Statsure Diagnostic Systems, Inc. - Annual Report (Small Business Issuers) (10KSB)

		Page
PART I

Item 1	Description of Business	3
Item 2	Description of Property	19
Item 3	Legal Proceedings	19
Item 4	Submission of Matters to a Vote of Security Holders	19

PART II

Item 5	Market for Common Equity and Related Stockholder Matters	20
Item 6	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7	Financial Statements and Supplementary Data	29
Item 8	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	30
Item 8A	Controls and Procedures	30
Item 8B	Other Information	30

PART III

Item 9	Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act of the Registrant	31
Item 10	Executive Compensation	33
Item 11	Security Ownership of Certain Beneficial Owners and Management	35

PART IV

Item 12	Certain Relationships and Related Transactions	36
Item 13	Exhibits	36
Item 14	Principal Accountant Fees and Services	40

Signatures		41
Certifications		64

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 10-KSB, THE MATTERS DISCUSSED HEREIN CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, UNCERTAIN MARKET ACCEPTANCE OF OUR METHOD OF DETERMINING THE PRESENCE OF HIV ANTIBODIES, LACK OF SUCCESS BY OUR LICENSEE IN SELLING AND MARKETING OUR HIV RAPID SCREENING TEST, AND INABILITY TO OBTAIN ADDITIONAL FINANCING, IF NEEDED, AS WELL AS THE OTHER RISKS AND UNCERTAINTIES DESCRIBED UNDER "RISK FACTORS" AND ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K IN WHICH THEY APPEAR AS THE CASE MAY BE. THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

STATSURE DIAGNOSTIC SYSTEMS, INC.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

At the beginning of business on January 24, 2006, the Company effected a name change from Saliva Diagnostic Systems, Inc. to StatSure (TM) Diagnostic Systems, Inc.

StatSure Diagnostic Systems, Inc ., (SDS), a Delaware corporation (the “Company” or “StatSure”), is primarily engaged in commercializing two product platforms: first, the development, manufacturing and marketing of oral-fluid collection devices to provide physiologic samples to screen for the presence of drugs-of-abuse or infectious diseases; second, the development of point-of-care (POC), rapid, immunoassays for use in the detection of infectious diseases. These immunoassays incorporate SDS’ patented “barrel” technology, designed to provide speed, safety and convenience which are considered critical factors in point-of-care markets. In the oral fluid collection market, the Company’s platform has a patented internal quality control that indicates sufficient volume of the oral fluid sample (“volume adequacy indicator”) .

The Company's principal executive offices are located at 1881 Worcester Rd. #200, Framingham, MA. 01701.

On November 5, 2007 the Company announced that the U.S. Food and Drug Administration ("FDA"), through its Center for Devices and Radiological Health, had approved a waiver under the Clinical Laboratory Improvements Amendments of 1988 ("CLIA") for the HIV 1/2 Rapid Test marketed by Inverness, as per the aforementioned agreement.

On October 17, 2007 the Company received a $500,000 financing from Inverness Medical Innovations, Inc. The financing consisted of a sale of 1,428,571 common shares at a price of $0.35 per share. Additionally, Inverness received 5 year warrants to purchase up to an additional 1,071,428 shares of the Company's stock at a price of $0.75 per share.

In connection with this financing, the Company and Inverness signed two additional agreements. First, the two companies signed an agreement whereby Inverness acquired an option to the exclusive, worldwide marketing and distribution rights to certain infectious disease diagnostic tests that may be developed by StatSure that may utilize specified Inverness and/or StatSure intellectual property. If exercised by Inverness, the option provides for StatSure and Inverness to equally share development expenses and profits. StatSure and Inverness also entered into a license agreement whereby Inverness granted to StatSure a license to certain Inverness lateral flow patents for use in a rapid test to detect HIV antibodies in point-of-care markets subject to payment of royalties to Inverness. This license pertains to HIV tests using formats other than the StatSure's "barrel format" which is already being sold by Inverness.

The Company has incurred significant operating losses since its inception, resulting in an accumulated deficit of $ 51,047,484 at December 31, 2007. 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's independent certified public accountants have included an explanatory paragraph in their report stating that 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. (See note 2 of notes to financial statements.)

From July 2004 through March 21, 2006, the Company's common stock traded on the OTC Bulletin Board market with the symbol SVAD. Since March 22, 2006, the Company’s shares have been trading with the new symbol SSUR.

(See Item 5 - Market for Common Equity and Related Stockholder Matters.)

PRODUCTS

The Company’s current products fall into two categories, rapid point-of-care immunoassays and oral fluid collection devices.

1. Rapid Point-Of-Care (POC) Immunoassays:

The Company has developed several rapid tests utilizing immunochromatography for the detection of antibodies to selected pathogens, including a test for HIV which the Company has licensed to Inverness Medical Innovations (“Inverness”) ( See ITEM 1. Marketing, Sales and Distribution: Point-of-Care Immunoassays ). The Company’s rapid tests are intended to be easy to run and quick to read; they require two simple steps to perform. The test produces a visual result in fifteen to twenty (15-20) minutes or less and may be used without special equipment, refrigeration-storage, or expert-training.

The StatSure(TM) branded barrel format is a disposable, single-use test-kit that collects, processes, and analyzes whole-blood, plasma, or serum with approximately 2.5 microliters of sample. Sample collection requires only a few seconds, typically from a “finger-stick” using a lancet. When utilizing this product with whole-blood, a filter traps red blood cells from the-whole blood sample permitting the migration of serum to flow onto the strip, thereby negating the need for the user to centrifuge a specimen to separate serum from the whole blood sample. This “barrel” technology utilizes a patented capillary flow technology for acquiring the sample into an integrated testing device: the barrel. Next a buffer solution is introduced. The resulting mixture of sample and buffer migrate along the test strip by capillary action, reconstituting a dye conjugate. As part of its internal control system, a single red control-line will appear at a designated point on the upper portion of the test-strip if the test has been performed properly and if all reagents are functionally active. When antibodies specific to the target disease are present in the sample, the conjugate binds with those antibodies to a pre-applied antigen to form a second red line (positive) at a designated point on the lower portion of the strip. In the absence of specific antibodies, a second line does not appear. However, in the presence of the specific targeted antibodies, a second line does appear and the result is considered positive and will typically be re-tested for confirmation following approved diagnostic protocols specific for the disease and the place of testing. Results are available at the point-of-care (POC) which may include, but are not limited to: satellite labs and patient treatment areas within a hospital (e.g. E.R.), clinics, centralized public health laboratories as well as mobile and neighborhood labs, the military, insurance companies, doctors’ offices and other similar sites where the benefits of easy-to-perform, rapid testing results are clinically meaningful.

2. Oral Fluid Collection Devices

The Company is currently marketing its oral-fluid collection devices with the trade names Omni-SAL(TM) and Saliva-Sampler(TM), in the U.S., in the United Kingdom and in certain other international markets. The Company markets its saliva medical specimen collector in the United Kingdom as Omni-SAL(TM) and as Saliva-Sampler(TM) in the U.S. (See "--Marketing, Sales and Distribution.") This oral-fluid collection-device product-line is patented; it is currently being sold by our customers to use with certain laboratory assays primarily to detect the presence of drugs-of-abuse. It has also been used to detect cigarette smoking and, in research, to collect saliva samples for studies of HIV and other infectious diseases.

RESEARCH, PRODUCT AND CLINICAL DEVELOPMENT

The Company's rapid testing platform is designed to be versatile, particularly in the research and development phase of bringing out new products. By adapting these patented platforms to add new analytes, the Company hopes to broaden the product-line in a cost-effective manner. However, the total cost of developing a menu of StatSure(TM) products often may include incremental licensing fees and clinical testing, and will always require product documentation, a quality program, and product launch expenses. The Company has conducted preliminary research that indicates its patented rapid whole-blood test format can be applied to screen for a broad spectrum of pathogens in addition to HIV such as H. pylori, TB, Syphilis, HPV, Viral Hepatitis, and certain other sexually transmitted diseases.

The Company has recently shifted its development programs, primarily by a series of small collaborative relationships with other diagnostic firms, to developing additional specimen collection platforms and new applications to be used in point of care testing. In February 2007, we filed a patent application for an integrated, oral-fluid collection and testing device. In addition to oral-fluid, the patent covers collection of other physiologic fluids including whole blood and serum samples. The device incorporates our patented "sample volume adequacy indicator" control system, which is an internal quality control mechanism incorporated into the Company's existing line of oral fluid collection devices. Internal testing by us has demonstrated encouraging results relating to cost, performance and reliability.

In 2007, the majority of research and development activities focused on the development of new oral fluid testing platforms. The Company expended $34,591 in research and development costs in fiscal year 2007. (See ITEM 7, Managements Discussion, Research and Development)

Limited revenues have been generated from sales of the Company's rapid tests and saliva collection devices. The Company's products are subject to all the risks inherent in the introduction and sales of diagnostic products. The Company may not have sufficient funds to design and develop new products. There can be no assurance that the Company's products will be successfully developed, be developed on a timely basis or prove to be as effective as products based on existing or newly developed technologies. The inability to successfully complete development, or a determination by the Company, for financial or other reasons, not to undertake or complete development of any product, particularly in instances in which the Company has made significant capital expenditures, will have a material adverse effect on the Company.

Marketing, Sales and Distribution: Oral-Collection Device

The Company is currently marketing its oral fluid collection devices in the U.S. and in certain countries around the globe. The oral fluid collection devices are sold into workplace-testing, forensic toxicology, criminal justice, and drug rehabilitation markets, primarily through several manufacturers of drugs-of-abuse diagnostic kits who incorporate our collection device as part of their kits.

Marketing, Sales and Distribution: Point-of-Care Immunoassays

On September 29, 2006, the Company announced it had signed several agreements relating to its patented barrel technology for use in screening antibodies to HIV (AIDS). As part of a three-way alliance with Inverness and Chembio , StatSure signed a worldwide, exclusive distribution deal for a rapid, point-of-care HIV test with Inverness. In a two-way deal with Chembio, the Company granted an exclusive license to Chembio solely to manufacture their recently FDA approved HIV barrel product for Inverness . This product will be marketed under the IMA brand, CLEARVIEW COMPLETE HIV1/2, and the parties (StatSure and Chembio) will equally share in the profits relating to sales of the HIV barrel product after reimbursement of the manufacturing and related costs. Under the two-way agreement (“Joint HIV Barrel Commercialization Agreement”) a long- term strategic “partnership” was established and the parties will act jointly in the HIV barrel field.

Terms of the agreement include:

·	IMA will market the “Barrel” HIV test under IMA brands globally [subject only to certain existing international agreements that the Company and StatSure may keep in place for up to one year];

·	IMA will be the exclusive distributor/marketer of the “Barrel” HIV test under the agreement as well as any new HIV products in the “barrel field” that are developed, and may not compete with any products in this field worldwide as defined;

·	The Company granted IMA exclusive marketing and distribution rights to their intellectual property in the HIV barrel field; and IMA also granted the Company a license to its lateral flow technology for an HIV cassette product as well as for certain other products.

On October 17, 2007 we signed an additional agreement whereby IMA acquired an option to the exclusive, worldwide marketing and distribution rights to certain infectious disease diagnostic tests that may be developed by StatSure that may utilize specified Inverness and/or StatSure intellectual property. If exercised by IMA, the option provides for StatSure and IMA to equally share development expenses and profits. StatSure and IMA also entered into a license agreement whereby Inverness granted to StatSure a license to certain IMA lateral flow patents for use in a rapid test to detect HIV antibodies in point-of-care markets subject to payment of royalties to IMA. This license pertains to HIV tests using formats other than the StatSure's "barrel format" which is already being sold by IMA.

In 2007, the Company's revenues were primarily generated from sales of its saliva collection devices. For the year ended December 31, 2007, sales to two customers accounted for 89% of the Company's total product sales. Sales to these customers were approximately $505,000 and $141,000. The Company is continuing to seek new markets and sales opportunities for its products.

MANUFACTURING AND SUPPLY

The Company contracts all its product manufacturing with third parties. Nonetheless, all the proprietary technology, molds, custom built machinery, and documentation are the property of the Company. The Company has invested in the design, process documentation, scale- up, and automated assembly and production machinery to allow it to manufacture its products consistently, efficiently, and economically, to compete on a global scale. There can be no assurance that these contractors will continue to meet the Company's or FDA requirements or will manufacture the Company's products on acceptable terms.

Our products are medical devices that are, for the most part, made and sold into regulated markets. As such, manufacturers located in the U.S. or manufacturing products to be sold in the U.S. must comply with the FDA's good manufacturing practices regulations ("GMP") and pass pre-approval and periodic GMP inspections by the FDA. The Company has been advised by its assembly contractors and injection molders that they are in compliance with GMP and other FDA regulations. There can be no assurance that these companies will continue to comply with GMP, that the Company will locate other manufacturers that comply with GMP, or that the Company will secure agreements with such manufacturers on acceptable terms.

Although the Company has no reason to believe it will encounter difficulties in obtaining components necessary for manufacture of its products, there can be no assurance that the Company will be able to enter into satisfactory agreements or arrangements for the purchase of commercial quantities of such components. The failure to enter into agreements or otherwise arrange for adequate or timely supplies of components, and the possible inability to secure alternative sources of components, could have a material adverse effect on the Company's ability to manufacture and sell its products. In addition, development and regulatory approval of the Company's products in the U.S. are dependent upon the Company's ability to procure certain components and certain packaging materials from FDA-approved sources.

GOVERNMENTAL REGULATION

In the U.S., under the Federal Food, Drug, and Cosmetics Act (the "FDC Act"), the FDA regulates all aspects, including manufacturing, testing, and marketing, of medical devices that are made or distributed in or from the U.S. The FDA as Class I, Class II, or Class III devices categorizes all medical devices. Class I devices are subject only to general control provisions of the FDC Act, such as purity, labeling and GMP. Class II devices are required to also ensure reasonable safety and efficacy through performance standards and other controls. Class III devices must, in addition to fulfilling all other provisions of the FDC Act, meet extensive and rigorous FDA standards that may require clinical trials.

A manufacturer of medical devices which can establish that a new device is substantially equivalent to a legally marketed Class I or Class II medical device, or to a Class III medical device for which the FDA has not required a PMA (Pre Market Approval), can seek FDA marketing clearance for the device by filing a 510(k) Premarket Notification ("510(k) Notice"). The 510(k) Notice for diagnostic devices is normally supported by various types of information, required to be submitted along with the 510(k) Notice. This information typically includes performance data indicating that the device is as safe and effective for its intended use as a legally marketed predicate device.

Diagnostic devices that require human clinical trials due to the potential clinical risk were they to be incorrectly used or interpreted, must obtain an Investigational Device Exemption ("IDE") from the FDA prior to the commencement of such human clinical trials. An application for an IDE must be supported by any clinical data (including any results of human testing obtained through "Research Use Only" use of a device for which FDA approval is not required), and the proscribed preclinical data and a broad spectrum of other data that compile the submission necessary to gain an IDE. Upon approval and award of the IDE, human clinical trials may begin

Two of the Company's products, Saliva-Sampler (R) and H. Pylori Stat-Simple(TM) (a product presently discontinued by the Company), have received FDA clearance through the 510(k) process for domestic distribution for in vitro diagnostic use in humans. The FDA clearance is subject to certain standard limitations, including persons who may be tested, persons who may administer the test and how the test results may be interpreted. Both of these products have been classified as Class II devices. The Company has discontinued selling H. Pylori products but may elect to resume sales if market conditions so warrant.

CLIA WAIVER

The Clinical Laboratory Improvement Amendments of 1988 (CLIA) law prohibit laboratories from performing in vitro-diagnostic tests aimed at the diagnosis, prognosis, treatment or prevention of a disease or human condition, unless the laboratory has been certified by the US Department of Health and Human Services specifically regarding for use the procedure in question. Point-of-care tests are often designed in a manner that would allow them to be waived from the CLIA requirements. If a product receives a CLIA waiver from the FDA, the available market for its use may be significantly expanded. Tests may be waived from this regulatory oversight if they meet certain requirements established by the statute. CLIA waiver permits use of the test and system by non-professional staff in settings with reduced regulatory constraints, acknowledging that waived tests have demonstrated a degree of ease-of-use, accuracy, and overall performance in these settings where certain quality control and other similar requirements may not be in place.

Inverness/Chembio has received a waiver of CLIA for the licensed barrel HIV product. This waiver allows sales of this product to a large number of markets that do not operate under the standards of the CLIA (e.g. doctors' offices, public health clinics).

International Regulation and Distribution:

The Company’s products are subject to similar regulatory agencies policies, procedures and regulations regarding human clinical testing, manufacturing and marketing of medical devices. The Company plans, over time, to sell or distribute its products on a global basis and to file, or have filed on its behalf, the necessary documentation, and clinical trials data that meet regulatory requirements that will, once met, allow its products to be marketed. Regulatory approval specifications for medical devices vary from country to country. Some countries may not require regulatory approval when registering a product for sale to the private sector. Others rely on evaluations by agencies such as the WHO. Also, registrations in certain countries are often issued in the name of distributors. As the Company is in the process of changing distributors, it may need to obtain new registrations in many of the markets in which it had previously been permitted to sell. The process of obtaining regulatory approval from foreign countries can be costly and time consuming, and involves many of the same procedures and risks as obtaining FDA approval. There can be no assurance that any of the Company’s products not yet approved will receive regulatory approval in any country, or that the Company will have the resources to seek regulatory approval for any of its products in any country. The International Organization for Standardization (“ISO”) is a global federation of national standards representing more than 100 countries; and ISO certification, for example, is a pre-requisite to obtaining a CE mark (the European Union requirement to permit selling of medical devices).

COMPETITION:

Overall: The in-vitro-diagnostics is a multi-billion dollar industry. It is extremely competitive and includes some of the world’s largest multinational corporations such as Johnson & Johnson; General Electric; Roche; and Siemens. Many of our competitors are substantially larger than we are, and have far greater research, financial, manufacturing, distribution, legal and marketing resources than we do .

ORAL-FLUID COLLECTION DEVICES — There are two levels of competition for sample collection devices for drug of abuse testing. In the first level, the Company's saliva collection device competes with other saliva collection products. The second level recognizes that the majority of the market for drugs-of-abuse testing (currently, the primary application for which the Company’s oral-collection devices are used) and other tests utilize urine collection products to obtain the physiologic sample. The market for replacing urine with saliva collection devices is emerging. The shift towards saliva is due to its convenience, ability to directly trace the authenticity of the specimen, less "invasiveness", increased speed to obtain quality sample, and overall cost-effectiveness. The oral fluid collection and diagnostic testing market is highly competitive and is expected to increase.

