**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      1O-QSB/A**





Amendment
      No. 2








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




For
      the
      quarterly period ended March 31, 2005





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




For
      the
      transition period from ________ to ________





Commission
      File Number: 0-21284





**STATSURE
      DIAGNOSTIC SYSTEMS, INC.**


FORMERLY
      SALIVA DIAGNOSTIC SYSTEMS, INC.


(Exact
      name of small business issuer as specified in its charter)





Delaware
            
            91-1549305(State
                or other jurisdiction
            
            (I.R.S.
                Employerof
                incorporation or organization)
            
            Identification
                No.)





1
      Clarks
      Hill Rd.


Framingham,
      MA. 01702


(Address
      of principal executive offices and zip code)





(508)
      872-2625


(Issuer's
      telephone number including area code)







Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 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
o   No x





The
      number of shares outstanding of the Registrant's Common Stock as of May 13,
      2005, 31,709,491 shares.





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





**Table
        of Contents**




**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/A for the period ending March 31, 2005.





This
      Amendment No. 2 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, 2005 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
                properly record the amount of compensation expense for 550,000 stock
                options granted to certain employees in March 2005,
                and




c)
            to
                record the proper expense for warrants issued for services rendered
                to the
                Company which was previously
                discounted.





The
      Statement of Cash Flows has been restated to reflect debt discount related
      to
      the debentures, the compensation cost recognized related to the options granted
      and additional expenses related to the warrants. Accordingly, Management's
      Discussion and Analysis has been revised to reflect the changes
      made.





This
      Amendment No. 2 amends Parts I and II of the Quarterly Report on Form 10-QSB
      for
      the quarterly period ended March 31, 2005. This Amendment No. 2 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.  -2-
 **Table
            of Contents**


STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS, INC.


FORM
      10-QSB/A




INDEX





PAGEPART
                I FINANCIAL INFORMATIONItem
                1.
            Financial
                StatementsBalance
                sheets - March 31, 2005 (unaudited) and December 31,
                2004
            4Statements
                of Operations - Three Months Ended March 31, 2005
                and 2004 (unaudited)
            5Statements
                of Cash Flows- Three Months Ended March 31, 2005 and
                2004 (unaudited)
            6Notes
                to Financial Statements
                (unaudited)
            7Item
                2.
            Management's
                Discussion and Analysis of Financial Condition
                And Plan of Operation
            17Item
                3.
            Controls
                and Procedures
            27PART
                II OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            28Item
                2.
            Changes
                in Securities
            28Item
                3.
            Defaults
                Upon Senior Securities
            28Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            28Item
                5.
            Other
                Information
            28Item
                6.
            Exhibits
                and Reports on Form 8-K
            29Signatures.
            30Certifications
            31




-3-
 **Table
          of Contents**




**PART
      I FINANCIAL INFORMATION**


**Item
      1. FINANCIAL STATEMENTS**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS, INC.**


**BALANCE
      SHEETS**




**March
                31, 2005**
              **(Unaudited)**
            
            **December 31, 2004****(Restated)****ASSETS**CURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            20,910
            
            $
            148,630Accounts
                receivable, net of allowance for doubtful accounts of $55,495 for
                both
                2005 and 2004
            
            
            286,922
            
            
            248,279Inventories
            
            
            84,010
            
            
            102,027Total
                current assets
            
            
            391,842
            
            
            498,936Property
                and equipment, net of accumulated depreciation of (2005) $528,567
                and
                $518,675 (2004)
            
            
            113,562
            
            
            73,269Equipment
                under construction
            
            
            664,401
            
            
            603,111Patents
                and trademarks, net of accumulated amortization of $117,827
                (2005)and
                $115,220 (2004)
            
            
            59,439
            
            
            62,046Deferred
                costs, less accumulated amortization of $167,747 (2005) and $141,600
                (2004)
            
            
            304,253
            
            
            170,400Deposits
            
            
            800
            
            
            800TOTAL
                ASSETS
            
            $
            1,534,297
            
            $
            1,408,562**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**CURRENT
                LIABILITIES:Bank
                overdraft
            
            $
            —
            
            $
            26,953Note
                payable - shareholders
            
            
            17,221
            
            
            243,398Accounts
                payable
            
            
            82,037
            
            
            129,222Customer
                advances
            
            
            455
            
            
            18,465Accrued
                expenses
            
            
            84,754
            
            
            356,081Accrued
                payroll expense to officers
            
            
            229,750
            
            
            161,250Payroll
                and payroll taxes payable
            
            
            106,078
            
            
            70,078Total
                current liabilities
            
            
            520,295
            
            
            1,005,447LONG-TERM
                DEBTDebentures
                payable-net of discount
            
            
            6,378
            
            
            —Note
                payable - shareholder
            
            
            1,932,099
            
            
            2,069,839TOTAL
                LIABILITIES
            
            
            2,458,772
            
            
            3,075,286COMMITMENTS
                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: 31,709,491 shares (2005) and 30,509,491
                (2004)
            
            
            31,709
            
            
            30,509Additional
                paid-in capital
            
            
            44,374,728
            
            
            42,073,056Less:
                Deferred compensation
            
            
            (562,879
            )Accumulated
                deficit
            
            
            (44,768,033
            )
            
            (43,770,289
            )TOTAL
                SHAREHOLDERS’ DEFICIT
            
            
            (924,475
            )
            
            (1,666,724
            )TOTAL
                LIABILITIES ANDSHAREHOLDERS’
                DEFICIT
            
            $
            1,534,297
            
            $
            1,408,562


The
      accompanying notes are an integral part of these statements.


