10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

Commission file number 0-13092

SPECTRASCIENCE, INC.

(Exact name of registrant

as specified in its charter)

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

11568 Sorrento Valley Rd., Suite 11

San Diego, California 92121

(Address of principal executive offices, including zip code)

(858) 847-0200

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES x     NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit and post such files). YES  x    NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer        ¨	Accelerated filer                  ¨
Non-accelerated filer           ¨	Smaller reporting company        x

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

YES ¨ NO x

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding on April 18, 2014 was 168,043,254.

SPECTRASCIENCE, INC.

FORM 10-Q

For the Three and Nine Months Ended September 30, 2013

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
SIGNATURES		29

2

PART I     FINANCIAL INFORMATION:

Item 1. Financial Statements

SpectraScience, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2013			2012
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	238,485		$	90,192
Accounts receivable, net		30,000			-
Inventories		120,642			202,077
Deferred debt issuance costs		45,076			165,649
Prepaid expenses and other current assets		223,331			191,030
Total current assets		657,534			648,948
Fixed assets, net		31,970			85,592
Patents, net		1,554,701			1,678,787
	$	2,244,205		$	2,413,327
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	1,014,469		$	861,698
Note payable to an affiliate		45,000			-
Convertible debt, net of discounts of $259,715 as of September 30, 2013 and $520,851 as of December 31, 2012		2,076,070			608,622
Derivative liability		2,199,794			2,335,560
Accrued Expenses		466,242			183,855
Total current liabilities		5,801,575			3,989,735
COMMITMENTS
Stockholders' deficit
Series A Convertible Preferred Stock, $.01 par value; 0 shares authorized, issued and outstanding as of September 30, 2013 and December 31, 2012		-			-
Series B Convertible Preferred Stock, $.01 par value; 2,585,000 shares authorized, issued and outstanding as of September 30, 2013 and December 31, 2012; liquidation value of $517,000 plus accumulated and and unpaid dividends of $106,931 as of September 30, 2013 and December 31, 2012		25,850			25,850
Series C Convertible Preferred Stock, $.01 par value; 1,000,000 shares authorized; 500,000 and 1,000,000 shares issued and outstanding as of September 30, 2013 and December 31, 2012; liquidation value of $100,000 and $200,000 as of September 30, 2013 and December 31, 2012		5,000			10,000
Common stock, $.01 par value; 321,415,000 shares authorized; 162,295,047 and 152,229,665 shares issued and outstanding as of September 30, 2013 and December 31, 2012		1,622,950			1,522,297
Additional paid in capital		36,524,648			35,491,603
Accumulated deficit		(41,735,818	)		(38,626,158	)
Total stockholders' deficit		(3,557,370	)		(1,576,408	)
	$	2,244,205		$	2,413,327

See accompanying summary of accounting polices and notes to unaudited condensed consolidated financial statements.

3

SpectraScience, Inc. and Subsidiary

Condensed Consolidated Statements of Operation

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Revenue	$	60,000		$	150,750		$	180,000		$	460,874
Cost of revenue		36,756			77,949			110,269			278,243
Gross profit		23,244			72,801			69,731			182,631
Operating expenses:
Research and development		59,176			235,988			440,086			905,686
General and administrative		375,200			536,656			1,527,780			1,737,056
Sales and marketing		33,285			107,174			200,355			347,925
		467,661			879,818			2,168,221			2,990,667
Loss from operations		(444,417	)		(807,017	)		(2,098,490	)		(2,808,036	)
Other expense (income)
Interest expense		79,260			105,596			202,352			259,463
Change in fair value of derivative and warrant liabilities		(1,156,215	)		(1,206,699	)		(1,073,017	)		3,265,264
Amortization of derivative and warrant liabilities discount		308,484			806,687			1,328,849			2,252,549
Amortization of deferred debt issuance costs and original issue discount		141,840			352,544			532,912			957,405
Loss on extinguishment of debt		-			-			16,989			-
Other expense (income), net		4,848			335			3,085			2,672
		(621,783	)		58,463			1,011,170			6,737,353
Net income (loss)	$	177,366		$	(865,480	)	$	(3,109,660	)	$	(9,545,389	)
Basic and diluted income (loss) per share	$	0.00		$	(0.01	)	$	(0.02	)	$	(0.09	)
Weighted average common shares outstanding:
Basic and diluted		161,854,734			117,152,589			158,736,987			111,078,252

See accompanying summary of accounting polices and notes to unaudited condensed consolidated financial statements.

4

SpectraScience, Inc. and Subsidiary

Condensed Consolidated Statement of Shareholders' Deficit

For the nine months ended September 30, 2013

(unaudited)

															Additional					Total
	Series B Preferred Stock				Series C Preferred Stock						Common Stock				Paid-In		Accumulated			Shareholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Deficit
Balance December 31, 2012		2,585,000	$	25,850		1,000,000		$	10,000			152,229,665	$	1,522,297	$	35,491,603	$	(38,626,158	)	$	(1,576,408	)
Non cash issuance of stock options		-		-		-			-			-		-		287,338		-			287,338
Common stock issued for cash		-		-		-			-			187,500		1,875		7,500		-			9,375
Common stock issued for services		-		-		-			-			4,000,000		40,000		204,500		-			244,500
Common stock issued for debt offering costs		-		-		-			-			312,500		3,125		12,500		-			15,625
Conversion of convertible debt		-		-		-			-			5,065,382		50,653		246,492		-			297,145
Conversion of Series C Convertible Preferred		-		-		(500,000	)		(5,000	)		500,000		5,000		-		-			-
Warrant valuation on issuance of convertible debt		-		-		-			-			-		-		257,726		-			257,726
Loss on debt extinguishment		-		-		-			-			-		-		16,989		-			16,989
Net loss		-		-		-			-			-		-		-		(3,109,660	)		(3,109,660	)
Balance September 30, 2013		2,585,000	$	25,850		500,000		$	5,000			162,295,047	$	1,622,950	$	36,524,648	$	(41,735,818	)	$	(3,557,370	)

5

SpectraScience, Inc. and Subsidiary

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
Operating activities:
Net loss	$	(3,109,660	)	$	(9,545,389	)
Adjustments to reconcile net loss to cash used in operating activities:
Provision for uncollectable accounts receivable		4,281			-
Amortization and depreciation		179,308			290,132
Non-cash issuance of stock options		287,338			279,992
Amortization of derivative and warrant liabilities discount		1,328,849			2,252,549
Amortization of deferred debt issuance costs and original issue discount		532,912			957,405
Change in fair value of derivative and warrant liabilities		(1,073,017	)		3,265,264
Loss on extinguishment of debt		16,989			-
Fair market value of common stock issued for services		244,500			8,500
Changes in assets and liabilities:
Accounts receivable		(34,281	)		(125,496	)
Inventory		81,435			91,544
Prepaid expense and other assets		(32,301	)		(95,536	)
Accounts payable		144,156			32,306
Accrued expenses		350,248			199,696
Net cash used in operating activities		(1,079,243	)		(2,389,033	)
Investing activities:
Purchases of fixed assets		(1,600	)		(4,170	)
Net cash used in investing activities		(1,600	)		(4,170	)
Financing activities:
Proceeds from issuance of convertible notes payable		1,372,000			2,688,000
Proceeds from issuance of note payable to affiliate		45,000			-
Proceeds from issuance of common stock for cash		9,375			-
Debt issuance costs		(197,239	)		(480,002	)
Net cash provided by financing activities		1,229,136			2,207,998
Net increase (decrease) in cash		148,293			(185,205	)
Cash, beginning of year		90,192			250,723
Cash, end of period	$	238,485		$	65,518
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	5,539		$	-
Income taxes	$	-		$	-
Non Cash Investing and Financing Activities:
Conversion of convertible notes to common stock	$	263,158		$	1,466,316
Conversion of interest due on convertible notes to common stock	$	33,988		$	146,632
Exchange of interest due on convertible notes to new notes	$	25,259		$	-
Conversion of preferred stock to common stock	$	5,000		$	-

See accompanying summary of accounting polices and notes to unaudited condensed consolidated financial statements.

6

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements

1.     Nature of Business and Basis of Presentation

Description of Business

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,” hereinafter, refers to SpectraScience, Inc. and its wholly owned subsidiaries Luma Imaging Corporation (“LUMA”) and Spectra Science International, Inc. (“International”). Since 1996, the Company has focused primarily on developing the WavSTAT Optical Biopsy System (the “WavSTAT System”).

The Company has developed and received the European CE mark approval to market a proprietary, minimally invasive technology that optically illuminates 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 determinations. The WavSTAT System operates by using cool, safe laser light to optically illuminate 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. Beginning in December 2011, the WavSTAT 4 version of the product began to be sold in the European Union for colon cancer detection. In June 2012, the Company entered into a distribution agreement with PENTAX Europe, GmbH, for the sale of its systems internationally.

On November 6, 2007, the Company acquired the assets of 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. During the fiscal year ended December 31, 2010, the Company wrote off the remaining fair value of the LUMA inventory in order to focus on the continued development and marketing of the WavSTAT System. The Company retained the intellectual property of LUMA for use in the development of future generations of the WavSTAT System.

The transaction was accounted for as an acquisition of assets that included intellectual property, inventory and equipment. The intellectual property consisted of a total of 34 issued U.S. patents and 28 additional patent applications.

Basis of Presentation

The accompanying unaudited 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 nine month period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. 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-K for the year ended December 31, 2012.

7

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

Going Concern

Historically, the Company’s sources of cash have come from the issuance and sales of equity securities and convertible debentures. The Company’s historical cash outflows have been primarily used for operating activities including research, development, administrative and sales activities. Fluctuations in the Company’s working capital due to timing differences of its cash receipts and cash disbursements also impact its cash flow. The Company expects to incur significant additional operating losses through at least the end of 2013, as it completes proof-of-concept trials, conducts outcome-based clinical studies and increases sales and marketing efforts to commercialize the WavSTAT4 Systems in Europe. If the Company does not receive sufficient funding, there is substantial doubt that the Company will be able to continue as a going concern. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding 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 becomes profitable and begins to generate positive cash flows from operations.

As of September 30, 2013, the Company had a working capital deficit of $5,144,041 and cash of $238,485, compared to a working capital deficit of $3,340,787 and cash of $90,192 as of December 31, 2012. In December 2011, the Company entered into an Engagement Agreement with Laidlaw & Company (UK) Ltd., which Engagement Agreement was amended in July 2012. Under the Engagement Agreement, Laidlaw agreed to assist the Company in raising up to $20.0 million in capital over a two year period from the date of the Engagement Agreement. During the nine months ended September 30, 2013, the Company raised $1,159,136, net of transaction costs, under this agreement. Subsequent to June 30, 2013, the Company has engaged another agent to assist the Company with raising capital and has commenced raising capital on its own. However, if the Company does not receive additional funds in a timely manner, the Company could be in jeopardy as a going concern. The Company may not be able to find alternative capital or raise capital or debt on terms that are acceptable. Management believes that if the events defined in the Engagement Agreement occur as expected, or if the Company is otherwise able to raise a similar level of funds, such proceeds will be sufficient to allow the Company to sustain operations until it attains profitability and positive cash flows from operations. However, the Company may incur unknown expenses or may not be able to meet its revenue expectations requiring it to seek additional capital. In such event, the Company may not be able to find capital or raise capital or debt on terms that are acceptable.

The holders of Convertible Debentures control the conversion of the Convertible Debentures and certain of the Convertible Debentures were not converted at their maturity constituting a potential default on the matured, but unconverted, Convertible Debentures. In the event of such default, principal, accrued interest and other related costs are immediately due and payable in cash. As of September 30, 2013, Convertible Debentures with a face value of $1,588,733 held by 32 individual investors are in default. None of these investors have served notice of default on the Convertible Debentures held by them.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

8

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

2.     Summary of Significant Accounting Policies

Revenue recognition

The Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue from the sale of the Company’s products is generally recognized when title and risk of loss transfers to the customer, the terms of which are generally free on board shipping point. The Company uses customer purchase orders to determine the existence of an arrangement. The Company uses shipping documents and third-party proof of delivery to verify that title has transferred. The Company assesses whether the price is fixed or determinable based upon the terms of the agreement associated with the transaction. To determine whether collection is probable, the Company assesses a number of factors, including past transaction history with the customer and the creditworthiness of the customer.

Consolidation

The accompanying consolidated financial statements include the accounts of SpectraScience, Inc. and its wholly-owned subsidiaries LUMA, and International. All significant intercompany balances and transactions have been eliminated in consolidation.

Risks and Uncertainties

The Company operates in an industry that is subject to intense competition, government regulation and rapid technological change. The Company's operations are subject to significant risk and uncertainties, including financial, operational, technological, regulatory and other risks associated with a short history of product sales, including the potential risk of business failure.

Use of Estimates

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 financial statements. Significant estimates made by management include, among others, realization of long-lived assets including intangible assets, assumptions used to value stock options, assumptions used to value the common stock issued and assumptions related to the determination of the fair value of the derivative components associated with the Company’s Convertible Debentures. Actual results could differ from those estimates.

Inventory Valuation

The Company states its inventories at the lower of cost or market value, determined on a specific cost basis. The Company provides inventory allowances when conditions indicate that the selling price could be less than cost due to obsolescence and reductions in estimated future demand. The Company balances the need to maintain strategic inventory levels with the risk of obsolescence due to changing technology and customer demand levels. Unfavorable changes in market conditions may result in a need for additional inventory reserves that could adversely impact the Company’s gross margins. Conversely, favorable changes in demand could result in higher gross margins when the Company sells products.