The primary direct competitor to our saliva collection device is Orasure Technologies, Inc., which sells FDA-approved oral fluid-based laboratory tests for drugs of abuse and HIV testing. There are several other collectors on the market from Sarstedt (Salivette), Malvern Medical, and International Diagnostic Systems (Ultrasal II),

RAPID IMMUNOASSAY — Lateral flow tests, also known as immunochromatographic strip (ICS) tests, offer benefits in the diagnostic process that point towards a growth market. These tests are designed to reduce the time spent waiting for test results from hours to minutes, require less training for operators, and reduce the cost of both device development and manufacturing. Rapid point of care testing devices are expected to play an increasingly important role in the decentralization of medicine, where testing is moving away from hospital-based central testing laboratories to point-of care (POC) locations inside and outside the hospital. Despite these trends, competition in point of care in vitro diagnostic testing is very active and strong. There are multiple vertical market segments for these POC products beyond testing for infectious disease which include: diabetes, oncology, cardiac markers, pregnancy and other tests relating to female health. There are many participants active within this industry that include, but by no means are limited to the following: General Electric-Abbott; Becton, Dickinson and Company (BD); Beckman Coulter Inc.; Biosite Incorporated; Instrumentation Laboratory (IL); Inverness Medical Innovations, Inc.; Johnson and Johnson; Roche Diagnostic; Calypte Biomedical Corporation; Binax, Inc.; Chembio Diagnostic Systems, Inc.; EY Laboratories, Inc.; OraSure Technologies, Inc.; MedMira Inc; Genzyme Corporation Meridian Bioscience, Inc.; Trinity Biotech plc

Orasure Technologies, Inc. is also a major competitor to our rapid HIV barrel technology in the U.S. Orasure Technologies, Inc. has an FDA approved blood-based and oral fluid-based rapid HIV test. Several companies market or have announced plans to market blood-based or oral fluid-based HIV rapid tests in the United States and abroad. MedMira and Trinity Biotech have also received FDA approval to sell rapid HIV blood tests in the United States. We believe other companies may seek FDA approval to sell competing rapid HIV tests in the future.

Our competitors also include in vitro diagnostic and rapid diagnostic companies, specialized biotechnology firms as well as pharmaceutical companies with biotechnology divisions and medical diagnostic companies, many of which are substantially larger and have greater financial, research, manufacturing, and marketing resources. Outside of the United States, where regulatory requirements for HIV screening tests may be less demanding, a much wider range of competitors may be found. Manufacturers from Japan, Canada, Europe, and Australia offer a number of HIV screening tests in those markets including HIV-1 and HIV-2 tests, rapid tests and other non-EIA format tests. There can be no assurances that our products will compete effectively against these products in foreign markets, or that these competing products will not achieve FDA approval. Internationally, the market for rapid, POC HIV products may be simplistically viewed as bifurcated. High-end, more convenient and more expensive products such as the barrel technology and Orasure’s product and the low-cost, “dip-stick or cassette product types that are somewhat more difficult to use but are often priced to meet the economic conditions throughout many of the undeveloped nations of the world such as in Africa and Southeast Asia. The Company does not expect to compete in the very-low-cost/price markets with its current barrel technology. These markets are considered high volume low margin opportunities. The Company may enter these markets in the future with a new, less expensive product design. Competition in the low-price segment includes: Orgenics (part of IMA), Chembio, Acon (part of IMA), Determine and others.

Important competitive factors for our products include product quality, price, ease-of-use, customer service, and reputation. Industry competition is based on the following:

Scientific and technological capability;

Proprietary know-how;

The ability to develop and market products and processes;

The ability to obtain FDA or other regulatory approvals;

The ability to manufacture products that meet applicable FDA requirements (i.e., good manufacturing practices);

Access to adequate capital;

The ability to attract and retain qualified personnel, consultants, contract manufacturers; and

The availability of patent protection.

We expect competition to intensify as technological advances are made and become more widely known, and as new products reach the market. Furthermore, new testing methodologies could be developed in the future that would render our products impractical, uneconomical or obsolete. In addition, there can be no assurance that our competitors will not succeed in obtaining regulatory approval for these products, or introduce or commercialize them before we do so. These developments could have a material adverse effect on our business, financial condition and results of operations.

In the dynamic biotechnology and medical device industry, technological change and obsolescence are rapid and frequent. There can be no assurance that the Company will be able to compete successfully with its competitors, keep pace with technological changes or avoid product obsolescence.

INTELLECTUAL PROPERTY

We utilize patent and other intellectual property rights to protect and preserve our proprietary technology and our right to capitalize on the results of our research and development activities. We also rely on trade secrets, know-how, continuing technological innovations, and licensing opportunities to provide competitive advantages for our products in our markets and to accelerate new product introductions. We regularly search for third-party patents in fields related to our business to shape our own patent and product commercialization strategies as effectively as possible and to identify licensing opportunities. United States patents generally have a maximum term of 20 years from the date an application is filed.

In 2006, we filed for a patent incorporating our existing saliva sampler with features to make it more adaptable for laboratory automated equipment.

In February 2007 we filed a patent application for an integrated, oral-fluid collection and testing device. In addition to oral-fluid, the patent covers collection of other physiologic fluids including whole blood and serum samples. The device incorporates StatSure's patented "sample volume adequacy indicator" control system, which is an internal quality control mechanism incorporated into the Company's existing line of oral fluid collection devices.

To date, eleven patents covering the Company's specimen collection devices have been awarded, five in the U.S. and six in other countries. Expiration dates for the patents range from 2008 to 2012. The Company intends to seek other patent protection in the U.S. and other countries for certain aspects of its collection devices and rapid test technology.

The Company has been issued a patent by the U.S. Patent and Trademark Office for its whole blood sampling technology. No assurance can be given that the Company will file any patent applications in the U.S. or abroad that patents will be issued to the Company pursuant to its patent applications, or that the Company's patent portfolio will provide the Company with a meaningful level of commercial protection. The Company recognizes the need to invest in broadening, defending and strengthening its intellectual property base as well as adding to it. Management is committed to this and to obtain sufficient capital to accomplish this on-going responsibility.

On September 30, 2006, Chembio and StatSure entered into a Settlement Agreement pursuant to which all matters in their litigation regarding SDS’ barrel patent and other matters have been settled. The Settlement Agreement, which is related to the parties’ three-way agreements with Inverness, provides that Chembio and StatSure will equally share the profits, and that they will act jointly in the HIV barrel field towards commercializing this technology and its ensuing products for the HIV market. The settlement combines each company’s HIV barrel intellectual property, including an exclusive manufacturing license from StatSure to Chembio of its barrel patent for all HIV applications.

The Company also depends on trade secrets and proprietary information to protect much of the technology that it has developed. The Company has entered into confidentiality agreements with its employees, certain third party suppliers, potential customers, joint venture partners, distributors and consultants. Despite such efforts, there can be no assurance that confidentiality of the Company's proprietary information can be obtained or maintained.

The Company believes that patent and trade secret protection are important to its business. However, the issuance of a patent and the existence of trade secret protection do not in itself ensure the Company's success. Competitors may be able to produce products competing with a patented Company product without infringing on the Company’s patent rights. Issuance of a patent in one country generally does not prevent the manufacture or sale of the patented products in other countries. The issuance of a patent to the Company is not conclusive as to the validity or as to the enforceable scope of the patent. The validity or enforceability of a patent can be challenged after its issuance, and if the outcome of such challenge is adverse to the owner of the patent, the owner's rights could be diminished or withdrawn. Additionally, trade secret protection does not prevent independent discovery and exploitation of a secret product or technique by other parties.

A large number of individuals and commercial enterprises seek patent protection for technologies, products and processes in fields related to the Company's area of product development. (See "Competition")

To the extent such efforts are successful, the Company may be required to obtain licenses in order to accomplish certain of its product strategies. There can be no assurance that such licenses will be available to the Company or available on acceptable terms.

The Company is aware of certain patents issued to developers of diagnostic products with potential applicability to the Company’s diagnostic technology. There can be no assurance that the Company would prevail if a patent infringement claim were to be asserted against it.

EMPLOYEES

As of March 15, 2008, the Company has four employees. This excludes our outside counsel, accountants, or manufacturing personnel at its contract manufacturers.

FORWARD-LOOKING STATEMENTS

This Report contains certain forward-looking statements, within the meaning of the Federal securities laws. These include statements about expected revenues, earnings, expenses or other financial performance, future product performance or development, expected regulatory filings and approvals, planned business transactions, views of future industry or market conditions, other factors that could affect future operations or financial position, and statements that include the words believes, expects, anticipates, intends, plans, estimates, may, will, should, could, or similar expressions. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors could cause actual performance or results to be materially different from those expressed or implied in these statements. Some of these factors are: ability to market products; impact of competitors, competing products and technology changes; ability to develop, commercialize and market new products; market acceptance of its testing products, ability to fund research and development and other projects and operations; ability to obtain and timing of obtaining necessary regulatory approvals; ability to develop product distribution channels; uncertainty relating to patent protection and potential patent infringement claims; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; loss or impairment of sources of capital; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; changes in relationships with strategic partners and reliance on strategic partners for the performance of critical activities under collaborative arrangements; changes in accounting practices or interpretation of accounting requirements; equipment failures and ability to obtain needed raw materials and components; and general business and economic conditions. These and other factors that could cause the forward-looking statements to be materially different are described in greater detail in the Section entitled, Risk Factors, and elsewhere in this Report. Although forward-looking statements help to provide complete information about future prospects, they may not be reliable. The forward-looking statements are made as of the date of this Report and the Company undertakes no duty to update these statements.

RISK FACTORS

The following is a discussion of certain significant risk factors that could potentially affect the Company's financial condition, performance and prospects.

REGULATORY RISKS

ABILITY TO OBTAIN AND TIMING OF REGULATORY APPROVALS

Our proposed and existing products are subject to regulation by the FDA and other governmental or public health agencies. In particular, we are subject to strict governmental controls on the development, manufacture, labeling, distribution and marketing of our products. In addition, we are often required to obtain approval or registration with foreign governments or regulatory bodies before we can import and sell our products in foreign countries .

The process of obtaining required approvals or clearances from governmental or public health agencies can involve lengthy and detailed laboratory testing, human clinical trials, sampling activities and other costly, time-consuming procedures. Approval of claims that become part of the approved label of the product requires the submission of clinical data and could require significant time to obtain. The submission of an application to the FDA or other regulatory authority for these or other claims does not guarantee that an approval or clearance to market the product will be received. Each authority may impose its own requirements and delay or refuse to grant approval or clearance, even though a product has been approved in another country or by another agency. Moreover, the approval or clearance process for a new product can be complex and lengthy. This time span increases our costs to develop new products as well as the risk that we will not succeed in introducing or selling them in the United States or other countries.

Newly promulgated or changed regulations could also impact our sales. Our distributor (U.S.) of the Saliva Sampler(TM) oral fluid collection device for the substance abuse market is presently seeking FDA approval for certain oral fluid drug tests using the Company's collection device. They may be required to undergo additional trials or procedures which may make it impractical or impossible to market our products for certain uses, in certain markets, or at all. For example, the Substance Abuse and Mental Health Services Administration ("SAMHSA"), which is part of the U.S. Department of Health and Human Services, is expected to issue regulations for the use of oral fluid drug testing for federal workers. Although we believe the SAMHSA regulations, when issued in final form, will permit us to market and sell our collector as part of the oral fluid drug test for use with federal workers, there is no guarantee that those regulations will do so, and our ability to sell those products in that market could be limited. In addition, the extent to which the final SAMHSA regulations permit the sale of our oral fluid drug tests for use with federal workers may influence whether customers in the workplace, criminal justice or other unregulated markets use our products. The regulations in some states may restrict our distributor from selling products in those states. For example, certain states restrict or do not allow the testing of oral fluid for drugs of abuse.

In addition, all in vitro diagnostic products that are to be sold in the European Union ("EU") must bear the CE mark indicating conformance with the essential requirements of the In Vitro Diagnostic Directive ("IVDD”). The licensees of our HIV test have not yet applied for a CE mark. The distributor of our saliva collection device has obtained the CE mark for the Omni Sal(R). We intend to obtain appropriate regulatory approvals and CE mark, if necessary, for our future products. While we are not aware of any material reason why we would be unable to do so, there can be no assurance that compliance with all provisions of the IVDD will be demonstrated and/or that we will be able to obtain a CE mark for all products that we desire to sell in the EU.

REGULATORY COMPLIANCE

We can manufacture and sell many of our products, both in the United States and in some cases abroad, only if we comply with regulations of government agencies such as the FDA. We have implemented quality assurance and other systems that are intended to comply with applicable regulations.

Although we believe that we have adequate processes in place to ensure compliance with these requirements, the FDA could force us to stop manufacturing our products if it concludes that we are out of compliance with applicable regulations. The FDA could also require us to recall products if we fail to comply with applicable regulations. See the Section entitled, "Government Regulations," for a further discussion of applicable regulatory requirements.

RISKS RELATING TO OUR FINANCIAL RESULTS, STRUCTURE AND NEED FOR FINANCING

LOSS OR IMPAIRMENT OF SOURCES OF CAPITAL

Although the Company has made significant progress toward limiting extraneous infrastructure and controlling expenses, the Company has historically depended on capital raised through private funding and the sale of equity to fund its operations. The Company's future liquidity and capital requirements will depend on numerous factors, including tooling costs, the success of product development efforts, the costs and timing of expansion of sales and marketing activities, the extent to which existing and new products gain market acceptance, and competing technological and market developments. In addition, the Company may license new technology or products to augment its product line; such licenses can cost millions of dollars. If additional financing is needed, the Company may seek to raise funds through the sale of equity.

We have not achieved full-year operating profitability. We recorded net income of approximately $0.9 million in 2007 and losses of approximately $5.3 million in 2006. The Company has incurred significant operating losses since its inception, resulting in an accumulated deficit of $ 51,047,484 at December 31, 2007. 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 and concomitant margins, sufficient to support its operations.

In order to achieve sustainable profitability, our revenues will have to grow at a significant rate. Our ability to achieve revenue growth, and profitability, is dependent upon a number of factors including, without limitation, the following:

Getting financing at reasonable cost of capital that will allow us to add a series of new products that utilize the existing technology platforms

Our distributors' success in creating market acceptance for and selling increasing volumes of the Saliva Sampler(TM) collection device.

The Company has entered into a distribution arrangement with Inverness Medical Systems, Inc. whereby they have been granted exclusive rights to our patented barrel technology in an HIV rapid test (Clearview® COMPLETE HIV1/2) for sale in the U.S which has received from the FDA a waiver under the Clinical Laboratory Improvements Amendments of 1988 ("CLIA").. We are reliant on Inverness’s abilities to market and sell the product.

Establishing a New Product Process that efficiently develops, tests, and obtains appropriate regulatory approval in a predictable manner consistent with the Company's growth objectives

Building and maintaining a Quality System that meets or exceeds the requirements of the various regulatory agencies around the globe.

Management of our contract manufacturing relationships to ensure the quality, timeliness and costs of each of our product lines; we also must manage these third-party relationships monitor their Quality System to ensure that it meets or exceeds the appropriate requirements of various regulatory agencies throughout the world where our products are shipped.

We have not yet fully achieved our financial and business objectives and there can be no assurance that we will be able to do so. Moreover, even if we achieve our objectives and become profitable, there can be no assurance that we will be able to sustain such profitability in the future.

WE WILL REQUIRE FUTURE ADDITIONAL CAPITAL TO FUND OUR OPERATIONS

The Company believes that its current cash position will not be sufficient to fund the Company's operations through 2008. Management believes that the agreements it entered into in September 2006 (See ITEM 1. DESCRIPTION OF BUSINESS) and the CLIA waiver granted by the FDA in the fourth quarter of 2007, will enable the Company to increase its revenues significantly in the next fiscal year, however it will be insufficient to fund its aggressive growth and marketing efforts, and to capitalize on its intellectual property portfolio to design and develop new products. The Company will need to raise additional capital.

The Company's independent registered public accounting firm has included an explanatory paragraph in their reports stating that 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 achieve significant revenues from the agreements with Inverness Medical and Chembio Diagnostic Systems, Inc. entered into in September 2006 or 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.

Although we have made significant progress in the past toward controlling expenses and increasing product revenue, we have historically depended, to a substantial degree, on capital raised through the sale of equity and borrowings to fund our operations.

Our future liquidity and capital requirements will depend on numerous factors, including, but not limited to, the following:

Although we rely on contract manufacturers for the manufacturing of our products, we often must pay for the production equipment used to manufacture our products.

The success of our research and product development efforts;

The scope and results of clinical testing;

The magnitude of capital expenditures;

Changes in existing and potential relationships with business partners;

The time and cost of obtaining regulatory approvals;

The costs involved in obtaining and enforcing patents, proprietary rights and necessary licenses;

The costs and timing of expansion of sales and marketing activities;

The timing of the commercial launch of new products;

The extent to which existing and new products gain market acceptance;

Competing technological and market developments; and

The scope and timing of strategic acquisitions.

ECONOMIC DOWNTURN OR TERRORIST ATTACKS

Changes in economic conditions could adversely affect our business. For example, in a difficult economic environment, customers may be unwilling or unable to invest in new diagnostic products, may elect to reduce the amount of their purchases or may perform less drug testing because of declining employment levels or the issuance of fewer life insurance policies. A weakening business climate could also cause longer sales cycles and slower growth, and could expose us to increased business or credit risk in dealing with customers adversely affected by economic conditions.

Terrorist attacks and subsequent governmental responses to these attacks could cause further economic instability or lead to further acts of terrorism in the United States and elsewhere. These actions could adversely affect economic conditions outside the United States and reduce demand for our products internationally. Terrorist attacks could also cause regulatory agencies, such as the FDA or agencies that perform similar functions outside the United States, to focus their resources on vaccines or other products intended to address the threat of biological or chemical warfare. This diversion of resources could delay our ability to obtain regulatory approvals required to manufacture, market or sell our products in the United States and other countries.

STOCK PRICE VOLATILITY

Our stock price may be volatile in the future, and could experience substantial declines. The following factors, among others, could have a significant impact on the market for our common stock:

Future announcements concerning us;

Future announcements concerning our partners, distributors, competitors or industry;

Governmental regulation;

Clinical results with respect to our products in development or those of our competitors;

Developments in patent or other proprietary rights;

Litigation or public concern as to the safety of products that we or others have developed;

The relatively low trading volume for our common stock;

Period to period fluctuations in our operating results;

Changes in estimates of our performance by securities analysts;

General market and/or healthcare/medical device or diagnostic product sub-segments and economic conditions; and

Terrorist attacks, civil unrest and war

THE REGISTRATION OF A SIGNIFICANT AMOUNT OF OUR OUTSTANDING STOCK IN 2007 MAY HAVE A NEGATIVE EFFECT ON THE TRADING PRICE OF OUR STOCK.