-4-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**STATEMENTS
      OF OPERATIONS**


**(Unaudited)**




**Three
                Months Ended March 31,****2005**
            
            **2004****(Restated)**REVENUES:Product
                Sales
            
            $
            264,473
            
            $
            280,198Royalty
                Income
            
            
            546
            
            
            921265,019
            
            
            281,119COSTS
                OF PRODUCTS SOLD
            
            
            94,346
            
            
            73,317Gross
                profit
            
            
            170,673
            
            
            207,802OPERATING
                EXPENSES:Research
                and development
            
            
            77,000
            
            
            210,000Selling,
                general and administrative expense
            
            
            983,754
            
            
            73,1591,060,754
            
            
            283,159Loss
                from operations
            
            
            (890,081
            )
            
            (75,357
            )OTHER
                EXPENSES:Interest
                expense-net
            
            
            (79,985
            )
            
            (72,923
            )Interest
                expense on beneficial conversion feature
            
            
            (6,378
            )
            
            —Financing
                costs
            
            
            (21,300
            )
            
            —Total
                other expenses:
            
            
            (107,663
            )
            
            (72,923
            )NET
                LOSS TO COMMON STOCKHOLDERS
            
            $
            (997,744
            )
            $
            (148,280
            )BASIC
                AND DILUTED NET LOSS PER SHARE
            
            $
            (0.03
            )
            $
            (0.01
            )WEIGHTED
                AVERAGE NUMBER OF SHARES USED IN BASIC AND DILUTED PER SHARE
                CALCULATIONS
            
            
            30,565,256
            
            
            30,509,700


The
      accompanying notes are an integral part of these statements.


-5-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS, INC.**


**STATEMENTS
      OF CASH FLOWS**


**(Unaudited)**




**Three Months Ended March
                31,****2005**
            
            **2004****(Restated)**OPERATING
                ACTIVITIES:Net
                loss
            
            $
            (997,744
            )
            $
            (148,280
            )Adjustments
                to reconcile net loss to net cash (used in) operating
                activities:Depreciation
                and amortization
            
            
            12,499
            
            
            8,931Amortization
                of deferred costs
            
            
            26,147
            
            
            21,300Warrants
                issued for recruiting services
            
            
            399,622
            
            
            —Beneficial
                conversion feature of convertible debentures
            
            
            6,378
            
            
            —Options
                issued to employee as compensation
            
            
            228,371
            
            
            —Changes
                in assets and liabilities:Accounts
                receivable
            
            
            (38,643
            )
            
            (26,619
            )Royalty
                receivable
            
            
            —
            
            
            9,078Subscription
                receivable
            
            
            —
            
            
            2,000Inventories
            
            
            18,017
            
            
            (26,348
            )Other
                current assets
            
            
            —
            
            
            (474
            )Accounts
                payable, accrued payroll expense to officers and accrued
                expenses
            
            
            (3,249
            )
            
            56,521Net
                cash used in operating activities
            
            
            (348,602
            )
            
            (103,891
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Purchases
                of property and equipment
            
            
            (111,475
            )
            
            (130,312
            )Deferred
                finance cost
            
            
            (160,000
            )
            
            —Net
                cash used in investing activities
            
            
            (271,475
            )
            
            (130,312
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Cash
                overdraft
            
            
            (26,953
            )
            
            —Proceeds
                from shareholder loans
            
            
            30,000
            
            
            522,000Proceeds
                from issuance of debentures
            
            
            1,100,000
            
            
            —Repayments
                of shareholder loans
            
            
            (612,690
            )
            
            (273,500
            )Proceeds
                from issuance of common stock
            
            
            2,000
            
            
            —Net
                cash provided by financing activities
            
            
            492,357
            
            
            248,500NET
                (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
            
            
            (127,720
            )
            
            14,297CASH
                AND CASH EQUIVALENTS, BEGINNING OF PERIOD
            
            
            148,630
            
            
            24,182CASH
                AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            20,910
            
            $
            38,479SUPPLEMENTAL
                DISCLOSURE OF NON-CASH FLOW INFORMATION:During
                the three month periods ended March 31, 2005 and 2004,the
                previous year’s balance ofaccrued interest of $228,773 and $68,265, respectively, for a
                shareholder’s loan was added to the loan balance as principal.
            
            $
            228,773
            
            $
            68,265During
                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.
            
            $
            10,000
            
            
            —During
                the three month period ended March 31, 2005, 550,000 options were
                issued
                to an employee as compensation .
            
            $
            791,250
            
            
            —During
                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.


-6-
 **Table
          of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**NOTES
        TO FINANCIAL STATEMENTS**
 **March
        31, 2005**
 **(UNAUDITED)**


**1.**
            **Description
                of Business/Basis of
                Presentation**





Statsure
      Diagnostic Systems, Inc. Formerly Saliva 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 proprietary platform for rapid testing for
      infectious diseases, offers significant advantages over the existing products,
      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”).





In
      May
      2002, the Company received its Investigational Device Exemption (IDE) from
      the
      U.S. Food and Drug Administration (FDA) for its Rapid HIV Hema-StripTM Test. 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
      manufacturing and regulatory compliance of the Company’s HIV test devices. 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
      completed its clinical trials and had submitted all modules of the Pre-Market
      Approval (PMA) to the FDA. The FDA has recently requested certain additional
      testing and the Company is presently completing these tests. Based on the
      results of the Hema-StripTM HIV Test clinical trials, the Company has reason to
      believe the product’s performance meets the necessary criteria for FDA approval.
      Should the Company receive PMA approval for its rapid HIV test, it will also
      file for a CLIA (Clinical Laboratory Improvements Amendments)
      waiver.





SDS
      is
      committed to and focused on the completion of the necessary requirements towards
      obtaining U.S. Food and Drug Administration (FDA) PMA marketing approval of
      our
      rapid Hema-StripTM HIV diagnostic tests in the United States. Although there is
      no assurance that we will receive approval, we believe that the Hema-StripTM HIV
      device 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.





The
      accompanying unaudited financial statements as of and for the three month
      periods ended March 31, 2005 and 2004, have been prepared in conformity with
      accounting principles generally accepted in the United States of America. The
      financial information as of December 31, 2004, is derived from Statsure
      Diagnostic Systems, Inc. Formerly Saliva Diagnostic Systems, Inc. (the
      "Company") financial statements included in the Company's Annual Report on
      Form
      10-KSB for the year ended December 31, 2004. Certain information or footnote
      disclosures 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 the 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, 2004, as included in the Company's
      Annual Report on Form 10-KSB for the year ended December 31, 2004. Operating
      results for the three month period ended March 31, 2005 are not necessarily
      indicative of the results that may be expected for the entire year ending
      December 31, 2005, or any other portion thereof.