Valuation of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and intangible assets. Equipment is carried at cost and is depreciated over the estimated useful lives of the assets, which are generally two to three years, and leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the improvements. The straight-line method is used for depreciation and amortization. Intangible assets consist of patents, which are amortized using the straight-line method over the estimated useful lives of the patents. The Company does not capitalize external legal costs and filing fees associated with obtaining patents on its new discoveries. Acquired intellectual property is recorded at cost and is amortized over its estimated useful life. The Company believes the useful lives assigned to these assets are reasonable. The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These computations utilize judgments and assumptions inherent in management’s estimate of future cash flows to determine recoverability of these assets. If management’s assumptions about these assets were to change as a result of events or circumstances, the Company may be required to record an impairment loss.

9

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of FASB ASC Topic 718, Compensation—Stock Compensation   (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company adopted ASC 718 on January 1, 2006. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes-Merton option-pricing model (the “Black-Scholes Model”). The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company estimates forfeitures at the time of grant and revises its estimate in subsequent periods if actual forfeitures differ from those estimates.

The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

All issuances of stock options or other equity instruments to employees and 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. Any stock options issued to non-employees are recorded in expense and additional paid-in capital in shareholders’ 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 reporting period.

As of September 30, 2013, the Company had one stock-based employee compensation plan under which it makes grants, the 2011 Equity Incentive Plan (the “EIP”). The EIP provides for the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”) and restricted stock awards to full-time employees (who may also be directors) and NQSOs and restricted stock awards to non-employee directors, consultants, customers, vendors or providers of services. 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 2011 EIP is 15,000,000 shares of common stock.  At September 30, 2013, the Company had outstanding 19,491,667 options under the EIP and the Company’s prior Amended 2001 Stock Plan representing approximately 12% of the Company’s outstanding shares (12,821,771 of which were exercisable), with 6,453,333 available for future issuance under the 2011 EIP. Awards under the Company’s EIP generally vest over four years.

The fair value of options granted were estimated at the date of grant using a Black-Scholes 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 complex and may change future expenses by increasing or decreasing stock-based compensation expense. There were no stock options granted during the three and nine month periods ended September 30, 2013. Management used the following weighted average assumptions to value stock options granted during the three and nine month periods ended September 30, 2013 and 2012.

10

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012
Expected term of options	None	5 years	None	5 years
Exercise price
Expected volatility	None	101%	None	101%-114%
Expected dividends	None	None	None	None
Risk-free interest rate	None	0.70%	None	0.70%-0.85%
Forfeitures	None	None	None	None

Management believes estimated forfeitures for employee stock options granted under the EIP would have a negligible effect on expenses because such forfeitures would be a very small percentage. Stock option grants have been to a group of individuals that have a high desire to see the Company succeed and have aligned themselves to that end.

The expected lives used in the calculations were selected by management based on past experience, forward looking profit forecasts and estimates of what the trading price of the Company’s stock might be at different future dates.

The risk-free interest rates used in the calculations are the five-year U.S. Treasury rates as published on the date of the applicable stock option grant.

Volatility is a calculation based on fluctuations in the Company’s stock price over a historical time period consistent with the estimated life of the option.

Options outstanding as of September 30, 2013 are as follows:

			Outstanding Options
	Options				Weighted Average		Weighted Average		Aggregate
	Available for		Plan Options		Exercise Price		Remaining Contractual		Intrinsic
	Grant		Outstanding		Per Share		Term (years)		Value (1)
Outstanding at January 1, 2013		6,453,333		19,491,667	$	0.18		8.20	$	-
Granted		-		-	$	-		-	$	-
Cancelled		-		-	$	-		-	$	-
Exercised		-		-	$	-		-	$	-
Outstanding at September 30, 2013		6,453,333		19,491,667	$	0.18		7.07	$	-
Exercisable at September 30, 2013				12,821,771	$	0.21		6.46	$	-
Weighted average fair value of options granted during the period				-	$	-		-	$	-

(1) These amounts represent the excess, if any, between the exercise price and $0.04, the closing market price of the Company’s common stock on September 30, 2013 as quoted on the Over-the-Counter Bulletin Board under the symbol “SCIE”.

11

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

There were no options exercised during the three and nine month periods ended September 30, 2013 and 2012. At September 30, 2013, total unrecognized estimated employee compensation cost related to non-vested stock options granted prior to that date is $556,464, which we expect to be recognized over the next four years.

Earnings (Loss) Per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss 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 if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive.

For the periods ended September 30, 2013 and 2012, the following common equivalent shares were excluded from the computation of loss per share since their effects are anti-dilutive.

	September 30,		September 30,
	2013		2012
Preferred Stock		3,085,000		3,585,000
Convertible debentures		39,111,869		20,269,100
Options		19,491,667		21,041,667
Warrants		77,127,289		55,815,367
Total		135,730,825		97,126,134

12

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

The following table sets forth the computation of basic and diluted loss per share and incorporates income and expense related to convertible debentures and warrants and a change in shares that could be outstanding on the conversion of the convertible debentures for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Numerator:
Net income (loss) for basic earnings per share	$	177,366		$	(865,480	)	$	(3,109,660	)	$	(9,545,389	)
Additions:
Interest expense related to convertible debentures		78,054			-			2,425
Amortization of deferred debt costs and original issue discount		141,840			-			-
Discounts on warrants and derivative debt		308,484			-
Subtractions:
Gain (loss) on debt extinguishment		-			-			30,796
Change in fair value of derivative securities		(1,156,215	)		-			(351,813	)
Net loss for diluted earnings per share	$	(450,471	)	$	(865,480	)	$	(3,428,252	)	$	(9,545,389	)
Denominator:
Weighted average basic shares outstanding		161,854,734			117,152,589			158,736,987			111,078,252
Additions:
Assumed conversion of convertible debentures at beginning of period		27,231,569			-			2,204,467			-
Assumed conversion of exchanged convertible debentures during the period		3,204,858			-			-			-
Subtractions:
Convertible debentures converted during the period		-			-			(2,025,203	)		-
Potentially dilutive common shares		30,436,427			-			179,264			-
Denominator for diluted earnings per share- Adjusted weighted average shares		192,291,161			117,152,589			158,916,251			111,078,252
Income (loss) per share
Basic	$	0.00		$	(0.01	)	$	(0.02	)	$	(0.09	)
Diluted	$	(0.00	)	$	(0.01	)	$	(0.02	)	$	(0.09	)

13

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

Inventories

Inventories consisted of the following at September 30, 2013 and December 31, 2012: 

	September 30,			December 31,
	2013			2012
Raw materials	$	132,315		$	124,905
Finished goods		35,921			124,766
		168,236			249,671
Reserve for obsolescence		(47,594	)		(47,594	)
	$	120,642		$	202,077

3. Liabilities

Note Payable to an Affiliate

In September 2013, the Company issued a nine month unsecured note with a face value of $45,000 and 500,000 restricted shares of common stock to an affiliate of the Company in exchange for $54,325 in cash. The imputed annual rate of interest was calculated to be 18.4% and is to be repaid in nine equal monthly installments. Of the 500,000 shares issued, 312,500 shares were issued for debt issuance costs in an amount of $15,625 which is being amortized as interest expense over the life of the note and 187,500 shares were issued for cash in an amount of $9,375.

Convertible Debentures

As of September 30, 2013, the Company has issued and outstanding Convertible Debentures (“Debentures”) with original terms of six months to one year, an interest rate ranging from 10-20% per year and an original issue discount of 5% which, at the option of the holder, may convert into common stock at an initial conversion price ranging from $0.045 to$0.099 per share. The Debentures were issued with detachable five year cashless Holders Warrants that allow the holders to purchase one share of stock for each two shares available under the converted Debentures at an exercise price ranging from $0.0745 to $0.1287 per share. In addition, the Company issued five year cashless Agent Warrants equal to 10% of the total number of shares issuable under the Debentures and Holders Warrants at an exercise price ranging from $0.0745 to $0.1287 per share. For debentures issued through March 31, 2013, at the option of the Debenture holder, the terms of the Debentures and Holders Warrants are subject to an exchange feature in the event that the Company issues securities with terms more favorable than those of the then outstanding Debentures and Holders Warrants. Debentures issued subsequent to March 31, 2013 do not contain such an exchange clause.

14

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

As of September 30, 2013 and December 31, 2012, the balances of the Debentures are as follows:

	September 30,			December 31,
	2013			2012
Balance at beginning of period	$	1,129,473		$	-
Issuance of debentures for cash		1,372,000			3,186,000
Original issue discount		72,211			167,685
Debentures surrendered in exchange transactions		(300,002	)		-
Debentures issued in exchange transactions		325,261			-
Debentures converted to common stock		(263,158	)		(2,224,212	)
Convertible debt		2,335,785			1,129,473
Less unamortized costs of financing		259,715			520,851
Convertible debt, net of unamortized costs	$	2,076,070		$	608,622
Convertible debt in default	$	1,588,733		$	-

Derivative Liability

Since the Company issued Convertible Debentures which included Holders Warrants, Agent Warrants and a conversion option that includes a possible exchange feature in the event of a future financing on terms more favorable than those of the existing warrants and debentures, this results in the warrants and conversion feature of the debentures being recorded as a liability and measured at fair value. The Company measures these warrants and conversion feature using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models using similar assumptions to those

described under “Stock-Based Compensation.” The time period over which the Company will be required to evaluate the fair value of the warrants is approximately five years and the time period over which the Company will be required to evaluate the fair value of the conversion feature is the lesser of six to twelve months or conversion.

The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment of the probability of a more favorably priced future financing or significant fluctuations in the volatility of the trading market for the Company’s common stock the Company’s fair value estimates could be materially different in the future.

The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Debentures, which the convertible feature is associated with, are converted into common stock or paid in full with cash. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.

15

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

As of September 30, 2013 and December 31, 2012, the balances of the Derivative Liability are as follows:

				Conversion
	Warrants			Feature			Total
Balance at January 1, 2012	$	-		$	-		$	-
Liability on issuance of debt and warrants		2,510,919			2,167,341			4,678,260
Change in fair value at year end		(780,875	)		991,912			211,037
Elimination of liability on conversion		-			(2,553,737	)		(2,553,737	)
Balance at December 31, 2012		1,730,044			605,516			2,335,560
Liability on issuance of debt and warrants		762,111			929,156			1,691,267
Change in fair value at period end		(847,119	)		(914,850	)		(1,761,969	)
Elimination of liability on conversion		-			(65,064	)		(65,064	)
Derivative liability	$	1,645,036		$	554,758		$	2,199,794

Debentures issued subsequent to March 31, 2013 did not contain an exchange provision and were accounted for using the equity method of valuing the note and warrant. For the three and nine months ended September 30, 2013, $413,908 and $447,090 were recorded as additional paid-in capital.

4. Shareholders’ Deficit

Common Stock

In January 2013, the Company issued 3,000,000 shares of restricted common stock to two vendors for services. The fair value of the vested portion of these shares was determined to be $55,149. In June 2013, the Company issued 1,000,000 shares of restricted common stock to one vendor for services. The fair value of the vested portion of these shares was determined to be $42,345.

During the nine months ended September 30, 2013, holders of Convertible Debentures with a face value of $297,146 converted their debentures into 4,592,636 shares of restricted common stock. In addition, associated with these debentures, the Company paid $33,988 in accrued interest by issuing 472,746 shares of restricted common stock.

In April 2013, a shareholder converted 500,000 shares of Series C Convertible Preferred stock into 500,000 shares of restricted common stock.

In September 2013, the Company issued a nine month unsecured note with a face value of $45,000 and 500,000 restricted shares of common stock to an affiliate of the Company in exchange for $54,325 in cash. The imputed annual rate of interest was calculated to be 18.4% and is to be repaid in nine equal monthly installments. Of the 500,000 shares issued, 312,500 shares were issued for debt issuance costs in an amount of $15,625 which is being amortized as interest expense over the life of the note and 187,500 shares were issued for cash in an amount of $9,375.

Warrants

During the nine months ended September 30, 2013, in conjunction with the sale of Convertible Debentures, the Company issued five year common stock purchase warrants to acquire 12,653,479 shares to holders of the Debentures and as compensation to Agents. These warrants have exercise prices ranging from $0.0745 to $0.1287 per share.

16

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

In addition, during the nine months ended September 30, 2013, the holders of common stock purchase warrants to acquire 1,515,151 shares at an exercise price of $0.1287 exchanged their warrants for new warrants to acquire 2,837,873 shares at an exercise price of $0.0745 under the exchange provisions of their Convertible Debentures.

The balance of all warrants outstanding as of September 30, 2013 is as follows:

				Weighted
				Average
				Exercise
Warrants	Shares			Price
Outstanding at January 1, 2013		59,066,992		$	0.18
Granted		16,737,575		$	0.08
Exchanged cancelled		(1,515,151	)	$	0.13
Exchanged issued		2,837,873		$	0.08
Cancelled		-		$	-
Exercised		-		$	-
Outstanding at September 30, 2013		77,127,289		$	0.15
Exercisable at September 30, 2013		77,127,289		$	0.15

5. Fair Value Measurements

Accounting guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system, and defines required disclosures. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business.

The Company's balance sheet contains derivative and warrant liabilities that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows:

Level 1: uses quoted market prices in active markets for identical assets or liabilities.