On June 8, 2006, the Company completed a private placement of $2,150,000 with 10 institutional and accredited investors pursuant to the 2006 Series A Convertible Preferred Stock Agreement dated June 7, 2006, and filed a registration statement for these securities which became effective in 2007. The Convertible Preferred Stock is convertible to shares of common stock at conversion price of $0.50 per share. If all these preferred shares are converted, it will result in the issuance of 4,300,000 shares of common stock. In addition warrants convertible into approximately 2.6 million shares were issued with the 2006 Series A Convertible Preferred Stock financing. If investors holding a significant number of freely tradable shares and warrants and decide to sell them and or exercise their warrants in a short period of time following the effectiveness of the registration statement, such sales could contribute to significant downward pressure on the price of our stock.

RISKS RELATING TO OUR INDUSTRY, BUSINESS AND STRATEGY

COMPETING PRODUCTS

The diagnostic industry is focused on the testing of biological specimens in a laboratory or at the point-of-care and is highly competitive and rapidly changing. The Company's principal competitors have considerably greater financial, technical, and marketing resources. As new products enter the market, the Company's products may become obsolete or a competitor's products may be more effective or more effectively marketed than the Company's. We also face competition from products which may be sold at a lower price. If the Company fails to maintain and enhance its competitive position, its customers, partners, and/or distributors may decide to use products and technology developed by competitors, which could result in a loss of revenues.

Governments in developing nations are key potential customers for our HIV rapid tests. Access to, and success in penetrating these high volume markets can be difficult, expensive and politically volatile and, as such, we are dependent upon our distribution networks to accomplish this effort in a commercially acceptable manner. Our competition has greater resources, more experience and expertise in these markets.

In addition, the development and commercialization of products outside of the diagnostics industry could adversely affect sales of our product. For example, the development of a safe and effective vaccine to HIV or treatments for other diseases or conditions that our products are designed to detect, could reduce, or eventually eliminate the demand for our HIV or other diagnostic products and thereby result in a loss of revenues.

ABILITY TO DEVELOP NEW PRODUCTS

In order to remain competitive, we must regularly commit substantial resources to research and development and the commercialization of new products. At times, the ability to commercialize an important product will require a license and the cost of obtaining such a license can range from a few thousand dollars to millions of dollars. Even after obtaining a license there can be no assurance that the Company will be able to obtain the necessary regulatory approvals to commercialize the product which can result in the complete loss of any licensing payments made.

The research and development process generally takes a significant amount of time from inception to commercial product launch. This process is conducted in various stages. During each stage there is a substantial risk that we will not achieve our goals on a timely basis, or at all, and we may have to abandon a product or project in which we have invested substantial amounts of time and money.

During 2007 and 2006, we incurred $34,591 and $181,181, respectively, in research and development expenses.

Successful products require significant development and investment, including testing, to demonstrate their cost-effectiveness or other benefits prior to commercialization. In addition, regulatory approval must be obtained before most products may be sold. Additional development efforts on these products will be required before any regulatory authority will review them. Regulatory authorities may not approve these products for commercial sale. In addition, even if a product is developed and all applicable regulatory approvals are obtained, there may be little or no market for the product. Accordingly, if we fail to develop commercially successful products, or if competitors develop more effective products or a greater number of successful new products, customers may decide to use products developed by our competitors. This would result in a loss of revenues and adversely affect our results of operations, cash flows and business.

CHANGES IN FEDERAL OR STATE LAW OR REGULATIONS

As described more fully above under Government Regulation, many of the Company's proposed and existing products are subject to regulation by the FDA and other governmental agencies. The process of obtaining required approvals from these agencies varies according to the nature of and uses for the product and can involve lengthy and detailed laboratory and clinical testing, sampling activities, and other costly and time-consuming procedures. Changes in government regulations could require the Company to undergo additional trials or procedures, or could make it impractical or impossible for the Company to market its products for certain uses, in certain markets, or at all. Other changes in government regulations, such as the adoption of the FDA's Quality System Regulation, may not affect the Company's products directly but may nonetheless adversely affect the Company's financial condition and results of operations by requiring that the Company incur the expense of changing or implementing new manufacturing and control procedures.

THE LOSS OF EXECUTIVE OFFICER, KEY CONSULTANTS, OR THE TECHNICAL STAFF OF OUR CONTRACT MANUFACTURERS, OUR BUSINESS COULD BE HARMED

We rely extensively on consultants and the technical staff of our contract manufacturers for regulatory compliance, sales and marketing advice, and product manufacturing and performance. Our success will also depend to a large extent on the contributions of our executive officers. It is possible that we and our contract manufacturers will not be able to retain qualified employees or consultants in the future due to the intense competition for qualified personnel among medical products businesses. If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience constraints that will adversely affect our ability to effectively manufacture, sell and market our products, to meet the demands of our strategic partners in a timely fashion, or to support internal research and development programs.

PRODUCT LIABILITY EXPOSURE

The Company may be held liable if any of its products, or any product which is made with the use or incorporation of any of the technologies belonging to the Company, causes injury of any type or is found otherwise unsuitable during product testing, manufacturing, marketing or sale. Although the Company has limited product liability insurance the Company's contract manufacturer has product liability insurance and we are named as a loss beneficiary. This insurance may not fully cover potential liabilities. If the Company is sued for any injury caused by its products, its liability could exceed its total assets. The bulk of the revenues from our saliva collection products is from sales to manufacturers who use our product as a component of their test; furthermore, they alter the product by opening it up and adding their own buffer to it before sealing, repackaging, re-labeling and incorporating into their product kit.

FUTURE ACQUISITIONS OR INVESTMENTS COULD DISRUPT OUR ONGOING BUSINESS, DISTRACT OUR MANAGEMENT, INCREASE OUR EXPENSES AND ADVERSELY AFFECT OUR BUSINESS

We may consider strategic acquisitions or investments as a way to expand our business in the future. These activities, and their impact on our business, are subject to the following risk factors:

Suitable acquisitions or investments may not be found or consummated on terms that are satisfactory to us;

o We may be unable to successfully integrate an acquired company's personnel, assets, management systems and technology into our business;

o Acquisitions may require substantial expense and management time and could disrupt our business;

o An acquisition and subsequent integration activities may require greater capital resources than originally anticipated at the time of acquisition;

An acquisition may result in the incurrence of unexpected expenses, the dilution of our earnings or our existing stockholders' percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from the seller(s) of the acquired business;

An acquisition may result in the loss of existing key personnel or customers or the loss of the acquired company's key personnel or customers;

The benefits to be derived from an acquisition could be affected by other factors, such as regulatory developments, general economic conditions and increased competition; and

An acquisition of a foreign business may involve additional risks, including not being able to successfully assimilate differences in foreign business practices or overcome language barriers.

The occurrence of one or more of the above or other factors may prevent us from achieving all or a significant part of the benefits expected from an acquisition or investment. This may adversely affect our financial condition, results of operations and ability to grow our business.

RISKS RELATING TO COLLABORATORS

Although we will try to maintain and expand our business with our distributors and require that they fulfill their contractual obligations, there can be no assurance that such companies will continue to purchase or distribute our products, maintain historic order volumes or otherwise meet their purchase or other obligations, or that new distribution channels will be available on satisfactory terms. In addition, the Company has elected to appoint long-term, exclusive distributors for certain products. The degree to which those products penetrate the market and establish market-share is very much in the control of the distributor.

ABILITY OF THE COMPANY TO DEVELOP PRODUCT DISTRIBUTION CHANNELS

The Company's sales depend to a substantial degree on its ability to develop product distribution channels and on the marketing abilities of these distribution companies. The Company will seek new marketing partners for distribution of recently developed testing platforms.

There can be no assurance that the Company's present distributors will continue to be able to distribute the Company's products or that new distribution channels will be available on satisfactory terms.

WE ARE DEPENDENT UPON STRATEGIC PARTNERS TO ASSIST IN DEVELOPING AND COMMERCIALIZING SOME OF OUR DIAGNOSTIC PRODUCTS

The Company has entered into a distribution arrangement with Immunalysis, Inc. whereby they have been granted exclusive rights to the Saliva Sampler(TM) for sale in the U.S. and Canada solely for the substance abuse market. They have applied for FDA marketing approval of their assay kit for oral fluids, which incorporates our Saliva Sampler(TM). The submission of an application to the FDA or other regulatory authority for these or other claims does not guarantee that an approval or clearance to market the product will be received. See the section entitled, "Government Regulations," for a further discussion of applicable regulatory requirements.

While we expect that our current and future partners, licensees and others have and will have an economic motivation to succeed in performing their contractual responsibilities, there is no assurance that they will do so and the amount and timing of resources to be devoted to these activities will be controlled by others. Consequently, there can be no assurance that any revenues or profits will be derived from such arrangements.

RISKS RELATING TO INTELLECTUAL PROPERTY

RELIANCE ON PATENTS AND OTHER PROPRIETARY RIGHTS

The diagnostics industry places considerable importance on obtaining patent, trademark, and trade secret protection, as well as other intellectual property rights, for new technologies, products and processes. The Company's success depends, in part, on its ability to develop and maintain a strong intellectual property portfolio for products and technologies both in the United States and in other countries. Litigation or other legal proceedings may be necessary to defend against claims of infringement or to enforce intellectual property rights, and could result in substantial costs and diversion of resources.

As appropriate, the Company intends to file patent applications and obtain patent protection for its proprietary technology. These patent applications and patents will cover, as appropriate, compositions of matter for the Company's products, methods of making those products, methods of using those products, and apparatus relating to the use or manufacture of those products. The Company will also rely on trade secrets, know-how and continuing technological advancements to protect its proprietary technology. The Company has entered, and will continue to enter, into confidentiality agreements with its employees, consultants, advisors and collaborators. However, these parties may not honor these agreements and the Company may not be able to successfully protect its rights to unpatented trade secrets and know-how. Others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to the Company's trade secrets and know-how.

To facilitate development and commercialization of a proprietary technology base, the Company may need to obtain licenses to patents or other proprietary rights from other parties. If the Company is unable to obtain these types of licenses, the Company's product development and commercialization efforts may be delayed.

The Company may collaborate with universities and governmental research organizations, which, as a result, may acquire part of the rights to any inventions or technical information derived from collaboration with them.

The Company may incur substantial costs in asserting or protecting its intellectual property rights, or in defending suits against it related to intellectual property rights. Disputes regarding intellectual property rights could substantially delay product development or commercialization activities. Disputes regarding intellectual property rights might include state or federal court litigation as well as patent interference, patent reexamination, patent reissue, or trademark opposition proceedings in the United States Patent and Trademark Office. Opposition or revocation proceedings could be instituted in a foreign patent office. An adverse decision in any proceeding regarding intellectual property rights could result in the loss of the Company's rights to a patent, an invention, or trademark.

R ISKS RELATING TO PRODUCT MARKETING AND SALES

ABILITY TO MARKET NEW PRODUCTS

The Company's future success will depend partly on the market acceptance, and the timing of such acceptance, of its product line, and other new products or technologies that may be developed or acquired and introduced in the future. To achieve market acceptance, the Company must make substantial marketing efforts and spend significant funds to inform potential customers and the public of the perceived benefits of these products. The Company currently has limited evidence on which to evaluate the market reaction to products that may be developed, and there can be no assurance that any products will meet with market acceptance and fill the market need that is perceived to exist.

IF ACCEPTANCE AND ADOPTION OF OUR RAPID TESTING IN THE MARKET DOES NOT CONTINUE, OUR FUTURE RESULTS MAY SUFFER

The primary method of testing in the United States and other countries is laboratory-based tests. The specimen sample is often collected at a clinical site and forwarded to a laboratory for analysis. The results are then forwarded to the clinician. Although we believe rapid testing is a preferable method, there can be no assurance that the market will migrate toward the acceptance and use of rapid tests and replace any laboratory-based tests.

OUR INCREASING INTERNATIONAL PRESENCE MAY BE AFFECTED BY REGULATORY, CULTURAL OR OTHER RESTRAINTS

A number of factors can slow or prevent international sales, or substantially increase the cost of international sales, including those set forth below:

Regulatory requirements (including compliance with applicable customs regulations) may slow, limit, or prevent the offering of products in foreign countries;

The unavailability of licenses to certain patents in force in a foreign country which cover our products may restrict our ability to sell into that country;

Our ability to obtain the CE mark on our products in a timely manner may preclude or delay our ability to sell products to the European Union;

Cultural and political differences may make it difficult to effectively market, sell and gain acceptance of products in foreign countries;

Inexperience in international markets may slow or limit our ability to sell products in foreign countries;

Exchange rates, currency fluctuations, tariffs and other barriers, extended payment terms and dependence on and o difficulties in managing international distributors or representatives may affect our revenues even when product sales occur;

The creditworthiness of foreign entities may be less certain and foreign accounts receivable collection may be more difficult;

Economic conditions, the absence of available funding sources, terrorism, civil unrest and war may slow or limit our ability to sell our products in foreign countries;

International markets often have long sales cycles, especially for sales to foreign governments, quasi-governmental agencies and international public health agencies, thereby delaying or limiting our ability to sell our products; and

We may be at a disadvantage if competitors in foreign countries sell competing products at prices at or below such competitors' or our cost.

The previous discussion of our business should be read in conjunction with the Financial Statements and accompanying notes included in Item 7 of this Annual Report on Form 10-KSB.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's executive offices are located at 1881 Worcester Rd. #200, Framingham, MA. 01701. In addition, the company maintains its accounting office at 1222 Avenue M, Brooklyn, New York. Rent expense for the years ended December 31, 2007 and 2006 aggregated $37,305 and $58,221, respectively. The Company rents on a month to month basis its premises in Framingham, MA, presently at $1,800 per month. The Company’s lease for its premises in Brooklyn, New York, has a three-year term ending August 30, 2008 and began with a base annual rental rate of $15,000 and increasing to $15,913 per year. Minimum future lease payments required under the operating lease for the Brooklyn office is $14,166 for the twelve month period ended December 31, 2008.

ITEM 3. LEGAL PROCEEDINGS

NONE

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

No matters were submitted to a vote of security holders during the years ended December 31, 2007 and 2006.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

From July 2004 through March 21, 2006, the Company's common stock traded on the OTC Bulletin Board market with the symbol SVAD. As of March 22, 2006, the shares of the Company have been trading with the new symbol SSUR.

The following table sets forth the high and low bid quotations as reported by the OTC Bulletin Board and "Pink Sheets" for the first quarter of 2008 and each quarter in 2007 and 2006. The OTC Bulletin Board and "Pink Sheets" quotations represent prices between dealers, and do not include retail markup, markdown or commissions, and may not represent actual transactions.

	HIGH		LOW
2008
First Quarter	$	0.35	$	0.15

2007
First Quarter	$	0.70	$	0.35
Second Quarter		0.45		0.15
Third Quarter		0.30		0.12
Fourth Quarter		0.40		0.15

	HIGH		LOW
2006
First Quarter	$	1.90	$	0.75
Second Quarter		1.50		0.80
Third Quarter		1.70		0.61
Fourth Quarter		1.02		0.51

Trades of our common stock are subject to Rule 15g-9 of the Securities and Exchange Commission, known as the Penny Stock Rule. This rule imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, brokers/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction prior to sale. The Securities and Exchange Commission also has rules that regulate broker/dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system), except for securities of companies that have tangible net assets in excess of $2,000,000 or average revenue of at least $6,000,000 for the previous three years. The Penny Stock Rule requires a broker/ dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of these rules, investors may find it difficult to sell their shares.

HOLDERS

There were approximately 300 shareholders of record and approximately 3,000 beneficial owners of the Company's common stock at March 31, 2008.

DIVIDENDS

Historically, we have never paid cash dividends on our common stock. Our future dividend policy will be determined by our board of directors and will depend upon a number of factors, including our financial condition and performance, our cash needs and expansion plans, income tax consequences, and the restrictions that applicable laws, our current preferred stock instruments, and our future credit arrangements may then impose.

During the year ended December 31, 2007, we declared cash dividends of $0.02 per share on our outstanding preferred stock for the quarters ended June 30, 2007, September 30, 2007 and December 31, 2007, for a total of $118,800 of accrued dividends.

RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIES

In January 2007, a dividend was paid on the Company’s 2006 Series A Convertible Preferred Stock with 81,068 shares of the Company’s common stock.

In March 2007, a dividend was paid on the Company’s 2006 Series A Convertible Preferred Stock with 138,306 shares of the Company’s common stock.

On September 18, 2007, the Company awarded 40,000 shares of common stock for financing and other services.

On October 17, 2007 the Company received $500,000 in financing from Inverness Medical Innovations, Inc. The financing consisted of a sale of 1,428,571 common shares at a price of $0.35 per share. Additionally, Inverness received five year warrants to purchase up to an additional 1,071,428 shares of the Company's stock at a price of $0.75 per share.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following information should be read in conjunction with the consolidated financial statements and related notes that are provided under Part II, Item 7 of this Annual Report on Form 10-KSB.

Information we provide in this Form 10-KSB or statements made by our directors, officers or employees may constitute "forward-looking" statements and may be subject to numerous risks and uncertainties. Any statements made in this Form 10-KSB, including any statements incorporated herein by reference, that are not statements of historical fact are forward-looking statements (including, but not limited to, statements concerning the characteristics and growth of our market and customers, our objectives and plans for future operations and products and our liquidity and capital resources). Such forward-looking statements are based on current expectations and are subject to uncertainties and other factors which may involve known and unknown risks that could cause actual results of operations to differ materially from those projected or implied. Further, certain forward-looking statements are based upon assumptions about future events which may not prove to be accurate. Risks and uncertainties inherent in forward looking statements include, but are not limited to:

fluctuations in our operating results;

announcements of technological innovations or new products which we or our competitors make;

FDA and international regulatory actions;

developments with respect to patents or proprietary rights;

changes in stock market analysts' recommendations regarding Statsure Diagnostic Systems,

other medical products companies or the medical product industry generally;

changes in domestic or international conditions beyond our control that may disrupt our or our customers' or distributors' ability to meet contractual obligations;

changes in health care policy in the United States or abroad;

our ability to obtain additional financing as necessary to fund both our long- and short-term business plans;

fluctuations in market demand for and supply of our products;

public concern as to the safety of products that we or others develop and public concern regarding HIV and AIDS;

availability of reimbursement for use of our products from private health insurers, governmental health administration authorities and other third-party payers; and

price and volume fluctuations in the stock market at large which do not relate to our operating performance.