-7-
 **Table
            of Contents**


**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**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 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 $44,768,033 at
      March
      31, 2005. Such losses are expected to continue for the foreseeable future and
      until such time, if ever, as the Company is able to attain sales 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.





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 and corporate partners 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**





Accounting
      Methods


The
      Company recognizes income and expenses based on the accrual method of
      accounting.





Dividend
      Policy


The
      Company has not yet adopted a policy regarding payment of
      dividends.





Income
      Taxes


The
      Company utilizes the liability method of accounting for income taxes. Under
      the
      liability method deferred tax assets and liabilities are determined based on
      the
      differences between financial reporting and the tax bases of the assets and
      liabilities and are measured using the enacted tax rates and laws that will
      be
      in effect, when the differences are expected to reverse. An allowance against
      deferred tax assets is recognized, when it is more likely that not, that such
      tax benefits will not be realized.


-8-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**3.**
            **Summary
                Of Significant Accounting Policies
                (continued)**





On
      March
      31, 2005, the Company has unused net operating loss carryforwards of
      approximately $44,000,000 which expire at various dates through 2024. Most
      of
      this amount is subject to annual limitations due to “changes in ownership” that
      have occurred upon the conversion of the Company’s Series 1998-B Convertible
      Preferred Stock in previous years.





Basic
      And
      Diluted Net Income (Loss) Per Share


Basic
      net
      income (loss) per share amounts are computed based on the weighted average
      number of shares actually outstanding. Diluted net income (loss) per share
      amounts are computed using the weighted average number of common shares and
      common equivalent shares outstanding as if shares had been issued on the
      exercise of any common or preferred share rights unless the exercise becomes
      antidilutive and then only the basic per share amounts are shown in the
      report.





Financial
      And Concentration Risk


The
      Company has no financial instruments that potentially subject the Company to
      significant concentration of credit risk.





Property
      And Equipment


Equipment
      is reflected at cost and is depreciated on the straight line method over five
      and seven years.





Patents


Patents
      have been recorded at cost and are being amortized over their useful lives
      of 17
      years.





Research
      And Development Costs


Research
      and development costs, including wages and supplies, used in the research
      activity, are being expensed as incurred.





Revenue
      Recognition


Revenue
      will be recognized on the sale of a product or the completion of a service
      provided.





Advertising
      And Market Development


The
      Company will expense advertising and market development costs as incurred.
      For
      the three months ended March 31, 2005, the Company expensed $125 in advertising
      costs.





Evaluation
      Of Long-Lived Assets


The
      Company periodically reviews its long lived assets, including equipment and
      patents, and makes adjustments, if the carrying value exceeds the fair
      value.





Financial
      Instruments


The
      carrying amounts of financial instruments, including cash and accounts payable,
      are considered by management to be their fair values due to their short term
      maturities.





Recent
      Accounting Pronouncements


The
      Company does not expect that the adoption of recent accounting pronouncements
      will have a material impact on its financial statements.





Reclassifications


Certain
      reclassifications have been made in the December 31, 2004 financial statements
      to confirm to the current fiscal year presentation.


-9-
 **Table
            of Contents**


**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**4.**
            **Restatement**





Subsequent
      to the filing of form 10-QSB/A for the period ended March 31, 2005, 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 $1,100,000 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 $1,093,622 being netted with the gross amount of the debenture
      payable of $1,100,000. The result of this restatement was to reflect the sale
      of
      the debentures as additional paid-in capital ($1,100,000) and to amortize the
      beneficial conversion feature for the period ended March 31, 2005 of
      $6,378.





The
      Company revalued options granted to employees using FASB Interpretation No.
      28,
      Accounting for Stock Appreciation Rights and Other Variable Stock Option or
      Award Plans, an interpretation of APB Opinions No. 15 and No. 25 (“FIN 28”). The
      Interpretation clarifies the accounting for compensation related to variable
      stock options and specifies that compensation should be measured at the end
      of
      each period as the amount by which the quoted market value of the shares of
      the
      Company’s common stock covered by a grant, exceeds the option price or value
      specified under the plan and should be accrued as a charge to expense over
      the
      periods the employee performs the related services. Changes in the quoted market
      value should be reflected as an adjustment of accrued compensation and
      compensation expense in the periods in which the changes occur until the date
      the number of shares and purchase price, if any, are both known. As a result,
      the compensation charge for these options has been restated to $228,371 from
      $8,910. In addition, deferred compensation was reduced to $562,879 from
      $920,340. The result of this restatement was to increase compensation expense
      by
      $219,461 and to reduce deferred compensation by $357,461 and accordingly to
      reduce additional paid-in capital by $138,000.





Further,
      the Company also revalued warrants issued as payment for services rendered,
      for
      which the Company had used a 30% discount for various restrictions. This
      revaluation increased the 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 three month period ended March 31, 2005. The effect of this
      restatement was to increase expenses and additional paid-in capital by
      $119,622.





The
      Balance Sheet as of March 31, 2005, the Statement of Operations for the three
      month period ended March 31, 2005, and the Statement of Cash flows for the
      three
      month period ended March 31, 2005 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:





March
                31, 2005As
                reported
            
            As
                RestatedBALANCE
                SHEET:Debentures
                payable-net of discount
            
            $
            1,100,000
            
            $
            6,378Additional
                paid-in capital
            
            
            43,293,106
            
            
            44,374,728Less:
                Deferred compensation
            
            
            (920,340
            )
            
            (562,879
            )Accumulated
                deficit
            
            
            (44,422,573
            )
            
            (44,768,033
            )





-10-
 **Table
          of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**4.**
            **Restatement
                (Continued)**





For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                RestatedSTATEMENT
                OF OPERATIONS:Selling,
                general and administrative expense
            
            $
            644,672
            
            $
            983,754Loss
                from operations
            
            
            (550,999
            )
            
            (890,081
            )Interest
                expense-net
            
            
            (101,285
            )
            
            (79,985
            )Interest
                expense on beneficial conversion feature
            
            
            —
            
            
            (6,378
            )Financing
                costs
            
            
            —
            
            
            (21,300
            )Net
                loss to common shareholders
            
            
            (652,284
            )
            