Level 2: uses observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: uses unobservable inputs that are not corroborated by market data.

The fair value of the Company’s recorded derivative and warrant liabilities is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A modified Binomial Lattice option valuation model was used to determine the fair value with similar assumptions to those described under “Stock-Based Compensation”. The Company records derivative and warrant liabilities on the consolidated balance sheets at fair value with changes in fair value recorded in the consolidated statements of operations.

17

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

The following table presents the balances of liabilities measured at fair value on a recurring basis by level as of September 30, 2013:

	Fair Value Measurements Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
As of September 30, 2013
Derivative liability	$	-	$	-	$	554,758	$	554,758
Warrant liability		-		-		1,645,036		1,645,036
Total	$	-	$	-	$	2,199,794	$	2,199,794

The following table presents changes in the liabilities with significant unobservable inputs (Level 3) for the nine months ended September 30, 2013:

	Warrant			Derivative			Total
	Liability			Liability			Liability
Balance December 31, 2012	$	1,730,044		$	605,516		$	2,335,560
Liability on issuance of debt and warrants		762,111			929,156			1,691,267
Change in estimated fair value (1)		(847,119	)		(914,850	)		(1,761,969	)
Elimination of liability on conversion		-			(65,064	)		(65,064	)
Balance September 30, 2013	$	1,645,036		$	554,758		$	2,199,794

(1) Included in the Statement of Operations on the line “Change in fair value of derivative liabilities.”

Management used the following inputs to value the Derivative and Warrant Liabilities for the nine months ended September 30, 2013:

	Derivative Liability	Warrant Liability
Expected term	6 months - 1 year	5 years
Exercise price	$0.045 - $0.099	$0.075 - $0.1287
Expected volatility	52% - 201%	106% - 176%
Expected dividends	None	None
Risk-free interest rate	.04% - .14%	.77% - 1.71%
Forfeitures	None	None

In computing the fair value of the derivative and warrant liability at September 30, 2013 for instruments under the Binomial Lattice option-pricing model, management estimated a 50% probability of a down round financing event at a price of $0.036 and a 20% to 80% probability that existing note holders with exchange priviledges would exchange their existing debentures and warrants for new debentures and warrants.

6. Contingencies

None

18

SpectraScience, Inc.

Notes to Unaudited Condensed Financial Statements (continued)

7. Subsequent Events

Convertible Debentures and Warrants

From October 2013 through April 2014, the Company sold $1,344,271 of Unsecured Convertible Debentures (the “Debentures”) to accredited investors for aggregate consideration of $1,286,376. The Debentures mature in twelve months, carry a fixed conversion price of $.045, an annual interest rate of 10% and are convertible into 29,872,683 shares of common stock at maturity. The Company received net cash proceeds of approximately $1,198,376 after payment of fees and expenses of $88,000. In addition, the Company issued the holders of the Debentures detachable five-year warrants to purchase 14,936,342 additional shares of common stock and issued to a placement agent of a portion of the offering warrants to purchase 200,000 shares of common stock all at an exercise price of $0.090 per share and issued to the same agent 400,000 shares of common stock in lieu of a cash payment.

In November 2013, the holders of Convertible Debentures with an aggregate face value of $264,211, interest rate of 16% and conversion prices ranging from $0.0573 to $0.099 per share exchanged their debentures for new debentures with a conversion price of $0.045 per share and an interest rate of 10%. In addition, associated with these new Convertible Debentures, the Company increased the face value by $36,895, which was the accrued interest at the time of exchange, to $301,106. The maturity date for the new debentures is November 30, 2014. In addition, the Company issued new five-year warrants to purchase 3,145,662 shares of common stock with an exercise price of $0.09 per share in exchange for warrants to purchase 1,660,948 shares of common stock with exercise prices ranging from $0.0745 to $0.1287 per share.

Common Stock

In November 2013, a holder of a Convertible Debenture with a face value of $210,526 converted his Convertible Debenture into 3,674,101 shares of restricted common stock. In addition, associated with this Convertible Debenture, the Company paid $25,378 in accrued interest by issuing 442,905 shares of common stock.

In November 2013, 300,000 shares of common stock valued at $12,000 were issued to two individuals in exchange for services provided.

In February 2014, an affiliate of the Company exercised a portion of his stock options into 931,200 shares of restricted common stock at an exercise price of $0.02 for proceeds to the Company of $18,624.

Subsequent events have been evaluated through the date financial statements are filed with the Securities and Exchange Commission.

19

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

Forward-Looking Statements

This quarterly report on Form 10-Q (the “Report”) contains forward-looking statements that are not related to historical results, including, without limitation, statements regarding our business strategy and objectives, our anticipated duration of periods of net loss, our near term operating goals, our expectations regarding the market for our products, the introduction of our products in new international markets and our beliefs with respect to opportunities and industry conditions in those markets, our beliefs about our products, product development, acquisition or licensing of complementary technologies and expectations with respect to our products’ performance and acceptance, the results of and our intentions with respect to our distribution agreement with PENTAX Europe GmbH, our beliefs about the strengths of our intellectual property portfolio, our regulatory goals and developments, anticipated clinical trials and research, our agreement with Laidlaw and its effect on our future capital resources and future financial position, our expectations with respect to stock option expense recognition, our future cash needs, the sufficiency of our working capital and our operating losses for the remainder of the current fiscal year. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, there can be no assurance that such assumptions will prove to be accurate and actual results could differ materially from those discussed in the forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause or contribute to such differences, including, but not limited to, changes in law or regulatory policies, unanticipated competition from other similar businesses, adverse outcomes from litigation, unexpected employee departures or disruptions, adverse market and general economic factors and other factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Such forward-looking statements are qualified in their entirety by the cautions and risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Business

SpectraScience, Inc. (the “Company,” “SpectraScience,” “we,” “our,” or “us”) 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 (the “WavSTAT System”) is SpectraScience's first product to incorporate its proprietary fluorescence technology for clinical use. The WavSTAT System carries the CE mark designation which allows for the sale and marketing in the European Union for the diagnosis of cancer. We are developing light-based diagnostics for additional indications including inflammatory bowel disease and esophageal cancer. Once these additional applications are developed we plan to self-certify for CE mark approval for sale in the European Union and then file an application with the FDA seeking permission to begin marketing for that indication for use in the United States. We believe we have a strong intellectual property portfolio that will allow us to continue to expand its WavSTAT cancer diagnosis platform to address the diagnosis of multiple cancers, utilize additional proprietary bio-photonic techniques to improve the WavSTAT’s overall diagnostic performance and ultimately allow for the detection of cancer and pre-cancer over a relatively large area of examined tissue.

Our principal executive offices are located at 11568 Sorrento Valley Rd., Suite 11, San Diego, CA 92121. We can be reached by telephone at (858) 847-0200; by fax at (858) 847-0880; or by email at info@spectrascience.com. We have a Web site at http://www.spectrascience.com. The information contained on our Web site shall not be deemed to be a part of this Report.

Plan of Operation

During the three and nine month periods ended September 30, 2013, SpectraScience carried forward on the improvements made to the WavSTAT4 in fiscal 2011 and continued working with PENTAX Europe, GmbH (“PENTAX”), for distribution of its products in Europe the Middle East and Africa.

20

Over the next 12 months, SpectraScience intends to:

· Market and sell the WavSTAT4 Optical Biopsy System colon cancer diagnostic application through PENTAX in the European Union;

· Conduct country-specific evaluation trials to demonstrate the effectiveness and cost benefit of the WavSTAT4 Optical Biopsy System in each relevant European jurisdiction;

· Coordinate the creation and publication of scientific papers and presentations related to the country-specific evaluation trials to support widespread education and adoption of the WavSTAT4 ;

· Pursue the introduction of the WavSTAT4 colon cancer application in other international markets, in particular Russia and India;

· Begin meeting with the FDA towards the preparation and submission of a Supplemental PMA filing with the FDA for the WavSTAT4 and plan for additional clinical trials to support eventual approval for sale in the United States;

· Begin the design and planning for the next generation of multi-modal fluorescence and broadband spectroscopy systems at our facility in San Diego, California; and

· Continue to expand and refine our intellectual property portfolio.

Results of Operations

Comparison of the Three Months Ended September 30, 2013 and 2012

	Three Months Ended September 30,						Favorable
	2013			2012			(Unfavorable)			%
Revenue	$	60,000		$	150,750		$	(90,750	)		-60.2	%
Cost of revenue		36,756			77,949			41,193			52.8	%
Gross profit		23,244			72,801			(49,557	)		-68.1	%
Operating expenses:
Research and development		59,176			235,988			176,812			74.9	%
General and administrative		375,200			536,656			161,456			30.1	%
Sales and marketing		33,285			107,174			73,889			68.9	%
		467,661			879,818			412,157			46.8	%
Loss from operations		(444,417	)		(807,017	)		362,600			-44.9	%
Other expense (income)		(621,783	)		58,463			680,246			NM
Net income (loss)	$	177,366		$	(865,480	)	$	1,042,846			-120.5	%

21

Revenues

Revenues for the quarter ended September 30, 2013 decreased $90,750, 60.2%, to $60,000 compared to $150,750 for the quarter ended September 30, 2012. The primary reason for the revenue decrease was a decrease in the number of WaveSTAT4 Systems shipped- 2 in 2013 vs. 5 in 2012. We anticipate that revenue will increase as a result of our distribution agreement with PENTAX.

Cost of Revenue

Cost of revenue for the quarter ended September 30, 2013 decreased $41,193, 52.8%, to $36,756 compared to $77,949 for the quarter ended September 30, 2012. The primary reason for the cost of revenue decrease was the reduction in revenue discussed above.

Research and Development Expenses

Research and development expenses decreased by $176,812, 74.9%, to $59,176 for the quarter ended September 30, 2013 from $235,988 for the quarter ended September 30, 2012. This decrease was primarily due to a reduction in engineering development costs of approximately $36,000 and a reduction of payroll costs of approximately $133,000. We anticipate that development costs will remain low but that clinical costs will increase as we proceed with our introduction of the WaveSTAT4 in Europe.

General and Administrative Expenses

General and administrative expenses decreased by $161,456, 30.1%, to $375,200 for the quarter ended September 30, 2013 from $536,656 for the quarter ended September 30, 2012. The primary reason for the decrease was a decrease in investor relations costs of approximately $67,000, a decrease in payroll costs of approximately $38,000, and a decrease in depreciation and amortization costs of approximately $50,000. We anticipate that general and administrative expenses will increase as we increase our activity in Europe.

Sales and Marketing Expenses

Sales and marketing expenses decreased by $73,889, 68.9%, to $33,285 for the quarter ended September 30, 2013 from $107,174 for the quarter ended September 30, 2012. The primary reason for the decrease was a decrease in payroll costs of approximately $35,000 and a decrease in consulting costs of approximately $35,000. We anticipate that sales and marketing expenses will increase as we increase our activity in Europe.

Other Expense (Income)

Other expense (income) for the quarter ended September 30, 2013 was income of $621,783 compared to expense of $58,463 for the quarter ended September 30, 2012. This change was due primarily to the change in valuation of our derivative liabilities. We anticipate continued large fluctuations in other expense (income) as a result of quarterly re-evaluating these obligations.

22

Comparison of the Nine Months Ended September 30, 2013 and 2012

	Nine Months Ended September 30,						Favorable
	2013			2012			(Unfavorable)			%
Revenue	$	180,000		$	460,874		$	(280,874	)		-60.9	%
Cost of revenue		110,269			278,243			167,974			60.4	%
Gross profit		69,731			182,631			(112,900	)		-61.8	%
Operating expenses:
Research and development		440,086			905,686			465,600			51.4	%
General and administrative		1,527,780			1,737,056			209,276			12.0	%
Sales and marketing		200,355			347,925			147,570			42.4	%
		2,168,221			2,990,667			822,446			27.5	%
Loss from operations		(2,098,490	)		(2,808,036	)		709,546			-25.3	%
Other expense		1,011,170			6,737,353			5,726,183			NM
Net loss	$	(3,109,660	)	$	(9,545,389	)	$	6,435,729			-67.4	%

Revenues

Revenues for the nine months ended September 30, 2013 decreased $280,874, 60.9%, to $180,000 compared to $460,874 for the nine months ended September 30, 2012. The primary reason for the revenue decrease was a decrease in the number of WaveSTAT4 Systems shipped- 6 in 2013 vs. 9 in 2012 coupled with accessories shipped in 2012 of approximately $70,000 vs. no shipments of accessories in 2013. We anticipate that revenue will increase as a result of our distribution agreement with PENTAX.

Cost of Revenue

Cost of revenue for the nine months ended September 30, 2013 decreased $167,974, 60.4%, to $110,269 compared to $278,243 for the nine months ended September 30, 2012. The primary reason for the cost of revenue decrease was the reduction in revenue discussed above.

Research and Development Expenses

Research and development expenses decreased by $465,600, 51.4%, to $440,086 for the nine months ended September 30, 2013 from $905,686 for the nine months ended September 30, 2012. This decrease was primarily due to a reduction in engineering development costs of approximately $253,000, a decrease in payroll expense of approximately $151,000 and a reduction in clinical studies of approximately $58,000. We anticipate that development costs will remain low but that clinical costs will increase as we proceed with our introduction of the WaveSTAT4 in Europe.

