U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 1O-QSB

[X] QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
           EXCHANGE ACT OF 1934
      For the quarterly period ended September 30, 2002

[ ] 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

                         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. Employer
of incorporation or organization)                            Identification No.)

                              2294 Nostrand Avenue
                               Brooklyn, NY 11210
              -----------------------------------------------------
              (Address of principal executive offices and zip code)

                                 (718) 552-3599
                 -----------------------------------------------
                 (Issuer's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the 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 [ ] No [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ]    No [X]

The  number  of  shares  outstanding  of the  Registrant's  Common  Stock  as of
September 30, 2002, 8,929,491 shares.

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


<PAGE>

                                        3
                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                                   FORM 10-QSB
                                      INDEX


<TABLE>
<CAPTION>
PART I    FINANCIAL INFORMATION                                                         Page No.
-------------------------------                                                         --------

<S>                                                                                         <C>
    Item 1.          Financial Statements

                     Consolidated Balance Sheets -September 30, 2002
                     (unaudited) and December 31, 2001                                       3

                     Consolidated Statements of Operations -Three Months and
                     Nine Months Ended September 30, 2002 and 2001 (unaudited)               4

                     Consolidated Statements of Cash Flows - Nine Months
                     Ended September 30, 2002 and 2001 (unaudited)                           5

                     Notes to Consolidated Financial Statements                              6

    Item 2.          Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                                              13

    Item 3.          Quantitative and Qualitative discussion about Market Risk              18

    Item 4.          Controls and Procedures                                                19


PART II    OTHER INFORMATION
-------------------------------                                                         --------

    Item 1.          Legal Proceedings                                                      20

    Item 2.          Changes in Securities                                                  20

    Item 6.          Exhibits and Reports on Form 8-K                                       20

    Signatures                                                                              21

    Exhibits                                                                                22
</TABLE>


<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             September 30, 2002
                                                                 (unaudited)          December 31, 2001
                                                             ------------------       -----------------
                                  Assets
<S>                                                              <C>                     <C>
Current assets:
     Cash and cash equivalents                                   $         --            $     19,197
     Accounts receivable, less allowance for
          doubtful accounts $5,000 for both periods                    25,460                  12,711
     Royalty receivable                                                    --                  14,099
     Due from affiliate (Note 5)                                      128,353                  97,565
     Other current assets                                              22,381                      --
                                                                 ------------            ------------
              Total current assets                                    176,194                 143,572

Property and equipment, less accumulated depreciation of
     $457,380 (2002) and $ 431,405(2001)                              104,511                 105,318
Patents and trademarks, less accumulated amortization of
$93,260 (2002) and $ 86,129(2001)                                      68,380                  75,511
Deposits                                                                   --                   1,300
                                                                 ------------            ------------
                                                                 $    349,085            $    325,701
                                                                 ============            ============

               Liabilities and Stockholders' Equity (Note 9)

Current liabilities:
     Bank overdraft                                              $      1,690            $         --
     Note payable - auto                                                   --                   6,305
     Notes payable - shareholders (Note 7)                            764,012                 499,998
     Accounts payable                                                 406,472                 383,940
     Accrued expenses (Note 6)                                        227,639                  89,619
     Customer deposits                                                  9,300                  39,300
                                                                 ------------            ------------
              Total current liabilities                             1,409,113               1,019,162

Long-term debts:
     Notes payable - shareholders (Note 7)                                 --               1,446,445
                                                                 ------------            ------------
              Total liabilities                                     1,409,113               2,465,607
                                                                 ------------            ------------

Commitments and Contingencies (Notes 5 and 9)

Shareholders' deficit (Notes 7 and 8):
     Common stock, $.001 par value, 50,000,000
          shares authorized, issued and outstanding:
          8,929,491 shares (2002) and 1,215,115
          shares (2001)(note 8)                                         8,929                   1,215

     Additional paid-in capital                                    37,696,410              36,257,679
     Accumulated deficit                                          (38,765,367)            (38,398,800)
                                                                 ------------            ------------
         Total shareholders' deficit                               (1,060,028)             (2,139,906)
                                                                 ------------            ------------
                                                                 $    349,085            $    325,701
                                                                 ============            ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                       Three months ended, September 30,   Nine months ended, September 30,
                                            2002             2001               2002              2001
                                         -----------      -----------        -----------      -----------
<S>                                      <C>              <C>                <C>              <C>
Revenues:
     Product Sales                       $     8,480      $    56,536        $   142,481      $   135,705
     Royalty Income                           30,436           88,352             33,762           94,322
                                         -----------      -----------        -----------      -----------
                                              38,916          144,888            176,243          230,027
Cost of products sold                         42,641           26,433             80,961           89,921
                                         -----------      -----------        -----------      -----------

Gross profit (loss)                           (3,725)         118,455             95,282          140,106
                                         -----------      -----------        -----------      -----------