            (997,744
            )Earnings
                per share
            
            
            (.02
            )
            
            (.03
            )






For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                RestatedSTATEMENT
                OF CASH FLOWS:Net
                loss
            
            $
            (652,284
            )
            $
            (997,744
            )Warrants
                issued for recruiting services
            
            
            280,000
            
            
            399,622Beneficial
                conversion feature of convertibledebentures
            
            
            —
            
            
            6,378Options
                issued to employee as compensation
            
            
            —
            
            
            228,371Amortization
                of options granted employees
            
            
            8,910
            
            
            —




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




The
      Company has adopted the disclosure provisions of Financial Accounting Standards
      Board Statement No. 123 ("SFAS 123") which defines a fair value based method
      of
      accounting for employee stock options and similar equity instruments and
      encourages all entities to adopt that method of accounting for all employee
      stock-based compensation plans. However, SFAS 123 also allows an entity to
      continue to measure compensation cost for such plans using the method of
      accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB 25").
      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.


-11-
 **Table
            of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**4.**
            **Restatement
                (Continued)**




For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                RestatedNet
                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
            )





The
      fair
      value of each option grant was estimated on the date of the grant using the
      Black-Scholes option-pricing model with the following weighted-average
      assumptions for 2005: expected volatility of 30%; risk-free interest rate of
      4.197%; and expected lives of 5 years.





The
      effects of applying SFAS 123 (revised 2004) in the above pro forma disclosures
      are not indicative of future amounts as future amounts are likely to be affected
      by the number of grants awarded and since additional awards are generally
      expected to be made at varying prices.





**5.**
            **Inventories**




Inventories
      are stated at the lower of cost or market determined on a first-in, first-out
      basis and are comprised of the following:




**March
                31, 2005**
            
            December
                31, 2004Raw
                materials
            
            **$**
            **72,771**
            
            $
            87,407Finished
                goods
            
            
            **11,239**
            
            
            14,620**$**
            **84,010**
            
            $
            102,027





-12-
 **Table
            of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**





**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
      StatSureTM HIV test upon FDA approval. As of March 31, 2005 we have not received
      FDA approval and the equipment has not been put in to service.





**7.**
            **Accrued
                Expenses**




**March
                31, 2005**
            
            December
                31, 2004Accrued
                interest
            
            **$**
            **79,985**
            
            $
            228,773Accrued
                legal expense
            
            
            **—**
            
            
            112,500Other
                accrued liabilities
            
            
            **4,769**
            
            
            14,808**$**
            **84,754**
            
            $
            356,081




**8.**
            **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 operating income and
      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,****2005**
            
            2004United
                States
            
            **$**
            **147,608**
            
            $
            133,966United
                Kingdom
            
            
            **80,948**
            
            
            95,339Africa
            
            
            **26,490**
            
            
            26,300Others
            
            
            **9,877**
            
            
            24,593**$**
            **264,473**
            
            $
            280,198





-13-
 **Table
            of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**9.**
            **Deferred
                Costs**





Deferred
      costs represent the value of payments of cash, warrants and shares issued to
      brokers and a shareholder as consideration for loan financing during the years.
      In addition deferred costs include $160,000 of cost incurred for the issuance
      of
      debentures this quarter. As of March 31, 2005, net deferred costs were $304,252,
      which are being amortized over the lives of the respective loan and
      debentures.





**10.**
            **Debenture
                Payable**





On
      January 19, 2005, the Company's board of directors authorized the issuance
      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
      recording a debenture debt discount of $1,100,000. The beneficial conversion
      feature was computed by the number of shares the debenture was convertible
      into
      multiplied by the difference between the conversion price of $1.00 and the
      fair
      value of the shares of the Company’s common stock limited to the amount of the
      debenture proceeds. The debenture debt discount is being amortized over the
      life
      of the debentures. The Company recognized an interest expense of $6,378 for
      the
      three month period ended March 31, 2005. The Company had sold an aggregate
      of
      $1,100,000 of these convertible debentures. During April 2005, subsequent to
      the
      balance sheet date, an additional $260,000 worth of debentures were
      sold.





As
      of
      March 31, 2005, there are outstanding $1,100,000 of 9% Convertible Debentures
      due in January 2009. Holders of the 9% Convertible Debentures are entitled
      to
      convert principal amounts into shares of common stock at a conversion price
      of
      $1.00.





Debentures
      payable-net of discount in the amount of $6,378, is net of gross amount of
      debenture payables of $1,100,000 reduced by unamortized debt discount of
      $1,093,622.




**11.**
            **Financing
                From Shareholders**





Per
      a
      promissory note dated January 2004, Helenka Bodner, a shareholder, agreed to
      advance or cause to be advanced to the Company from time to time, through
      December 31, 2005, up to the sum of $1,000,000 at the interest rate of 12%
      per
      annum in order to advance the process of the FDA approval of the HemaStripTM HIV
      Rapid Test. The shareholder reserves the right to demand payment in full or
      in
      part at anytime on or after December 31, 2005. As of March 31, 2005, there
      was
      no loan balance on this note.




As
      of
      March 31, 2005, Helenka Bodner had loaned the Company $10,597. The loan is
      to be
      repaid in 2005 and bears no interest and has no conversion features. If the
      loan
      is repaid after its due dates in 2005, the Company agreed to repay such borrowed
      funds with accrued interest at 12% per annum from the date of the loan
      origination.





Per
      a
      promissory note dated February 2003, Jules Nordlicht, 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, 2005 the loan balance
      to this second shareholder aggregated $1,932,099.


-14-
 **Table
            of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


Resonance
      Limited, a shareholder, is owed $6,624 as of March 31, 2005. The loan bears
      no
      interest and is due on demand.




**12.**
            **Shareholders’
                Equity Transactions**





For
      the
      three months ended March 31, 2005, 200,000 warrants exercisable at a price
      of
      $.01 per share, were issued as payment for services rendered to the Company.
      Based upon the market value of the common stock on the date of issuance of
      $2.00, the Company recorded an expense and related additional paid-in capital
      of
      $399,622




These
      warrants, as well as additional warrants exercisable into 1,000,000 shares
      previously issued, exercisable at $.01 per share, were converted during March
      2005 into common stock, resulting in the issuance of 1,200,000 common shares
      during this period.





