PART I	FINANCIAL INFORMATION:	4

Item 1.	Financial Statements (Unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4.	Controls and Procedures	17

Item 4T.	Controls and Procedures	17

PART II	OTHER INFORMATION	18

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Submission of Matters to a Vote of Security Holders	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

SIGNATURES		19

	March 31, 2008			December 31, 2007
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,524,587		$	5,188,177
Certificates of deposit		1,000,000			-
Inventories		1,074,356			1,044,856
Prepaid expenses and other current assets		151,722			41,437
Total current assets		5,750,665			6,274,470
Fixed assets, net		957,853			943,482
Patents, net		3,352,725			3,415,117
TOTAL ASSETS	$	10,061,243		$	10,633,069

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	93,231		$	155,051
Accrued liabilities		91,071			12,463
Total current liabilities		184,302			167,514

STOCKHOLDERS’ EQUITY
Undesignated capital stock, undesignated par value, 22,750,000 shares authorized, none issued		-			-
Series A Convertible Preferred Stock, $.01 par value:
Authorized - 2,250,000 shares Issued and outstanding - 0 shares at March 31, 2008 (2,000,000 shares at December 31, 2007)		-			20,000
Common stock, $.01 par value:
Authorized—100,000,000 shares
Issued and outstanding 67,608,330 shares at March 31, 2008 (58,992,944 shares at December 31, 2007)		676,083			589,929
Additional paid-in capital		17,120,069			16,430,997
Deficit accumulated during the development stage		(7,919,211	)		(6,575,371	)
TOTAL STOCKHOLDERS’ EQUITY		9,876,941			10,465,555
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,061,243		$	10,633,069

	Three Months Ended March 31,						August 2, 2004 (Inception of Successor Company) to March 31,
	2008			2007			2008

Revenue	$	3,800		$	-		$	3,800
Cost of revenue		2,716			-			2,716
Gross profit		1,084			-			1,084

Operating expenses:
Research and development		490,448			74,442			2,024,467
General and administrative		687,783			189,029			4,238,657
Sales and marketing		202,206			-			791,741
Total operating expenses		1,380,437			263,471			7,054,865
Operating loss		(1,379,353	)		(263,471	)		(7,053,781	)

Other income, net		35,513			911			134,570
Net Loss		(1,343,840	)		(262,560	)		(6,919,211	)
Deemed dividend on preferred stock		-			-			(1,000,000	)
Net loss applicable to common Stockholders	$	(1,343,840	)	$	(262,560	)	$	(7,919,211	)
Basic and diluted net loss per share	$	(0.02	)	$	(0.01	)
Weighted average common shares outstanding		59,649,405			38,529,254

	Preferred Stock Shares Amount						Common Stock Shares Amount				Additional Paid-In Capital			Deficit Accumulated During The Development Stage			Total Stockholders’ Equity

Balance, December 31, 2007		2,000,000		$	20,000			58,992,944	$	589,929	$	16,430,997		$	(6,575,371	)	$	10,465,555

Stock based compensation - consultants		-			-			-		-		69,543			-			69,543
Stock based compensation - employees		-			-			-		-		308,430			-			308,430
Sale of common stock @ $0.70 per share		-			-			615,386		6,154		371,099			-			377,253
Conversion of Series A Preferred Stock		(2,000,000	)		(20,000	)		8,000,000		80,000		(60,000	)		-			—

Net loss		-			-			-		-		-			(1,343,840	)		(1,343,840	)
Balance, March 31, 2008		—		$	—			67,608,330	$	676,083	$	17,120,069		$	(7,919,211	)	$	9,876,941