Operating expenses:
     Research and development
          expense                                 --           40,200                 --          147,074
     Selling, general and
          administrative expense             148,310          102,477            348,524          351,358
                                         -----------      -----------        -----------      -----------
                                             148,310          142,677            348,524          498,432
                                         -----------      -----------        -----------      -----------

          (Loss) from operations
                                            (152,035)         (24,222)          (253,242)        (358,326)

Interest (expense)                           (16,054)         (29,094)           (46,125)         (83,522)
Other (expense)                              (67,200)         (32,791)           (67,200)          (7,791)
                                         -----------      -----------        -----------      -----------

   Net (loss) to common stockholders     $  (235,289)     $   (86,107)       $  (366,567)        (449,639)
                                         ===========      ===========        ===========      ===========

Basic and diluted net (loss) per
 share (Note 4)                          $     (0.03)     $     (0.07)       $     (0.06)     $     (0.38)
                                         ===========      ===========        ===========      ===========

Shares used in basic and diluted net
(loss) per share calculations              8,929,401        1,215,115          6,323,976        1,189,717
                                         ===========      ===========        ===========      ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 Nine months ended September 30,
                                                                     2002              2001
                                                                  ---------         ---------
<S>                                                               <C>               <C>
Cash Flows From Operating Activities:
       Net (loss)                                                 $(366,567)        $(449,639)
       Adjustments to reconcile net (loss) to net cash
            (used) in operating activities:
       Depreciation and amortization                                 34,447            33,873
       Stock issued for consulting services                              --            20,400
       Options issued for litigation settlement                          --             2,791
       Loss due to disposal of assets                                 4,021                --
       Write off of accounts receivable                                  --            26,594

       Changes in current assets and liabilities:
            Accounts receivable                                     (12,749)           31,538
            Royalty receivable                                       14,099           (56,794)
            Due from affiliate                                      (30,788)          (74,860)
            Prepaid expenses and deposits                           (21,081)               --
            Accounts payable, accrued expenses and accrued
                Interest                                            160,552            34,720
            Customer deposits                                       (30,000)               --
            Unearned royalties                                           --           (15,000)
                                                                  ---------         ---------
                Net cash (used) in operating activities            (248,066)         (446,377)
                                                                  ---------         ---------

Cash Flows From Investing Activities:
       Acquisitions of property and equipment                       (30,530)               --
                                                                  ---------         ---------
                Net cash (used) in investing activities             (30,530)               --
                                                                  ---------         ---------

Cash Flows From Financing Activities:
       Proceeds from shareholders loans                             803,911           450,509
       Repayment of long-term debt                                 (546,202)           (6,305)
       Bank overdraft                                                 1,690             2,173
                                                                  ---------         ---------
                Net cash provided by financing activities           259,399           446,377
                                                                  ---------         ---------

       Net (decrease) in cash and cash equivalents                  (19,197)               --

       Cash and cash equivalents, beginning of period                19,197                --
                                                                  ---------         ---------

       Cash and cash equivalents, end of period                   $      --         $      --
                                                                  =========         =========

Supplemental Disclosure of Cash Flow Information:

    Cash paid during the period for interest                      $   1,411         $   1,247
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       5
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

1. DESCRIPTION OF BUSINESS/BASIS OF PRESENTATION:

Saliva  Diagnostic  Systems,  Inc., a Delaware  corporation (the "Company"),  is
primarily  engaged in the  development,  manufacturing  and marketing of medical
collection devices and rapid immunoassays for use in the detection of infectious
diseases.  The Company believes that its patented proprietary  platforms,  offer
significant  advantages compared to existing  competitive blood and saliva based
devices,  including  ease-of-use,  lower total costs, and significantly  reduced
risk of infection from collecting and handling specimens.

The accompanying  unaudited  financial  statements as of and for the three month
and nine month periods  ended  September 30, 2002 and 2001 have been prepared in
conformity with accounting principles generally accepted in the United States of
America.  The  financial  information  as of December  31, 2001 is derived  from
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, 2001.
Certain  information or footnote  disclosures  normally included in consolidated
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  consolidated financial statements should be
read in conjunction with the Company's audited financial statements for the year
ended  December 31, 2001,  as included in the  Company's  Annual  Report on Form
10-KSB for the year ended  December  31, 2001.  Operating  results for the three
month and nine  month  periods  ended  September  30,  2002 are not  necessarily
indicative of the results that may be expected for the entire fiscal year ending
December 31, 2002, or any other portion thereof.

All prior  year  common  stock  and share  amounts  have  been  restated  in the
financial  statements  due to the  Company's one for  twenty-five  reverse stock
split of March 18, 2002 (See Note 8).


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  $38,765,367  at
September  30, 2002.  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.  Despite the
Company's debt  financings,  substantial  additional  financing will be required
through 2003 and 2004.


                                       6
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

2.  SUBSTANTIAL   DOUBT  REGARDING  ABILITY  TO  CONTINUE  AS  A  GOING  CONCERN
(CONTINUED):

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  consolidated  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  consolidated  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.