The forward-looking information set forth in this Annual Report on Form 10-KSB is as of March 31, 2008, and StatSure Diagnostic Systems (SDS) undertakes no duty to update this information. Should events occur subsequent to March 31, 2008 that make it necessary to update the forward-looking information contained in this Form 10-KSB, the updated forward-looking information will be filed with the SEC in a Quarterly Report on Form 10-QSB, or as an earnings release included as an exhibit to a Form 8-K, each of which will be available at the SEC's website at www.sec.gov. More information about potential factors that could affect SDS's business and financial results is included in the section entitled "Risk Factors" beginning on page 12 of this Form 10-KSB.

OVERVIEW AND OUTLOOK

StatSure Diagnostic Systems, Inc ., (SDS), a Delaware corporation (the “Company” or “StatSure”), is primarily engaged in commercializing two product platforms: first, the development, manufacturing and marketing of oral-fluid collection devices to provide physiologic samples to use to screen for the presence of drugs-of-abuse or infectious diseases; and second, the development of point-of-care (POC), rapid, immunoassays for use in the detection of infectious diseases. These immunoassays incorporate SDS’ patented “barrel” technology, designed to provide speed, safety and convenience which are considered critical factors in point-of-care markets. In the oral fluid collection market, the Company’s platform has a patented internal quality control that indicates sufficient volume of the oral fluid sample (“volume adequacy indicator”) .

The Company's new principal executive offices are located at 1881 Worcester Rd. #200, Framingham, MA. 01701.

The Company and Chembio also entered into a Settlement Agreement pursuant to which all matters in their litigation regarding StatSure’s barrel patent and other matters were settled. As previously stated, under the terms of this agreement, the parties will equally share in the profits relating to CLEARVIEW COMPLETE HIV1/2 (the IMA brand-name for the HIV barrel-based) product after reimbursement of the manufacturing and related costs, as defined, and the parties will act jointly in the HIV barrel field. The Settlement combines each company’s HIV barrel intellectual property, including an exclusive manufacturing license from StatSure to Chembio of its barrel patent for all HIV applications, thereby ensuring their exclusive right to manufacture, as well as Inverness’ right to market and distribute though the marketing license that StatSure granted Inverness under the three way agreement.

On February 14, 2007, Inverness introduced the licensed HIV barrel-based product (CLEARVIEW® Complete HIV 1/2) to its U.S. Sales force. Management believes its royalty revenues could increase significantly in the next fiscal year as the Company announced on November 5, 2007, that the filing in August 2007 for waiver of the Clinical Laboratory Improvement Amendments of 1988(CLIA) for this product, was granted by the FDA. The CLIA waiver will allow sales of this product to a large number of markets that do not operate under the standards of the CLIA (e.g. doctors' offices, public health clinics). Until this waiver was obtained, marketing and sales of the product was restricted to those laboratory settings with CLIA certification, which seriously restricted the revenues derived from the product.

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. 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 CDC (national Center for Disease Control) and the New England Journal of Medicine's Editorial pages. In 2006, the CDC recommended that persons between the ages of 13 and 64 be screened for HIV annually. The FDA has conducted hearings to discuss the potential need, requirements, and issues of over- the-counter (OTC) marketing of HIV tests. Although at this time there is no HIV rapid test approved for over-the-counter use in the U.S., we expect that eventually this will be permitted. Further, we are aware of certain clinical trials that have been initiated in the U.S. to gain approval to market a rapid HIV POC product through OTC channels. There can be no assurance that we will achieve or sustain significant revenues from our alliance with Inverness, or from other new products we may develop or introduce.

The Company has limited marketing, sales and distribution resources. Achieving market acceptance will require substantial efforts and capabilities in these areas. The Company relies in large part on forming partnerships for marketing, sales and distribution of its products. The Company’s revenues are mostly generated from the sales of two distributors of our saliva sampling devices. Although we are hopeful that our alliance with Inverness will result in revenues to the Company, there can be no such assurance, as the agreement does not provide for minimum guaranteed revenues.

Concerning long term growth, industry observers believe that sales of HIV rapid tests will eventually be approved in certain markets for OTC sales, and that self-testing will become as easy to purchase as home pregnancy tests. If this were to occur, we believe that our platform used in the Inverness branded product, results in performance, design, and ease of use that could have a competitive advantage over many of the existing technologies and platforms. However, there can be no assurance that any HIV test will be allowed for sale as an OTC product. We also feel that we may increase revenues of our POC HIV test as regulatory approvals for certain other international markets are attained. We believe growth of revenues from our Saliva Sampler(R) oral fluid collectors could result from increased demand by our two major customers who have both indicated a positive outlook for 2008 and beyond. We have also initiated several collaborative, application-development programs with our oral collection device. The intent of these is to ultimately define new niche markets for this product. There is no assurance that any of these will result in meaning revenues for the Company in the future. In addition, the company has recently applied for a patent on a new rapid POC testing format which we anticipate further developing , as funds become available, with the hope of generating revenues in the future.

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

The Company believes that its current cash position may not be sufficient to maintain the Company's operations through 2008. The Company will need to raise additional capital to fund its growth and marketing efforts and to capitalize on its IP portfolio to design, develop, test, gain regulatory approval and launch new products as well as to meet its debt obligations. Development, marketing, manufacturing and clinical testing may require capital resources substantially greater than the resources, which may be available to the Company. The Company is reviewing its options, including the selling of common stock, 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.

The Company has incurred significant operating losses since its inception, resulting in an accumulated deficit of $ 51,047,484 at December 31, 2007. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain revenues sufficient to support its operations. The Company's independent certified public accountants have included an explanatory paragraph in their report on our December 31, 2007 financial statements stating that 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.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2007 AND 2006

REVENUES: The Company's revenues consist of royalties, product sales of its patented saliva collection devices, and other income. Revenues increased to $974,321 in 2007 from $899,594 in 2006. The 2007 increase in revenues was due to greater royalties and equipment rental income earned from Inverness Medical and Chembio Diagnostic Systems offsetting reduced sales of our saliva collector and international sales of our “barrel” HIV product from 2006. . Specimens collected with the device are sent to and processed at laboratories. For the year ended December 31, 2007, sales to two customers were in excess of 10% of the Company's total sales. Sales to these customers were approximately $505,000, and $141,000.

COST OF PRODUCTS SOLD: Costs of products sold decreased to $209,354 in 2007 from $346,426 in 2006. The decrease was primarily attributable to the decrease in sales of our saliva collector and the discontinuance of manufacturing our “barrel” HIV product.

RESEARCH AND DEVELOPMENT EXPENSES: Direct research and development expenses decreased to $34,591 in 2007 from $181,181 in 2006. The decrease is due to fewer expenses incurred in 2007 due to the abandonment of the StatSure(TM) HIV test clinical trials during 2006. The expenses for research and development are expected to approximate 2007 spending until such time as the Company has sufficient funds to implement a new R&D program.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and administrative expenses decreased to $1,706,180 in 2007 from $2,423,160 in 2006. The expenses which decreased substantially during 2007 were:

Professional expenses of auditing and accounting, and legal amounted to approximately $283,000 in 2007 from approximately $405,000 in 2006. In 2006 we incurred greater costs associated with patent reviews, patent litigation , filing of a registration statement and negotiation of an agreement with Inverness and Chembio.

Issuances of common stock to Chardan Group for advisory banking services in 2006 for which the Company recorded an expense for $383,000. No similar costs were incurred in 2007.

Fees incurred to the Chardan Group with the Convertible Preferred Stock for which the Company recorded an expense in 2006 for $826,881. No similar costs were incurred in 2007.

Amortization expenses- These expenses in 2007 amounted to approximately $29,000 from $217,000 in 2006. The decrease was due to greater deferred financing costs charged in 2006.

Consultants, public relations and rent expenses also decreased in 2007 from 2006. The Company was able to reduce consulting expenses when it abandoned the StatSure(TM) HIV test clinical trials during 2006 and no longer needed the services of the consultants for this project. Consultant expenses were approximately $7,000 and $267,000 in 2007 and 2006, respectively. The Company also reduced expenses relating to public relations. Public relation expenses were approximately $22,000 and $56,000 in 2007 and 2006, respectively. The Company benefited from lower rents at its present location in Massachusetts. Rent expenses were approximately $37,000 and $58,000 in 2007 and 2006, respectively.

Penalties increased from $35,700 in 2006 to $93,629 in 2007. The penalties are a result of the Company’s withdrawal of the registration statement filed in 2006, and which became effective during 2007, the Company accrued penalties to the holders of the 2006 Series A Convertible Preferred Stock.

IMPAIRMENT OF FIXED ASSETS: During the fourth quarter of 2006, we placed in service equipment that had been accounted for in Equipment Under Construction (and not in service). We had received orders from overseas clients for shipment during the fourth quarter 2006. We submitted these orders to our contract manufacturer for production using this equipment. As we had just signed the agreements with Inverness and Chembio (See Item 1. Description of Business), these orders were to be the last orders we would be placing with the contract manufacturer for our HIV product. We were planning on using this equipment at this contract manufacturer for development and production of other tests for infectious diseases. We were not able to schedule timely production of the HIV product and were forced to cancel the orders. Management decided that based upon this experience we would at this time not be able to plan future production using this equipment. Additionally, upon signing of the agreements, our business model changed. Management is evaluating future opportunities for the Company and is uncertain at this time whether any cash flow is to be generated by this equipment. Therefore now management has determined that these long-lived assets are impaired. As a result, we recorded a $661,181 non-cash charge to operating expense relating to the impairment of long-lived assets during the year ended December 31, 2006. The $661,181 impairment charge included (1) a $30,000 charge relating to the impairment of facility improvements made at our contract manufacturer and (2) a $631,181 impairment charge relating to manufacturing equipment that was considered impaired. The $661,181 impairment charge was determined based upon a valuation received from our machinery manufacturer as to the equipment’s scrap value. There were no impairment charges recorded during the fiscal year 2007 .

INTEREST INCOME: In 2006, the Company earned interest on cash deposits at its financial institution of $8,041. The Company did not have similar interest income in 2007.

INTEREST EXPENSE: Interest expense decreased to $222,116 in 2007 from $320,363 in 2006. The decrease in 2007 was due to lower principal balances on debentures and notes payables to shareholders which resulted in lower interest expense.

INTEREST EXPENSE ON BENEFICIAL CONVERSION FEATURE: Interest expense on beneficial conversion feature decreased to $143,626 in 2007 from $1,056,470 in 2006. The decrease of non-cash expense was due to the greater amounts of amortization of beneficial conversion feature of debentures during the year ended December 31, 2006.

FINANCING COSTS: Financing costs decreased to $0 in 2007 from $3,708,145 in 2006. All of the decrease was due to the Series 2006-A convertible preferred stock financing and the application of derivative accounting.

DERIVATIVE INCOME: Non-cash derivative income of $2,228,388 for the year ended December 31, 2007 was due to the mark-to market adjustment on embedded derivatives principally driven by the decrease in our common stock price from $0.55 to $0.35.

DEBT CONVERSION EXPENSE: Other expense consists of an induced conversion expense of $403,872 incurred to convert the 9% convertible debentures as required under SFAS 84 during 2006. The Company did not incur a similar expense in 2007.

LIQUIDITY AND CAPITAL RESOURCES

	December 31,
	2007			2006
Cash and cash equivalents	$	43,516		$	109,332
Working capital deficit		(2,382,831	)		(659,517	)

Net cash used in operating activities in 2007 was $332,339 as compared to $1,043,301 in 2006. In 2007, the decrease in cash used as compared to 2006, was primarily due to the net income in 2007 of $886,842. The Company had a loss of $5,331,814 in 2006.

Cash used in investing activities in 2007 was $33,290 as compared to $58,756 in 2006. The decrease represents reduced costs incurred related to patents and trademarks.

Cash provided by financing activities in 2007 was $299,813 and in 2006 was $1,135,068. The decrease in cash provided by financing activities is primarily due to the 2006 proceeds from issuance of Series 2006-A preferred shares in the gross amount of $2,150,000, which did not recur in 2007 and the decrease in shareholder loans during 2007.

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.

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. 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.

The accompanying financial statements on pages of this Form 10-KSB have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, they do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the company be unable to 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 Company’s auditors have issued a going concern qualification as part of their opinion.

EFFORTS TO IMPROVE THE COMPANY’S FINANCIAL RESULTS

The Company has incurred losses over the past years. Management has taken great efforts and continues to implement changes designed to significantly improve the Company’s financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies, most notably on September 29, 2006, we executed several agreements by and among the Company, Inverness Medical Innovations, Inc. and Chembio Diagnostic Systems, Inc. Pursuant to these agreements, Inverness is marketing our barrel format in a FDA approved rapid HIV test. The distribution agreements contain gross margin sharing formulae among Inverness, the Company and Chembio. The Company expects this agreement to result in an increasing source of revenues to the Company starting in 2007.

The Company has and may continue to supplement cash flows from sales with additional equity and debt financing. Operations are expected to require additional capital, either from a future offering of equity or the company pursuing other methods of financing, as appropriate.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

We believe that there are several accounting policies that are critical to understanding our historical and future performance, as these policies affect the reported amounts of revenue and the more significant areas involving management’s judgments and estimates. These significant accounting policies relate to revenue recognition, allowance for uncollectible accounts receivable, research and development costs, valuation of inventory, valuation of long-lived assets and income taxes. These policies, and the related procedures, are described in detail below.

REVENUE RECOGNITION. The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104"). Under SAB 104, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the sales price is determinable, and collectibility is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns. Revenue derived from royalty income is recognized as revenue in the period in which it is earned.

RESEARCH & DEVELOPMENT COSTS. Direct research and development activities consist primarily of new product development, continuing engineering for existing products, regulatory and clinical trial costs. Costs related to research and development efforts on existing or potential products are expensed as incurred. Allocated SG&A costs associated with R&D activities have not been included in the R&D expenses; in addition, the costs associated with building and protecting our Intellectual Property are currently included in our SG&A and not counted as direct research and development costs.

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE. Accounts receivable are reduced by an estimated allowance for amounts that may become uncollectible in the future. On an ongoing basis, we perform credit evaluations of our customers and adjust credit limits based upon the customer's payment history and creditworthiness, as determined by a review of their current credit information. We also continuously monitor collections and payments from our customers.

INVENTORIES. Our inventories are valued at the lower of cost or market, determined on a first-in, first-out basis, and include the cost of raw materials. The majority of our inventories are subject to expiration dating. We continually evaluate the carrying value of our inventories and when, in the opinion of management, factors indicate that impairment has occurred, either a reserve is established against the inventories' carrying value or the inventories are completely written off. We base these decisions on the level of inventories on hand in relation to our estimated forecast of product demand, production requirements over the next twelve months and the expiration dates of raw materials and finished goods. Presently we order raw materials and produce finished goods to confirmed orders, thereby reducing the risk of losses due to product expiration.

LONG-LIVED AND INTANGIBLE ASSETS. Our long-lived assets are comprised of property and equipment and our intangible assets primarily consist of patents and product rights. Together, these assets have a net book value of approximately $153,000 or 37% of our total assets at December 31, 2007. Property and equipment, patents and product rights are amortized on a straight-line basis over their useful lives, which we determine based upon our estimate of the period of time over which each asset will generate revenues. An impairment of long-lived or intangible assets could occur whenever events or changes in circumstances indicate that the net book value of these assets may not be recoverable. Events which could trigger asset impairment include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of our use of an asset or in our strategy for our overall business, significant negative industry or economic trends, shortening of product life-cycles or changes in technology. If we believe impairment of an asset has occurred, we measure the amount of such impairment by comparing the net book value of the affected assets to the fair value of these assets, which is generally determined based upon the present value of the expected cash flows associated with the use of these assets. If the net book value exceeds the fair value of the impaired assets, we would incur an impairment expense equal to this difference. We currently believe the future cash flows to be received from our long-lived and intangible assets will exceed their book value and, as such, we have not recognized any impairment losses through December 31, 2007. Any unanticipated significant impairment in the future, however, could have a material adverse impact to our financial position and future operating results.

IMPAIRMENT OF LONG-LIVED ASSETS, In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), our long-lived assets to be held and used in the business are reviewed for impairment. When impairment is noted, assets are evaluated for impairment at the lowest level for which there is identifiable cash flows. If the sum of expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on assets to be disposed of are determined in a similar manner, except that the fair values are reduced for disposal costs. Considerable management judgment and assumptions are necessary to identify indicators of impairment and to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

INCOME TAXES, The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). Under SFAS 109, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48) on January 1, 2007. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. The adoption of FIN 48 did not have a material impact to the Company’s financial statements.

CONTINGENCIES. In the ordinary course of business, we have entered into various contractual relationships with strategic corporate partners, customers, distributors, research laboratories and universities, licensors, licensees, suppliers, vendors and other parties. As such, we could be subject to litigation, claims or assessments arising from any or all of these relationships. We account for contingencies such as these in accordance with Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies" ("SFAS 5"). SFAS 5 requires us to record an estimated loss contingency when information available prior to issuance of our financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies arising from contractual or legal proceedings requires that we use our best judgment when estimating an accrual related to such contingencies. As additional information becomes known, our accrual for a loss contingency could fluctuate, thereby creating variability in our results of operations from period to period. Likewise, an actual loss arising from a loss contingency which significantly exceeds the amount accrued for in our financial statements could have a material adverse impact on our operating results for the period in which such actual loss becomes known.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements, together with the report thereon of Lazar Levine & Felix, LLP are included in this report as follows:

Report of Independent Registered Public Accounting Firm- December 31, 2007 and 2006			F-1
Balance Sheets as of December 31, 2007 and 2006			F-2
Statements of Operations - For the Years Ended December 31, 2007 and 2006			F-3
Statements of Shareholders' Deficit - For the Years Ended December 31, 2007 and 2006			F-4
Statements of Cash Flows - For the Years Ended December 31, 2007 and 2006			F-5
Notes to Financial Statements			F-6

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders of

StatSure Diagnostic Systems, Inc.

(formerly known as Saliva Diagnostic Systems, Inc.)

Brooklyn, New York

We have audited the accompanying balance sheets of StatSure Diagnostic Systems, Inc. (a Delaware Corporation, formerly known as Saliva Diagnostic Systems, Inc.), as of December 31, 2007 and 2006, and the related statements of operations, shareholders' deficit and cash flows for the years ended December 31, 2007 and 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of StatSure Diagnostic Systems, Inc. and the results of its operations and its cash flows in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has negative working capital and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

LAZAR LEVINE & FELIX LLP

New York, NY

March 28, 2008

F-1

STATSURE DIAGNOSTIC SYSTEMS, INC.