	Three Months Ended March 31,						August 2, 2004 (Inception of Successor Company) to March 31,
	2008			2007			2008
OPERATING ACTIVITIES:
Net loss	$	(1,343,840	)	$	(323,276	)	$	(6,919,211	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		66,887			7,396			190,214
Stock-based compensation employees		308,430			19,779			1,611,515
Stock-based compensation consultants		69,543			69,184			925,239
Gain on disposal of fixed assets		-			-			(28,839	)
Write-off of obsolete inventories		-			-			25,188
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(29,500	)		12,709			(93,592	)
Accounts payable		(61,819	)		35,816			33,531
Accrued liabilities		(31,677	)		(637	)		(51,307	)
Net cash used in operating activities		(1,021,975	)		(179,029	)		(4,307,262	)

INVESTING ACTIVITIES:
Purchase of certificate of deposit		(1,000,000	)		-			(1,000,000	)
Purchases of fixed assets		(18,866	)		-			(41,288	)
Proceeds from the sale of assets		-			-			38,891
Net cash provided by (used in) investing activities		(1,018,866	)		-			(1,008,397	)

FINANCING ACTIVITIES
Proceeds from issuance of common stock		377,251			-			6,413,235
Net proceeds from issuance of preferred stock		-			-			973,021
Proceeds from exercise of stock options		-			4,275			12,000
Net cash provided by financing activities		377,251			4,275			7,398,256
Net increase (decrease) in cash and cash equivalents		(1,663,590	)		(174,754	)		2,082,597

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		5,188,177			441,025			1,441,990

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,524,587		$	266,271		$	3,524,587
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock for assets of LUMA Imaging Corporation	$	-		$	-		$	5,024,783
Conversion of notes payable and accrued interest to common stock	$	-		$	-		$	565,000
Issuance of common stock in settlement of bankruptcy debt	$	-		$	-		$	60,000
Fresh start adjustment to fixed assets and patents	$	-		$	-		$	255,379

SpectraScience, Inc. was incorporated in the State of Minnesota on May 4, 1983 as GV Medical, Inc. In October 1992, GV Medical discontinued its prior business, refocused its development efforts and changed its name to SpectraScience, Inc. The “Company”refers to SpectraScience, Inc. and its wholly owned subsidiary Luma Imaging Corporation From 1996, the Company primarily focused on developing the WavSTAT® Optical Biopsy System (“WavSTAT System”).

The Company has developed and received FDA approval to market a proprietary, minimally invasive technology that optically scans tissue in real-time to distinguish between normal, pre-cancerous or cancerous cells without the need to remove the subject cell tissue from the body to make such determination. The WavSTAT System operates by using cool, safe UV laser light to optically scan and analyze tissue, enabling the physician to make an instant diagnosis during endoscopy when screening for cancer, and if warranted, to begin immediate treatment during the same procedure. The WavSTAT is FDA approved for colon cancer detection.

On November 6, 2007, the Company acquired the assets of Luma Imaging Corporation (“LUMA^®”) in an equity transaction accounted for as an acquisition of assets and now operates LUMA as a wholly owned subsidiary of the Company. LUMA had acquired the assets from a predecessor company that had developed and received FDA approval for, a non-invasive diagnostic imaging system that can detect cervical cancer precursors and which utilizes an underlying technology that is similar to that of the WavSTAT System. The addition of the LUMA technology to the Company’s existing WavSTAT System technology provides the Company with a broad suite of fluorescence-based intellectual property and know-how. LUMA received FDA approval as an adjunct to colposcopy in March 2006.

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q as they are prescribed for smaller reporting companies. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the three month period ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. These statements should be read in conjunction with the financial statements and related notes, which are included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007.

The Company is a development stage enterprise since it has not yet generated significant revenue from the sale of products.Through March 31, 2008,its efforts have been principally devoted to moving the Company forward and preparing our products for domestic and international market introduction. Activities beginning on August 2, 2004 are deemed to be development stage operations. Accordingly, Company activities on the accompanying financial statements reflect both period to date and inception to date development stage activities. As of March 31, 2008, the Company had working capital of approximately $5,566,000 and cash and cash equivalents of approximately $3,524,000 and short-term certificates of deposit of $1,000,000 for a total of approximately $4,524,000. The Company believes that existing working capital balances will be sufficient to provide for operations and execution of its present business plans. However, the Company may incur unknown expenses, or the Company may not be able to meet its revenue forecasts, and this may require the Company to seek additional capital. In such an event, the Company may not be able to find such capital or be able to raise capital or debt on terms that are acceptable.