3. RECENT ACCOUNTING PRONOUNCEMENTS:

On July 30, 2002, the FASB issued  Statement of Financial  Accounting  Standards
No. 146,  "Accounting  for Costs  Associated  with Exit or Disposal  Activities"
("SFAS 146"), that is applicable to exit or disposal activities  initiated after
December  31,  2002.  This  standard  requires   companies  to  recognize  costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan.  This standard does not
apply where SFAS 144 is  applicable.  This new standard does not currently  have
any impact on the Company's operating results and financial position.

On  December  31,  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No. 148,  "Accounting  for  Stock-Based  Compensation-Transition  and
Disclosure" ("SFAS 148"), that is applicable to financial  statements issued for
fiscal years ending after  December 15, 2002.  In addition,  interim  disclosure
provisions are applicable for financial  statements  issued for interim  periods
beginning  after December 15, 2002.  This standard  amends SFAS 123 and provides
guidance to companies electing to voluntarily change to the fair value method of
accounting for stock-based compensation.  In addition, this standard amends SFAS
123 to  require  more  prominent  and more  frequent  disclosures  in  financial
statements regarding the effects of stock-based compensation.  This new standard
does not  currently  have any  impact on the  Company's  operating  results  and
financial position.


                                       7
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

3. RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED):

During April 2003,  the Financial  Accounting  Standards  Board issued SFAS 149,
"Amendment of Statement 133 on Derivative  Instruments and Hedging  Activities."
SFAS 149 amends and clarifies accounting for derivative  instruments,  including
certain  derivative  instruments  embedded in other  contracts,  and for hedging
activities  under SFAS 133,  "Accounting for Derivative  Instruments and Hedging
Activities."   The   statement   requires   that   contracts   with   comparable
characteristics  be accounted  for  similarly  and  clarifies  when a derivative
contains a financing  component that warrants special reporting in the statement
of cash flows.  SFAS 149 is  effective  for  contracts  entered into or modified
after  June  30,  2003,  except  in  certain  circumstances,   and  for  hedging
relationships  designated  after June 30, 2003. The Company does not expect that
the  adoption  of this  standard  will have a material  effect on its  financial
position or results of operations.

In May  2003,  the FASB  issued  SFAS 150,  "Accounting  for  Certain  Financial
Instruments  with  Characteristics  of both  Liabilities  and Equity."  SFAS 150
requires that certain financial instruments,  which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. The financial
instruments  affected include  mandatorily  redeemable stock,  certain financial
instruments  that  require  or may  require  the  issuer to buy back some of its
shares in exchange for cash or other assets and certain  obligations that can be
settled  with  shares  of  stock.  SFAS  150  is  effective  for  all  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003. We do not expect the adoption of SFAS 150 to have a material impact on our
consolidated financial position, results of operations or cash flows.


4. LOSS PER SHARE:

Basic earnings  (loss) per common share is computed  using the weighted  average
number of shares of common stock  outstanding for the period.  Diluted  earnings
per common  share is computed  using the  weighted  average  number of shares of
common stock and dilutive common  equivalent shares related to stock options and
warrants  outstanding  during  the  period.  Diluted  earning  per  share is not
presented  because all common  equivalent shares related to options and warrants
would be anti-dilutive.


5. DUE FROM AFFILIATE:

In November 2000, the Company entered into a letter of intent whereby they would
acquire all the outstanding  shares of Chembio Diagnostic  Systems,  Inc. (CDS).
This  acquisition  would be  accounted  for as a reverse  acquisition  and would
result in the CDS  shareholders  holding a majority  of the common  stock of the
Company.

An  additional  part of this  agreement  called for the Company to advance up to
$1,000,000  to CDS.  Amounts  advanced  under this  agreement,  net of  expenses
incurred on behalf of the Company,  through  September 2002 aggregated  $128,353
and are reflected as a current asset "Due from affiliate".

As of May  20,  2002,  the  Company  announced  that  it had  terminated  merger
discussions  with CDS. In April 2003 the Company and CDS terminated all business
relationships.  Considering  the  financial  condition  of CDS and the  costs of
collecting this receivable, the Company may have to allow a reserve against this
receivable for as much as the total amount of $128,353.


                                       8
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

6. ACCRUED EXPENSES:

                             September 30, 2002     December 31, 2001

Accrued interest                   $ 44,714             $     --
Accrued wages and salaries           18,750                   --
Accrued payroll taxes                 7,356                   --
Accrued litigation expenses          89,619               89,619
Other accrued liabilities            67,200                   --
                                   --------             --------
                                   $227,639             $ 89,619
                                   ========             ========


7. SHAREHOLDERS' TRANSACTIONS:

During the nine months ended  September 30, 2002, the Company  issued  7,714,376
shares of its common  stock to  shareholders  whom had  elected to  convert,  on
December 31, 2001,  their  convertible  debt into shares of the Company's common
stock.  The  conversion  could not be executed  until a reverse  stock split was
completed (See Note 8).