In
      March
      of 2005, 550,000 stock options were granted to an employee per an employment
      agreement. Of these options, 100,000 are vested immediately and exercisable
      from
      June 1, 2005 until June 1, 2015 and remaining options are vested in three equal
      amounts annually, commencing on October 1, 2005. The compensation cost related
      to the options is been deferred over a two-year employment period. An adjustment
      of $228,371 in the selling, general and administrative expense was recorded
      to
      recognize the compensation expense for the period ended March 31, 2005.





**13.**
            **Contingencies**





In
      March
      2005, the Company signed a lease to occupy premises in Framingham, MA beginning
      April 1, 2005. This location will be our primary corporate office. The lease
      has
      a three-year initial term ending March 31, 2008 and a base 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
      following table lists the future payments required on debt and any other
      contractual obligations of the Company:





Payments
                Due by Period
            
            Future
                Payments<1
                year
            
            $
            43,5711-3
                years
            
            
            2,746,4334th
                year
            
            
            366,666$
            3,156,670


Legal
      Matters





In
      March
      2004, Chembio Diagnostics, Inc. 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 not infringed.  The Company has filed
      counterclaims for patent infringement seeking an injunction and damages. 
Discovery has commenced and the parties are in the midst of filing briefs with
      the Court that seek different interpretations of the patent.   The
      Company believes its position is sound, and intends to vigorously defend its
      intellectual property rights.





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 is currently in discussions with Bayer to settle this
      matter.


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


-15-
 **Table
            of Contents**




**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **March
          31, 2005**
 **(UNAUDITED)**


**13.**
            **Contingencies
                (continued)**





Economic
      Dependency





The
      Company had two customers that accounted for 87% of product sales (56% and
      31%)
      during the first quarter of 2005 and 69% of product sales (35% and 34%) during
      the first quarter of 2004. The loss of these customers could have a material
      adverse effect on the Company.




**14.**
            **Subsequent
                Events**





The
      Company announced the appointment of Mr. D. Bruce Pattison as President and
      Chief Operating Officer, effective May 2, 2005. Mr. Pattison had been working
      closely with the Company as a consultant over the past five months. Mr. Pattison
      has over thirty years experience with technology based health-care companies
      serving both diagnostic and therapeutic market segments.




In
      connection with hiring Mr.
      Pattison, during the Employment Period ending May 2, 2007, the Company will
      pay
      a temporary base salary at the annual rate of one hundred twenty thousand
      dollars ($120,000). Said base salary shall increase to the annual rate of One
      Hundred Eighty Thousand ($180,000) upon the closing of a financing for the
      Company with gross proceeds of at least three million dollars ($3,000,000).
      The
      Board of Directors may determine, from time to time, in its sole discretion,
      to
      pay Mr. Pattison bonuses or additional compensation. Mr. Pattison shall be
      entitled to participate in all fringe benefits the Company provides for its
      employees generally, and such other benefits as the Company provides generally
      for its senior executives. Until such benefit programs are adopted, the Company
      shall reimburse Mr. Pattison for 75% of Health Insurance and for up to $2,000/yr
      of Life Insurance premiums. In addition the Company granted 550,000 options
      to
      Mr. Pattison to purchase the common stock of the Company (the “Common Stock”),
      as follows:




(1) Stock
      options, vested as of the date hereof, exercisable from June 1, 2005 until
      June
      1, 2015, entitling Mr. Pattison to purchase 100,000 shares of the Company's
      common stock ("Common Stock") at an exercise price of $ 0.10-per share.





(2) Stock
      options (the "Options") to acquire 450,000 shares of Common Stock only if Mr.
      Pattison remains employed as of a vesting date. The Options shall vest in three
      equal amounts annually, commencing on October 1, 2005 at which time one-third,
      (150,000) of the Options shall vest, and on each of the two anniversaries
      thereafter, an additional one-third of the Options shall vest, provided that,
      if
      Mr. Pattison is terminated without Cause within six months of a vesting date,
      all Options due to vest as of such date shall vest as of the date of
      termination. All vested Options shall terminate ten years from issuance. The
      exercise price shall be equal to the lessor of (i) 66-2/3% of the price per
      share of Common Stock as established in any Company offering and sale of Common
      Stock occurring prior to April 30, 2006, and (ii) $1.00 per share. In the event
      of a termination of Mr. Pattison’s employment for any reason other than for
      Cause, Mr. Pattison shall have until their expiration to exercise any vested
      portion of an Option. In the event of an acquisition or change in control of
      the
      Company, all unvested options shall immediately vest.


-16-
 **Table
          of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
      31, 2005**




**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 saliva based collection
      devices and rapid assays for infectious diseases. 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
      February 2000, the Company closed its Vancouver, Washington manufacturing
      facility and moved its executive offices to New York. The Company no longer
      has
      its own manufacturing plant which would allow it to independently produce its
      products, and relies exclusively on its contract manufacturers to supply the
      Company’s needs.





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. Based on the results of the Hema-Strip HIV Test
      clinical trials completed thus far, the Company believes the product’s
      performance meets the necessary criteria for U.S. approval. The Company has
      recently been notified by the FDA that certain additional clinical testing
      is
      required and the Company expects to complete these tests during the second
      quarter of 2005.





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. Since that time the FDA has
      inspected each of the six clinical sites that participated in the clinical
      trials for our HIV-HemaStripTM product. The Company is completing a small study
      of 200 samples and expects to complete its data base with that information
      in
      June 2005. Following that, the Company expects its contract manufacturer (ABMC)
      to be audited by the FDA. Typically several months pass, following a successful
      inspection and submission of a completed PMA, to receive notification. 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.





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.


-17-
 **Table
            of Contents**


**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **March
        31, 2005**
  A
        Certificate of Exportability was issued by the FDA in October 2003 allowing
        the
        resumption of the Company’s HIV diagnostics export sales.