General and Administrative Expenses

General and administrative expenses decreased by $209.276, 12.0%, to $1,527,780 for the nine months ended September 30, 2013 from $1,737,056 for the nine months ended September 30, 2012. The primary reason for the decrease was a decrease in investor relations costs of approximately $100,000 and a decrease in depreciation and amortization expenses of approximately $110,000. We anticipate that general and administrative expenses will increase as we increase our activity in Europe.

23

Sales and Marketing Expenses

Sales and marketing expenses decreased by $147,570, 42.4%, to $200,355 for the nine months ended September 30, 2013 from $347,925 for the nine months ended September 30, 2012. The primary reason for the decrease was a decrease in payroll costs of approximately $59,000, a decrease in consulting costs of approximately $25,000 and a reduction in trade show and related costs of approximately $49,000. We anticipate that sales and marketing expenses will increase as we increase our activity in Europe.

Other Expense

Other expense for the nine months ended September 30, 2013 was expense of $1,011,170 compared to expense of $6,737,353 for the nine months ended September 30, 2012. This change was due primarily to the change in valuation of our derivative liabilities. We anticipate continued large fluctuations in other expense (income) as a result of quarterly re-evaluating these obligations.

24

Liquidity and Capital Resources

	As of						Increase
	September 30, 2013			December 31, 2012			(Decrease)
Working Capital
Current assets	$	657,534		$	648,948		$	8,586
Current liabilities		5,801,575			3,989,735			1,811,840
Working capital deficit	$	(5,144,041	)	$	(3,340,787	)	$	1,803,254
Long-term debt	$	-		$	-		$	-
Stockholders' deficit	$	(3,557,370	)	$	(1,576,408	)	$	1,980,962

	Nine Months Ended September 30,						Increase
	2013			2012			(Decrease)
Statements of Cash Flows Select Information
Net cash provided (used) by:
Operating activities	$	(1,079,243	)	$	(2,389,033	)	$	(1,309,790	)
Investing activities	$	(1,600	)	$	(4,170	)	$	(2,570	)
Financing activities	$	1,229,136		$	2,207,998		$	(978,862	)

	As of				Increase
	September 30, 2013		December 31, 2012		(Decrease)
Balance Sheet Select Information
Cash	$	238,485	$	90,192	$	148,293
Accounts receivable	$	30,000	$	-	$	30,000
Inventories	$	120,642	$	202,077	$	(81,435	)
Accounts payable and accrued expenses	$	1,480,711	$	1,045,553	$	435,158

Historically, the Company’s sources of cash have come from the issuance and sales of equity securities and convertible debentures. The Company’s historical cash outflows have been primarily used for operating activities including research, development, administrative and sales activities. Fluctuations in the Company’s working capital due to timing differences of its cash receipts and cash disbursements also impact its cash flow. The Company expects to incur significant additional operating losses through at least the end of 2013, as it completes proof-of-concept trials, conducts outcome-based clinical studies and increases sales and marketing efforts to commercialize the WavSTAT4 Systems in Europe. If the Company does not receive sufficient funding, there is substantial doubt that the Company will be able to continue as a going concern. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding 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 becomes profitable and begins to generate positive cash flows from operations.

25

As of September 30, 2013, the Company had a working capital deficit of $5,144,041 and cash and cash equivalents of $238,485, compared to a working capital deficit of $3,340,787 and cash and cash equivalents of $90,192 as of December 31, 2012. In December 2011, the Company entered into an Engagement Agreement with Laidlaw & Company (UK) Ltd., which Engagement Agreement was amended in July 2012. Under the Engagement Agreement, Laidlaw agreed to assist the Company in raising up to $20.0 million in capital over a two year period from the date of the Engagement Agreement. During the nine months ended September 30, 2013, the Company raised $692,560, net of transaction costs, under this agreement. Subsequent to June 30, 2013, the Company has engaged another agent to assist it with raising capital and has commenced raising capital on its own. During the quarter ended September 30, 2013, The Company raised $466,576, net of transaction costs, under this agreement. However, if the Company does not receive additional funds in a timely manner, the Company could be in jeopardy as a going concern. The Company may not be able to find alternative capital or raise capital or debt on terms that are acceptable. Management believes that if the events defined in the Engagement Agreement occur as expected, such proceeds will be sufficient to allow the Company to sustain operations until it attains profitability and positive cash flows from operations. However, the Company may incur unknown expenses or may not be able to meet its revenue expectations requiring it to seek additional capital. In such event, the Company may not be able to find capital or raise capital or debt on terms that are acceptable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Report (the “Evaluation Date”).  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.

Changes in Internal Financial Controls

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

26

PART II OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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

During the quarter ended September 30, 2013 we issued the following equity securities:

			Number of
	Date of		Common Shares		Source of
Common Stock	Issuance		Issued		Payment	Amount
		9/29/2013		500,000	Cash	$	9,375

Common Stock Purchase Warrants	Date of
Issued With Convertible Debentures	Issuance		Number of Shares		Exercise Price		Expiration Date
		7/15/2013		91,853	$	0.0745	7/15/2018
		9/3/2013		2,923,977	$	0.0900	9/3/2018
		9/9/2013		2,923,977	$	0.0900	9/9/2018
		9/15/2013		504,716	$	0.0900	9/15/2018

With respect to the above equity securities issuances, the Company relied on exemptions provided by Sections 4(a)(2) and 3(a)9 of the Securities Act of 1933, as amended (the “Securities Act”). No advertising or general solicitation was employed in offering the securities. The securities were issued to a limited number of persons all of whom were accredited investors as that term is defined in Rule 501 of Regulation D under the Securities Act. All were capable of analyzing the merits and risks of their investment, acknowledged in writing that they were acquiring the securities for investment and not with a view toward distribution or resale, and understood the speculative nature of their investment. All securities issued contained a restrictive legend prohibiting transfer of the shares except in accordance with federal securities laws.

Item 3. Defaults Upon Senior Securities

As of April 18, 2014 there are 5% Original Issue Discount Unsecured Convertible Debentures with a face value of $1,588,733 held by 32 individual Holders in default. As a result, the outstanding principal amount of these Debentures, plus accrued but unpaid interest, liquidated damages and other amounts owing (estimated to be approximately $75,000) shall become immediately due and payable in cash at the election of the Holders. As of April 18, 2014, none of the Holders of these Debentures have elected to provide notice of default.

27

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

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

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

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

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

101* Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended September 30, 2013, formatted in XBRL; (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.

* Furnished herewith

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SpectraScience, Inc. (Registrant)
Date: April 18, 2014	/s/ Michael P. Oliver
	Michael P. Oliver
	President and Chief Executive Officer
	(Principal executive officer)
Date: April 18, 2014	/s/ Lowell W. Giffhorn
	Lowell W. Giffhorn
	Chief Financial Officer
	(Principal financial officer and principal accounting officer)

29

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. . §1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael P. Oliver, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SpectraScience, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Michael P. Oliver
Name:	Michael P. Oliver
Title:	Chief Executive Officer
Date:	April 18, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. . §1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lowell W. Giffhorn, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SpectraScience, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Lowell W. Giffhorn
Name:	Lowell W. Giffhorn
Title:	Chief Financial Officer
Date:	April 18, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SpectraScience, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael P. Oliver, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael P. Oliver

Michael P. Oliver

Chief Executive Officer

Date: April 18, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SpectraScience, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lowell W. Giffhorn, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lowell W. Giffhorn

Lowell W. Giffhorn

Chief Financial Officer

Date: April 18, 2014

XML

Changes in Liabilities with Significant Unobservable Inputs (Level 3) (Detail) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013		Dec. 31, 2012
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance	$ 2,335,560		$ 0
Liabillity on issuance of debt and warrants	1,691,267		4,678,260
Change in estimated fair value	(1,761,969)	[1]	211,037
Elimination of liability on conversion	(65,064)		(2,553,737)
Balance	2,199,794		2,335,560
Warrant
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance	1,730,044		0
Liabillity on issuance of debt and warrants	762,111		2,510,919
Change in estimated fair value	(847,119)	[1]	(780,875)
Elimination of liability on conversion	0		0
Balance	1,645,036		1,730,044
Derivative Liability
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance	605,516
Liabillity on issuance of debt and warrants	929,156
Change in estimated fair value	(914,850)	[1]
Elimination of liability on conversion	(65,064)
Balance	$ 554,758

[1] Included in the Statement of Operations on the line “Change in fair value of derivative liabilities.”

XML

Inventories (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Inventory Disclosure [Line Items]
Raw Materials	$ 132,315		$ 124,905
Finished Goods	35,921		124,766
Inventory, Gross, Total	168,236		249,671
Reserve for obsolescence	(47,594)		(47,594)
Inventories	$ 120,642	$ 202,077	$ 202,077

XML

Liabilities

9 Months Ended

Sep. 30, 2013

Liabilities [Abstract]

Liabilities

3. Liabilities

Note Payable to an Affiliate

In September 2013, the Company issued a nine month unsecured note with a face value of $45,000 and 500,000 restricted shares of common stock to an affiliate of the Company in exchange for $54,325 in cash. The imputed annual rate of interest was calculated to be 18.4% and is to be repaid in nine equal monthly installments. Of the 500,000 shares issued, 312,500 shares were issued for debt issuance costs in an amount of $15,625 which is being amortized as interest expense over the life of the note and 187,500 shares were issued for cash in an amount of $9,375.

Convertible Debentures

As of September 30, 2013, the Company has issued and outstanding Convertible Debentures (“Debentures”) with original terms of six months to one year, an interest rate ranging from 10-20% per year and an original issue discount of 5% which, at the option of the holder, may convert into common stock at an initial conversion price ranging from $0.045 to$0.099 per share. The Debentures were issued with detachable five year cashless Holders Warrants that allow the holders to purchase one share of stock for each two shares available under the converted Debentures at an exercise price ranging from $0.0745 to $0.1287 per share. In addition, the Company issued five year cashless Agent Warrants equal to 10% of the total number of shares issuable under the Debentures and Holders Warrants at an exercise price ranging from $0.0745 to $0.1287 per share. For debentures issued through March 31, 2013, at the option of the Debenture holder, the terms of the Debentures and Holders Warrants are subject to an exchange feature in the event that the Company issues securities with terms more favorable than those of the then outstanding Debentures and Holders Warrants. Debentures issued subsequent to March 31, 2013 do not contain such an exchange clause.

As of September 30, 2013 and December 31, 2012, the balances of the Debentures are as follows:

	September 30,		December 31,
	2013		2012
Balance at beginning of period	$	1,129,473	$	-
Issuance of debentures for cash		1,372,000		3,186,000
Original issue discount		72,211		167,685
Debentures surrendered in exchange transactions		(300,002)		-
Debentures issued in exchange transactions		325,261		-
Debentures converted to common stock		(263,158)		(2,224,212)
Convertible debt		2,335,785		1,129,473
Less unamortized costs of financing		259,715		520,851
Convertible debt, net of unamortized costs	$	2,076,070	$	608,622
Convertible debt in default	$	1,588,733	$	-

Derivative Liability

Since the Company issued Convertible Debentures which included Holders Warrants, Agent Warrants and a conversion option that includes a possible exchange feature in the event of a future financing on terms more favorable than those of the existing warrants and debentures, this results in the warrants and conversion feature of the debentures being recorded as a liability and measured at fair value. The Company measures these warrants and conversion feature using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models using similar assumptions to those

described under “Stock-Based Compensation.” The time period over which the Company will be required to evaluate the fair value of the warrants is approximately five years and the time period over which the Company will be required to evaluate the fair value of the conversion feature is the lesser of six to twelve months or conversion.

The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment of the probability of a more favorably priced future financing or significant fluctuations in the volatility of the trading market for the Company’s common stock the Company’s fair value estimates could be materially different in the future.

The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Debentures, which the convertible feature is associated with, are converted into common stock or paid in full with cash. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.

As of September 30, 2013 and December 31, 2012, the balances of the Derivative Liability are as follows:

			Conversion
	Warrants		Feature		Total
Balance at January 1, 2012	$	-	$	-	$	-
Liability on issuance of debt and warrants		2,510,919		2,167,341		4,678,260
Change in fair value at year end		(780,875)		991,912		211,037
Elimination of liability on conversion		-		(2,553,737)		(2,553,737)
Balance at December 31, 2012		1,730,044		605,516		2,335,560
Liability on issuance of debt and warrants		762,111		929,156		1,691,267
Change in fair value at period end		(847,119)		(914,850)		(1,761,969)
Elimination of liability on conversion		-		(65,064)		(65,064)
Derivative liability	$	1,645,036	$	554,758	$	2,199,794

Debentures issued subsequent to March 31, 2013 did not contain an exchange provision and were accounted for using the equity method of valuing the note and warrant. For the three and nine months ended September 30, 2013, $413,908 and $447,090 were recorded as additional paid-in capital.