During the nine  month  period  ended  September  30,  2002,  shareholder  loans
increased by $264,014.

Pursuant to an agreement  dated  October 1999 and later amended as to amount and
expiration  date,  Helenka Bodner,  agreed to advance or cause to be advanced to
the Company  from time to time,  through  December  31,  2004,  up to the sum of
$1,500,000.  In  consideration  for the above,  the Company agreed to repay such
borrowed funds with accrued  interest at 12% per annum, six months from the date
of the  loan  or upon  demand,  at the  option  of the  lender.  The  loans  are
convertible into preferred  shares of the Company,  which in turn is convertible
into common stock under the same terms as the previously  issued 1998 - Series B
convertible preferred stock.  Pursuant to the terms of the loan instrument,  the
loan is  convertible,  at the option of the  holder,  into  Common  Stock of the
Company  upon terms  similar to the Series B Preferred  Stock  (i.e.  75% of the
closing bid price for the five prior days of conversion).

As of March 28,  2003,  subsequent  to the  balance  sheet date,  the  Company's
outstanding  loans from  stockholders,  which are convertible into the Company's
common stock, totaled $1,046,574.  Had the stockholders elected to convert these
loans into common stock as of such date,  it would result in the issuance by the
Company of 6,977,160 shares of common stock.

In July 2002,  pursuant to a dispute  regarding  the rights of Brian  Bramell et
al.,  to  additional  common  stock of the Company as set forth in a prior stock
subscription agreement, the Company agreed to issue 80,000 shares of the Company
common stock with a restrictive  legend.  The common stock was issued in October
2003. Based upon the market value of the common stock on the date of settlement,
discounted 30% for its restriction,  the Company  recorded a settlement  expense
and related accrual for $67,200 in the September 2002 financial statements.

In February 2003,  subsequent to the balance sheet date,  certain  shareholders,
elected to convert an aggregate total of $382,500 in convertible  debt held into
8,500,000 shares of the Company's common stock.

In February 2003, subsequent to the balance sheet date, the Company issued Jules
Nordlicht,  6,000,000  shares of common  stock as  additional  compensation  for
financing the Company's equipment purchases and clinical trials.


                                       9
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

7. SHAREHOLDERS' TRANSACTIONS (CONTINUED):

In February  2003,  subsequent to the balance sheet date, the Company issued Leo
Ehrlich,  President and CEO,  4,000,000 shares of common stock as settlement for
claims of compensation for past services.

In February 2003,  subsequent to the balance sheet date, the Company's  Board of
Directors authorized the issuance of three million shares of its common stock as
compensation  to  individuals  who  will  participate  and act as the  Company's
Business Advisory board. The Company issued 3,000,000 shares of its common stock
in October  2003;  1,000,000  shares each to Harmon  Aronson,  Robert Cook,  and
Harold Snyder who have agreed to join the Company's Advisory Board.


8. CHANGES IN SECURITIES:

On March 2002, the Company amended its Certificate of  Incorporation to effect a
one-for-twenty  five reverse  split of its common stock.  As of that date,  each
twenty five outstanding  shares of the Company's common stock were converted and
reconstituted  into one share of common stock,  par value $0.001 per share.  The
number of  authorized  shares of common stock of the Company was not affected by
the reverse stock split and remains at 50,000,000.  Options, warrants, preferred
stock and other securities convertible into shares of the Company's common stock
will be adjusted  in  accordance  with their terms to reflect the reverse  stock
split. Upon exercise or conversion,  holders of such securities will be entitled
to receive  one-twenty fifth of the number of shares of post-split  common stock
as they were entitled to receive of pre-split common stock.

As of March  2002,  the  Company's  common  stock  resumed  trading  on the NASD
Bulletin  Board  market  with a new  symbol  "SVAD".  Prior  to such  date,  the
Company's  stock had traded under the symbol  "SALV".  Between the months of May
2000 and  February  2002,  and  subsequent  to May 2002,  the Company was and is
delisted  from the NASD  Bulletin  Board  market and has traded on the OTC "Pink
Sheets" due to its failure to meet the financial  reporting  requirements of the
NASD.

As a result of the  delisting,  an investor may find it difficult to dispose of,
or to obtain accurate quotations as to the price of, the Company's securities.


9. CONTINGENCIES:

In May 2002, Chembio Diagnostic  Systems,  the Company's contract  manufacturer,
issued a recall on certain lots of the Company's HIV products sent to Canada and
Africa.

As of May  20,  2002,  the  Company  announced  that  it has  terminated  merger
discussions with Chembio Diagnostic Systems (See Note 5).