BALANCE SHEETS

	December 31,
	2007			2006
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	43,516		$	109,332
Accounts receivable, net of allowance for doubtful accounts of $2,015 (2007) and $3,585 (2006)		152,049			176,135
Inventories		48,256			40,241
Prepaid expenses		9,795			6,857
Total current assets		253,616			332,565

Property and equipment, net of accumulated depreciation of $573,765 (2007) and $557,613 (2006)		47,158			42,149

OTHER ASSETS
Patents and trademarks, net of accumulated depreciation of $163,138 (2007) and $148,428 (2006)		105,527			108,108
Deferred loan costs		2,006			16,497
Deposits		2,500			14,350
Total other assets		110,033			138,955

TOTAL ASSETS	$	410,807		$	513,669

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
Notes payable-shareholders, current portion	$	1,476,317		$	240,000
Debentures payable, net of discount		139,194			70,568
Accounts payable		123,516			100,758
Customer advances		—			31,792
Accrued expenses		187,309			108,022
Accrued interest		17,451			18,330
Accrued interest-due to shareholder		428,775			234,313
Accrued payroll expense to officers		124,999			127,499
Payroll and payroll taxes payable		20,086			11,300
Cash dividends payable to preferred shareholders		118,800			49,500
Total current liabilities		2,636,447			992,082

LONG-TERM LIABILITIES
Notes payable - shareholder, net of current portion		—			1,361,504
Deferred rent payable		—			6,745
Derivative instrument		1,010,390			3,238,778
TOTAL LIABILITIES		3,646,837			5,599,109

COMMITMENTS AND CONTINGENCIES

Series 2006-A Convertible Preferred Stock: 2,500 shares authorized, $.001 par value, 1,980 issued and outstanding		2			2

SHAREHOLDERS' 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: 39,651,096 (2007) and 37,213,151 (2006)		39,651			37,213
Additional paid-in capital		47,771,801			46,643,371
Accumulated deficit		(51,047,484	)		(51,766,026	)
Total shareholders' deficit		(3,236,032	)		(5,085,442	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	410,807		$	513,669

The accompanying notes are an integral part of these statements.

F-2

STATSURE DIAGNOSTIC SYSTEMS, INC.

STATEMENTS OF OPERATIONS

	Years Ended December 31
	2007			2006
REVENUES:
Product Sales	$	725,768		$	820,969
Royalty and Other Income		248,553			78,625
		974,321			899,594

Cost of products sold		209,354			346,426

Gross profit		764,967			553,168

OPERATING EXPENSES:
Research and development		34,591			181,181
Selling, general and administrative		1,706,180			2,423,160
Impairment of fixed assets		—			661,181

		1,740,771			3,265,522

LOSS FROM OPERATIONS		(975,804	)		(2,712,354	)

OTHER INCOME (EXPENSES):
Interest income		—			8,041
Interest expense		(222,116	)		(320,363	)
Interest expense on beneficial conversion features		(143,626	)		(1,056,470	)
Financing costs		—			(3,708,145	)
Derivative income		2,228,388			2,861,349
Debt conversion expense		—			(403,872	)

Total other income (expenses)		1,862,646			(2,619,460	)



Income (loss) before provision for income taxes		886,842			(5,331,814	)
Provision for income taxes		—			—

NET INCOME (LOSS)		886,842			(5,331,814	)

Dividends - Preferred stock series 2006-A		168,300			103,250

NET INCOME (LOSS) TO COMMON SHAREHOLDERS	$	718,542		$	(5,435,064	)

BASIC EARNINGS (LOSS) PER SHARE	$	0.02		$	(0.15	)
DILUTED EARNINGS (LOSS) PER SHARE	$	(0.03	)	$	(0.15	)
WEIGHTED AVERAGE NUMBER OF SHARES:
BASIC EARNINGS (LOSS) PER SHARE		38,219,775			35,407,035
DILUTED EARNINGS (LOSS) PER SHARE		42,622,632			35,407,035

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

F-3

STATSURE DIAGNOSTIC SYSTEMS, INC.

STATEMENTS OF SHAREHOLDERS' DEFICIT

	SERIES 1998-B
	PREFERRED STOCK				COMMON STOCK
	SHARES		AMOUNT		SHARES		AMOUNT

BALANCES, JANUARY 1, 2006		-	$	-		31,769,491	$	31,769
COMMON STOCK ISSUED FOR SERVICES RENDERED		-		-		300,000		300
EXERCISE OF WARRANTS		-		-		3,250,000		3,250
OPTIONS GRANTED TO NON-EMPLOYEES DIRECTORS		-		-		-		-
CONVERSION OF DEBENTURES AND INTEREST		-		-		1,497,810		1,498
INDUCED CONVERSION OF DEBENTURES		-		-		-		-
COST OF PREFERRED STOCK OFFERING		-		-		-		-
OPTIONS GRANTED TO EMPLOYEES		-		-		-		-
COMMON STOCK ISSUED IN LIEU OF CASH DIVIDEND PAYMENTS		-		-		55,850		56
CONVERSION OF SERIES 2006-A PREFERRED SHARES		-		-		340,000		340
DIVIDENDS ON PREFERRED STOCK SERIES 2006-A		-		-		-		-
NET LOSS		-		-		-		-
BALANCES, DECEMBER 31, 2006		-	$	-		37,213,151	$	37,213

OPTIONS GRANTED TO NON-EMPLOYEES DIRECTORS		-		-		-		-
COMMON STOCK ISSUED IN LIEU OF CASH DIVIDEND PAYMENTS		-		-		219,374		219
OPTIONS GRANTED TO EMPLOYEES		-		-		-		-
PREFERRED STOCK DIVIDEND		-		-		-		-
WARRANTS ISSUED FOR TERMINATION PENALTY		-		-		-		-
COMMON STOCK ISSUED FOR TERMINATION PENALTY		-		-		750,000		750
COMMON STOCK ISSUED FOR SERVICES		-		-		40,000		40
COMMON STOCK AND WARRANT ISSUED FOR CASH		-		-		1,428,571		1,429
NET INCOME		-		-		-		-
BALANCES, DECEMBER 31, 2007		-	$	-		39,651,096	$	39,651

	ADDITIONAL
	PAID-IN			DEFERRED			ACCUMULATED			TOTAL
	CAPITAL			COMPENSATION			DEFICIT			(DEFICIT)


BALANCES, JANUARY 1, 2006	$	44,545,318		$	(2,927	)	$	(46,330,962	)	$	(1,756,802	)
COMMON STOCK ISSUED FOR SERVICES RENDERED		383,500			-			-			383,800
EXERCISE OF WARRANTS		29,250			-			-			32,500
OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS		46,485			-			-			46,485
CONVERSION OF DEBENTURES AND INTEREST		1,108,109			-			-			1,109,607
INDUCED CONVERSION OF DEBENTURES		403,872			-			-			403,872
COST OF PREFERRED STOCK OFFERING		(826,881	)		-			-			(826,881	)
OPTIONS GRANTED TO EMPLOYEES		560,364			2,927			-			563,291
COMMON STOCK ISSUED IN LIEU OF CASH DIVIDEND PAYMENTS		53,694			-			-			53,750
CONVERSION OF SERIES 2006-A PREFERRED SHARES		339,660			-			-			340,000
DIVIDENDS ON PREFERRED STOCK SERIES 2006-A		-			-			(103,250	)		(103,250	)
NET LOSS		-			-			(5,331,814	)		(5,331,814	)
BALANCES, DECEMBER 31, 2006		46,643,371		$	-			(51,766,026	)		(5,085,442	)
OPTIONS GRANTED TO NON-EMPLOYEES DIRECTORS		46,488			-			-			46,488
COMMON STOCK ISSUED IN LIEU OF CASH DIVIDEND PAYMENTS		98,781			-			-			99,000
OPTIONS GRANTED TO EMPLOYEES		187,081			-			-			187,081
PREFERRED STOCK DIVIDEND		-			-			(168,300	)		(168,300	)
WARRANTS ISSUED FOR TERMINATION PENALTY		66,499			-			-			66,499
COMMON STOCK ISSUED FOR TERMINATION PENALTY		224,250			-			-			225,000
COMMON STOCK ISSUED FOR SERVICES		6,760			-			-			6,800
COMMON STOCK AND WARRANT ISSUED FOR CASH		498,571			-			-			500,000
NET INCOME		-			-			886,842			886,842
BALANCES, DECEMBER 31, 2007	$	47,771,801		$	-		$	(51,047,484	)	$	(3,236,032	)

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

F-4

STATSURE DIAGNOSTIC SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

	2007			2006

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	886,842		$	(5,331,814	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		30,862			80,250
Amortization of deferred costs		14,491			194,764
Stock issuance for services rendered		6,800			383,800
Stock and warrants issued for termination penalty		291,499			—
Options granted to employees as compensation		187,081			563,291
Options granted to non-employee		46,488			46,485
Beneficial conversion features of convertible debts		143,626			1,056,470
Financing costs on derivative instruments		—			3,644,248
Mark-to-market gain on derivative instruments		(2,228,388	)		(2,861,349	)
Induced conversion expense on debentures		—			403,872
Impairment of assets		—			661,181
Changes in current assets and liabilities:
Accounts receivable		24,086			(106,394	)
Inventories		(8,015	)		15,909
Prepaid expenses		(2,938	)		3,962
Deposits		11,850			—
Accounts payable, accrued payroll expense to officers and accrued expenses		270,122			201,469
Deferred rent		(6,745	)		555
Net cash used in operating activities		(332,339	)		(1,043,301	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		(21,161	)		(1,319	)
Acquisitions of patents and trademarks		(12,129	)		(57,437	)
Net cash used in investing activities		(33,290	)		(58,756	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholder loans		185,000			649,894
Repayments of shareholder loans		(310,187	)		(1,403,826	)
Repayments of debentures		(75,000	)		(112,500	)
Proceeds from issuance of common stock		500,000			32,500
Gross proceeds from issuance of Series 2006-A preferred shares and derivative instruments		—			2,150,000
Payment of financing costs		—			(181,000	)
Net cash provided by financing activities		299,813			1,135,068

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(65,816	)		33,011

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		109,332			76,321

CASH AND CASH EQUIVALENTS, END OF YEAR	$	43,516		$	109,332

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	28,500		$	58,800
Cash paid for taxes		—			1,788

SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:
Reclassification of accrued interest to loan principal		—			251,282

Conversion of debenture and interest payable into common stock		—			1,109,607

Warrants issued to a placement agent related to Series 2006-A convertible preferred stock issuance and were recorded as additional paid in capital and warranty liability		—			645,881

Common stock issued in lieu of cash dividend payments		99,000			53,750
Preferred stock dividends accrued and not paid		118,800			49,500
Common stock shares issued for conversion of Series 2006-A preferred shares		—			340,000

The accompanying notes are an integral part of these financial statements

F-5

STATSURE DIAGNOSTIC SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1 . DESCRIPTION OF BUSINESS:

StatSure Diagnostic Systems, Inc., a Delaware corporation ("the Company"), is primarily engaged in the development, manufacture and marketing of rapid in-vitro assays for use in the detection of infectious diseases and other conditions, and medical specimen collection devices. The Company is currently marketing its medical specimen collection devices both in the U.S. and overseas.

On September 29, 2006, the Company announced it had signed several agreements relating to its patented barrel technology for use in screening antibodies to HIV (Human Immunodeficiency Virus, the virus that causes AIDS). As part of a three-way alliance with Inverness Medical Innovations (AMEX:IMA) Chembio Diagnostics (CEMI.OB) (“Chembio”), and the Company signed a worldwide, exclusive distribution deal for a rapid, point-of-care HIV test with Inverness. In a two-way deal with Chembio, the Company granted an exclusive license to Chembio solely to manufacture the recently FDA approved HIV barrel product for Inverness. This product is being marketed under the IMA brand. In this two-way agreement (“Joint HIV Barrel Commercialization Agreement”), a long- term strategic “partnership” was established, wherein both companies equally split the margin dollars of the HIV barrel product once the actual cost of manufacturing is reimbursed. The Company announced on November 5, 2007, that the HIV 1/2 Rapid Test employing the Company's patented "barrel" technology marketed and distributed worldwide by Inverness Medical Innovations under its Clearview® brand as "Clearview COMPLETE HIV 1 /2, received an FDA waiver of the Clinical Laboratory Improvement Amendments of 1988(CLIA). This CLIA waiver will allow sales of this product to a large number of markets that do not operate under the standards of the CLIA (e.g. doctors' offices, public health clinics). Until this waiver was obtained, marketing and sales of the product was restricted to those laboratory settings with CLIA certification, which seriously restricted the revenues derived from the product in 2007.

At the beginning of business on January 24, 2006, the Company effected a name change from Saliva Diagnostic Systems, Inc. to StatSure Diagnostic Systems, Inc.

NOTE 2. SUBSTANTIAL DOUBT REGARDING ABILITY TO CONTINUE AS A GOING CONCERN

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 incurred significant operating losses since its inception, resulting in an accumulated deficit of $ 51,047,484 at December 31, 2007. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain revenues levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. In addition, the Company is in default on certain debt obligations. Despite the Company's financings in 2006 and October 2007, substantial additional financing will be required in future periods.

F-6

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 intends to continue to seek public or private placement of its equity securities in order to provide the funds necessary to meet its obligations. In addition, Management believes that the agreements it entered into with Inverness Medical Innovations in September 2006 (See Note 1), could enable the Company to increase its revenues significantly during the next few years.

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 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.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash and short-term highly liquid investments purchased with original or remaining maturities of three months or less. There were no cash equivalents at December 31, 2007.

ACCOUNTS RECEIVABLE

Accounts receivable have been reduced by an allowance for amounts that may become uncollectible in the future. This estimated allowance is based primarily on management’s evaluation of specific balances as the balances become past due, the financial condition of our customers and our historical experience of write-offs.

INVENTORIES

Our inventories are valued at the lower of cost or market, determined on a first-in, first-out basis, and includes the cost of raw materials. The majority of our inventories are subject to expiration dating. We continually evaluate the carrying value of our inventories and when, in the opinion of management, factors indicate that impairment has occurred, either a reserve is established against the inventories’ carrying value or the inventories are completely written off. We base these decisions on the level of inventories on hand in relation to our estimated forecast of product demand, production requirements over the next twelve months and the expiration dates of raw materials and finished goods. Presently we order raw materials and produce finished goods for confirmed orders only, thereby reducing the risk of losses due to product expiration.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation on machinery and equipment is computed using the straight-line method over an estimated useful life of five years; depreciation commences when the assets are placed in service.

F-7

Depreciation expense charged to operations for the years ended December 31, 2007 and 2006 amounted to $16,152 and $57,698, respectively.

PATENTS AND TRADEMARKS

Patents and trademarks consist of costs associated with the acquisition of patents and trademarks. Patents and trademarks are amortized using the straight-line method over 17 years. Accumulated amortization was $163,138 and $148,428 at December 31, 2007 and 2006, respectively. Amortization expense for fiscal 2007 and 2006 was $14,710 and $22,552, respectively. Amortization expense for each of the five succeeding fiscal years and thereafter is as follows:

2008	$	15,000
2009		15,000
2010		11,800
2011		8,100
2012		6,700
Thereafter		48,927
	$	105,527

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), our long-lived assets to be held and used in the business are reviewed for impairment. When impairment is noted, assets are evaluated for impairment at the lowest level for which there is identifiable cash flows. If the sum of expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on assets to be disposed of are determined in a similar manner, except that the fair values are reduced for disposal costs. Considerable management judgment and assumptions are necessary to identify indicators of impairment and to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

During the fourth quarter of 2006, we placed in service equipment that had been accounted for in Equipment Under Construction (and not in service). We had received orders from overseas clients for shipment during the fourth quarter 2006. We submitted these orders to our contract manufacturer for production using this equipment. As we had just signed the agreements with Inverness and Chembio (See Note 1 ) , these orders were to be the last orders we would be placing with the contract manufacturer for our HIV product. We were planning on using this equipment at this contract manufacturer for development and production of other tests for infectious diseases. We were not able to schedule timely production of the HIV product and were forced to cancel the orders. Management decided that based upon this experience we would at this time not be able to plan future production using this equipment. Additionally, upon signing of the agreements, our business model changed. Therefore management determined that these long-lived assets were impaired. As a result, we recorded a $661,181 non-cash charge to operating expense relating to the impairment of long-lived assets. The $661,181 impairment charge included (1) a $30,000 non-cash charge relating to the impairment of facility improvements made at our contract manufacturer and (2) a $631,181 impairment charge relating to manufacturing equipment that was considered impaired. The $661,181 non-cash impairment charge was determined based upon a valuation received from our machinery manufacturer as to the equipment’s scrap value. There were no impairment charges recorded during the fiscal year 2007.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104"). Under SAB 104, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the sales price is determinable, and collectability is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns.

F-8

Revenue derived from royalty income is recognized as revenue in the period in which it is earned.

PRODUCT LIABILITY

The Company has not established any allowance for product liability at present because of the limited distribution and product sale history. In addition, the bulk of the revenues from our saliva collection products are from sales to manufacturers who use our product as a component to their test; furthermore, they may substantially alter the product by opening it up and adding their own buffer to it before sealing, repackaging, re-labeling and incorporating into their product kit. The Company does not deem this to be a material item to its financial position and results of operations.

RESEARCH AND DEVELOPMENT

Direct research and development activities consist primarily of new product development, continuing engineering for existing products, regulatory and clinical trial costs. Costs related to research and development efforts on existing or potential products are expensed as incurred. Allocated SG&A costs associated with R&D activities have not been included in the R&D expenses; in addition, the costs associated with building and protecting our Intellectual Property are currently included in our SG&A and not counted as direct research and development costs.

INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). Under SFAS 109, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

STOCK BASED COMPENSATION

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

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

F-9

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

As a result of the adoption of FAS 123(R), the Company's results for the year ended December 31, 2007 and 2006 include share-based compensation expense of $187,081 and $563,291, respectively, recorded in the selling, general and administrative expenses for the years ended December 31, 2007 and 2006. There was no income tax benefit recognized in the income statement for share-based compensation arrangements as the Company has provided a 100% valuation allowance on its’ deferred tax asset

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

EARNINGS (LOSS) PER SHARE

Basic and diluted earnings (loss) per common share was calculated for all periods in accordance with the requirements of Statement of Financial Accounting Standards No. 128, “Earnings per Share”. The following table sets forth the computation of the diluted loss per share for the years ended December 31, 2007 and 2006, respectively:

	For the Year’s Ended December 31,
	2007			2006
Numerator:
Net income (loss) to common shareholders	$	718,542		$	(5,435,064	)
(Deduct)/Add:
Mark-to-market gain-derivative liability		(2,228,388	)		(2,861,349	)
Interest on convertible debt		27,653			6,982
Dividends on preferred stock payable in shares		168,300			103,250
Net loss to common shareholders and assumed conversion	$	(1,313,893	)	$	(8,186,181	)
Denominator:
Share reconciliation:
Shares used for basic income (loss) per share		38,219,775			35,407,035
Effect of dilutive items:
Stock options		442,857			-
Convertible securities		3,960,000			-
Shares used for diluted loss per share		42,622,632			35,407,035
Net loss per share:
Diluted:	$	(0.03	)	$	(0.15	)

F-10

The numerator has been adjusted for the change in fair value of derivative liability related to the convertible notes and warrants. The diluted income (loss) per share for the years ended December 31, 2007 excludes from the calculation 126,667 shares issuable upon the exercise of stock options and warrants and 4,260,000 shares issuable upon the conversion of convertible securities. These shares are excluded due to their anti-dilutive effect as a result of the Company’s net loss after adjusting for the change in fair value of derivative income effect during these periods. The calculation for the year ended December 31, 2006 excludes 3,847,188 shares issuable upon exercise of stock options and warrants, 4,871,594 shares issuable upon the conversion of convertible securities and 55,850 shares issuable for preferred stock dividends due to net loss for these periods.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK/ FAIR VALUE

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalents with what it believes to be various high quality banks. Amounts held in individual banks may periodically exceed, for brief time periods, federally insured amounts. Our accounts receivable consist of amounts due from customers located throughout the world. Management monitors the credit risk due to accounts receivable by prescreening customers, periodic follow-up, and collection efforts.