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 diagnostic and
      treatment practitioners, and by the general population. Recently, 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 England
      Journal of Medicine’s Editorial pages. Consequently, we are now actively working
      to commercialize our HIV rapid test products, and to obtain requisite regulatory
      approvals to introduce these products in international markets. 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. The Company
      relies in large part on forming partnerships for marketing, sales and
      distribution of its products. To date, the Company has signed an exclusive
      distribution agreement of our HemaStripTM test product, for The Russian
      Federation, the C.I.S. and certain African countries with Memorand Limited.
      Memorand is currently working to obtain appropriate government and regulatory
      requirements. ADR PRE Ltd. acted as the agent in developing this relationship
      and distribution agreement. The Company has agreed to compensate ADR PRE Ltd.
      for their efforts based on a sales commission basis.





The
      Company has signed a distribution agreement with Medsource Ozone Biomedicals
      for
      distribution of our HemaStripTM and SeroStrip products throughout India.





Our
      Saliva Sampler® oral fluid collectors are being sold under a distribution
      agreement with Immunalysis, Inc., whereby they have been granted exclusive
      rights to the Saliva Sampler® for sale in the U.S. and Canada solely for the
      laboratory testing market to detect a drug of abuse. They have incorporated
      our
      Saliva Sampler® collector in their application for FDA marketing approval of
      their assay kit for oral fluid substance abuse testing.





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





The
      Company has incurred significant operating losses since its inception, resulting
      in an accumulated deficit of $ 44,768,033 at
      March
      31, 2005. Such losses are expected to continue for the foreseeable future and
      until such time, if ever, as the Company is able to attain sales levels
      sufficient to support its operations.





The
      Company believes that its current cash position will not be sufficient to
      maintain the Company’s operations through 2005. However, 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. 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 in the midst
      of
      raising up to three million dollars as a convertible debt instrument. The
      Company has received to date approximately $1.4 million dollars and expects
      to
      close this round shortly. The Company is reviewing its options, including the
      selling of common stock, as a means to fund the Company’s future growth plans.
      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.


-18-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


**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.





The
      Company believes there have been no significant changes, during the quarterly
      period ended March 31, 2005, 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, 2004.





**Restatement
      of Financial Statements**





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/A for the period ending March 31, 2005.





This
      Amendment No. 2 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, 2005 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
                properly record the amount of compensation expense for 550,000 stock
                options granted to certain employees in March 2005,
                and




c)
            to
                record the proper expense for warrants issued for services rendered
                to the
                Company which was previously
                discounted.





The
      Statement of Cash Flows has been restated to reflect debt discount related
      to
      the debentures, the compensation cost recognized related to the options granted
      and additional expenses related to the warrants. Accordingly, Management's
      Discussion and Analysis has been revised to reflect the changes
      made.





This
      Amendment No. 2 amends Parts I and II of the Quarterly Report on Form 10-QSB
      for
      the quarterly period ended March 31, 2005. This Amendment No. 2 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.





a)
                Subsequent
                    to the filing of form 10-QSB/A for the period ended March 31,
                    2005, 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 $1,100,000 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


-19-
 **Table
          of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


discount
      of $1,093,622 being netted with the gross amount of the debenture payable of
      $1,100,000. The result of this restatement was to reflect the sale of the
      debentures as additional paid-in capital ($1,100,000) and to amortize the
      beneficial conversion feature for the period ended March 31, 2005 of
      $6,378.





b)
            The
                Company revalued options granted to employees using FASB Interpretation
                No. 28, Accounting for Stock Appreciation Rights and Other Variable
                Stock
                Option or Award Plans, an interpretation of APB Opinions No. 15 and
                No. 25
                (“FIN 28”). The Interpretation clarifies the accounting for compensation
                related to variable stock options and specifies that compensation
                should
                be measured at the end of each period as the amount by which the
                quoted
                market value of the shares of the Company’s common stock covered by a
                grant, exceeds the option price or value specified under the plan
                and
                should be accrued as a charge to expense over the periods the employee
                performs the related services. Changes in the quoted market value
                should
                be reflected as an adjustment of accrued compensation and compensation
                expense in the periods in which the changes occur until the date
                the
                number of shares and purchase price, if any, are both known. As a
                result,
                the compensation charge for these options has been restated to $228,371
                from $8,910. In addition, deferred compensation was reduced to $562,879
                from $920,340. The result of this restatement was to increase compensation
                expense by $219,461 and to reduce deferred compensation by $357,461
                and
                accordingly to reduce additional paid-in capital by
                $138,000.





c)
            Further,
                the Company also revalued warrants issued as payment for services
                rendered, for which the Company had used a 30% discount for various
                restrictions. This revaluation increased the 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
                three month period ended March 31, 2005. The effect of this restatement
                was to increase expenses and additional paid-in capital by
                $119,622.





-20-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


The
      Balance Sheet as of March 31, 2005, the Statement of Operations for the three
      month period ended March 31, 2005, and the Statement of Cash flows for the
      three
      month period ended March 31, 2005 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:





March
                31, 2005As
                reported
            
            As
                RestatedBALANCE
                SHEET:Debentures
                payable-net of discount
            
            $
            1,100,000
            
            $
            6,378Additional
                paid-in capital
            
            
            43,293,106
            
            
            44,374,728Less:
                Deferred compensation
            
            
            (920,340
            )
            
            (562,879
            )Accumulated
                deficit
            
            
            (44,422,573
            )
            
            (44,768,033
            )






For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                RestatedSTATEMENT
                OF OPERATIONS:Selling,
                general and administrative expense
            
            $
            644,672
            
            $
            983,754Loss
                from operations
            
            
            (550,999
            )
            
            (890,081
            )Interest
                expense-net
            
            
            (101,285
            )
            
            (79,985
            )Interest
                expense on beneficial conversion feature
            
            
            —
            
            
            (6,378
            )Financing
                costs
            
            
            —
            
            
            (21,300
            )Net
                loss to common shareholders
            
            
            (652,284
            )
            
            (997,744
            )Earnings
                per share
            
            
            (.02
            )
            
            (.03
            )






For
                the three months ended
              March
                31, 2005As
                reported
            
            As
                RestatedSTATEMENT
                OF CASH FLOWS:Net
                loss
            
            $
            (652,284
            )
            $
            (997,744
            )Warrants
                issued for recruiting services
            
            
            280,000
            
            
            399,622Beneficial
                conversion feature of convertibledebentures
            
            
            —
            
            
            6,378Options
                issued to employee as compensation
            
            
            —
            
            
            228,371Amortization
                of options granted employees
            
            
            8,910
            
            
            —




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




The
      Company has adopted the disclosure provisions of Financial Accounting Standards
      Board Statement No. 123 ("SFAS 123") which defines a fair value based method
      of
      accounting for employee stock options and similar equity instruments and
      encourages all entities to adopt that method of accounting for all employee
      stock-based compensation plans. However, SFAS 123 also allows an entity to
      continue to measure compensation cost for such plans using the method of
      accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB 25").
      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.