                                       10
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

9. CONTINGENCIES (CONTINUED):

In  February  1998,  Lealos v.  Saliva  Diagnostic  Systems,  Inc.  was filed in
Superior  Court in Clark  County in the State of  Washington  by Ronald  Lealos,
former President and CEO of the Company.  The complaint  alleged that Mr. Lealos
was entitled to certain cash payments and benefits under an employment agreement
whereby  he  would  serve as the  Company's  president,  and that the  Company's
failure to make such payments and grant such benefits  constituted  anticipatory
breach and breach of that  contract.  The complaint  sought damages in excess of
$1,000,000.  In addition,  the  complaint  alleged  that the Company  wrongfully
rescinded options to purchase 38,500 shares of common stock in breach of a stock
option  agreement  with Mr. Lealos.  The Company  denied all  allegations of the
complaint and filed a counterclaim  for Mr.  Lealos'  wrongful  conduct  Seeking
damages of  approximately  $1,500,000.  On January 15, 2000, the Company and Mr.
Lealos  settled the claim for $246,000 paid and payable as follows:  $72,095 was
paid on January  15,  2000,  $11,048 was paid on February  15,  2000;  $6,000 is
payable on the 15th of each month for thirteen additional months beginning March
15, 2000, plus $5,048 payable on the 15th of each month for nineteen  additional
months  beginning  March 15, 2000. The Company  stopped  making  payments on its
settlement  agreement  due to the  alleged  actions  of  Ronald  Lealos  and his
attorneys.  Lealos in 2002  filed a motion  in New York  State  Seeking  summary
judgment in the amount of $148,206.02 plus interest. In a ruling dated March 21,
2003,  subsequent to the balance sheet date,  the court denied Lealos motion for
summary  judgment.   The  Company  has  not  made  any  additional   accrual  or
contingencies for interest or legal fees due to Lealos. Should this matter go to
trial, the Company will vigorously defend its position.


10. INCOME TAXES:

The  Company is in a net  deferred  tax asset  position  due to  generating  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 entire  deferred  tax asset 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 $38 million,
which is available to offset future taxable  income,  if any,  expiring in years
through  the year 2021.  As a result of the  shares  issued in March  2002,  the
Internal  Revenue  Code rules under  Section 382 could  significantly  limit the
future use of these losses based on ownership changes.


11. SUBSEQUENT EVENTS:

In May 2002, the Company  received its  Investigational  Device  Exemption (IDE)
from the U.S. Food and Drug  Administration  (FDA) for approval of its Rapid HIV
Hema-Strip  Test. Upon termination of all business  relationships  with its then
contract manufacturer,  Chembio Diagnostic Systems, the Company needed to file a
new IDE with the FDA. A new  submission  to the FDA was made in October 2003 and
the IDE was received in November  2003,  subsequent  to the balance  sheet date.
This is the initial step towards FDA approval to market and sell the test in the
United States.  After  conferring with  representatives  of the FDA's Center for
Biologics  Evaluation  and  Research  (CBER),  the Company  decided to begin its
filing using a modular pre-market approval (PMA) application  approach.  Instead
of beginning  filing after all the clinicals are  completed,  the modular method
allows the Company to begin its filings concurrent with its US clinical studies.
Should the  Company  receive  PMA  approval,  it will file for a CLIA  (Clinical
Laboratory Improvements Amendments) waiver.


                                       11
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

11. SUBSEQUENT EVENTS (CONTINUED):

The IDE is only the first step in a difficult and financially  costly process to
receive US marketing approval.  There is no assurance that the Company will have
the financial  resources,  expertise,  ability, or that the product will perform
adequately to complete the application process.

In July of 2003,  subsequent  to the balance  sheet date,  the Company  signed a
Manufacturing/Research   &  Development   Agreement  with  American  Bio  Medica
Corporation  (ABMC)  of  Kinderhook,   NY.   Responsibilities  of  ABMC  include
manufacturing,   assembly,   regulatory  compliance  and  documentation  of  the
Company's HIV test devices.  The Company has already completed  transferring its
technology to ABMC.  Based on internal test panels used to test the  performance
of HIV tests, the Company believes the product's performance meets the necessary
criteria for US approval.  However,  no assurances can be given that the product
will meet performance specifications required for FDA approval, until actual FDA
approved trials are completed.


                                       12
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

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.  Other  than sales of the
Company's  collection devices, the Company has not yet commenced any significant
product commercialization.

In February 2000, the Company  closed its  Vancouver,  Washington  manufacturing
facility and moved its executive  offices to New York City and  subsequently  to
Medford,  NY. The Company no longer has its own manufacturing  plant which would
allow it to  independently  produce its products,  and has entered into a supply
agreement with Chembio Diagnostic  Systems,  Inc. to supply the Company's needs.
The Company  believes that it has  successfully  transferred  its technology but
significant  start-up costs associated with producing its product line are still
likely to be incurred.

As of May 2002, Chembio Diagnostic Systems, the Company's contract manufacturer,
issued a recall on certain lots of the Company's HIV products sent to Canada and
Africa.

In May 20, 2002, the Company announced that it had terminated merger discussions
with Chembio Diagnostic Systems.