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financials statements. Significant estimates made by management include, among others, realization of long-lived assets, assumptions used to value stock options, assumptions used to value the common stock issued and the assets acquired in the Luma acquisition and the realization of intangible assets. Actual results could differ from those estimates.

Highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash equivalent accounts.

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards, (“SFAS”) No. 123(R), “Share-Based Payment”, (“SFAS 123(R)”) which establishes standards for transactions in which an entity exchanges its equity instruments for goods or services. SFAS 123(R) requires an issuer to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. SFAS 123(R) became effective for the Company commencing January 1, 2006. In accordance with the provisions of SFAS No. 123 “Accounting for Stock-Based Compensation”, (“SFAS 123”) and Emerging Issues Task Force (“EITF”) No. 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring or in Conjunction with Selling Goods or Services,” all other issuances of common stock, stock options or other equity instruments to non-employees as the consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). Any options issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ equity over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options at the end of each period. The intrinsic value of the options granted are assumed to be zero because the exercise price of options granted equaled the fair market value of the underlying stock at the date of grant.

For the three months ended March 31, 2008 and 2007, stock-based compensation was approximately $378,000 and $90,000, respectively. Stock-based compensation expense of approximately $184,000 and $0 was recognized in research and development expenses for the three months ended March 31, 2008 and 2007, repectively. Stock-based compensation expense of approximately $188,000 and $90,000 was recognized in general and administrative expenses for the three months ended March 31, 2008 and 2007, respectively. Stock based compensation expense of approximately $6,000 and $0 was recognized in sales and marketing expense for the three months ended March 31, 2008 and 2007, respectively. The Company previously adopted the fair value recognition provisions of SFAS 123 prospectively for all employee and consultant awards granted, modified, or settled by the Company on August 2, 2004. Accordingly, SFAS 123(R) has not had a material impact on the comparability of Company’s financial statements.

As of March 31, 2008, the Company has one stock-based employee compensation plan (the “Option Plan"). The Option Plan provides for the grant of incentive stock options (“ISOs") to full-time employees (who may also be Directors) and nonqualified stock options ("NSOs") to non-employee directors, consultants, customers, vendors or providers of services and expires on January 30, 2011. The exercise price of any ISO may not be less than the fair market value of the common stock on the date of grant and the term shall not exceed ten years. The amount reserved under the Option Plan equals 15% of the outstanding shares of the Company, totaling 10,141,250 reserved at March 31, 2008. At March 31, 2008 the Company had outstanding 5,795,000 options under the Option Plan representing approximately 8.5% of the outstanding shares (3,345,000 of which were exercisable), with 4,346,250 available for future issuance. Awards under the Company’s Option Plan generally vest over twoyears.

The fair value of options granted were estimated at the date of grant using a Black-Scholes option-pricing model which includes several variables including expected life, risk free interest rate, expected stock price volatility, stock option exercise patterns and expected dividend yield. The Company also must estimate forfeitures for employee stock options. These models and assumptions are emerging and may change future expenses by increasing or decreasing stock-based compensation expense. Management used the following weighted average assumptions to value all stock options for the three months ending March 31, 2008 and 2007:

Volatility is a calculation based on the Company’s stock price since the beginning of the Successor Company. Management computed and tested this volatility calculation for reasonableness and found it to be acceptable based on a number of factors including the Company’s current market capitalization, comparables to other companies in our area of interest, the current development stage of the Company and management’s estimate of the net present value of forward looking profits that has been compiled (for which there is no assurance).