-21-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


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
                RestatedNet
                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
            )





The
      fair
      value of each option grant was estimated on the date of the grant using the
      Black-Scholes option-pricing model with the following weighted-average
      assumptions for 2005: expected volatility of 30%; risk-free interest rate of
      4.197%; and expected lives of 5 years.





The
      effects of applying SFAS 123 (revised 2004) in the above pro forma disclosures
      are not indicative of future amounts as future amounts are likely to be affected
      by the number of grants awarded and since additional awards are generally
      expected to be made at varying prices.






**RESULTS
      OF OPERATIONS**





First
      Quarter of 2005 Compared to First Quarter of 2004





REVENUES.
      The Company’s revenues consist of product sales and royalties. Revenues
      decreased 6% to **$** 265,019 **** in
      the
      first quarter of 2005 yielding a gross margin of $170,673 or 64% from the first
      quarter of 2004 revenues of $281,119, yielding a gross margin of $207,802 or
      74%. The first quarter of 2005 decrease in margins is primarily due to increased
      scrap rates incurred in validating new machinery in conformity with Good
      Manufacturing Practices (GMP). This incurs labor costs and running the machinery
      while consuming materials as if it were a normal production cycle. However
      the
      product produced is used only for evaluation and is thereafter scrapped.





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. The Company is presently working on updating its
      saliva collection devices to meet the needs of laboratories high throughput
      machines and expects to announce product changes and patent filings during
      the
      second quarter 2005.





For
      the
      first quarter of December 31, 2005, sales to two customers were in excess of
      10%
      of the Company’s total sales. Sales to these customers were approximately
      $148,000, and $81,000. The Company is continuing to seek new markets and sales
      opportunities for its products


-22-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


COST
      OF
      PRODUCTS SOLD. Costs of products sold increased to $ 94,346 (36% of product
      sales) in the first quarter of 20055 from $73,317 (26% of product sales) in
      the
      first quarter of 2004. The increase in product cost was attributable to
      increased scrap rates in validating new machinery. SEE REVENUES





RESEARCH
      AND DEVELOPMENT EXPENSES *.* Research
      and development expenses decreased to $77,000 in the first quarter of 2005
      from
      $210,000 in the first quarter of 2004. The decrease is due to fewer expenses
      incurred in the first quarter of 2005 for:


·
            the
                Hema-StripTM HIV test clinical
                trials


·
            the
                preparation of documents for FDA submissions





R&D
      costs for Hema-StripTM HIV are expected to continue in 2005 until such time that
      we receive FDA approval to market the test in the U.S. Hema-StripTM HIV R&D
      costs in 2005 are estimated at $200,000. The Company expects total R&D costs
      to increase in 2005 should it begin clinical trials for a new product, a project
      presently being considered by management.





SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES *.* Selling,
      general and administrative expenses increased 1245% to $983,754 in the first
      quarter of 2005 from $73,159 in the first quarter of 2004. In the first quarter
      of 2005, the Company incurred significantly greater expenses for consulting
      of
      $60,000 and recruitment expenses of approximately $499,000. Included in
      recruitment expenses are approximately $399,000 of non-cash expenses associated
      with the issuance of shares and/or warrants for services rendered. The Company
      also incurred $228,371 of additional compensation expense relating to options
      issued to an employee. The Company did not incur similar expenses in the first
      quarter of 2004.





LOSS
      FROM
      OPERATIONS *.* The loss
      from operations for the first quarter of 2005 of $890,081 reflects a 1081%
      increase over the $75,357 loss reported for the first quarter of 2004. Decreased
      sales, lower gross margins and greater expenses in the first quarter of 2005
      contributed to the Company’s increased loss.





OTHER
      EXPENSES *.* Net
      interest expense for the first quarter of 2005 increased to $79,985 from $72,923
      in the first quarter of 2004. This increase is primarily due to increased
      borrowings. Interest expense for the beneficial conversion feature on the
      convertible debentures amounted to $6,378 and financing costs amounted to
      $21,300 in the first quarter of 2005. No similar costs were incurred in the
      first quarter of 2004.




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 $44 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.


-23-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


**LIQUIDITY
      AND CAPITAL RESOURCES**





**March
                31, 2005**
            
            December
                31, 2004Cash
                and cash equivalents
            
            **$**
            **20,910**
            
            $
            148,630Working
                capital deficit
            
            
            (128,453
            )
            
            (506,511
            )





Net
      cash
      used by operating activities in the first quarter 2005 was $348,602. Net cash
      used in the first quarter 2004 was $103,891. In 2005, the increase in cash
      used
      by operations was primarily due to the increase of the net loss $997,744 (2005)
      and $148,280 (2004). The following expenses increased in the first quarter
      of
      2005 when compared to the first quarter of 2004:





·
            Legal
                and accounting costs


·
            Expenses
                recorded for beneficial conversion features of convertible debt,
                and


·
            Stock
                and warrant issuance costs


·
            Consulting
                expenses




Cash
      used
      in investing activities in the first quarter 2005 was $271,475 as compared
      to
      $130,312 in the first quarter 2004. The increase represents costs incurred
      and
      paid for in our debenture financing. However this cost is being amortized over
      the life of the debenture.