                                       13
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

GENERAL (CONTINUED)

In May 2002 the Company received its Investigational Device Exemption (IDE) from
the U.S.  Food and Drug  Administration  (FDA)  for  approval  of its  Rapid HIV
Hema-Strip  Test. Upon termination of all business  relationships  with its then
contract manufacturer,  Chembio Diagnostic Systems, the Company needed to file a
new IDE with the FDA.  A new IDE was  received  in  November  2004.  This is the
initial  step  towards  FDA  approval  to market and sell the test in the United
States.  After conferring with representatives of the FDA's Center for Biologics
Evaluation and Research (CBER),  the Company decided to begin its filing using a
modular  pre-market  approval (PMA) application  approach.  Instead of beginning
filing after all the  clinicals  are  completed,  the modular  method allows the
Company to begin its filings concurrent with its US clinical studies. Should the
Company  receive  PMA  approval,  it will file for a CLIA  (Clinical  Laboratory
Improvements Amendments) waiver.

The IDE is only the first step in a difficult and financially  costly process to
receive US marketing approval.  There is no assurance that the Company will have
the financial  resources,  expertise,  ability, or that the product will perform
adequately to complete the application process.

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,  assembly, regulatory compliance
and  documentation  of the Company's  HIV test devices.  The Company has already
completed  transferring  its  technology to ABMC.  Based on internal test panels
used to test the  performance of HIV tests,  the Company  believes the product's
performance meets the necessary criteria for US approval. However, no assurances
can be given that the product will meet performance  specifications required for
FDA approval, until actual FDA approved trials are completed.

The Company has  incurred  significant  operating  losses  since its  inception,
resulting in an accumulated  deficit of $38,765,367 at September 30, 2002.  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 be insufficient to fund
the Company's operations through 2003.  Substantial additional financing will be
required in 2003. The Company's  significant  operating  losses and  significant
capital  requirements  raise  substantial  doubt about the Company's  ability to
continue as a going concern.  There can be no assurance that the Company will be
able to obtain the  additional  capital  resources  necessary  to  continue  its
business,  or that such financing will be available on  commercially  reasonable
terms or at all.


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   Consolidated   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.


                                       14
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

CRITICAL ACCOUNTING POLICIES AND ESTIMATES (CONTINUED):

The Company believes the following critical accounting  policies,  among others,
may be impacted significantly by judgment, assumptions and estimates used in the
preparation of the unaudited Consolidated Financial Statements:

The Company  recognizes  revenue in  accordance  with  Securities  and  Exchange
Commission Staff Accounting Bulleted No. 101, "Revenue  Recognition in Financial
Statements"  ("SAB 101").  Under SAB 101,  revenue is recognized at the point of
passage to the customer of title and risk of loss, there is persuasive  evidence
of an  arrangement,  the sales  price is  determinable,  and  collection  of the
resulting  receivable is reasonably  assured.  The Company generally  recognizes
revenue  at the time of  shipment.  Sales are  reflected  net of  discounts  and
returns.

The allowance for doubtful  accounts is maintained to provide for losses arising
from customers' inability to make required payments. If there is a deterioration
of our customers' credit worthiness and/or there is an increase in the length of
time that the receivables  are past due greater than the historical  assumptions
used, additional allowances may be required.

Loss contingencies arise in the ordinary course of business. In determining loss
contingencies,  we evaluate the likelihood of the loss or impairment of an asset
or the incurrence of a liability,  as well as our ability to reasonable estimate
the amount of such loss. We accrue for an estimated loss  contingency when it is
probable  that a liability  has been  incurred or an asset has been impaired and
the amount of the loss can be reasonably estimated.

Saliva  diagnostic  Systems,  Inc.  accounts for income taxes in accordance with
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes." Under SFAS No. 109,  deferred tax assets and  liabilities are determined
based on the difference between the financial  statement and tax bases of assets
and  liabilities,  using  enacted  tax rates in effect for the year in which the
differences  are expected to reverse.  Deferred tax assets are  reflected on the
balance  sheet only when it is  determined  that it is more likely than not that
the asset will be realized.


RESULTS OF OPERATIONS

THIRD QUARTER AND FIRST NINE MONTHS OF 2002 COMPARED TO THIRD QUARTER AND FIRST
NINE MONTHS OF 2001

Revenues:  The Company's  revenues  consist of product sales and royalty income.
Revenues and royalty  income  decreased  73% to $38,916 in the third  quarter of
2002 from $144,888 in the third  quarter of 2001,  and decreased 23% to $176,243
in the first nine months of 2002 from $230,027 in the first nine months of 2001.
Due to the closure of the Company's facility in Vancouver,  WA, the necessity to
transfer technology to an outside  contractor,  the FDA warning letter received,
and the recall of product in May 2002, the Company  continues to have negligible
sales through September 30, 2002.