	Options Available For Grant		Plan Options Outstanding		Weighted Average Exercise Price Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding December 31, 2007		3,053,942		5,795,000	$	0.70
Options granted
Options exercised
Additional options available		1,292,308
Forfeited or expired
Outstanding at March 31, 2008		4,346,250		5,795,000	$	0.70		8.38	$	1,134,250
Exercisable at March 31, 2008				3,345,000	$	0.56		7.66	$	1,147,750

SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), addresses financial accounting and reporting for the impairment or disposal of long-lived assets (such as our patents). SFAS 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset (excluding interest), an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value. SFAS 144 also requires companies to separately report discontinued operations and extends that reporting requirement to a component of an entity that either has been disposed of (by sale, abandonment or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or the estimated fair value less costs to sell. The Company adopted SFAS 144 on August 2, 2004. The provisions of this pronouncement relating to assets held for sale or other disposal generally are required to be applied prospectively after the adoption date to newly initiated commitments to plan to sell or dispose of such asset, as defined, by management. As a result, management cannot determine the potential effects that adoption of SFAS 144 will have on the Company's consolidated financial statements with respect to future disposal decisions, if any. Management believes no impairment exists at March 31, 2008.

In July 2006, the Financial Accounting Standards Board issued Financial Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes”, which applies to all tax positions related to income taxes subject to SFAS 109, “Accounting for Income Taxes”, which is effective on January 1, 2007. FIN 48 requires a new evaluation process for all tax positions taken. If the probability for sustaining said tax position is greater than 50%, then the tax position is warranted and recognition should be at the highest amount which would be expected to be realized upon ultimate settlement. FIN 48 requires expanded disclosure at each annual reporting period unless a significant change occurs in an interim period. Differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption are to be accounted for as an adjustment to the beginning balance of deficit accumulated during the development stage. The Company has completed its evaluation of the impact of FIN 48 and determined that such adoption does not have a material impact on the Company's financial position or results of operations.

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted earnings (loss) per share is computed similarly to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and only if the additional common shares would be dilutive. Basic and diluted loss per share are the same for the three months ended March 31, 2008 and 2007, since any additional common stock equivalents would be antidilutive. Potentially dilutive shares of common stock that have been excluded from the calculation of the weighted average number of dilutive common shares for the three months ended March 31, 2008 include exercisable stock options to purchase 3,345,000 shares of common stock and warrants to purchase 1,775,824 shares of common stock. If converted under the treasury method, these instruments would have resulted in an additional approximate 2,211,000 equivalent common shares outstanding.

In September 2006, the Financial Accounting Standards Board, or FASB, issued SFAS, No. 157, “Fair Value Measurement.” SFAS No. 157 established a framework for measuring fair value in accordance with GAAP, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. It also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company has adopted SFAS No. 157 and such adoption has no effect on the Company's financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115,” (“SFAS 159”). This statement permits, but does not require, entities to measure many financial instruments at fair value. The objective is to provide entities with an opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Entities electing this option will apply it when the entity first recognizes an eligible instrument and will report unrealized gains and losses on such instruments in current earnings. This statement (1) applies to all entities, (2) specifies certain election dates, (3) can be applied on an instrument-by-instrument basis with some exceptions, (4) is irrevocable, and (5) applies only to entire instruments. One exception is demand deposit liabilities which are explicitly excluded as qualifying for fair value. With respect to SFAS 115, available-for-sale and held-to-maturity securities at the effective date are eligible for the fair value option at that date. If the fair value option is elected for those securities at the effective date, cumulative unrealized gains and losses at that date shall be included in the cumulative-effect adjustment and thereafter, such securities will be accounted for as trading securities. SFAS 159 became effective for the Company on January 1, 2008. The Company has adopted SFAS No. 159 and determined that such adoption has no effect on the Company's financial position or results of operations.

In December 2007, the FASB issued No. 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) replaces SFAS 141 and provides greater consistency in the accounting and financial reporting of business combinations. SFAS 141(R) requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction and any non-controlling interest in the acquiree at the acquisition date and be measured at the fair value as of that date. This includes the measurement of the acquirer’s shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gain and loss contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance and deferred taxes. SFAS 141(R) will be effective for the Company on January 1, 2009 and is to be applied prospectively. Early adoption is not permitted. Management is currently assessing the impact, if any, that SFAS 141(R) may have on the Company.