SEGMENT REPORTING

The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards No. 131 "Disclosure About Segments and Related Information" ("SFAS 131"). SFAS 131 requires public companies to report information about segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the product, services an entity provides, the material countries in which it holds assets and reports revenues, and its major customers. The Company's business segments disclosures are included in Note 13.

SHIPPING AND HANDLING COSTS

Shipping and handling costs associated with inbound freight are included in cost of sales. Shipping and handling costs associated with outbound freight are included in selling, general and administrative expenses.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair values of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, and dividends payable reflected in these financial statements approximate carrying value as these are short-term in nature. Fair value of notes payable- shareholders and derivative instruments associated with Series A convertible preferred stock are disclosed in Notes 7 and 8 respectively.

RECLASSIFICATIONS

Certain reclassifications have been made in the December 31, 2006 financial statements in order to conform to the current fiscal year presentation.

F-11

RECENT ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY

Statement of Financial Accounting Standard 157, Fair Value Measurements (“SFAS 157”)

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements , which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and all interim periods within those fiscal years. I n February 2008, the FASB released FASB Staff Position (FSP FAS 157-2 - Effective Date of FASB Statement No. 157 ) which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. We are currently assessing the potential impact that adoption of this statement would have on our financial statements.

Statement of Financial Accounting Standard 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”)

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. SFAS 159 permits the measurement of specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. We do not anticipate that adoption of this statement will have a material impact on our financial statements.

Statement of Financial Accounting Standard 141 (revised 2007), Business Combinations ("SFAS 141R")

In December 2007, the FASB issued SFAS No. 141R which establishes the principles and requirements for how an acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; 2) in a business combination achieved in stages, sometimes referred to as a step acquisition, recognizes the identifiable assets and liabilities, as well as the non-controlling interest in the acquiree, at the full amounts of their fair values; 3) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase. SFAS 141R establishes disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement is to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2008. The adoption of SFAS 141R will have an impact on our accounting for future business combinations; however, the materiality of that impact cannot be determined.

Statement of Financial Accounting Standard 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”)

In December 2007, the FASB issued SFAS 160 which changes the accounting and reporting of minority interests. Minority interests will be recharacterized as noncontrolling interests and will be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement and, upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS 160 is effective for annual periods beginning after December 15, 2008. We are currently assessing the potential impact that adoption of SFAS 160 would have on our financial statements.

F-12

Statement of Financial Accounting Standard 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”)

In March 2008, the Financial Accounting Standards Board (FASB) issued FASB Statement 161, Disclosures about Derivative Instruments and Hedging Activities. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of adopting SFAS 161 on its financial statements.

In June 2007, the EITF reached consensus on EITF Issue No. 07-3, Accounting for Advance Payments for Goods and Services to Be Used in Future Research and Development Activities ("EITF 07-3"). EITF 07-3 states that non-refundable advance payments for future research and development activities should be capitalized until the goods have been delivered or the related services have been performed. EITF is effective for fiscal years beginning after December 15, 2007. Entities are to recognize the effects of EITF 07-3 prospectively for new contracts entered into after the effective date. The adoption of EITF 07-3 is not expected to have a material impact on our financial statements.

In December 2007, the EITF of the FASB reached a consensus on Issue No. 07-1 , Accounting for Collaborative Arrangements ("EITF 07-1"). The EITF concluded on the definition of a collaborative arrangement and that revenues and costs incurred with third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF 99-19 and other accounting literature. Based on the nature of the arrangement, payments to or from collaborators would be evaluated and its terms, the nature of the entity's business, and whether those payments are within the scope of other accounting literature would be presented. Companies are also required to disclose the nature and purpose of collaborative arrangements along with the accounting policies and the classification and amounts of significant financial-statement amounts related to the arrangements. Activities in the arrangement conducted in a separate legal entity should be accounted for under other accounting literature; however required disclosure under EITF 07-1 applies to the entire collaborative agreement. EITF 07-1 is effective for annual periods beginning after December 15, 2007 and is to be applied retrospectively to all periods presented for all existing collaborative arrangements. We do not expect the adoption of EITF 07-1 to have a material impact on our financial statements.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

F-13

NOTE 4. INVENTORIES

Inventories consisted of the following:

	December 31,
	2007		2006

Raw materials	$	28,884	$	23,867
Finished goods		19,372		16,374
	$	48,256	$	40,241

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	December 31,
	2007			2006

Machinery and equipment	$	620,923		$	599,762
		620,923			599,762
Less: accumulated depreciation and amortization		(573,765	)		(557,613	)
	$	47,158		$	42,149

NOTE 6. DEFERRED LOAN COSTS

Deferred loan 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. As of December 31, 2007, deferred loan costs were $2,006, which are being recognized on a straight-line basis over the contractual term of the respective loan and debenture agreements. Loan costs charged to interest expense for the years ended 2007 and 2006 was $14,491 and $194,764, respectively.

NOTE 7. FINANCING FROM SHAREHOLDERS

Per a promissory note dated February 2003, Jules Nordlicht, a shareholder, agreed to advance in total or in installments, up to the amount of $1,000,000 to the Company. In November 2003 and August 2004, agreements were executed with this shareholder to cause additional advances in total or in installments up to the amount of $2,500,000 to advance the process of the FDA approval. In consideration for the financing, the Company agreed to repay such borrowed funds with accrued interest at 12% per annum and the shareholder reserved the right to demand payment in full or in part at any time after December 31, 2006. On May 8, 2006 the shareholder agreed to extend the maturity date to December 31, 2008 provided that (i) a partial payment of $350,000 will be made by the Company on or prior to July 31, 2006 and (ii) accrued interest will be paid quarterly thereafter, commencing September 30, 2006. The agreement was amended on September 4, 2006 so that the Company need no longer pay the quarterly accrued interest but an amount of $60,000 quarterly as a principal reduction. If the Company should default in these payments, the promissory note reverts to the original maturity date of December 31, 2006. As of December 31, 2007, the loan balance to this shareholder aggregated $1,476,317. An additional amount of $194,462 of interest on this note has been accrued during 2007 and a total of $428,775 in accrued interest remains owed as of December 31, 2007. The lender has filed a Uniform Commercial Code (UCC) Lien on the Company's equipment and patents as security for this loan. The Company was unable to make its quarterly principal payment of $60,000 for the quarter ended September 30, 2007 and therefore, the remaining principal balance is being classified as a current liability due on demand.

F-14

On September 22, 2007, the Company advised Mr. Nordlicht that in consideration of his forebearing from calling the Company in default on the loan outstanding of principal and all accrued interest, the Company agrees to pay him no later than December 31, 2008, an amount totaling $2,600,000 as full payment of loan (principal and interest). Any payments made during the interim period between October 1, 2007 and December 31, 2008 will be deducted from this total amount. As of the date of this filing, Mr. Nordlicht has not sent the Company a default notice.

NOTE 8. 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. Under EITF 98-5, the discount related to the beneficial conversion feature would be calculated based on its intrinsic value which was $2,614,400, and is limited to the amount of the proceeds of $1,510,000 allocated to the convertible debt instrument. Accordingly, the beneficial conversion feature is being amortized using the interest method of accounting, resulting in a charge to interest expense of $143,626 and $1,056,470, respectively, for the years ended December 31, 2007 and 2006. The Company had sold an aggregate of $1,510,000 in convertible debentures. In September 2005, a debenture in the amount of $60,000 was converted into 60,000 shares of common stock. In May 2006, the Company issued 796,056 and 701,754 shares of common stock at $0.90 and $0.57 per share, respectively, for the induced conversion of $1,109,607 in convertible debentures including interest of $109,608. The debenture holders accepted these shares as full consideration for the outstanding convertible debentures. The Company recognized an additional expense of $403,872 because of the induced conversion to the debenture holders pursuant to the accounting requirements of SFAS No. 84, Induced Conversions of Convertible Debt. The original terms of the debentures called for them to be converted at $1.00 per share. The Company induced the debenture holders to convert at $0.90 and $0.57 per share.

As of December 31, 2007, there are outstanding $262,500 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.

The Company is in default to the debenture holders for not making payments on a timely basis. As a result, in accordance with the debenture agreements, these debentures became payable on demand unless the default is waived by the investors. The amount of debentures at December 31, 2007 of $262,500 plus accrued interest of $15,106 has therefore been reflected as a current liability. The Company has not received any notice of default from any of the holders of the outstanding debentures.

Debentures payable-net of discount in the amount of $139,194, is the net of gross amount of debenture payables of $262,500 reduced by unamortized debt discount of $123,306, and is shown on the balance sheet as a current liability.

NOTE 9. EQUITY TRANSACTIONS

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

F-15

In February 2006, the Company engaged Chardan Capital Markets LLC., as its investment advisers. The agreement is for a period of 12 months. For the advisory services, the Company has agreed to issue a total of 300,000 shares of its common stock of which 100,000 shares were issued on signing of the agreement and the remaining 200,000 shares are to be issued in eight equal installments of 25,000 shares on the 1st day of each month following the date of the agreement. As of December 31, 2006, all shares had been earned.

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

In May 2006, previously issued warrants, exercisable into 1,750,000 shares at $.01 per share for total proceeds of $17,500 were converted into common stock, resulting in the issuance of 1,750,000 common shares.

During May 2006, convertible debentures in the principal amount of $1,000,000 and accrued interest of $109,607 were converted into common stock, resulting in the issuance of 1,497,810 common shares .

On June 8, 2006, the Company completed a private placement of $2,150,000 with 10 institutional and accredited investors pursuant to the 2006 Series A Convertible Preferred Stock Agreement dated June 7, 2006. Net proceeds from the placement were approximately $1,969,000. The Company issued 2,150 shares of Series 2006-A Convertible Preferred Stock, par value $0.001 per share (the “Convertible Preferred Stock”), at a purchase price of $1,000 per share. Each investor also received a Series A Warrant (a “Warrant”) to purchase up to 75% of the number of shares of common stock issuable to him upon conversion of his Convertible Preferred Stock. If all of the Warrants are exercised, the Company will issue a total of 2,015,625 shares of common stock. In addition, the Company issued to the placement agent 631,562 warrants valued at $645,881 and paid fees of $181,000. All the warrants have a term of 5 years and the initial exercise price of $1.50 per share has been adjusted to $1.00 per share as the contingent event stated in the agreement failed to materialize. This $1.00 exercise price is subject to adjustments for certain corporate events such as merger, reorganization or future sale of securities at a price below the exercise price. As the fair value of warrants and conversion option exceeded the net proceeds of $2,150,000 from preferred stock, the Company deemed the fair value of the preferred stock to be $0 at inception. The $2 reflects the minimum par value of the stock.

The Convertible Preferred Stock is convertible to shares of common stock at an initial conversion price of $0.80 per share, which has been since adjusted to $0.50 per share, as the contingent event stated in the agreement failed to materialize. The conversion price of $0.50 per share is subject to adjustment in the event of certain corporate events such as merger, reorganization or future sale of securities at a price below the conversion rate. Cash dividends accrue on the Convertible Preferred Stock at the rate of 8% per annum, payable quarterly beginning in October 2006; or, at the Company's option, dividends are payable in shares of the Company’s common stock, accruing at the rate of 10% per annum based on the volume-weighted average market price for shares of common stock for the 10 trading days preceding payment. In October 2006, a dividend was paid on the Company’s 2006 Series A Convertible Preferred Stock with 55,850 shares of the Company’s common stock valued at $53,750.

As of December 31, 2007, the Company has accrued $118,800 in dividends at the rate of 8% per annum. The Company intends to settle this amount with cash during 2008.

The Company may mandate conversion of the Convertible Preferred Stock if the closing bid price of the common stock exceeds $2.50 for twenty (20) consecutive trading days. In the event of a merger or sale of more than 50% of the assets of the Company, or in the event shares of common stock issuable upon the conversion of Convertible Preferred Stock or exercise of warrants fail or cease to be registered as contemplated by the terms of the Certificate of Designation of the Relative Rights and Preferences of Series 2006 A Convertible Preferred Stock, the Convertible Preferred Stock is redeemable at a price of $1,000 per share, plus any accrued and unpaid dividends payable thereon, payable at the option of the Company in cash or in shares of the Company’s common stock.

F-16

In connection with the issuance of the Preferred Stock and Warrants pursuant to the June 8, 2006 private placement described above, we agreed to file a registration statement with the Securities and Exchange Commission to register for sale the shares of common stock issuable upon conversion of Convertible Preferred Stock and the exercise of Warrants. The Company was required to file a registration statement on or before August 4, 2006, which was timely filed. If the registration statement is not timely declared effective or is suspended for a certain length of time, the Company is required to pay 1% of the purchase price of the Convertible Preferred Stock for each 30 day period or portion thereof after such effective date until the registration statement is declared effective or reinstated.

There is no stated limit on the maximum penalty that could be incurred. However, the maximum penalty is effectively capped as the period or periods for which payments are due for events of default and limited under the registration rights agreement to 24 months. Accordingly, the penalty is capped at 24%.

The Company is required to keep the Registration Statement continuously effective until such date as is the earlier of (x) the date when all Registerable Shares covered by the registration statement have been sold or (y) the date on which the Registerable Shares may be sold without any restriction pursuant to Rule 144 as determined by Counsel to the Company. The registration statement was timely filed and declared effective. On October 13, 2006, the Company announced its intention to restate financial statements, and suspended use of its Registration Statement declared effective by the SEC October 4, 2006. For such time as the Registration Statement is not effective, the Company is obligated, pursuant to Company’s Registration Rights Agreement with holders of the Company’s Convertible Preferred Stock, to pay such holders an amount equal to one percent per month of the original purchase price of the Convertible Preferred Stock until the earlier of the date the Registration Statement is again declared effective by the SEC, or June 2008. As of December 31, 2007, a penalty of $129,329 was accrued.

The Company has accounted for the conversion option in the preferred stock as an embedded derivative under the provisions of FAS 133: Accounting for Derivative Instruments and Hedging Activities. Pursuant to the provisions of Statement of Financial Accounting Standards No. 133, and EITF 00-19: “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock” (“EITF 00-19”), the Company has recorded initially the value of the warrants and conversion option at $2,095,930 and $3,698,316, respectively which are reflected as derivative instruments on the balance sheet. As the proceeds from the issuance of preferred shares of $2,150,000 were less than the combined fair value of the warrants and the conversion option, the difference of $3,644,246 was charged in fiscal 2006 to financing costs in the statements of operations.

At inception, the Warrants and Conversion Options had a reset provision for the exercise price based on the same contingent event. Management assigned an equal probability of 50% to each of the conditions at inception to weight the fair value. The Company computed the weighted fair value at June 8, 2006 of the Series A Warrants and Conversion Options using the Black-Scholes pricing model with the following weighted average assumptions:

Stock price	$	1.10
Exercise price	$	0.5-1.5
Expected life in years		4.5 years
Risk free interest rate		5.04	%
Expected volatility		179	%
Dividend yield		0	%

As of December 31, 2007, the Company believed that none of the events that trigger redemption upon major corporate events were probable of occurring. The Company believes that many of these events are within its control and accordingly the probability of occurrence of any of such events is small. Other events that are not within Company’s control and which trigger redemption are lapse of registration or unavailability of registration and suspension of listing. The Company believes that although these events are not in its control, as of December 31, 2007, redemption was not likely and that the Company could cure within any cure period after receipt of a Notice of Redemption. As such, in accordance with paragraphs 15 of EITF Topic D-98: Classification and Measurement of Redeemable Securities, the Preferred Stock is not currently accreted to its redemption value, there is no likelihood that it will become redeemable; accordingly, no accretion is being made to bring the carrying value up to its redemption value.

F-17

As of December 31, 2006, the liability for the value of the warrants and conversion option was “marked to market” and the difference of $1,477,689 and $1,723,660, respectively, has been accounted for as a decrease to the derivative expense initially recognized in the statements of operations. The liability for the value of the conversion option and warrants will be “marked to market” in future accounting periods until such time as the preferred shares are converted and the warrants are exercised or they meet the criteria for equity classification. At December 31, 2007 and 2006, the balances in the liability accounts were $1,010,390 and $3,238,778, respectively. For the years ended December 31, 2007 and 2006, the Company recognized derivative income of $2,228,388 and $2,861,349, respectively. As of December 31, 2007, the Company used the Black-Scholes option pricing model to revalue the fair value of warrants and conversion options with the following assumptions:

Stock price	$	0.35
Exercise price	$	0.80-1.00
Expected life in years		3.42 years
Risk free interest rate		3.07	%
Expected volatility		82.79	%
Dividend yield		0	%

On January 7, 2007 the Company issued 81,068 shares of common stock for payment of accrued dividends in the amount of $49,500.

Dividends declared to the holders of the 2006 Series A Convertible Preferred Stock in the amount of $168,000, for the year ended December 31, 2007, resulted in $49,500 in dividend obligations (for the first quarterly dividend) at the rate of 10% per annum paid with 138,306 shares of the Company’s common stock; and $118,800 in dividend obligations to be paid in cash.

On May 1, 2007, the Company issued 750,000 shares of common stock and 250,000 warrants to former distributors. Subsequent to the signing of an exclusive worldwide distribution agreement with Inverness Medical (IMA) for the Company's patented HIV test in a barrel format, the Company was contacted by two of its distributors claiming that they continue to have certain distribution rights. The Company settled the claim by issuing these equities to cancel all their distribution rights and settle all potential claims by these former distributors. Based upon the fair market value of the 750,000 shares of common stock on May 1, 2007, the Company recorded a termination expense of $225,000. The warrants granted allow for the purchase of 250,000 shares of common stock at $.50 per share. These warrants, if not exercised will expire in May 2012. The fair value of these warrants in the amount of $66,499 was recorded as a termination expense.

