      and
      sale and sale of up to three million dollars of convertible debentures. These
      debentures mature March 31, 2009 and carry an interest rate of 9% per year
      and
      are convertible into common stock at the lower of 66.6% of the valuation of
      the
      Company's next raise of equity or $1 per share. In accordance with EITF Issue
      98-5 "Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios", the Company had evaluated that
      the convertible debt had a beneficial conversion feature as the conversion
      price
      was less than the fair value of the Company's common stock on the measurement
      date. Accordingly, for the three month period ended March 31, 2006, the Company
      recognized this beneficial conversion feature by charging an interest expense
      of
      $117,612 . As of March 31, 2006, the Company had sold an aggregate of $1,510,000
      in convertible debentures. In September 2005, a debenture in the amount of
      $60,000 was converted into 60,000 shares of common stock, resulting in the
      balance of outstanding debentures payables to be reduced to $1,450,000. As
      of
      March 31, 2006, the Company was in default on payment of interest on the
      debentures. As a result, in accordance with the debenture agreements, these
      debentures become payable on demand unless the default is waived by the
      investors.




Debentures
      payable-net of discount in the amount of $244,209 is net of gross amount of
      debentures payable of $1,450,000 reduced by unamortized debt discount of
      $1,205,791.




As
      of
      March 31, 2006, the Company owes a shareholder, Helenka Bodner, $213,425. This
      shareholder loan is due on December 31, 2006 but may be repaid earlier. The
      Company agreed to pay interest at 12% per annum on this loan.




Per
      a
      promissory note dated February 2003, Jules Nordlicht, another shareholder,
      agreed to advance in total or in installments, up to the amount of $1,000,000
      to
      the Company. In November 2003 and August 2004, agreements were executed with
      this shareholder to cause additional advances in total or in installments up
      to
      the amount of $2,500,000 to advance the process of the FDA approval. In
      consideration for the financing, the Company agreed to repay such borrowed
      funds
      with accrued interest at 12% per annum and the shareholder reserves the right
      to
      demand payment in full or in part at anytime after December 31, 2006. As of
      March 31, 2006, the loan balance to this shareholder aggregated $2,171,503
      which
      is reflected as a short term liability. An additional amount of $64,253 of
      interest on this note has been accrued during 2006 and remains owed as of March
      31, 2006.The lender (J. Nordlicht) has filed a Uniform Commercial Code (UCC)
      Lien on the Company's equipment and patents as security for this
      loan.





20


**STATSURE
          DIAGNOSTIC SYSTEMS, INC.**
 **March
          31, 2006**




In
      January 2006, the Company granted options to its two outside directors, Richard
      Woodrich and Joseph Levi, to purchase in the aggregate 100,000 shares of the
      Company's common stock. The options vest quarterly in equal amounts over a
      period of three years, and are exercisable for seven years from the vesting
      date
      at an exercise price equal to the lower of $1.00 or two-thirds of the price
      of
      common stock established in any offering and sale occurring prior to April
      30,
      2006.





In
      February 2006, the Company engaged Chardan Capital Markets LLC. as its
      investment bankers. The agreement is for a period of 12 months. For the advisory
      services, the Company has agreed to issue a total of 300,000 shares of its
      common stock of which 100,000 shares were issued on signing of the agreement
      and
      the remaining 200,000 shares are to be issued in eight equal installments of
      25,000 shares on 1st day of each month following the date of the agreement.
      As
      of March 31, 2006, the first installment has been earned. In addition, the
      advisor is entitled to a cash fee of 9% of total gross proceeds for any equity
      financing introduced by them and accepted by the Company and warrants to
      purchase shares of common stock as shall equal 9% of the shares of the Common
      Stock so issued, of which the shares of common stock are to be calculated as
      specified in the agreement. All fees due for advisory services are
      non-refundable and non-cancelable.




In
      March
      2006, previously issued warrants, exercisable into 1,500,000 shares at $.01
      per
      share for total proceeds of $15,000 were converted into common stock, resulting
      in the issuance of 1,500,000 common shares.