XML

Shareholders' Deficit - Additional Information (Detail) (USD $)	9 Months Ended				9 Months Ended					1 Months Ended		9 Months Ended	1 Months Ended				9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Maximum	Sep. 30, 2013 Minimum	Sep. 30, 2013 Exercise Price 0.0745	Sep. 30, 2013 Exercise Price 0.1287	Sep. 30, 2013 Five Year Warrants	Sep. 30, 2013 Five Year Warrants Maximum	Sep. 30, 2013 Five Year Warrants Minimum	Apr. 30, 2013 Restricted Stock	Apr. 30, 2013 Series C Convertible Preferred Stock	Sep. 30, 2013 Common Stock	Jun. 30, 2013 One Vendor	Jun. 30, 2013 One Vendor Restricted Stock	Jan. 31, 2013 Two Vendors	Jan. 31, 2013 Two Vendors Restricted Stock	Sep. 30, 2013 Convertible Debentures
Stockholders' Deficit Note [Line Items]
Common Stock issued for services (in shares)	400,000											4,000,000		1,000,000		3,000,000
Common Stock issued for services	$ 244,500											$ 40,000	$ 42,345		$ 55,149
Debt instrument, face amount	72,211	167,685										45,000					297,146
Debt Instrument, Convertible, Number of Equity Instruments																	4,592,636
Accrued interest related to debentures																	33,988
Debt Instrument Convertible Interest Expense Number Of Equity Instruments issued																	472,746
Stock Issued During Period, Shares, Conversion Of Convertible Securities										500,000	500,000	5,065,382
Warrants Issued To Purchase Common Stock					2,837,873	1,515,151	12,653,479
Warrants Exercise Price					$ 0.0745	$ 0.1287		$ 0.1287	$ 0.0745
Stock Issued During Period, Shares, Restricted Stock Award, Gross												500,000
Debt Instrument, Interest Rate, Stated Percentage			20.00%	10.00%								18.40%
Common Stock, Shares, Issued	162,295,047	152,229,665										500,000
Stock Issued During Period Shares Issued For Cash												187,500
Stock Issued During Period Value Issued For Cash	9,375											1,875
Debt instrument exchange currency												54,325
Stock Issued During Period Shares For Debt Offering Costs												312,500
Stock Issued During Period Value For Debt Offering Costs	$ 15,625											$ 3,125

XML

Balances of Derivative Liability (Detail) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Balance	$ 2,335,560		$ 0
Liabililty on issuance of debt and warrants	1,691,267		4,678,260
Change in fair value at year end	(1,761,969)	[1]	211,037
Elimination of liability on conversion	(65,064)		(2,553,737)
Balance	2,199,794		2,335,560
Warrant
Debt Instrument [Line Items]
Balance	1,730,044		0
Liabililty on issuance of debt and warrants	762,111		2,510,919
Change in fair value at year end	(847,119)	[1]	(780,875)
Elimination of liability on conversion	0		0
Balance	1,645,036		1,730,044
Feature
Debt Instrument [Line Items]
Balance	605,516		0
Liabililty on issuance of debt and warrants	929,156		2,167,341
Change in fair value at year end	(914,850)		991,912
Elimination of liability on conversion	(65,064)		(2,553,737)
Balance	$ 554,758		$ 605,516

[1] Included in the Statement of Operations on the line “Change in fair value of derivative liabilities.”

XML

Warrants Outstanding (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Shares
Outstanding at January 1, 2013	19,491,667
Granted	0
Exercised	0
Outstanding at September 30, 2013	19,491,667
Number of shares exercisable	12,821,771
Weighted Average Exercise Price
Outstanding at January 1, 2013	$ 0.18
Granted	$ 0
Outstanding at September 30, 2013	$ 0.18
Warrant
Shares
Outstanding at January 1, 2013	59,066,992
Granted	16,737,575
Exchanged cancelled	(1,515,151)
Exchanged issued	2,837,873
Cancelled	0
Exercised	0
Outstanding at September 30, 2013	77,127,289
Number of shares exercisable	77,127,289
Weighted Average Exercise Price
Outstanding at January 1, 2013	$ 0.18
Granted	$ 0.08
Exchanged cancelled	$ 0.13
Exchanged issued	$ 0.08
Cancelled	$ 0
Exercised	$ 0
Outstanding at September 30, 2013	$ 0.15
Exercisable at September 30, 2013	$ 0.15

XML

Fair Value Measurements - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assumed stock prices	50.00%
Change in stock price	$ 0.036
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Probability of existing note holders	20.00%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Probability of existing note holders	80.00%

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.     Summary of Significant Accounting Policies

Revenue recognition

The Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue from the sale of the Company’s products is generally recognized when title and risk of loss transfers to the customer, the terms of which are generally free on board shipping point. The Company uses customer purchase orders to determine the existence of an arrangement. The Company uses shipping documents and third-party proof of delivery to verify that title has transferred. The Company assesses whether the price is fixed or determinable based upon the terms of the agreement associated with the transaction. To determine whether collection is probable, the Company assesses a number of factors, including past transaction history with the customer and the creditworthiness of the customer.

Consolidation

The accompanying consolidated financial statements include the accounts of SpectraScience, Inc. and its wholly-owned subsidiaries LUMA, and International. All significant intercompany balances and transactions have been eliminated in consolidation.

Risks and Uncertainties

The Company operates in an industry that is subject to intense competition, government regulation and rapid technological change. The Company's operations are subject to significant risk and uncertainties, including financial, operational, technological, regulatory and other risks associated with a short history of product sales, including the potential risk of business failure.

Use of Estimates

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 financial statements. Significant estimates made by management include, among others, realization of long-lived assets including intangible assets, assumptions used to value stock options, assumptions used to value the common stock issued and assumptions related to the determination of the fair value of the derivative components associated with the Company’s Convertible Debentures. Actual results could differ from those estimates.

Inventory Valuation

The Company states its inventories at the lower of cost or market value, determined on a specific cost basis. The Company provides inventory allowances when conditions indicate that the selling price could be less than cost due to obsolescence and reductions in estimated future demand. The Company balances the need to maintain strategic inventory levels with the risk of obsolescence due to changing technology and customer demand levels. Unfavorable changes in market conditions may result in a need for additional inventory reserves that could adversely impact the Company’s gross margins. Conversely, favorable changes in demand could result in higher gross margins when the Company sells products.

Valuation of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and intangible assets. Equipment is carried at cost and is depreciated over the estimated useful lives of the assets, which are generally two to three years, and leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the improvements. The straight-line method is used for depreciation and amortization. Intangible assets consist of patents, which are amortized using the straight-line method over the estimated useful lives of the patents. The Company does not capitalize external legal costs and filing fees associated with obtaining patents on its new discoveries. Acquired intellectual property is recorded at cost and is amortized over its estimated useful life. The Company believes the useful lives assigned to these assets are reasonable. The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These computations utilize judgments and assumptions inherent in management’s estimate of future cash flows to determine recoverability of these assets. If management’s assumptions about these assets were to change as a result of events or circumstances, the Company may be required to record an impairment loss.

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of FASB ASC Topic 718, Compensation—Stock Compensation   (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company adopted ASC 718 on January 1, 2006. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes-Merton option-pricing model (the “Black-Scholes Model”). The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company estimates forfeitures at the time of grant and revises its estimate in subsequent periods if actual forfeitures differ from those estimates.

The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

All issuances of stock options or other equity instruments to employees and 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. Any stock options issued to non-employees are recorded in expense and additional paid-in capital in shareholders’ 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 reporting period.

As of September 30, 2013, the Company had one stock-based employee compensation plan under which it makes grants, the 2011 Equity Incentive Plan (the “EIP”). The EIP provides for the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”) and restricted stock awards to full-time employees (who may also be directors) and NQSOs and restricted stock awards to non-employee directors, consultants, customers, vendors or providers of services. 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 2011 EIP is 15,000,000 shares of common stock.  At September 30, 2013, the Company had outstanding 19,491,667 options under the EIP and the Company’s prior Amended 2001 Stock Plan representing approximately 12% of the Company’s outstanding shares (12,821,771 of which were exercisable), with 6,453,333 available for future issuance under the 2011 EIP. Awards under the Company’s EIP generally vest over four years.

The fair value of options granted were estimated at the date of grant using a Black-Scholes 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 complex and may change future expenses by increasing or decreasing stock-based compensation expense. There were no stock options granted during the three and nine month periods ended September 30, 2013. Management used the following weighted average assumptions to value stock options granted during the three and nine month periods ended September 30, 2013 and 2012.

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012
Expected term of options	None	5 years	None	5 years
Exercise price
Expected volatility	None	101%	None	101%-114%
Expected dividends	None	None	None	None
Risk-free interest rate	None	0.70%	None	0.70%-0.85%
Forfeitures	None	None	None	None

Management believes estimated forfeitures for employee stock options granted under the EIP would have a negligible effect on expenses because such forfeitures would be a very small percentage. Stock option grants have been to a group of individuals that have a high desire to see the Company succeed and have aligned themselves to that end.

The expected lives used in the calculations were selected by management based on past experience, forward looking profit forecasts and estimates of what the trading price of the Company’s stock might be at different future dates.

The risk-free interest rates used in the calculations are the five-year U.S. Treasury rates as published on the date of the applicable stock option grant.

Volatility is a calculation based on fluctuations in the Company’s stock price over a historical time period consistent with the estimated life of the option.

Options outstanding as of September 30, 2013 are as follows:

			Outstanding Options
	Options				Weighted Average		Weighted Average		Aggregate
	Available for		Plan Options		Exercise Price		Remaining Contractual		Intrinsic
	Grant		Outstanding		Per Share		Term (years)		Value (1)
Outstanding at January 1, 2013		6,453,333		19,491,667	$	0.18		8.20	$	-
Granted		-		-	$	-		-	$	-
Cancelled		-		-	$	-		-	$	-
Exercised		-		-	$	-		-	$	-
Outstanding at September 30, 2013		6,453,333		19,491,667	$	0.18		7.07	$	-
Exercisable at September 30, 2013				12,821,771	$	0.21		6.46	$	-
Weighted average fair value of options granted during the period				-	$	-		-	$	-

(1) These amounts represent the excess, if any, between the exercise price and $0.04, the closing market price of the Company’s common stock on September 30, 2013 as quoted on the Over-the-Counter Bulletin Board under the symbol “SCIE”.

There were no options exercised during the three and nine month periods ended September 30, 2013 and 2012. At September 30, 2013, total unrecognized estimated employee compensation cost related to non-vested stock options granted prior to that date is $556,464, which we expect to be recognized over the next four years.

Earnings (Loss) Per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss 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 if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive.

For the periods ended September 30, 2013 and 2012, the following common equivalent shares were excluded from the computation of loss per share since their effects are anti-dilutive.

	September 30,		September 30,
	2013		2012
Preferred Stock		3,085,000		3,585,000
Convertible debentures		39,111,869		20,269,100
Options		19,491,667		21,041,667
Warrants		77,127,289		55,815,367
Total		135,730,825		97,126,134

The following table sets forth the computation of basic and diluted loss per share and incorporates income and expense related to convertible debentures and warrants and a change in shares that could be outstanding on the conversion of the convertible debentures for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net income (loss) for basic earnings per share	$	177,366	$	(865,480)	$	(3,109,660)	$	(9,545,389)
Additions:
Interest expense related to convertible debentures		78,054		-		2,425
Amortization of deferred debt costs and original issue discount		141,840		-		-
Discounts on warrants and derivative debt		308,484		-
Subtractions:
Gain (loss) on debt extinguishment		-		-		30,796
Change in fair value of derivative securities		(1,156,215)		-		(351,813)
Net loss for diluted earnings per share	$	(450,471)	$	(865,480)	$	(3,428,252)	$	(9,545,389)
Denominator:
Weighted average basic shares outstanding		161,854,734		117,152,589		158,736,987		111,078,252
Additions:
Assumed conversion of convertible debentures at beginning of period		27,231,569		-		2,204,467		-
Assumed conversion of exchanged convertible debentures during the period		3,204,858		-		-		-
Subtractions:
Convertible debentures converted during the period		-		-		(2,025,203)		-
Potentially dilutive common shares		30,436,427		-		179,264		-
Denominator for diluted earnings per share- Adjusted weighted average shares		192,291,161		117,152,589		158,916,251		111,078,252
Income (loss) per share
Basic	$	0.00	$	(0.01)	$	(0.02)	$	(0.09)
Diluted	$	(0.00)	$	(0.01)	$	(0.02)	$	(0.09)

Inventories

Inventories consisted of the following at September 30, 2013 and December 31, 2012: 

	September 30,		December 31,
	2013		2012
Raw materials	$	132,315	$	124,905
Finished goods		35,921		124,766
		168,236		249,671
Reserve for obsolescence		(47,594)		(47,594)
	$	120,642	$	202,077

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Balances of Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $)	Sep. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	$ 554,758
Warrant liability	1,645,036
Total	2,199,794
QuotedPricesin ActiveMarketsfor IdenticalAssets (Level1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	0
Warrant liability	0
Total	0
SignificantOther Observable Inputs (Level2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	0
Warrant liability	0
Total	0
Significant Unobservable Inputs (Level3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	554,758
Warrant liability	1,645,036
Total	$ 2,199,794

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash	$ 238,485	$ 90,192
Accounts receivable, net	30,000	0
Inventories	120,642	202,077
Deferred debt issuance costs	45,076	165,649
Prepaid expenses and other current assets	223,331	191,030
Total current assets	657,534	648,948
Fixed assets, net	31,970	85,592
Patents, net	1,554,701	1,678,787
TOTAL ASSETS	2,244,205	2,413,327
Current liabilities:
Accounts payable	1,014,469	861,698
Note payable to an affiliate	45,000	0
Convertible debt, net of discounts of $259,715 as of September 30, 2013 and $520,851 as of December 31, 2012	2,076,070	608,622
Derivative liability	2,199,794	2,335,560
Accrued Expenses	466,242	183,855
Total current liabilities	5,801,575	3,989,735
COMMITMENTS
Stockholders' deficit
Common stock, $.01 par value; 321,415,000 shares authorized; 162,295,047 and 152,229,665 shares issued and outstanding as of September 30, 2013 and December 31, 2012	1,622,950	1,522,297
Additional paid in capital	36,524,648	35,491,603
Accumulated deficit	(41,735,818)	(38,626,158)
Total stockholders' deficit	(3,557,370)	(1,576,408)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)	2,244,205	2,413,327
Series A Convertible Preferred Stock
Stockholders' deficit
Convertible Preferred Stock, value	0	0
Series B Convertible Preferred Stock
Stockholders' deficit
Convertible Preferred Stock, value	25,850	25,850
Total stockholders' deficit	25,850	25,850
Series C Convertible Preferred Stock
Stockholders' deficit
Convertible Preferred Stock, value	5,000	10,000
Total stockholders' deficit	$ 5,000	$ 10,000