In November 2007, the Emerging Issues Task Force (EITF) ratified a consensus on EITF Issue No. 07-1, “Accounting for Collaborative Arrangements” (“EITF 07-1”) which requires participants in a collaboration to make separate disclosures regarding the nature and purpose of an arrangement, their rights and obligations under the arrangement, the accounting policy for the arrangement and the income statement classification and amounts arising from the arrangement between participants for each period an income statement is presented. EITF 07-1 is effective for us beginning in the first quarter of fiscal year 2009. We are currently evaluating the impact of the provisions of EITF 07-1 on our financial position, results of operations and cash flows and therefore, the impact of the adoption is unknown at this time.

In June 2007, the EITF ratified a consensus on EITF Issue No. 07-3 (“EITF 07-3”), “Accounting for Non-Refundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities,” which concluded that non-refundable advance payments for goods or services for use in research and development activities should be deferred and capitalized. EITF 07-3 is effective for us beginning in the first quarter of fiscal year 2008. We are currently evaluating the impact of the provisions of EITF 07-3 on our financial position, results of operations and cash flows and therefore, the impact of the adoption is unknown at this time.

In February 2008, the Company issued 615,386 shares of common stock to accredited investors at a price of $0.70 per share for an aggregate consideration of $430,770 in a second closing which is a part of a private equity financing (the “Financing”). The Company received net cash proceeds of approximately $377,000 after placement agent commissions and expenses of $42,770. The Company is obligated to file a registration statement with the SEC for these common shares within 60 days of the Closing and to use its best efforts to have such registration statement effective 180 days from the Closing unless the shares are saleable without volume restrictions under Rule 144. In the event that the Company does not have an effective registration statement in place within 180 days from the Closing or that the shares are not otherwise saleable under Rule 144, the Company is required to pay liquidated damages in an amount equal to 1% of the aggregate purchase price paid by the subscribers for each 30-day period in which the Company remains in default under this provision. In no event, however, can the aggregate liquidated damage amount exceed 6% of the aggregate purchase price paid by the investors. This transaction was exempt from registration pursuant to Regulation D promulgated under the Securities Act of 1933.

On June 12, 2007, the Company’s Articles of Incorporation were amended to designate 2,250,000 of the Company’s undesignated capital stock as Series A Convertible Preferred Stock (the “Preferred”) with par value $0.01 per share. At issuance, the Preferred is convertible into an equal number of shares of the Company’s common stock based upon an initial conversion price of $.50 per share and carries a liquidation preference of like amount. In addition, the Preferred has rights which provide for (i) dividend payments senior to those with respect to common shares, (ii) voting rights equal to the number of common shares into which the Preferred is convertible, (iii) automatic conversion in the event either of an underwritten public offering exceeding $30 million in gross proceeds to the Company at an offering price in excess of $2.00 per share or approval of 67% of the Preferred holders and (iv) adjustments to the conversion price in the event of stock dividends, stock splits or other effective stock subdivisions. If the Company declares a dividend or a distribution on any common stock of the Company, the Company shall pay a dividend or make a distribution on all outstanding shares of Preferred in an amount per share equal to the maximum amount paid or set aside for all shares of common stock into which each such share of Preferred could then be converted. On June 15, 2007, the Company sold 2,000,000 shares of its Preferred to three accredited investors for gross proceeds of $1,000,000 in cash. As additional consideration for the purchase of the Preferred, the Company issued five-year warrants to purchase 250,000 additional shares of Preferred at an initial exercise price of $0.50 per share. The Company is also required to reserve 250,000 shares of Preferred for issuance in relation to the warrants.