                                       15
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

RESULTS OF OPERATIONS (CONTINUED)

Cost of products sold: Costs of products sold increased to $42,641 (greater than
100% of  product  sales) in the  third  quarter  of 2002  from $ 26,433  (47% of
product  sales) in the second  quarter of 2001, and decreased to $80,961 (57% of
product  sales) in the first nine  months of 2002 from  $89,921  (66% of product
sales) in the first nine months of 2001. A significant cause for the differences
in "percent of product sales (%)" is the fixed amount of depreciation  taken for
manufacturing  equipment per period  regardless of sales revenues,  and start up
costs associated with suppliers.

Research  and  development  expenses:  During the first nine  months of 2002 the
Company  did not incur any  research  and  development  expenses.  Research  and
development  expenses of $40,200 were incurred in the third quarter of 2001, and
$147,074 was incurred in the first nine months of 2001.

Selling,   general   and   administrative   expenses:   Selling,   general   and
administrative  expenses  increased 45% to $148,310 in the third quarter of 2002
from $102,477 in the third quarter of 2001,  and decreased 1% to $348,524 in the
first  nine  months of 2002 from  $351,358  in the  first  nine  months of 2001,
primarily as a result of clinical trial costs.

Interest expense:  Interest expense decreased to $16,054 in the third quarter of
2002 from $29,094 in the third quarter of 2001,  and decreased to $46,125 in the
first nine  months of 2002 from  $83,522 in the first nine  months of 2001.  The
conversion  into  equity of  outstanding  loans and notes  resulted  in  reduced
interest expenses on outstanding loan balances.

Income  taxes:  The  Company is in a net  deferred  tax asset  position  and has
generated net operating losses to date. Accordingly, 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 $38 million.


LIQUIDITY AND CAPITAL RESOURCES

As  of  September  30,  2002,  the  Company  had  negative  working  capital  of
$1,248,419.  Cash used in operating  activities in the first nine months of 2002
was $248,066. This was primarily a result of a net loss of $366,567.

Since  inception,  the Company has  financed  its capital  requirements  through
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 borrowings.


                                       16
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Pursuant to an agreement  dated  October 1999 and later amended as to amount and
expiration  date,  Helenka Bodner,  agreed to advance or cause to be advanced to
the Company  from time to time,  through  December  31,  2002,  up to the sum of
$1,500,000.  In  consideration  for the above,  the Company agreed to repay such
borrowed funds with accrued  interest at 12% per annum, six months from the date
of the  loan  or upon  demand,  at the  option  of the  lender.  The  loans  are
convertible into preferred  shares of the Company,  which in turn is convertible
into common stock under the same terms as the previously  issued 1998 - Series B
convertible preferred stock.  Pursuant to the terms of the loan instrument,  the
loan is  convertible,  at the option of the  holder,  into  Common  Stock of the
Company  upon terms  similar to the Series B Preferred  Stock  (i.e.  75% of the
closing bid price for the five prior days of conversion).

Helenka  Bodner has assigned the Note to Resonance Ltd. The balance at September
30, 2002 was $764,012. Pursuant to the terms of the loan instrument, the loan is
convertible,  at the option of the holder,  into Common  Stock of the Company at
75% of the closing stock bid price for the five days prior to conversion.

As of March 28,  2003,  subsequent  to the  Balance  Sheet date,  the  Company's
outstanding  loans from  stockholders,  which are convertible into the Company's
common stock, totaled $1,046,574 (See earlier paragraph regarding Helenka Bodner
loan). Had the  stockholders  elected to convert these loans into common stock -
as of such date,  it would  result in the  issuance by the Company of  6,977,160
shares of common stock.

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 effort 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.

On March 2002, the Company amended its Certificate of  Incorporation to effect a
one-for-twenty  five reverse  split of its common stock.  As of that date,  each
twenty five outstanding  shares of the Company's common stock were converted and
reconstituted  into one share of common stock,  par value $0.001 per share.  The
number of  authorized  shares of common stock of the Company was not affected by
the reverse stock split and remains at 50,000,000.  Options, warrants, preferred
stock and other securities convertible into shares of the Company's common stock
will be adjusted  in  accordance  with their terms to reflect the reverse  stock
split. Upon exercise or conversion,  holders of such securities will be entitled
to receive  one-twenty fifth of the number of shares of post-split  common stock
as they were entitled to receive of pre-split common stock.

As of March  2002,  the  Company's  common  stock  resumed  trading  on the NASD
Bulletin  Board  market  with a new  symbol  "SVAD".  Prior  to such  date,  the
Company's  stock had traded under the symbol  "SALV".  Between the months of May
2000 and  February  2002,  and  subsequent  to May 2002 the  Company  was and is
delisted  from the NASD  Bulletin  Board  market and has traded on the OTC "Pink
Sheets" due to its failure to meet the financial  reporting  requirements of the
NASD. As a result of the delisting, an investor may find it difficult to dispose
of,  or to  obtain  accurate  quotations  as to  the  price  of,  the  Company's
securities.