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Operating activities:
Net loss	$ (3,109,660)	$ (9,545,389)
Adjustments to reconcile net loss to cash used in operating activities:
Provision for uncollectable accounts receivable	4,281	0
Amortization and depreciation	179,308	290,132
Non-cash issuance of stock options	287,338	279,992
Amortization of derivative and warrant liabilities discount	1,328,849	2,252,549
Amortization of deferred debt issuance costs and original issue discount	532,912	957,405
Change in fair value of derivative and warrant liabilities	(1,073,017)	3,265,264
Loss on extinguishment of debt	16,989	0
Fair market value of common stock issued for services	244,500	8,500
Changes in assets and liabilities:
Accounts receivable	(34,281)	(125,496)
Inventory	81,435	91,544
Prepaid expense and other assets	(32,301)	(95,536)
Accounts payable	144,156	32,306
Accrued expenses	350,248	199,696
Net cash used in operating activities	(1,079,243)	(2,389,033)
Investing activities:
Purchases of fixed assets	(1,600)	(4,170)
Net cash used in investing activities	(1,600)	(4,170)
Financing activities:
Proceeds from issuance of convertible notes payable	1,372,000	2,688,000
Proceeds from issuance of note payable to affiliate	45,000	0
Proceeds from issuance of common stock for cash	9,375	0
Debt issuance costs	(197,239)	(480,002)
Net cash provided by financing activities	1,229,136	2,207,998
Net increase (decrease) in cash	148,293	(185,205)
Cash, beginning of year	90,192	250,723
Cash, end of period	238,485	65,518
Supplemental Disclosure of Cash Flow Information:
Interest	5,539	0
Income taxes	0	0
Non Cash Investing and Financing Activities:
Conversion of convertible notes to common stock	263,158	1,466,316
Conversion of interest due on convertible notes to common stock	33,988	146,632
Exchange of interest due on convertible notes to new notes	25,259	0
Conversion of preferred stock to common stock	$ 5,000	$ 0

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Subsequent Events - Additional Information (Detail) (USD $)	9 Months Ended						9 Months Ended		1 Months Ended						9 Months Ended			1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Minimum	Sep. 30, 2013 Maximum	Sep. 30, 2013 Two Individuals	Sep. 30, 2013 Five Year Warrants	Sep. 30, 2013 Original Issue Discount Unsecured Convertible Debentures 5	Feb. 28, 2014 Subsequent Event	Nov. 30, 2013 Subsequent Event	Nov. 30, 2013 Subsequent Event Minimum	Nov. 30, 2013 Subsequent Event Maximum	Nov. 30, 2013 Subsequent Event Agent Warrants	Nov. 30, 2013 Subsequent Event Five Year Warrants	Sep. 30, 2013 Subsequent Event Original Issue Discount Unsecured Convertible Debentures 5	Sep. 30, 2013 Subsequent Event Original Issue Discount Unsecured Convertible Debentures 5 Agent Warrants	Sep. 30, 2013 Subsequent Event Original Issue Discount Unsecured Convertible Debentures 5 Five Year Warrants	Nov. 30, 2013 Subsequent Event Convertible Debentures	Nov. 30, 2013 Subsequent Event New Convertible Debenture
Subsequent Event [Line Items]
Convertible debt, net	$ 2,076,070		$ 608,622							$ 210,526								$ 264,211	$ 301,106
Debt conversion converted instrument amount 1										3,674,101
Debt instrument, convertible, conversion price				$ 0.045	$ 0.099						$ 0.0573	$ 0.099			$ 0.045				$ 0.045
Common stock shares exercise price										$ 0.09	$ 0.0745	$ 0.1287
Long-term Debt, Gross	1,372,000		3,186,000					1,344,271
Proceeds From Convertible Debt	1,372,000	2,688,000													1,286,376
Debt Instrument, Interest Rate at Period End															10.00%			16.00%	10.00%
Debt Instrument, Convertible, Number Of Equity Instruments															29,872,683
Proceeds From Conversion Of Convertible Debt															1,198,376
Payment Of Fees And Expenses															88,000
Warrants Issued To Purchase Common Stock							12,653,479						1,660,948	3,145,662		200,000	14,936,342
Common Stock Exercise Price	$ 0.090
Interest Payable																			36,895
Debt Instrument, Maturity Date																		Nov. 30, 2014
Accrued interest related to debentures										25,378
Issuance Of Common Stock For Accrued Interest Shares										442,905
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercises In Period	0								931,200
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price									$ 0.02
Stock Issued During Period, Value, Stock Options Exercised									18,624
Stock Issued During Period, Shares, Issued for Services	400,000
Common Stock Shares Issued	162,295,047		152,229,665			300,000
Common Stock Value	$ 1,622,950		$ 1,522,297			$ 12,000

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Options Outstanding (Detail) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013		Dec. 31, 2012
Plan Options Outstanding
Outstanding at January 1, 2013	19,491,667
Granted	0
Cancelled	0
Exercised	0
Outstanding at September 30, 2013	19,491,667		19,491,667
Exercisable at September 30, 2013	12,821,771
Weighted average fair value of options granted during the period	0
Weighted Average Exercise Price Per Share
Outstanding at January 1, 2013	$ 0.18
Granted	$ 0
Cancelled	$ 0
Exercised	$ 0
Outstanding at September 30, 2013	$ 0.18		$ 0.18
Exercisable at September 30, 2013	$ 0.21
Weighted average fair value of options granted during the period	$ 0
Weighted Average Remaining Contractual Term (years)
Weighted-Average Remaining Contractual Term	7 years 25 days		8 years 2 months 12 days
Granted	0 years
Cancelled	0 years
Exercised	0 years
Exercisable at September 30, 2013	6 years 5 months 16 days
Weighted average fair value of options granted during the period	0 years
Aggregate Intrinsic Value
Outstanding at January 1, 2013	$ 0	[1]
Granted	0	[1]
Cancelled	0	[1]
Exercised	0	[1]
Outstanding at September 30, 2013	0	[1]	0	[1]
Exercisable at September 30, 2013	0	[1]
Weighted average fair value of options granted during the period	$ 0	[1]
Option
Options Available for Grant
Outstanding at January 1, 2013	6,453,333
Granted	0
Cancelled	0
Exercised	0
Outstanding at September 30, 2013	6,453,333

[1] These amounts represent the excess, if any, between the exercise price and $0.04, the closing market price of the Company’s common stock on September 30, 2013 as quoted on the Over-the-Counter Bulletin Board under the symbol “SCIE”.

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Summary Basic and Diluted Earnings Per Share and Additional Income (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Numerator:
Net income (loss) for basic earnings per share	$ 177,366	$ (865,480)	$ (3,109,660)	$ (9,545,389)
Additions:
Interest expense related to convertible debentures	78,054	0	2,425
Amortization of deferred debt costs and original issue discount	141,840	352,544	532,912	957,405
Discounts on warrants and derivative debt	308,484	0
Subtractions:
Gain (loss) on debt extinguishment	0	0	(16,989)	0
Change in fair value of derivative securities	(1,156,215)	0	(351,813)
Net loss for diluted earnings per share	$ (450,471)	$ (865,480)	$ (3,428,252)	$ (9,545,389)
Denominator:
Weighted average basic shares outstanding	161,854,734	117,152,589	158,736,987	111,078,252
Additions:
Assumed conversion of convertible debentures at beginning of period	27,231,569	0	2,204,467	0
Assumed conversion of exchanged convertible debentures during the period	3,204,858	0	0	0
Subtractions:
Convertible debentures converted during the period	0	0	(2,025,203)	0
Potentially dilutive common shares	30,436,427	0	179,264	0
Denominator for diluted earnings per share- Adjusted weighted average shares	192,291,161	117,152,589	158,916,251	111,078,252
Income (loss) per share
Basic	$ 0.00	$ (0.01)	$ (0.02)	$ (0.09)
Diluted	$ 0.00	$ (0.01)	$ (0.02)	$ (0.09)

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Nature of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Nature of Business and Basis of Presentation

1.     Nature of Business and Basis of Presentation

Description of Business

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,” hereinafter, refers to SpectraScience, Inc. and its wholly owned subsidiaries Luma Imaging Corporation (“LUMA”) and Spectra Science International, Inc. (“International”). Since 1996, the Company has focused primarily on developing the WavSTAT Optical Biopsy System (the “WavSTAT System”).

The Company has developed and received the European CE mark approval to market a proprietary, minimally invasive technology that optically illuminates 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 determinations. The WavSTAT System operates by using cool, safe laser light to optically illuminate 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. Beginning in December 2011, the WavSTAT 4 version of the product began to be sold in the European Union for colon cancer detection. In June 2012, the Company entered into a distribution agreement with PENTAX Europe, GmbH, for the sale of its systems internationally.

On November 6, 2007, the Company acquired the assets of 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. During the fiscal year ended December 31, 2010, the Company wrote off the remaining fair value of the LUMA inventory in order to focus on the continued development and marketing of the WavSTAT System. The Company retained the intellectual property of LUMA for use in the development of future generations of the WavSTAT System.

The transaction was accounted for as an acquisition of assets that included intellectual property, inventory and equipment. The intellectual property consisted of a total of 34 issued U.S. patents and 28 additional patent applications.

Basis of Presentation

The accompanying unaudited 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 nine month period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. 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-K for the year ended December 31, 2012.

Going Concern

Historically, the Company’s sources of cash have come from the issuance and sales of equity securities and convertible debentures. The Company’s historical cash outflows have been primarily used for operating activities including research, development, administrative and sales activities. Fluctuations in the Company’s working capital due to timing differences of its cash receipts and cash disbursements also impact its cash flow. The Company expects to incur significant additional operating losses through at least the end of 2013, as it completes proof-of-concept trials, conducts outcome-based clinical studies and increases sales and marketing efforts to commercialize the WavSTAT4 Systems in Europe. If the Company does not receive sufficient funding, there is substantial doubt that the Company will be able to continue as a going concern. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding 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 becomes profitable and begins to generate positive cash flows from operations.

As of September 30, 2013, the Company had a working capital deficit of $5,144,041 and cash of $238,485, compared to a working capital deficit of $3,340,787 and cash of $90,192 as of December 31, 2012. In December 2011, the Company entered into an Engagement Agreement with Laidlaw & Company (UK) Ltd., which Engagement Agreement was amended in July 2012. Under the Engagement Agreement, Laidlaw agreed to assist the Company in raising up to $20.0 million in capital over a two year period from the date of the Engagement Agreement. During the nine months ended September 30, 2013, the Company raised $1,159,136, net of transaction costs, under this agreement. Subsequent to June 30, 2013, the Company has engaged another agent to assist the Company with raising capital and has commenced raising capital on its own. However, if the Company does not receive additional funds in a timely manner, the Company could be in jeopardy as a going concern. The Company may not be able to find alternative capital or raise capital or debt on terms that are acceptable. Management believes that if the events defined in the Engagement Agreement occur as expected, or if the Company is otherwise able to raise a similar level of funds, such proceeds will be sufficient to allow the Company to sustain operations until it attains profitability and positive cash flows from operations. However, the Company may incur unknown expenses or may not be able to meet its revenue expectations requiring it to seek additional capital. In such event, the Company may not be able to find capital or raise capital or debt on terms that are acceptable.