To
      conserve cash and to obtain goods and services, the Company may continue to
      issue options and warrants at discounts to market or issue direct stock grants.
      In the event that the Company issues additional options and warrants, it is
      anticipated that the securities will contain cost-free registration rights
      which
      will be granted to holders of the options and warrants, and that there may
      be
      dilution to the Company's existing stockholders.





The
      Company’s capital requirements have been and will continue to be significant.
      The Company currently has an accumulated deficit due to its history of losses.
      The Company is dependent upon its efforts to raise capital to finance its future
      operations, including the cost of manufacturing and marketing of its products,
      to conduct clinical trials and submissions for FDA approval of its products
      and
      to continue the design and development of its new products.





Marketing,
      manufacturing and clinical testing may require capital resources substantially
      greater than the resources available to the Company.




The
      Company occupies premises in Framingham, MA. The lease has a three-year initial
      term ending March 31, 2008 and a base annual rental rate starting at
      approximately $26,350 and increasing to approximately $40,500 per year over
      that
      initial term. The lease also has a one-year renewal option at an annual base
      rental rate of approximately $40,500. The Company also occupies premises in
      Brooklyn, New York. This lease has a three-year term ending August 30, 2008
      and
      a base annual rental rate starting at $15,000 and increasing to $15,913 per
      year.




The
      following table lists the future payments required on debt and any other
      contractual obligations of the Company as of March 31, 2006.


Obligations
              
              Total
              
              Less
                  than 1 year
              
              1-3
                  yearsLong-term
                  debt
              
              $
              3,834,928
              
              $
              3,834,928
              
              $
              -Operating
                  leases
              
              
              119,700
              
              
              55,700
              
              
              64,000





There
      can
      be no assurance that the Company will be able to obtain the additional capital
      resources necessary to implement or continue its programs, or that such
      financing will be available on commercially reasonable terms or at all. The
      Company will continue to seek public or private placement of its equity
      securities and corporate partners to develop products. There can be no assurance
      that the Company will be able to sell its securities on commercially reasonable
      terms or to enter into agreements with corporate partners on favorable terms
      or
      at all. The Company’s future capital needs will depend upon numerous factors,
      including the progress of the approval for sale of the Company’s products in
      various countries, including the U.S., the extent and timing of the acceptance
      of the Company’s products, the cost of marketing and manufacturing activities
      and the amount of revenues generated from operations, none of which can be
      predicted with certainty.





21




**STATSURE
          DIAGNOSTIC SYSTEMS, INC.**
 **March
          31, 2006**


**ITEM
      3. CONTROLS AND PROCEDURES**





**EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES**





As
      of the
      end of the period covered by this report, we evaluated, under the supervision
      and with the participation of our management, including our chief executive
      officer and chief financial officer, the effectiveness of the design and
      operation of our "disclosure controls and procedures" [as defined in the
      Securities Exchange Act of 1934, Rules 13a - 15(e) and 15d - 15(e)]. It is
      noted
      that the Company has amended its original Form 10-QSB filing with the SEC.
      The
      reason for this amended filing is due to complex financial transactions which
      resulted in accounting restatements in response to a recent SEC routine inquiry.
      As a result, our chief executive officer and chief financial officer have
      concluded that as of the date of the evaluation our disclosure controls and
      procedures were not effective to ensure that all material information required
      to be filed in this report has been made known to them. Accordingly, we have
      engaged an accounting firm other than our auditors to assist in the accounting
      for these complex transactions. Management believes that these measures will
      ensure the proper recording of all transactions in future periods.





**CHANGE
      IN INTERNAL CONTROLS**





There
      have been no changes in internal controls over financial reporting that occurred
      during the most recent fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, our internal controls over financial
      reporting.