Cash
      provided by financing activities in the first quarter 2005 was $492,357 and
      in
      the first quarter 2004 was $248,500. These are primarily additional net
      borrowings from a debenture less repayments of shareholder loans.





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
      existing cash as well as funds provided from debenture offerings in 2005.





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 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
      recording a debenture debt discount of $1,100,000. The beneficial conversion
      feature was computed by the number of shares the debenture was convertible
      into
      multiplied by the difference between the conversion price of $1.00 and the
      fair
      value of the shares of the Company’s common stock limited to the amount of the
      debenture proceeds. The debenture debt discount is being amortized over the
      life
      of the debentures. The Company recognized an interest expense of $6,378 for
      the
      three month period ended March 31, 2005. The Company had sold an aggregate
      of
      $1,100,000 of these convertible debentures. During April 2005, subsequent to
      the
      balance sheet date, an additional $260,000 worth of debentures were
      sold.


-24-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


As
      of
      March 31, 2005, there are outstanding $1,100,000 of 9% Convertible Debentures
      due in January 2009. Holders of the 9% Convertible Debentures are entitled
      to
      convert principal amounts into shares of common stock at a conversion price
      of
      $1.00.





Debentures
      payable-net of discount in the amount of $6,378, is net of gross amount of
      debenture payables of $1,100,000 reduced by unamortized debt discount of
      $1,093,622.




Per
      a
      promissory note dated January 2004, Helenka Bodner, a shareholder, agreed to
      advance or cause to be advanced to the Company from time to time, through
      December 31, 2005, up to the sum of $1,000,000 at the interest rate of 12%
      per
      annum in order to advance the process of the FDA approval of the HemaStripTM HIV
      Rapid Test. The shareholder reserves the right to demand payment in full or
      in
      part at anytime on or after December 31, 2005. As of March 31, 2005, there
      was
      no loan balance on this note.




As
      of
      March 31, 2005, Helenka Bodner had loaned the Company $10,597. The loan is
      to be
      repaid in 2005 and bears no interest and has no conversion features. If the
      loan
      is repaid after its due dates in 2005, the Company agreed to repay such borrowed
      funds with accrued interest at 12% per annum from the date of the loan
      origination.





Per
      a
      promissory note dated February 2003, Jules Nordlicht, 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, 2005 the loan balance
      to this second shareholder aggregated $1,932,099.





Resonance
      Limited, a shareholder, is owed $6,624 as of March 31, 2005. The loan bears
      no
      interest and is due on demand.





For
      the
      three months ended March 31, 2005, 200,000 warrants exercisable at a price
      of
      $.01 per share, were issued as payment for services rendered to the Company.
      Based upon the market value of the common stock on the date of issuance of
      $2.00, the Company recorded an expense and related additional paid-in capital
      of
      $399,622




These
      warrants, as well as additional warrants exercisable into 1,000,000 shares
      previously issued, exercisable at $.01 per share, were converted during March
      2005 into common stock, resulting in the issuance of 1,200,000 common shares
      during this period.





In
      March
      of 2005, 550,000 stock options were granted to an employee per an employment
      agreement. Of these options, 100,000 are vested immediately and exercisable
      from
      June 1, 2005 until June 1, 2015 and remaining options are vested in three equal
      amounts annually, commencing on October 1, 2005. The compensation cost related
      to the options is being deferred over the vesting period. An adjustment of
      $228,371 in the selling, general and administrative expense was recorded to
      recognize the compensation expense for the period ended March 31, 2005.





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.


-25-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


The
      following table lists the future payments required on debt and any other
      contractual obligations of the Company:





Payments
                Due by Period
            
            Future
                Payments<1
                year
            
            $
            43,5711-3
                years
            
            
            2,746,4334th
                year
            
            
            366,666$
            3,156,670


In
      March
      2005, the Company signed a lease to occupy premises in Framingham, MA beginning
      April 1, 2005. This location will be our primary corporate office. The lease
      has
      a three-year initial term ending March 31, 2008 and a base 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.





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.




**SUBSEQUENT
      EVENTS**





The
      Company announced the appointment of Mr. D. Bruce Pattison as President and
      Chief Operating Officer, effective May 2, 2005. Mr. Pattison had been working
      closely with the Company as a consultant over the past five months. Mr. Pattison
      has over thirty years experience with technology based health-care companies
      serving both diagnostic and therapeutic market segments.


-26-
 **Table
          of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


**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 president 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)]. Based on this evaluation, our
      president and chief financial officer concluded that as of the date of the
      evaluation our disclosure controls and procedures were effective to ensure
      that
      all material information required to be filed in this report has been made
      known
      to them. Subsequent to the original filing of Form 10-QSB, we had to restate
      the
      filing due to certain complex financial instrument transactions. 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.  -27-
 **Table
            of Contents**
  **STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **March
        31, 2005**


**PART
      II. OTHER INFORMATION**





**ITEM
      1****.
      LEGAL PROCEEDINGS**





In
      March
      2004, Chembio Diagnostics, Inc. 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 not infringed.  The Company has filed
      counterclaims for patent infringement seeking an injunction and damages. 
Discovery has commenced and the parties are in the midst of filing briefs with
      the Court that seek different interpretations of the patent.   The
      Company believes its position is sound, and intends to vigorously defend its
      intellectual property rights.





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 is currently in discussions with Bayer to settle this
      matter.


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**





None





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





None





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





None


-28-
 **Table
            of Contents**




**STATSURE
      DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
      INC.**


**March
        31, 2005**


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





(a)
            Exhibit
                index




**Exhibit**10.16
            
            Employment
                Agreement dated May 2, 2005 between the Company and D. Bruce
                Pattison.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




No
      reports on Form 8-K were filed during the quarter ended March 31,
      2005.


-29-
 **Table
          of Contents**


**STATSURE
        DIAGNOSTIC SYSTEMS, INC. FORMERLY SALIVA DIAGNOSTIC SYSTEMS,
        INC.**
 **March
        31, 2005**


**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. Peltzman


Steve
      M.
      Peltzman


Chief
      Executive Officer


(principal
      executive officer)




/s/
      Leo
      Ehrlich


Leo
      Ehrlich


Chief
      Financial Officer


(principal
      financial officer)


-30-