The fair value of the Company’s option-based awards granted was estimated using the Black-Scholes option-pricing model with the following assumptions.

Expected term (in years)		4.83
Expected stock price volatility		150.47	%
Risk-free interest rate		4.54	%
Expected dividend yield		0	%
Estimated fair value per option granted	$	0.27

On September 18, 2007, the Company awarded 40,000 shares of common stock to an individual for certain financing and other services. These shares were valued at $0.17 per share or $6,800 and have been included in selling, general and administrative expenses in the accompanying Statements of Operations.

F-18

During October 2007, Inverness Medical Innovations, Inc. (Inverness) entered into a strategic investment with the Company and purchased 1,428,571 common shares for $500,000 ($0.35 per share). Additionally, Inverness received 5 year warrants to purchase up to an additional 1,071,428 million shares of the Company's stock at a price of $0.75 per share.

NOTE 10. STOCK-BASED COMPENSATION PLANS

Plan Options

The Company has two stock option plans, a "1992 Plan", under which 350,000 shares of its common stock have been reserved for issuance, and a "1994 Plan", under which an additional 350,000 shares of its common stock have been reserved for issuance. Under both plans, the Company's Board of Directors may grant either incentive stock options with an exercise price of not less than the fair market value of the common stock at the date of grant or non-qualified stock options with an exercise price of not less than 85% of the fair market value of the common stock at the date of grant. The Board of Directors shall determine the period of each option and the time or times at which options may be exercised and any restrictions on the transfer of stock issued upon exercise of any options. Both plans also provide for certain automatic grants to each non-employee director at a price of 100% of fair market value of the common stock at the time of grant. Options generally vest over a period of six months and are exercisable over a period of five years.

Non-Plan Options

On March 25, 2005, 550,000 stock options were granted to one officer/employee and on May 2, 2005, another 550,000 stock options were granted to a second officer/employee in accordance with their employment agreements. Both employment agreements provided for immediate vesting of 100,000 stock options at an exercise price of $0.10 on date of grant and then vesting of the remaining 450,000 stock options in three equal tranches of 150,000 stock options on October 1, 2005, October 1, 2006 and October 1, 2007, at an exercise price of $1.00 per share. These options are exercisable until June 1, 2015 and had a fair value at the date of grant of $2,265,050. Stock option compensation for non-plan option grants recognized during the years ended December 31, 2007 and 2006 amounted to $187,081 and $563,291, respectively.

Stock option compensation expense in fiscal 2007 is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award. The Company has not adjusted the expense by estimated forfeitures, as required by FAS 123(R) for employee options, since the forfeiture rate based upon historical data was determined to be immaterial.

F-19

The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. During the year ending December 31, 2007, the assumptions made in calculating the fair values of options are as follows:

	For the Year ended
	December 31, 2007
Expected term (in years)		5
Expected volatility		181.5	%
Expected dividend yield		0	%
Risk-free interest rate		4.35	%

The following table summarizes all stock option activity for options granted under the 1992 Plan, the 1994 Plan and non-plan options during the years ended December 31, 2007 and 2006:

	Number of Options			Weighted Average Exercise Price
Outstanding at January 1, 2006		1,151,000		$	1.64
Granted		100,000			1.00
Exercised		—			—
Forfeited/expired		(51,000	)		19.23
Outstanding at December 31, 2006		1,200,000		$	0.85
Granted		—			—
Exercised		—			—
Forfeited/expired		—			—
Outstanding at December 31, 2007		1,200,000		$	0.85
Exercisable at December 31, 2007		1,166,667		$	0.85

As of December 31, 2007, there was $46,487 of unrecognized compensation cost related to non-vested awards granted, which is expected to be recognized over a weighted-average period of less than a year. The following table summarizes the information about stock options outstanding at December 31, 2007:

Options Outstanding							Options Exercisable
Range of Exercise Price Per Share	Number Outstanding at December 31, 2007		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price Per Share		Number Exercisable at December 31, 2007		Weighted Average Exercise Price Per Share
$0. 10-$1.00		1,200,000		7.18	$	0.85		1,166,667	$	0.85

F-20

The following table summarizes the information about warrants outstanding at December 31, 2007:

	Number of Warrants			Weighted Average Exercise Price
Outstanding at January 1, 2006		3,312,000		$	0.01
Granted		2,647,187			1.00
Exercised		(3,250,000	)		0.01
Forfeited/expired		(2,000	)		0.01
Outstanding at December 31, 2006		2,707,187		$	0.01
Granted		1,321,428			0.70
Exercised		—
Forfeited/expired		(60,000	)		0.01
Outstanding at December 31, 2007		3,968,615		$	0.90

Of the above warrants, 2,647,187 expire in 2011 and 1,321,428 expire in 2012.

NOTE 11. INCOME TAXES

A current provision for Federal and State income taxes was not required for the years ended December 31, 2007 or 2006, due to the Company’s tax losses. At December 31, 2007 and 2006, the Company has unused net operating loss carry-forwards of approximately $45,500,000 and $44,800,000, respectively which expire at various dates through 2026. Most of this amount is subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership”.

As of December 31, 2007 and 2006, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since significant utilization of such amounts is not presently expected in the foreseeable future.

Deferred tax assets and valuation allowances consist of:

	Year Ended
	December 31,
	2007			2006

Deferred Tax Assets:
Stock option compensation	$	—		$	100,000
Deferred Compensation		76,000			200,000
Net Operating Losses		18,100,000			17,500,000
Valuation Allowances		(18,176,000	)		(17,800,000	)

Net Deferred Tax Asset	$	0		$	0

F-21

A reconciliation of the difference between the expected tax rate using the statutory federal tax rate and the Company’s effective tax rate is as follows:

	Year Ended
	December 31,
	2007			2006
U.S Federal income tax statutory rate		34.0	%		34.0	%
State income tax, net of federal income tax benefit		5.0	%		5.0	%
Deferred tax asset allowance		(39.0	) %		(39.0	) %
Effective tax rate		(0.0	) %		(0.0	)%

NOTE 12. OPERATING LEASES

The Company leases premises in Brooklyn, New York. This lease has a three-year term ending August 30, 2008 and a base annual rental rate starting at $15,000 and increasing to $15,913 per year. Minimum future lease payments required under the operating lease for the Brooklyn office is $14,166 for the twelve month period ended December 31, 2008. Rent expense of $37,305 and $58,221 was recognized in fiscal 2007 and 2006, respectively.

The Company rents, on a month to month basis, its executive offices located in Framingham, Massachusetts, for $1,800 per month.

NOTE 13. COMMITMENTS AND CONTINGENCIES

ECONOMIC DEPENDENCY

For the year ended December 31, 2007, sales to two customers were in excess of 10% of the Company's total sales. Sales to these customers were approximately $505,112 and $141,492 and accounts receivable from these customers as of December 31, 2007, aggregated $115,010 and $29,700, respectively. The loss of either of these customers could have a material adverse effect on the Company. The Company is continuing to seek new markets and sales opportunities for its products. For the year ended December 31, 2006, sales to two customers were in excess of 10% of the Company's total sales. Sales to these customers were approximately $592,000 and $131,000 and accounts receivable from these customers as of December 31, 2006, aggregated $97,600 and $0, respectively. The loss of either of these customers could have a material adverse effect on the Company.

For the year ended December 31, 2007, purchases from three suppliers were in excess of 10% of the Company's total purchases. The purchases from these suppliers through December 31, 2007 were approximately $115,000, $67,000, and $29,000. The corresponding accounts payable at December 31, 2007, to these suppliers, aggregated approximately $66,000. For the year ended December 31, 2006, purchases from six suppliers were in excess of 10% of the Company's total purchases. The purchases from these suppliers through December 31, 2006 were approximately $62,000, $44,000, $38,000, $36,000, $31,000 and $29,000. The corresponding accounts payable at December 31, 2006, to these suppliers, aggregated approximately $16,000.

F-22

SEGMENT 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 the United Kingdom. Segmentation of operating income and identifiable assets is not applicable since all of our revenues outside the United States are export sales. Foreign sales during 2007 and 2006 were approximately $582,000 and $684,000, respectively. The following table represents total product sales revenue by geographic area:

	Year Ended December 31,
	2007		2006

United States	$	143,337	$	136,985
Europe		542,351		597,891
Canada, Americas, and Asia		37,560		34,045
Africa		2,520		52,048
	$	725,768	$	820,969

All of the Company’s long lived assets are located in the United States.

EMPLOYMENT CONTRACTS

In March and May of 2005, the Company entered into employment agreements respectively with Steve Peltzman, Chief Executive Officer and Chairman of the Board, and Bruce Pattison, President. Both agreements provide a minimum annual base salary of $120,000 for a term of two years and renewable annually. The current annual renewal period ends in May 2008 and continues to provide for a base salary of $120,000. Either party can terminate the agreement upon 90 days notice. This base salary will increase to $180,000 per year upon closing of a financing to the Company with minimum gross proceeds of $3,000,000. The Company is also obligated to pay health and life insurance benefits and reimburse expenses incurred by the officers on behalf of the Company. Each executive, if terminated by the Company without cause, would be entitled to six months’ severance.

RELATED PARTY AGREEMENT

On October 17, 2007 the Company received a $500,000 financing from Inverness Medical Innovations, Inc. The financing consists of a purchase of 1,428,572 common shares at a price of $0.35 per share. Additionally, Inverness received 5 year warrants to purchase up to an additional 1,071,428 million shares of the Company’s stock at a price of $0.75 per share. In connection with this financing, the Company and Inverness signed two additional agreements. First, the two companies signed an agreement whereby Inverness acquired an option to the exclusive, worldwide marketing and distribution rights to certain infectious disease diagnostic tests developed by StatSure that may utilize specified Inverness and/or StatSure intellectual property. If exercised by Inverness, the option provides for StatSure and Inverness to equally share development expenses and profits. StatSure and Inverness also entered into a license agreement whereby Inverness granted to StatSure a license to certain Inverness lateral flow patents for use in a rapid test to detect HIV antibodies in point-of-care markets subject to payment of royalties to Inverness. This license pertains to HIV tests using formats other than the StatSure’s “barrel format” which is already being sold by Inverness. During the year ended December 31, 2007, the Company earned $168,721 in royalty income under this agreement.

F-23

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in or disagreements with the Company's accountants on accounting and financial disclosure.

ITEM 8A. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures .

The Company’s Chief Financial Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ending December 31, 2007 covered by this Annual Report on Form 10-KSB. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after December 31, 2007.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2007 under the criteria set forth in the Internal Control—Integrated Framework .

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that material weaknesses exist due to the lack of segregation of duties, resulting from the Company’s limited resources.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-KSB.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the quarter ended December 31, 2007, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 8B. OTHER INFORMATION.

None.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
NAME	AGE	POSITION WITH THE COMPANY
Steven Peltzman	61	Chief Executive Officer and Chairman of
		The Board of Directors
D. Bruce Pattison	61	President, Chief Operating Officer and Director
Leo Ehrlich	50	Chief Financial Officer, Secretary, and Director
Mo Bodner	50	Vice President
Richard Woodrich	62	Director
Joseph Levi	49	Director

The following are brief summaries of the business experience of the directors and executive officers of the Company during 2006, including, where applicable, information as to other directorships held by each of them. There are no family relationships among any of the directors and executive officers of the Company.

Mr. Steven Peltzman has been a consultant to the Company from October 2004. As of March 25, 2005, the Company and Mr. Peltzman have signed an employment agreement whereby Mr. Peltzman has become the Company's Chief Executive Officer. Mr. Peltzman brings more than thirty years of experience in the general management and commercialization in both public and private healthcare companies ranging from diagnostics and medical devices to biotechnology. From 1991 to 1997 Mr. Peltzman served as Chief Operating Officer of OSI Pharmaceuticals (OSIP) and from 1994 to 1997 was appointed its President. During this period and through 1999 he also served as a Director of OSI Pharmaceuticals, Inc. From 1984 to 1991, Mr. Peltzman was President and Chief Executive Officer of Applied BioTechnology, Inc. Prior to that he spent ten years at Corning Medical and four years at Millipore serving in a number of executive positions. During the past several years, following his retirement from OSI Pharmaceuticals, Mr. Peltzman has been engaged in the interim management, corporate development and /or M&A functions for a number of technology-based biopharmaceutical, drug-delivery, and device companies. During 2006, Mr. Peltzman was a Director and Interim President of InterPath Pharmaceuticals, Inc., a private, Houston-based oncology company. Mr. Peltzman was also a Director of Protein Polymer Technologies, Inc. (PPTI) a San Diego based biotechnology company engaged in genetically engineered proteins targeting biomedical and special materials applications. Mr. Peltzman is member of the Board of Overseers at Beth Israel Deaconess Medical Center, a graduate of the University of Rochester and of the Advanced Management Program at Harvard University's Graduate School of Business Administration.

Mr. D. Bruce Pattison has thirty-four years of business experience as a CEO and in other senior executive leadership roles; his career involved advanced technology businesses serving the medical diagnostic and therapeutic markets. He has managed the product development, clinical trials and market introduction of several unique medical technologies. Throughout the 1970's Mr. Pattison held a number of management positions within the medical division of Corning Glass Works. During this time he developed the strategic plan and market introduction for Corvac, a unique evacuated tube for collecting blood and harvesting serum for chemistry analysis. This product is still "the standard method" utilized for serum chemistry sample collection. As President of Infusaid Corporation from 1981 to 1985 he took the world's first implantable drug delivery pump through the FDA's PMA process and market introduction; he managed the development of clinical applications for treating chronic intractable pain, severe spasticity, and hepatic metastases. During this time Infusaid also developed and brought to market the first vascular access port. These devices are now part of standard practice for patients receiving systemic chemotherapy regimens. Mr. Pattison has served as CEO of Omniflow, a venture capital backed company that developed and brought to market a sophisticated four-channel bedside drug delivery pump. Mr. Pattison was a principle in Therex Corporation a company that developed and brought to market a second generation implantable pump and vascular access port. He negotiated the sale of Therex to Arrow International in 1995 and stayed on to manage the drug delivery division for Arrow. As part of a change in Arrows' strategic direction, Mr. Pattison negotiated the sale of the implantable pump business to Johnson& Johnson in 2002. Following the divestiture of this business unit, Mr. Pattison has served with its acquirer, J&J, as Executive Director of drug delivery and as a consultant to certain J&J entities developing drug delivery platforms. Mr. Pattison is a graduate of Cornell University, Ithaca NY.

Mr. Leo Ehrlich was appointed to the Board of Directors in September 1999. He is also the CFO and a director of Cellceutix Corporation, a pharmaceutical company with drugs in preclinical development, and until May 2007 was the CFO of NanoViricides, Inc. (NNVC), a pharmaceutical company. He is a Certified Public Accountant and received his BBA from Bernard Baruch College of the City University of New York.

Mr. Mo Bodner was appointed on April 12, 2007 as Vice President of Business Development, effective May 1, 2007. Mr. Bodner began as a consultant and then as an employee to the Company since 2005. Prior to his relationship with the Company, Mr. Bodner was self-employed as a private investor. From 1998 to 2001 Mr. Bodner headed the equity trading desk at American Third Market Securities and was Head Trader at International Securities Corp. Mr. Bodner has experience in funding and assisting small and micro-cap companies. Mr. Bodner is the husband of Helenka Bodner, a major shareholder of the Company.

Mr. Richard Woodrich is President and CEO of Woodrich & Associates, Inc., a management consulting firm providing strategic services to the biotechnology industry. Mr. Woodrich has more than twenty five years of business experience in technology-based life science companies. Prior to founding Woodrich & Associates, Mr. Woodrich held several senior management positions with emerging growth biotechnology companies. Mr. Woodrich served from 1999 to 2004 as the Senior Vice President, Business Development for Therion Biologics Corporation, a privately held biopharmaceutical company. Previously, Mr. Woodrich served as Executive Vice President and Chief Operating Officer of CytoMed, Inc. from 1995 until its acquisition in1999. From 1991 until its acquisition in 1995, Mr. Woodrich served as Senior Vice President, Finance and Administration, CFO and later as President and Director of Oculon Corporation. Mr. Woodrich has served in financial management positions at Infinet, Inc., Applied bioTechnology, and Millipore Corporation. While serving as a Senior Accountant at Arthur Andersen & Co., Mr. Woodrich became a Certified Public Accountant. Mr. Woodrich has a Bachelor of Science degree from Rensselaer Polytechnic Institute and a Masters in Business Administration from the Harvard University Graduate School of Business Administration.

Mr. Joseph Levi was appointed to the Board of Directors in September 1999. Mr. Levi began his career as a systems engineer for ITT Avionics where he participated in the design of military communications systems. Subsequently, Mr. Levi was a software engineer at SIAC where he developed trading systems for the NYSE floor. Mr. Levi then held senior sales and marketing positions for various computer-consulting firms. In 1991, Mr. Levi founded CompuNet Solutions, which focused on selling computer equipment, and consulting services to Fortune 2000 customers. Since 1995, Mr. Levi has practiced law at various top-tier New York law firms counseling technology clients on protecting, leveraging and enforcing their intellectual property rights. Mr. Levi is also the founder of Alleytech Ventures, LLC, an investment fund focusing on Internet technology investments. Mr. Levi has a BS in Electrical Engineering, summa cum laude, and an MS in Systems Engineering, both from Polytechnic University, and a JD from Brooklyn Law School, magna cum laude. Mr. Levi is registered to practice before the U.S. Patent and Trademark Office.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT PLEASE UPDATE

Our executive officers and directors and persons who own beneficially more than ten percent of our equity securities are required under Section 16(a) of the Securities Exchange Act of 1934 to file reports of ownership and changes in their ownership of our securities with the Securities and Exchange Commission. They must also furnish copies of these reports to us. Based solely on a review of the copies of reports furnished to us and written representations that no other reports were required, we believe that for fiscal year 2006 our executive officers, directors and 10% beneficial owners complied with all applicable Section 16(a) filing requirements, except that a Form 4 for Helenka Bodner was filed late.

ITEM 10. EXECUTIVE COMPENSATION

The following table provides certain summary information for 2007 concerning compensation awarded to, earned by or paid the Company's Executive Officers.

Name and Principal Position	Year		Salary ($) ¹		Bonus ($) ²		Option Awards ($) ³		All Other Compensation		Total ($)
Steven Peltzman, CEO and Chairman of the Board ^4,6		2006 2007	$ $	120,000 120,000	$ $	- -	$ $	299,677 -	$ $	- -	$ $	419,677 120,000
D. Bruce Pattison, President, COO, and Director ⁴		2006 2007	$ $	120,000 120,000	$ $	- -	$ $	263,614 -	$ $	- -	$ $	383,614 120,000
Leo Ehrlich, CFO, Secretary, and Director ⁴		2006 2007	$ $	60,000 60,000	$ $	- -	$ $	- -	$ $	- -	$ $	60,000 60,000
Moshe Bodner ⁵ , Vice President		2006 2007	$ $	120,000 120,000	$ $	- -	$ $	- -	$ $	- -	$ $	120,000 120,000

¹ Salary is total base salary.