                                       17
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

In July 2002,  subsequent  to the  balance  sheet  date,  pursuant  to a dispute
regarding the rights of Brian Bramell et al., to additional  common stock of the
Company as set forth in a prior stock subscription agreement, the Company agreed
to issue 80,000 shares of the Company  common stock with a  restrictive  legend.
The common stock was issued in October 2003.  Based upon the market value of the
common stock on the date of settlement,  discounted 30% for its restriction, the
Company will record a settlement expense and related accrual for $ 67,200 in the
September 2002 financial statements.

In February  2003,  subsequent to the balance sheet date,  certain  shareholders
elected to convert an aggregate total of $382,500 in convertible  debt held into
8,500,000 shares of the Company's common stock.

In February 2003, subsequent to the balance sheet date, the Company issued Jules
Nordlicht  6,000,000  shares  of common  stock as  additional  compensation  for
financing the Company's equipment purchases and clinical trials.

In February  2003,  subsequent to the balance sheet date, the Company issued Leo
Ehrlich,  President and CEO,  4,000,000 shares of common stock as settlement for
claims of compensation for past services.

In February 2003,  subsequent to the balance sheet date, the Company's  Board of
Directors authorized the issuance of three million shares of its common stock as
compensation  to  individuals  who  will  participate  and act as the  Company's
Business Advisory board. The Company issued in October 2003, 3,000,000 shares of
its common stock;  1,000,000  shares each to Harmon  Aronson,  Robert Cook,  and
Harold Snyder who have agreed to join the Company's Advisory Board.

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. The Company's significant operating losses and capital
requirements  raise substantial doubt about the Company's ability to continue as
a going concern.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

From time to time,  the  Company's  earnings  and cash flow have been subject to
fluctuations  due to changes in foreign  currency  exchange  rates in connection
with its foreign subsidiaries. The Company is not currently generating any sales
from its foreign  subsidiaries.  We do not anticipate any material currency risk
to the Company's  financial  condition or results of operations  resulting  from
currency fluctuations.


                                       18
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

ITEM 4.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE OF CONTROLS AND PROCEDURES

As of the end of the period  covered by this  report,  we  evaluated,  under the
supervision and with the  participation  of our management,  including our chief
executive officer and chief financial  officer,  the effectiveness of the design
and operation of our  "disclosure  controls and  procedures"  [as defined in the
Securities  Exchange Act of 1934,  Rules 13a - 15(e) and 15d - 15(e)].  Based on
this evaluation,  our chief executive  officer and chief financial  officer have
concluded  that as of the date of the  evaluation  our  disclosure  controls and
procedures are effective to ensure that all material  information required to be
filed in this report has been made known to them.

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.


                                       19
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company had stopped making payments on its January 2000 settlement agreement
with Ronald  Lealos.  In a ruling dated March 21, 2003,  the court denied Lealos
motion for summary  judgment.  Should this matter go to trial,  the Company will
vigorously defend its position. The Company has retained legal counsel.


ITEM 2. CHANGES IN SECURITIES

On January 31,  2002,  the  Company's  Board of Directors  recommended  that the
Company's  shareholders  approve its  proposal  to effect a  one-for-twenty-five
reverse  stock split and a change of the  Company's  common  stock from $.01 par
value  to  $.001  par  value,  effective  upon  filing  of an  amendment  to the
certificate of incorporation to that effect.  Shareholders holding a majority of
the  Company's  outstanding  common stock  approved both such actions by written
consent on the same day. The amendment was filed on March 18, 2002.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None


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

On January 31,  2002,  the  Company's  Board of Directors  recommended  that the
Company's  shareholders  approve its  proposal  to effect a  one-for-twenty-five
reverse  stock split and a change of the  Company's  common  stock from $.01 par
value  to  $.001  par  value,  effective  upon  filing  of an  amendment  to the
certificate of incorporation to that effect.  Shareholders holding a majority of
the  Company's  outstanding  common stock  approved both such actions by written
consent on the same day. The amendment was filed on March 18, 2002.


ITEM 5.  OTHER INFORMATION

None


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Certification of Chief Financial  Officer Pursuant to Rules 13a-14(a) and
       15d-14(a)  promulgated  under the  Securities  Exchange  Act of 1934,  as
       amended.

       Certification of Chief Executive Officer Pursuant to 18 U.S.C.ss. 1350.

(b)    Earnings per share - See Exhibit 11

(c)    Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended June 30, 2002.


                                       20
<PAGE>

                         SALIVA DIAGNOSTIC SYSTEMS, INC.
                               September 30, 2002

                                   SIGNATURES

Pursuant  to the  requirements  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.

                                    Saliva Diagnostic Systems, Inc.
                                    --------------------------------------------
                                    (Registrant)

Date:  March 5, 2004                /s/ LEO EHRLICH
                                    --------------------------------------------
                                    Leo Ehrlich
                                    President & Chief Financial
                                    (Duly Authorized Officer)


                                       21