The convertible feature of the Preferred and the terms of the warrants provide for a rate of conversion or exercise that was below market value at issuance. Such feature, as it specifically relates to the convertible feature of the Preferred, is characterized as a "Beneficial Conversion Feature" ("BCF"). Pursuant to EITF Issue No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" (“EITF 98-5”) and EITF No. 00-27, "Application of EITF Issue No. 98-5 to Certain Convertible Instruments," the estimated relative fair values of the Preferred and the warrants, in approximate amounts of $782,000 and $218,000, respectively, were calculated assuming the most favorable conversion price determinable to the Preferred shareholders. The value of the BCF was determined by the intrinsic value method and the fair value of the warrants was determined by the Black-Scholes option-pricing model at the date of issuance. The warrant fair value was determined assuming a five-year term, stock volatility of 140%, and a risk-free interest rate of 5.10%. The stand-alone fair value of the BCF was determined to be substantially higher than the proceeds received and, accordingly, the value assigned to the BCF was limited to the gross proceeds received from the offering. Per the guidance of EITF 98-5, the value of the BCF and warrants are treated as a deemed dividend to the Preferred stockholders and, due to the potential immediate convertibility of the Preferred stock at issuance, is recorded as an increase to both additional paid-in-capital and deficit accumulated during the development stage at the time of issuance.

This Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Report, or in our future filings with the SEC, in our press releases and in oral statements made with the approval of an authorized executive officer, the words or phrases “anticipates,” “estimates,” “expects,” “will likely result,” “projects,” “believes,” “intends,” or similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements.

We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date made. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances after the date of such statements. Readers are urged to carefully review and consider the various disclosures made by us in this Report and other reports we file with the SEC that attempt to advise interested parties of the risks and factors that may affect our business. Such forward-looking statements are qualified in their entirety by the cautions and risk factors set forth in our Annual Report on Form 10-KSB covering the year ended December 31, 2007.

SpectraScience, Inc. develops and manufactures innovative Laser Induced Fluorescence spectrophotometry systems capable of determining whether tissue is normal, pre-cancerous or cancerous without removing tissue from the body. The WavStat® Optical Biopsy System (“WavStat”) is SpectraScience's first fully developed product to incorporate its proprietary Laser Induced Fluorescence technology for worldwide clinical use. It is approved by the FDA for use during endoscopy of the colon when screening for colon cancer. The Company’s second application of this technology for detecting pre-esophageal cancer is undergoing a clinical trial at four institutions. Upon completion of the trial, the Company plans to file with the FDA a supplement to its existing PMA seeking permission to begin marketing for that indication for use. SpectraScience believes its core technology is a platform technology that can be developed for use in many areas of the human body.

The Company currently has FDA approval to market the WavSTAT System for detecting pre-cancerous and cancerous tissue in the colon and to market the LUMA System for use as an adjunct to colposcopy in the detection of early stage cancer and pre-cancer of the cervix. Our plan is to add another indication for use in detecting pre-cancer and cancer in the esophagus. With the acquisition of the LUMA product in November 2007, we will be developing a sales plan during the first half of 2008. Over the next twelve months SpectraScience intends to:

Overall research and development expenses for the three months ended March 31, 2008 and 2007 were $490,448 and $74,442, respectively. The increase in research and development expenses related to increases in personnel and activity related to the final development work and commercialization of the WavSTAT and LUMA product platforms. Of the total expense increase of $414,922, approximately $184,000 was a result of increases in non-cash stock option expense.

General and administrative expenses for the three months ended March 31, 2008 and 2007 were $687,783 and $189,029, respectively. The increase for the three months ended March 31, 2008 compared to the three months ended March 31, 2007 was due to the increased activity related to the commercialization of our WavSTAT and LUMA product platforms. Of the total expense increase of $498,754, approximately $188,000 was a result of increases in non-cash stock option expense.

As a result of the above, the net loss for the three months ended March 31, 2008 and 2007 was ($1,343,840) and ($262,560), respectively. The increased net loss was due to increases overall operating expense as a result of preparation for the production and commercialization of the WavSTAT and LUMA systems, increases in stock option compensation expense and the increased cost personnel associated with new sales and marketing activities. Of the net loss for the quarter ended March 31, 2008 approximately ($378,000) was comprised of non-cash stock-option expense.