² No bonuses were paid.

³ The valuations of these options reflect the compensation costs of each option award over the requisite service period in accordance with FAS123R.

⁴ Also serves as a director on the Company’s board of directors and does not receive any compensation for this director role.

⁵ Moshe Bodner is the husband of Helenka Bodner. See Item 11. Security Ownership Of Certain Beneficial Owners And Management.

⁶ Principal executive officer (“PEO”).

Employment Agreements

In March and May of 2005, the Company entered into employment agreements respectively with Steve Peltzman, Chief Executive Officer and Chairman of the Board, and Bruce Pattison, President. Both agreements provide a minimum annual base salary of $120,000 for a term of two years and renewable annually. Either party can terminate the agreement upon 90 days notice. This base salary will increase to $180,000 per year upon closing of a financing to the Company with minimum gross proceeds of $3,000,000. The Company is also obligated to pay health and life insurance benefits and reimburse expenses incurred by the officers on behalf of the company. Each executive, if terminated by the Company without cause, would be entitled to six months severance.

Additionally both employment agreements provided for immediate vesting of 100,000 stock options at an exercise price of $0.10 on date of grant and then vesting of the remaining 450,000 stock options in three equal tranches of 150,000 stock options on October 1, 2005, October 1, 2006 and October 1, 2007, at an exercise price of $1.00 per share. These options are exercisable until June 1, 2015

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007

Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date		Option Vesting Date
Steve Peltzman ¹		100,000				0.10		03/24/2015		3/25/2005
		150,000				1.00		03/24/2015		10/01/2005
		150,000				1.00		03/24/2015		10/01/2006
				150,000		1.00		03/24/2015		10/01/2007
Bruce Pattison ¹		100,000				0.10		5/01/2015		5/01/2005
		150,000				1.00		5/01/2015		10/01/2005
		150,000				1.00		5/01/2015		10/01/2006
				150,000		1.00		5/01/2015		10/01/2007

¹ ^{See
“Employment Agreements” in preceding paragraph}

DIRECTOR COMPENSATION

Name	Fees Earned or Paid in Cash ($) ¹		Stock Awards ($)		Option Awards ($) ²		Total ($)
Richard Woodrich	$	13,667	$	-	$	23,242	$	36,909
Joseph Levi	$	12,000		-		23,243		35,243

¹ Cash compensation for outside directors is set at $3,000 per quarter. The audit committee of the Board of Directors was established November 15, 2005 composed of directors Richard Woodrich and Joseph Levi, with Mr. Woodrich serving as chairman. Mr. Woodrich is compensated an additional sum for the necessary services as chairman of the Audit Committee. Additional compensation for the period from January 1, 2007 through November 30, 2007, was set at $3,000 per quarter. On December 1, 2007, it was changed to $2,000 per quarter.

² In January 2006, the Company granted options to its two outside directors, Richard Woodrich and Joseph Levi, to purchase in the aggregate 100,000 shares of Company's common stock. The options vest quarterly in equal amounts over a period of three years, and are exercisable for seven years from the vesting date at an exercise price of $1.00. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and each of our “named executive officers” and all of our directors and executive officers as a group as of March 15, 2008.

NAME AND ADDRESS OF BENEFICIAL	SHARES BENEFICIALLY		PERCENT OF SHARES
OWNER	OWNED		BENEFICIALLY OWNED
Steve Peltzman (1)
c/o SDS, Inc.		550,000		1.4	%
1881 Worcester Rd. #200

Framingham, MA. 01701

Bruce Pattison (1)
c/o SDS, Inc.
1881 Worcester Rd. #200

Framingham, MA. 01701		550,000

Richard Woodrich (1,3)
c/o SDS, Inc.
1881 Worcester Rd. #200

Framingham, MA. 01701		41,666		*

Leo Ehrlich (1)
c/o SDS, Inc.
1222 Avenue M
Brooklyn, NY 11230		3,667,442		9.2	%

Joe Levi (1,3)
c/o SDS, Inc.
1222 Avenue M
Brooklyn, NY 11230		41,666		*

Moshe Bodner
1337 E. 9th St.
Brooklyn, NY 11230		*		*

All Executive Officers,
Directors and Director
nominees as a group		4,550,774		11.2	%

Helenka Bodner
1337 E. 9th St
Brooklyn, NY 11230		15,266,896		38.5	%

Jules Nordlicht
225 West Beech St
Long Beach, NY 11561		2,500,000		6.3	%

* Denotes beneficial ownership of less than 1%.

(1) Director of the Company.

(2) The percentage includes the warrants held and fully exercisable within 60 days subsequent to March 15, 2008.

(3) Does not include 16,668 in the aggregate, (8,334 each) of shares issuable upon exercise of options that are not exercisable within the next 60 days.

Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options warrants and any other type of convertible securities held by that person that are currently exercisable or exercisable within 60 days of March 15, 2008 , are deemed issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of each other shareholder. Percentage of ownership is based on 39,651,096 shares of common stock outstanding on March 15, 2008.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Per a promissory note dated February 2003, Jules Nordlicht, a shareholder, agreed to advance in total or in installments, up to the amount of $1,000,000 to the Company. In November 2003 and August 2004, agreements were executed with this shareholder to cause additional advances in total or in installments up to the amount of $2,500,000 to advance the process of the FDA approval. In consideration for the financing, the Company agreed to repay such borrowed funds with accrued interest at 12% per annum and the shareholder reserved the right to demand payment in full or in part at any time after December 31, 2006. On May 8, 2006 the shareholder agreed to extend the maturity date to December 31, 2008 provided that (i) a partial payment of $350,000 will be made by the Company on or prior to July 31, 2006 and (ii) accrued interest will be paid quarterly thereafter, commencing September 30, 2006. The agreement was amended on September 4, 2006 so that the Company need no longer pay the quarterly accrued interest but an amount of $60,000 quarterly as a principal reduction. If the Company should default in these payments, the promissory note reverts to the original maturity date of December 31, 2006. As of December 31, 2007, the loan balance to this shareholder aggregated $1,476,817. An additional amount of $428,775 of interest on this note has been accrued during 2007 and remains owed as of December 31, 2007. The lender has filed a Uniform Commercial Code (UCC) Lien on the Company's equipment and patents as security for this loan. The Company was unable to make its quarterly principal payment of $60,000 for the quarter ended September 30, 2007 and therefore, the remaining principal balance is being classified as a current liability due on demand.

On October 17, 2007 the Company received a $500,000 financing from Inverness Medical Innovations, Inc. The financing consists of a purchase of 1,428,571 common shares at a price of $0.35 per share. Additionally, Inverness received 5 year warrants to purchase up to an additional 1,071,428 shares of the Company's stock at a price of 75 cents per share. In connection with this financing, the Company and Inverness signed two additional agreements. First, the two companies signed an agreement whereby Inverness acquired an option to the exclusive, worldwide marketing and distribution rights to certain infectious disease diagnostic tests developed by StatSure that may utilize specified Inverness and/or StatSure intellectual property. If exercised by Inverness, the option provides for StatSure and Inverness to equally share development expenses and profits. StatSure and Inverness also entered into a license agreement whereby Inverness granted to StatSure a license to certain Inverness lateral flow patents for use in a rapid test to detect HIV antibodies in point-of-care markets subject to payment of royalties to Inverness. This license pertains to HIV tests using formats other than the StatSure's "barrel format" which is already being sold by Inverness. During the year ended December 31, 2007, the Company earned $168,721 in royalty income under this agreement.

Director Independence

Our common stock trades on the OTC Bulletin Board. As such, we are not currently subject to corporate governance standards of listed companies, which require, among other things, that the majority of the board of directors be independent.

Since we are not currently subject to corporate governance standards relating to the independence of our directors, we choose to define an “independent” director in accordance with the NASDAQ Global Market's requirements for independent directors (NASDAQ Marketplace Rule 4200). We do not currently have an independent director under the above definition. We do not list that definition on our Internet website.

PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) EXHIBITS INCLUDED HEREIN :

EXHIBIT NO. DESCRIPTION

3.1 Certificate of Incorporation, as amended, incorporated by reference to Exhibits 2.1 through 2.6 of the Company's Registration Statement No. 33-46648 filed on Form S-1 (the "Form S-1"); and to Exhibit 2.7 of the Company's Annual Report on Form 10-KSB for its fiscal year ended December 31, 1995

3.2 Certificate of Amendment, dated February 25, 1997, incorporated by reference to Exhibit 2.2 of the Company's Annual Report on Form 10-KSB for its fiscal year ended December 31, 1996

3.3 Certificate of Amendment, dated November 21, 1997, incorporated by reference to Exhibit 3.3 of the Company's Annual Report on Form 10-KSB for its fiscal year ended December 31, 1997 (the "1997 10-KSB")

3.4 Certificate of Amendment, dated July 31, 1998, incorporated by reference to Exhibit 3.4 of the Company's Quarterly Report on Form 10-QSB for its fiscal quarter ended June 30, 1998 (the "1998 10-QSB")

3.5 Company's By-laws, as amended, incorporated by reference to Exhibit 3.4 of 1997 10-KSB

3.6 Certification of Amendment dated March 18, 2002 incorporated by reference to Company's Form 14C filing on February 2, 2002

4.1 Specimen of Certificate Representing Common stock, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Registration No. 33-46648)

4.2 Form of Underwriter's Warrant, incorporated by reference to Exhibit 4.2 of the Form S-1.

4.3 7.5% Convertible Debenture due February 28, 1999, issued by the Company to The Tail Wind Fund, Ltd. on March 11, 1997, incorporated by reference to Exhibit 4 to the Company's Quarterly Report on Form 10-QSB for its fiscal quarter ended March 31, 1997

4.4 Common Stock Purchase Warrant for 8,995 shares, issued by the Company to Grayson & Associates on March 14, 1997, incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form SB-2(Registration No. 333-26795)

4.5 Letter Agreement dated May 28, 1997 between the Company and The Tail Wind Fund Ltd., incorporated by reference to Exhibit 4.9 to the Company's Current Report on Form 8-K dated June 5, 1997 (File No. 000-21284) (the "June 1997 8-K")

4.6 Letter Agreement dated June 27, 1997 between the Company and The Tail Wind Fund Ltd, incorporated by reference to Exhibit 4.10 to the June 1997 8-K

4.7 Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and The Tail Wind Fund Ltd., incorporated by reference to Exhibit 4.2 of the June 1997 8-K

4.8 Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and the investors set forth on Schedule A thereto, incorporated by reference to Exhibit 4.3 of the June 1997 8-K.

4.9 Registration Rights Agreement dated as of June 30, 1997 between the Company and The Tail Wind Fund Ltd., incorporated by reference to Exhibit 4.4 of the June 1997 8-K.

4.10 Form of Registration Rights Agreement dated as of June 30, 1997 between the Company and the investors set forth on Schedule A to the Common Stock Subscription Agreement dated as of June 30, 1997 by and between the Company and the investors set forth on Schedule A thereto, incorporated by reference to Exhibit 4.5 of the June 1997 8-K.

4.11 Form of Warrant issued to each of Grayson & Associates, Inc. and The Tail Wind Fund Ltd., incorporated by reference to Exhibit 4.1 of the June 1997 8-K.

4.13 Registration Rights Agreement dated as of August 22, 1997 between the Company and David Freund, incorporated by reference to Exhibit 10.6 of the S-3/A.

4.14 Certificate of Designations, Rights and Preferences of the Series 1998-A Convertible Preferred Stock, incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated January 26, 1998.

4.15 Warrant dated as January 26, 1998 issued to Biscount Overseas Limited, incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-3 dated February 26, 1998 (Registration No. 333-46961)(the "1998 S-3")

4.16 Amended Certificate of Designations, Rights and Preferences of the Series 1998-A Convertible Preferred Stock, incorporated by reference to Exhibit 4.14 of the 1998 10-QSB

4.17 Certificate of Designations, Rights and Preferences of the Series 1998-B Convertible Preferred Stock, incorporated by reference to Exhibit 4.16 of the 1998 10-QSB

4.25 Letter Agreement dated April 23, 1999, between the Company and Biscount Overseas Limited regarding Series 1998-B Convertible Preferred Stock

4.26 Loan agreement with Helenka Bodner, dated December 6, 1999

4.27 Form of Securities Purchase Agreement for sale of 9% Convertible Debentures commencing January 2005.

4.28 Audit Committee Charter commencing November 2005.

4.29 Certificate Of Designation Of The Relative Rights And Preferences Of The Series 2006 A Convertible Preferred Stock, incorporated by reference to Exhibit 4.18 of the August 4, 2006 SB-2.

10.2 Employment Agreement, dated August 9, 1994, between the Company and David Barnes, incorporated by reference to Exhibit 10.3 to the 1996 10-KSB. #

10.3 1992 Stock Option Plan, incorporated by reference to Exhibit 10.1 of the Form S-1. #

10.4 1994 Stock Option Plan, incorporated by reference to Exhibit A of the Proxy Statement for the Company's 1994 Annual Meeting. #

10.9 License Agreement between Saliva Diagnostic Systems, Inc. and Saliva Diagnostic Systems (Singapore) Pte. Ltd., incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-KSB for its fiscal year ended December 31, 1994 (the "1994 10-KSB")

10.10 Consulting Agreement, dated December 5, 1997, between the Company and International Business Consultants Limited, incorporated by reference to Exhibit 10.16 of the 1997 10-KSB

10.11 Sub-License Agreement by and among Saliva Diagnostic Systems, Pte. Ltd., Saliva Diagnostic Systems, Inc., Fremont Novo Sciences, L.L.C. and the Company dated February 21, 1995, incorporated by reference to Exhibit 10.17 of the 1997 10-KSB

10.12 Amendment to Sub-License Agreement, dated March 8, 1995, incorporated by reference to Exhibit 10.18 of the 1997 10-KSB

10.13 Agreement between Unilever PLC and the Company dated December 15, 1997, incorporated by reference to Exhibit 10.19 of the 1997 10-KSB

10.14 Distribution Agreement between Cadila Healthcare, Ltd. and the Company, dated January 18, 1999

10.15 Employment Agreement dated March 25, 2005 between the Company and Steve Peltzman.

10.16 Distribution Agreement between Memorand Management (1998) Ltd. and the Company, dated July 8, 2004

10.16 (2) Employment Agreement dated May 2, 2005 between the Company and Bruce Pattison.

10.17 Distribution Agreement between Ozonebio and the Company, dated August 15, 2004

10.18 Series A Convertible Preferred Stock Purchase Agreement, incorporated by reference to Exhibit 10.18 of the August 4, 2006 SB-2.

10.19 Series A Warrant To Purchase Shares Of Common Stock incorporated by reference to Exhibit 10.18 of the August 4, 2006 SB-2.

10.20 HIV Barrel License, Marketing and Distribution Agreement Dated As Of September 29, 2006 Among Inverness Medical Innovations, Inc. And Chembio Diagnostic Systems, Inc. And StatSure Diagnostic Systems, Inc. incorporated by reference to Exhibit 10.1 of the October 6, 2006 8-K

10.21 Joint HIV Barrel Product Commercialization Agreement with Chembio Diagnostic Systems, Inc. incorporated by reference to Exhibit 10.2 of the October 6, 2006 8-K

10.22 Settlement Agreement with Chembio Diagnostic Systems, Inc. incorporated by reference to Exhibit 10.3 of the October 6, 2006 8-K

10.23 Securities Purchase Agreement between StatSure Diagnostic Systems, Inc., and IM US Holdings, LLC, incorporated by reference to Exhibit 10.23 of the December 5, 2007 8-K.

10.24 Issuance of warrant to purchase shares of common stock of StatSure Diagnostic Systems, Inc. incorporated by reference to Exhibit 10.24 of the December 5, 2007 8-K.

11.5* Earnings Per Share

24* Powers of Attorney (included on the signature pages to this Annual Report)

31* Certifications required under Section 302 of the Sarbanes Oxley Act of 2002

32* Certifications required under Section 906 of the Sarbanes Oxley Act of 2002

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The Company's independent accountants during the years ending December 31, 2007 and 2006 were Lazar Levine & Felix LLP.

Audit Fees. During the years ended December 31, 2007 and 2006, the aggregate fees billed by the Company's auditors, for services rendered for the audit of our annual financial statements and the review of the financial statements included in our quarterly reports on Form 10-QSB and for services provided in connection with the statutory and regulatory filings or engagements for those fiscal years was $129,000 and $145,000, respectively.

Audit-Related Fees. During years ended December 31, 2007 and 2006 our auditors did not receive any fees for any audit-related services other than as set forth in paragraph (a) above.

Tax Fees. Our auditors did not provide tax compliance or tax planning advice during the years ended December 31, 2007 and 2006.

All Other Fees. There were no fees billed for services rendered by Lazar Levine & Felix LLP for 2007 and 2006, other than the services described above.

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: April 2, 2008

STATSURE DIAGNOSTIC SYSTEMS, INC.

	/s/ Steve M. Peltzman
	Steve M. Peltzman
	Chairman of the Board and
	Chief Executive Officer

	/s/ Leo Ehrlich
	Leo Ehrlich
	Chief Financial Officer and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on April 2, 2008

/s/ D. Bruce Pattison
D. Bruce Pattison		President, Chief Operating Officer and Director

/s/ Richard Woodrich
Richard Woodrich		Director

/s/ Joseph Levi		Director
Joseph Levi

StatSure Diagnostic Syst... (CE) (USOTC:SSUR)
Gráfica de Acción Histórica
De May 2024 a Jun 2024

Haga Click aquí para más Gráficas StatSure Diagnostic Syst... (CE).

StatSure Diagnostic Syst... (CE) (USOTC:SSUR)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024

Datos

Noticias

Herramientas

Mercados

Descubrir

Hot Features

Follow Feed

Flujo de Opciones

Monitor

SSUR StatSure Diagnostic Systems Inc (CE)

Noticias sobre Statsure Diagnostic Systems, Inc. SSUR

Su Consulta Reciente

Empresa

Negocios

Popular

Obtener la aplicación

Tendencias Ahora

Listas Principales

Datos

Noticias

Herramientas

Mercados

Descubrir

Hot Features

Follow Feed

Flujo de Opciones

Monitor

SSUR StatSure Diagnostic Systems Inc (CE)

Noticias sobre Statsure Diagnostic Systems, Inc. SSUR

Su Consulta Reciente

Empresa

Negocios

Popular

Obtener la aplicación