The holders of Convertible Debentures control the conversion of the Convertible Debentures and certain of the Convertible Debentures were not converted at their maturity constituting a potential default on the matured, but unconverted, Convertible Debentures. In the event of such default, principal, accrued interest and other related costs are immediately due and payable in cash. As of September 30, 2013, Convertible Debentures with a face value of $1,588,733 held by 32 individual investors are in default. None of these investors have served notice of default on the Convertible Debentures held by them.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Convertible debt, net of discounts	$ 259,715	$ 520,851
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	321,415,000	321,415,000
Common stock, shares issued	162,295,047	152,229,665
Common stock, shares outstanding	162,295,047	152,229,665
Series A Convertible Preferred Stock
Convertible Preferred Stock, par value	$ 0.01	$ 0.01
Convertible Preferred Stock, authorized	0	0
Convertible Preferred Stock, shares issued	0	0
Convertible Preferred Stock, shares outstanding	0	0
Series B Convertible Preferred Stock
Convertible Preferred Stock, par value	$ 0.01	$ 0.01
Convertible Preferred Stock, authorized	2,585,000	2,585,000
Convertible Preferred Stock, shares issued	2,585,000	2,585,000
Convertible Preferred Stock, shares outstanding	2,585,000	2,585,000
Convertible Preferred Stock, liquidation value	517,000	517,000
Convertible Preferred Stock, accumulated and unpaid dividends	106,931	106,931
Series C Convertible Preferred Stock
Convertible Preferred Stock, par value	$ 0.01	$ 0.01
Convertible Preferred Stock, authorized	1,000,000	1,000,000
Convertible Preferred Stock, shares issued	500,000	1,000,000
Convertible Preferred Stock, shares outstanding	500,000	1,000,000
Convertible Preferred Stock, liquidation value	$ 100,000	$ 200,000

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Shareholders' Deficit (Tables)

9 Months Ended

Sep. 30, 2013

Stockholders Equity Note [Abstract]

Schedule of Balance of all Warrants Outstanding

The balance of all warrants outstanding as of September 30, 2013 is as follows:

			Weighted
			Average
			Exercise
Warrants	Shares		Price
Outstanding at January 1, 2013		59,066,992	$	0.18
Granted		16,737,575	$	0.08
Exchanged cancelled		(1,515,151)	$	0.13
Exchanged issued		2,837,873	$	0.08
Cancelled		-	$	-
Exercised		-	$	-
Outstanding at September 30, 2013		77,127,289	$	0.15
Exercisable at September 30, 2013		77,127,289	$	0.15

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Apr. 18, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	SCIE
Entity Common Stock, Shares Outstanding		168,043,254
Entity Registrant Name	SPECTRASCIENCE INC
Entity Central Index Key	0000727672
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Balances of Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of liabilities measured at fair value on a recurring basis by level as of September 30, 2013:

	Fair Value Measurements Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
As of September 30, 2013
Derivative liability	$	-	$	-	$	554,758	$	554,758
Warrant liability		-		-		1,645,036		1,645,036
Total	$	-	$	-	$	2,199,794	$	2,199,794

Changes in Liabilities with Significant Unobservable Inputs (Level 3)

The following table presents changes in the liabilities with significant unobservable inputs (Level 3) for the nine months ended September 30, 2013:

	Warrant		Derivative		Total
	Liability		Liability		Liability
Balance December 31, 2012	$	1,730,044	$	605,516	$	2,335,560
Liability on issuance of debt and warrants		762,111		929,156		1,691,267
Change in estimated fair value (1)		(847,119)		(914,850)		(1,761,969)
Elimination of liability on conversion		-		(65,064)		(65,064)
Balance September 30, 2013	$	1,645,036	$	554,758	$	2,199,794

(1) Included in the Statement of Operations on the line “Change in fair value of derivative liabilities.”

Derivative and Warrant Liabilities

Management used the following inputs to value the Derivative and Warrant Liabilities for the nine months ended September 30, 2013:

	Derivative Liability	Warrant Liability
Expected term	6 months - 1 year	5 years
Exercise price	$0.045 - $0.099	$0.075 - $0.1287
Expected volatility	52% - 201%	106% - 176%
Expected dividends	None	None
Risk-free interest rate	.04% - .14%	.77% - 1.71%
Forfeitures	None	None

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Condensed Consolidated Statements of Operation (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenue	$ 60,000	$ 150,750	$ 180,000	$ 460,874
Cost of revenue	36,756	77,949	110,269	278,243
Gross profit	23,244	72,801	69,731	182,631
Operating expenses:
Research and development	59,176	235,988	440,086	905,686
General and administrative	375,200	536,656	1,527,780	1,737,056
Sales and marketing	33,285	107,174	200,355	347,925
Total operating expenses	467,661	879,818	2,168,221	2,990,667
Loss from operations	(444,417)	(807,017)	(2,098,490)	(2,808,036)
Other expense (income)
Interest expense	79,260	105,596	202,352	259,463
Change in fair value of derivative and warrant liabilities	(1,156,215)	(1,206,699)	(1,073,017)	3,265,264
Amortization of derivative and warrant liabilities discount	308,484	806,687	1,328,849	2,252,549
Amortization of deferred debt issuance costs and original issue discount	141,840	352,544	532,912	957,405
Loss on extinguishment of debt	0	0	16,989	0
Other expense (income), net	4,848	335	3,085	2,672
Nonoperating Income (Expense)	(621,783)	58,463	1,011,170	6,737,353
Net income (loss)	$ 177,366	$ (865,480)	$ (3,109,660)	$ (9,545,389)
Basic and diluted income (loss) per share	$ 0.00	$ (0.01)	$ (0.02)	$ (0.09)
Weighted average common shares outstanding:
Basic and diluted	161,854,734	117,152,589	158,736,987	111,078,252

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Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Contingencies

6. Contingencies

None

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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

5. Fair Value Measurements

Accounting guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system, and defines required disclosures. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business.

The Company's balance sheet contains derivative and warrant liabilities that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows:

Level 1: uses quoted market prices in active markets for identical assets or liabilities.

Level 2: uses observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: uses unobservable inputs that are not corroborated by market data.

The fair value of the Company’s recorded derivative and warrant liabilities is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A modified Binomial Lattice option valuation model was used to determine the fair value with similar assumptions to those described under “Stock-Based Compensation”. The Company records derivative and warrant liabilities on the consolidated balance sheets at fair value with changes in fair value recorded in the consolidated statements of operations.

The following table presents the balances of liabilities measured at fair value on a recurring basis by level as of September 30, 2013:

	Fair Value Measurements Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
As of September 30, 2013
Derivative liability	$	-	$	-	$	554,758	$	554,758
Warrant liability		-		-		1,645,036		1,645,036
Total	$	-	$	-	$	2,199,794	$	2,199,794

The following table presents changes in the liabilities with significant unobservable inputs (Level 3) for the nine months ended September 30, 2013:

	Warrant		Derivative		Total
	Liability		Liability		Liability
Balance December 31, 2012	$	1,730,044	$	605,516	$	2,335,560
Liability on issuance of debt and warrants		762,111		929,156		1,691,267
Change in estimated fair value (1)		(847,119)		(914,850)		(1,761,969)
Elimination of liability on conversion		-		(65,064)		(65,064)
Balance September 30, 2013	$	1,645,036	$	554,758	$	2,199,794

(1) Included in the Statement of Operations on the line “Change in fair value of derivative liabilities.”

Management used the following inputs to value the Derivative and Warrant Liabilities for the nine months ended September 30, 2013:

	Derivative Liability	Warrant Liability
Expected term	6 months - 1 year	5 years
Exercise price	$0.045 - $0.099	$0.075 - $0.1287
Expected volatility	52% - 201%	106% - 176%
Expected dividends	None	None
Risk-free interest rate	.04% - .14%	.77% - 1.71%
Forfeitures	None	None

In computing the fair value of the derivative and warrant liability at September 30, 2013 for instruments under the Binomial Lattice option-pricing model, management estimated a 50% probability of a down round financing event at a price of $0.036 and a 20% to 80% probability that existing note holders with exchange priviledges would exchange their existing debentures and warrants for new debentures and warrants.

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Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	30,436,427	0	179,264	0
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			19,491,667	21,041,667
Convertible Debentures
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			39,111,869	20,269,100
Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			3,085,000	3,585,000
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			77,127,289	55,815,367

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Nature of Business and Basis of Presentation - Additional Information (Detail) (USD $)	9 Months Ended			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2011 Maximum	Sep. 30, 2013 Minimum
Disclosure Nature Of Business and Basis Of Presentation Additional Information [Line Items]
Working capital deficit	$ 5,144,041	$ 3,340,787
Cash and cash equivalents	238,485	90,192
Capital to be raised			20,000,000
Working capital contribution period				2 years
Capital raised during period	1,159,136
Conversion of stock, amount issued	$ 1,588,733

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Summary of Weighted Average Assumptions To Value Stock Options Granted

Management used the following weighted average assumptions to value stock options granted during the three and nine month periods ended September 30, 2013 and 2012.

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012
Expected term of options	None	5 years	None	5 years
Exercise price
Expected volatility	None	101%	None	101%-114%
Expected dividends	None	None	None	None
Risk-free interest rate	None	0.70%	None	0.70%-0.85%
Forfeitures	None	None	None	None

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

For the periods ended September 30, 2013 and 2012, the following common equivalent shares were excluded from the computation of loss per share since their effects are anti-dilutive.

	September 30,		September 30,
	2013		2012
Preferred Stock		3,085,000		3,585,000
Convertible debentures		39,111,869		20,269,100
Options		19,491,667		21,041,667
Warrants		77,127,289		55,815,367
Total		135,730,825		97,126,134

Schedule Of Earnings Per Share Basic And Diluted

The following table sets forth the computation of basic and diluted loss per share and incorporates income and expense related to convertible debentures and warrants and a change in shares that could be outstanding on the conversion of the convertible debentures for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net income (loss) for basic earnings per share	$	177,366	$	(865,480)	$	(3,109,660)	$	(9,545,389)
Additions:
Interest expense related to convertible debentures		78,054		-		2,425
Amortization of deferred debt costs and original issue discount		141,840		-		-
Discounts on warrants and derivative debt		308,484		-
Subtractions:
Gain (loss) on debt extinguishment		-		-		30,796
Change in fair value of derivative securities		(1,156,215)		-		(351,813)
Net loss for diluted earnings per share	$	(450,471)	$	(865,480)	$	(3,428,252)	$	(9,545,389)
Denominator:
Weighted average basic shares outstanding		161,854,734		117,152,589		158,736,987		111,078,252
Additions:
Assumed conversion of convertible debentures at beginning of period		27,231,569		-		2,204,467		-
Assumed conversion of exchanged convertible debentures during the period		3,204,858		-		-		-
Subtractions:
Convertible debentures converted during the period		-		-		(2,025,203)		-
Potentially dilutive common shares		30,436,427		-		179,264		-
Denominator for diluted earnings per share- Adjusted weighted average shares		192,291,161		117,152,589		158,916,251		111,078,252
Income (loss) per share
Basic	$	0.00	$	(0.01)	$	(0.02)	$	(0.09)
Diluted	$	(0.00)	$	(0.01)	$	(0.02)	$	(0.09)

Inventory

Inventories consisted of the following at September 30, 2013 and December 31, 2012: 

	September 30,		December 31,
	2013		2012
Raw materials	$	132,315	$	124,905
Finished goods		35,921		124,766
		168,236		249,671
Reserve for obsolescence		(47,594)		(47,594)
	$	120,642	$	202,077

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

7. Subsequent Events

Convertible Debentures and Warrants

From October 2013 through April 2014, the Company sold $1,344,271 of Unsecured Convertible Debentures (the “Debentures”) to accredited investors for aggregate consideration of $1,286,376. The Debentures mature in twelve months, carry a fixed conversion price of $.045, an annual interest rate of 10% and are convertible into 29,872,683 shares of common stock at maturity. The Company received net cash proceeds of approximately $1,198,376 after payment of fees and expenses of $88,000. In addition, the Company issued the holders of the Debentures detachable five-year warrants to purchase 14,936,342 additional shares of common stock and issued to a placement agent of a portion of the offering warrants to purchase 200,000 shares of common stock all at an exercise price of $0.090 per share and issued to the same agent 400,000 shares of common stock in lieu of a cash payment.

In November 2013, the holders of Convertible Debentures with an aggregate face value of $264,211, interest rate of 16% and conversion prices ranging from $0.0573 to $0.099 per share exchanged their debentures for new debentures with a conversion price of $0.045 per share and an interest rate of 10%. In addition, associated with these new Convertible Debentures, the Company increased the face value by $36,895, which was the accrued interest at the time of exchange, to $301,106. The maturity date for the new debentures is November 30, 2014. In addition, the Company issued new five-year warrants to purchase 3,145,662 shares of common stock with an exercise price of $0.09 per share in exchange for warrants to purchase 1,660,948 shares of common stock with exercise prices ranging from $0.0745 to $0.1287 per share.

Common Stock

In November 2013, a holder of a Convertible Debenture with a face value of $210,526 converted his Convertible Debenture into 3,674,101 shares of restricted common stock. In addition, associated with this Convertible Debenture, the Company paid $25,378 in accrued interest by issuing 442,905 shares of common stock.

In November 2013, 300,000 shares of common stock valued at $12,000 were issued to two individuals in exchange for services provided.

In February 2014, an affiliate of the Company exercised a portion of his stock options into 931,200 shares of restricted common stock at an exercise price of $0.02 for proceeds to the Company of $18,624.

Subsequent events have been evaluated through the date financial statements are filed with the Securities and Exchange Commission.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Revenue recognition

Revenue recognition

The Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue from the sale of the Company’s products is generally recognized when title and risk of loss transfers to the customer, the terms of which are generally free on board shipping point. The Company uses customer purchase orders to determine the existence of an arrangement. The Company uses shipping documents and third-party proof of delivery to verify that title has transferred. The Company assesses whether the price is fixed or determinable based upon the terms of the agreement associated with the transaction. To determine whether collection is probable, the Company assesses a number of factors, including past transaction history with the customer and the creditworthiness of the customer.

Consolidation

Consolidation

The accompanying consolidated financial statements include the accounts of SpectraScience, Inc. and its wholly-owned subsidiaries LUMA, and International. All significant intercompany balances and transactions have been eliminated in consolidation.

Risks and Uncertainties

Risks and Uncertainties

The Company operates in an industry that is subject to intense competition, government regulation and rapid technological change. The Company's operations are subject to significant risk and uncertainties, including financial, operational, technological, regulatory and other risks associated with a short history of product sales, including the potential risk of business failure.

Use of Estimates

Use of Estimates

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 financial statements. Significant estimates made by management include, among others, realization of long-lived assets including intangible assets, assumptions used to value stock options, assumptions used to value the common stock issued and assumptions related to the determination of the fair value of the derivative components associated with the Company’s Convertible Debentures. Actual results could differ from those estimates.