22




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**


**PART
      II. OTHER INFORMATION**





**Item
      1** **.
      LEGAL PROCEEDINGS**




In
      March
      2004, Chembio Diagnostic Systems, Inc. (the Company's former contract
      manufacturer) commenced an action in Federal Court, Eastern District of New
      York, seeking a declaration that the Company's US Patent No. 5,935,864 was
      invalid and did not infringe the Company’s Patent. The Company had filed
      counterclaims for patent infringement seeking an injunction and damages. Some
      initial discovery took place, and the remainder of discovery had been stayed
      pending the Court's ruling interpreting the patent claims.





In
      January 2000, the Company received notice from the United States Patent and
      Trademark Office that Bayer Corporation has filed a petition to cancel the
      Company’s trademark, HemaStripTM. The petition alleged that the Company’s
      trademark HemaStripTM, would likely be confused with Bayer’s trademark,
      HEMASTICK. The Company did not respond to the Petition and in December 2000,
      the
      Company received notice that the trademark was cancelled. In November 2003,
      the
      Company filed to re-register the trademark in the U.S., and in April
      2004 filed in Europe. Bayer has filed opposition to the Company’s trademark
      and the Company has settled this matter with Bayer.




Other
      than that set forth above, to the best knowledge of the Company, no other
      material legal proceedings are pending.




**Item
      2.** **CHANGES
      IN SECURITIES**





None





**ITEM
      3.** **DEFAULTS
      UPON SENIOR SECURITIES**





On
      January 19, 2005, the Company's board of directors authorized the issuance
      and
      sale and sale of up to three million dollars of convertible debentures. These
      debentures mature March 31, 2009 and carry an interest rate of 9% per year
      and
      are convertible into common stock at the lower of 66.6% of the valuation of
      the
      Company's next raise of equity or $1 per share. In accordance with EITF Issue
      98-5 "Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios", the Company had evaluated that
      the convertible debt had a beneficial conversion feature as the conversion
      price
      was less than the fair value of the Company's common stock on the measurement
      date. Accordingly, the Company recognized this beneficial conversion feature
      by
      charging an interest expense of $2,614,400 for the year ended December 31,
      2005;
      and a corresponding credit to additional paid-in capital account. As of March
      31, 2006; the Company had sold an aggregate of $1,510,000 in convertible
      debentures. In September 2005, a debenture in the amount of $60,000 was
      converted into 60,000 shares of common stock, resulting in the balance of
      outstanding debentures payables to be reduced to $1,450,000. As of March 31,
      2006, the Company was in default on payment of interest on the debentures.
      As a
      result, in accordance with the debenture agreements, these debentures become
      payable on demand unless the default is waived by the investors.





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





None





**ITEM
      5.** **OTHER
      INFORMATION**





None




23





**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**


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





(a) **** Exhibit
      index




**Exhibit**11
            
            Earnings
                per share31.1
            
            Certification
                ofChief
                Executive Officerrequired by Rule 13a-14(a) or Rule 15d-14(a) under the Securities
                Exchange
                Act of 1934, as amended.31.2
            
            Certification
                ofChief
                Financial Officerrequired by Rule 13a-14(a) or Rule 15d-14(a) under the Securities
                Exchange
                Act of 1934, as amended.32.1
            
            Certification
                ofChief
                Executive Officerrequired by Rule 13a-14(b) or Rule 15d-14(b) under the Securities
                Exchange
                Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant
                to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
            
            Certification
                ofChief
                Financial Officerrequired by Rule 13a-14(b) or Rule 15d-14(b) under the Securities
                Exchange
                Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant
                to Section 906 of the Sarbanes-Oxley Act of
                2002.




(b)  Reports
      on Form 8-K :




Date
            
            Items
                Reported3/29/06
            
            5.03





24




**STATSURE
        DIAGNOSTIC SYSTEMS, INC.**
 **March
        31, 2006**


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




Dated:
      March 6, 2007




**STATSURE
                DIAGNOSTIC SYSTEMS, INC.**/s/
                Steve M. PeltzmanSteve
                M. Peltzman
              Chief
                Executive Officer
              (principal
                executive officer)/s/
                Leo EhrlichLeo
                Ehrlich
              Chief
                Financial Officer
              (principal
                financial officer)




25