On March 31, 2008, the Company had cash balances of $3,524,587 and short-term certificates of deposit of $1,000,000 for a total of $4,424,587 as compared to $5,188,177 in cash at December 31, 2007 representing a decrease of ($663,590) in liquid assets for the period. The cash and liquid asset balances decreased primarily due to working capital used in operations offset by funds raised through Regulation D private placements of common stock. During the three months ending March 31, 2008, the Company raised $387,693, net of issuance costs, from the sale of 615,386 shares of common stock at $0.70 per share, in each case sold to accredited investors. There have been minimal capital equipment expenditures and none are foreseen.

SpectraScience expects to incur significant additional operating losses through at least 2008, as we complete a clinical trial, begin outcome-based clinical studies, continue research and development activities, and increase sales and marketing efforts to commercialize the WavSTAT and LUMA systems. If we do not receive additional funding in a timely manner, the Company may be unable to continue as a going concern. We may not be able to find alternative capital or raise capital or debt on terms that are acceptable. Even if the Company receives additional funding, such proceeds may not be sufficient to allow the Company to sustain operations until it attains profitability and positive cash flows from operations; we may incur unknown expenses; or we may not be able to meet our revenue forecast, and one or more of these circumstances would require us to seek additional capital.

As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Report, the Company’s Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15c). Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective.

Under the supervision of and with the participation of our management, including our Chief Executive Officer, and Chief Financial Officer, we performed an evaluation of the Company’s internal controls over financial reporting as per the requirements of Section 404 of the Sarbanes-Oxley Act (“SOX”) for non-accelerated filers. Management understands that it is its responsibility to establish and maintain adequate internal control over financial reporting for the Company. Management assessed the processes related to and the systems of internal control over financial reporting and determined that, in combination with mitigating corporate controls, the Company’s internal control over financial reporting is effective at March 31, 2008.

Management identified and analyzed material financial statement accounts and their associated relevant business processes in first performing a financial risk assessment, then an entity-level risk assessment and, finally, an information technology risk assessment. The Financial Risk assessment segmented the different financial control processes (for example, the financial reporting, inventory management and purchasing processes) against material real and nominal financial accounts to determine which processes might imply the highest risk of financial statement misstatement. Management then reviewed and vetted these high-risk processes. Management conducted an Entity-Level risk assessment and reviewed such controls utilizing the COSO (Committee of Sponsoring Organizations of the Treadway Commission) control framework. In addition, Management performedan Information Technology risk assessment and reviewed the primary computer systems which effect the reporting of financial information. Management reviewed application, database, operating system and network software. We also reviewed our server, storage, network and desktop hardware environment.

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings
	None

Item 1A.	Risk Factors
	None

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	In February 2008, the Company sold 615,386 shares of common stock to accredited investors at a price of $0.70 per share for an aggregate consideration of $430,770. The Company received net cash proceeds of approximately $388,000 after placement agent commissions and expenses of $42,770.This transaction was exempt from registration pursuant to Regulation D promulgated under the Securities Act of 1933.

Item 3.	Defaults Upon Senior Securities
	None

Item 4.	Submission of Matters to a Vote of Security Holders
	None

Item 5.	Other Information
	None

Item 6.	Exhibits

Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Minnesota	41-1448837
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x

	2008		2007
Expected life		5 years		5 years
Risk-free interest rate		3.2%		4.5%
Expected volatility		133%		144%
Expected dividend yield		0%		0%

	March 31, 2008		December 31, 2007
Raw materials	$	1,016,240	$	986,740
Finished goods		58,116		58,116
Totals	$	1,074,356	$	1,044,856

	SpectraScience, Inc.
	(Registrant)

Date May 15, 2008	/s/ James Hitchin
	James Hitchin
	President, Chief Executive Officer
	(Principal executive officer)

Date May 15, 2008	/s/ James Dorst
	James Dorst
	Chief Financial Officer
	(Principal Financial and Accounting Officer)