Inventory Valuation

Inventory Valuation

The Company states its inventories at the lower of cost or market value, determined on a specific cost basis. The Company provides inventory allowances when conditions indicate that the selling price could be less than cost due to obsolescence and reductions in estimated future demand. The Company balances the need to maintain strategic inventory levels with the risk of obsolescence due to changing technology and customer demand levels. Unfavorable changes in market conditions may result in a need for additional inventory reserves that could adversely impact the Company’s gross margins. Conversely, favorable changes in demand could result in higher gross margins when the Company sells products.

Valuation of Long-lived Assets

Valuation of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and intangible assets. Equipment is carried at cost and is depreciated over the estimated useful lives of the assets, which are generally two to three years, and leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the improvements. The straight-line method is used for depreciation and amortization. Intangible assets consist of patents, which are amortized using the straight-line method over the estimated useful lives of the patents. The Company does not capitalize external legal costs and filing fees associated with obtaining patents on its new discoveries. Acquired intellectual property is recorded at cost and is amortized over its estimated useful life. The Company believes the useful lives assigned to these assets are reasonable. The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These computations utilize judgments and assumptions inherent in management’s estimate of future cash flows to determine recoverability of these assets. If management’s assumptions about these assets were to change as a result of events or circumstances, the Company may be required to record an impairment loss.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of FASB ASC Topic 718, Compensation—Stock Compensation   (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company adopted ASC 718 on January 1, 2006. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes-Merton option-pricing model (the “Black-Scholes Model”). The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company estimates forfeitures at the time of grant and revises its estimate in subsequent periods if actual forfeitures differ from those estimates.

The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

All issuances of stock options or other equity instruments to employees and 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. Any stock options issued to non-employees are recorded in expense and additional paid-in capital in shareholders’ 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 reporting period.

As of September 30, 2013, the Company had one stock-based employee compensation plan under which it makes grants, the 2011 Equity Incentive Plan (the “EIP”). The EIP provides for the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”) and restricted stock awards to full-time employees (who may also be directors) and NQSOs and restricted stock awards to non-employee directors, consultants, customers, vendors or providers of services. 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 2011 EIP is 15,000,000 shares of common stock.  At September 30, 2013, the Company had outstanding 19,491,667 options under the EIP and the Company’s prior Amended 2001 Stock Plan representing approximately 12% of the Company’s outstanding shares (12,821,771 of which were exercisable), with 6,453,333 available for future issuance under the 2011 EIP. Awards under the Company’s EIP generally vest over four years.

The fair value of options granted were estimated at the date of grant using a Black-Scholes 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 complex and may change future expenses by increasing or decreasing stock-based compensation expense. There were no stock options granted during the three and nine month periods ended September 30, 2013. Management used the following weighted average assumptions to value stock options granted during the three and nine month periods ended September 30, 2013 and 2012.

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012
Expected term of options	None	5 years	None	5 years
Exercise price
Expected volatility	None	101%	None	101%-114%
Expected dividends	None	None	None	None
Risk-free interest rate	None	0.70%	None	0.70%-0.85%
Forfeitures	None	None	None	None

Management believes estimated forfeitures for employee stock options granted under the EIP would have a negligible effect on expenses because such forfeitures would be a very small percentage. Stock option grants have been to a group of individuals that have a high desire to see the Company succeed and have aligned themselves to that end.

The expected lives used in the calculations were selected by management based on past experience, forward looking profit forecasts and estimates of what the trading price of the Company’s stock might be at different future dates.

The risk-free interest rates used in the calculations are the five-year U.S. Treasury rates as published on the date of the applicable stock option grant.

Volatility is a calculation based on fluctuations in the Company’s stock price over a historical time period consistent with the estimated life of the option.

Options outstanding as of September 30, 2013 are as follows:

			Outstanding Options
	Options				Weighted Average		Weighted Average		Aggregate
	Available for		Plan Options		Exercise Price		Remaining Contractual		Intrinsic
	Grant		Outstanding		Per Share		Term (years)		Value (1)
Outstanding at January 1, 2013		6,453,333		19,491,667	$	0.18		8.20	$	-
Granted		-		-	$	-		-	$	-
Cancelled		-		-	$	-		-	$	-
Exercised		-		-	$	-		-	$	-
Outstanding at September 30, 2013		6,453,333		19,491,667	$	0.18		7.07	$	-
Exercisable at September 30, 2013				12,821,771	$	0.21		6.46	$	-
Weighted average fair value of options granted during the period				-	$	-		-	$	-

(1) These amounts represent the excess, if any, between the exercise price and $0.04, the closing market price of the Company’s common stock on September 30, 2013 as quoted on the Over-the-Counter Bulletin Board under the symbol “SCIE”.

There were no options exercised during the three and nine month periods ended September 30, 2013 and 2012. At September 30, 2013, total unrecognized estimated employee compensation cost related to non-vested stock options granted prior to that date is $556,464, which we expect to be recognized over the next four years.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss 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 if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive.

For the periods ended September 30, 2013 and 2012, the following common equivalent shares were excluded from the computation of loss per share since their effects are anti-dilutive.

	September 30,		September 30,
	2013		2012
Preferred Stock		3,085,000		3,585,000
Convertible debentures		39,111,869		20,269,100
Options		19,491,667		21,041,667
Warrants		77,127,289		55,815,367
Total		135,730,825		97,126,134

The following table sets forth the computation of basic and diluted loss per share and incorporates income and expense related to convertible debentures and warrants and a change in shares that could be outstanding on the conversion of the convertible debentures for the three and nine month periods ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net income (loss) for basic earnings per share	$	177,366	$	(865,480)	$	(3,109,660)	$	(9,545,389)
Additions:
Interest expense related to convertible debentures		78,054		-		2,425
Amortization of deferred debt costs and original issue discount		141,840		-		-
Discounts on warrants and derivative debt		308,484		-
Subtractions:
Gain (loss) on debt extinguishment		-		-		30,796
Change in fair value of derivative securities		(1,156,215)		-		(351,813)
Net loss for diluted earnings per share	$	(450,471)	$	(865,480)	$	(3,428,252)	$	(9,545,389)
Denominator:
Weighted average basic shares outstanding		161,854,734		117,152,589		158,736,987		111,078,252
Additions:
Assumed conversion of convertible debentures at beginning of period		27,231,569		-		2,204,467		-
Assumed conversion of exchanged convertible debentures during the period		3,204,858		-		-		-
Subtractions:
Convertible debentures converted during the period		-		-		(2,025,203)		-
Potentially dilutive common shares		30,436,427		-		179,264		-
Denominator for diluted earnings per share- Adjusted weighted average shares		192,291,161		117,152,589		158,916,251		111,078,252
Income (loss) per share
Basic	$	0.00	$	(0.01)	$	(0.02)	$	(0.09)
Diluted	$	(0.00)	$	(0.01)	$	(0.02)	$	(0.09)

Inventories

Inventories

Inventories consisted of the following at September 30, 2013 and December 31, 2012: 

	September 30,		December 31,
	2013		2012
Raw materials	$	132,315	$	124,905
Finished goods		35,921		124,766
		168,236		249,671
Reserve for obsolescence		(47,594)		(47,594)
	$	120,642	$	202,077

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Liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Liabilities [Abstract]

Schedule of Balance of Debentures

As of September 30, 2013 and December 31, 2012, the balances of the Debentures are as follows:

	September 30,		December 31,
	2013		2012
Balance at beginning of period	$	1,129,473	$	-
Issuance of debentures for cash		1,372,000		3,186,000
Original issue discount		72,211		167,685
Debentures surrendered in exchange transactions		(300,002)		-
Debentures issued in exchange transactions		325,261		-
Debentures converted to common stock		(263,158)		(2,224,212)
Convertible debt		2,335,785		1,129,473
Less unamortized costs of financing		259,715		520,851
Convertible debt, net of unamortized costs	$	2,076,070	$	608,622
Convertible debt in default	$	1,588,733	$	-

Schedule of Balances of Derivative Liability

As of September 30, 2013 and December 31, 2012, the balances of the Derivative Liability are as follows:

			Conversion
	Warrants		Feature		Total
Balance at January 1, 2012	$	-	$	-	$	-
Liability on issuance of debt and warrants		2,510,919		2,167,341		4,678,260
Change in fair value at year end		(780,875)		991,912		211,037
Elimination of liability on conversion		-		(2,553,737)		(2,553,737)
Balance at December 31, 2012		1,730,044		605,516		2,335,560
Liability on issuance of debt and warrants		762,111		929,156		1,691,267
Change in fair value at period end		(847,119)		(914,850)		(1,761,969)
Elimination of liability on conversion		-		(65,064)		(65,064)
Derivative liability	$	1,645,036	$	554,758	$	2,199,794

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Derivative and Warrant Liabilities (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Derivative | Maximum
Derivative and Warrant Liabilities Disclosure [Line Items]
Expected term	1 year
Exercise Price	$ 0.099
Expected Volatility	201.00%
Risk-free interest rate	0.14%
Derivative | Minimum
Derivative and Warrant Liabilities Disclosure [Line Items]
Expected term	6 months
Exercise Price	$ 0.045
Expected Volatility	52.00%
Risk-free interest rate	0.04%
Warrant
Derivative and Warrant Liabilities Disclosure [Line Items]
Expected term	5 years
Warrant | Maximum
Derivative and Warrant Liabilities Disclosure [Line Items]
Exercise Price	$ 0.1287
Expected Volatility	176.00%
Risk-free interest rate	1.71%
Warrant | Minimum
Derivative and Warrant Liabilities Disclosure [Line Items]
Exercise Price	$ 0.075
Expected Volatility	106.00%
Risk-free interest rate	0.77%

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Summary of Weighted Average Assumptions to Value Stock Options Granted (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of options	0 years	5 years	0 years	5 years
Expected volatility	0.00%	101.00%	0.00%
Expected volatility, Minimum				101.00%
Expected volatility, Maximum				114.00%
Expected dividends	0.00%	0.00%	0.00%	0.00%
Risk-free interest rate	0.00%	0.70%	0.00%
Risk-free interest rate, Minimum				0.70%
Risk-free interest rate, Maximum				0.85%

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Liabilities - Additional Information (Detail) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Original issue discount, percent	5.00%	5.00%
Debt instrument, face amount	$ 72,211	$ 72,211	$ 167,685
Adjustments to Additional Paid in Capital, Other	413,908	447,090
Common stock, shares issued	162,295,047	162,295,047	152,229,665
Stock Issued During Period Value For Debt Offering Costs		15,625
Stock Issued During Period Value Issued For Cash		9,375
Notes Payable to Affiliates
Debt Instrument [Line Items]
Accrued interest rate per year	18.40%	18.40%
Debt instrument, face amount	45,000	45,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross		500,000
Debt instrument exchange currency		54,325
Common stock, shares issued	500,000	500,000
Stock Issued During Period Shares For Debt Offering Costs		312,500
Stock Issued During Period Value For Debt Offering Costs		15,625
Stock Issued During Period Shares Issued For Cash		187,500
Stock Issued During Period Value Issued For Cash		$ 9,375
Minimum
Debt Instrument [Line Items]
Debentures payment term		6 months
Accrued interest rate per year	10.00%	10.00%
Conversion price at maturity	$ 0.045	$ 0.045
Convertible Debentures exercise price		$ 0.0745
Maximum
Debt Instrument [Line Items]
Debentures payment term		1 year
Accrued interest rate per year	20.00%	20.00%
Conversion price at maturity	$ 0.099	$ 0.099
Convertible Debentures exercise price		$ 0.1287

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Condensed Consolidated Statement of Shareholders' Deficit (USD $)	Total	Series B Preferred Stock	Series C Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Series C Convertible Preferred Stock	Series C Convertible Preferred Stock Series B Preferred Stock	Series C Convertible Preferred Stock Series C Preferred Stock	Series C Convertible Preferred Stock Common Stock	Series C Convertible Preferred Stock Additional Paid-In Capital	Series C Convertible Preferred Stock Accumulated Deficit
Beginning Balance at Dec. 31, 2012	$ (1,576,408)	$ 25,850	$ 10,000	$ 1,522,297	$ 35,491,603	$ (38,626,158)
Beginning Balance (in shares) at Dec. 31, 2012		2,585,000	1,000,000	152,229,665
Non cash issuance of stock options	287,338	0	0	0	287,338	0
Common stock issued for cash	9,375	0	0	1,875	7,500	0
Common stock issued for cash (in shares)		0	0	187,500
Common Stock issued for services	244,500	0	0	40,000	204,500	0
Common Stock issued for services (in shares)	400,000	0	0	4,000,000
Common stock issued for debt offering costs	15,625	0	0	3,125	12,500	0
Common stock issued for debt offering costs (in shares)		0	0	312,500
Conversion of convertible debt	297,145	0	0	50,653	246,492	0	0	0	(5,000)	5,000	0	0
Conversion of convertible debt (In shares)		0	0	5,065,382				0	(500,000)	500,000
Warrant valuation on issuance of convertible debt	257,726	0	0	0	257,726	0
Loss on debt extinguishment	(16,989)	0	0	0	16,989	0
Net loss	(3,109,660)	0	0	0	0	(3,109,660)
Ending Balance at Sep. 30, 2013	$ (3,557,370)	$ 25,850	$ 5,000	$ 1,622,950	$ 36,524,648	$ (41,735,818)
Ending Balance (in shares) at Sep. 30, 2013		2,585,000	500,000	162,295,047

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Shareholders' Deficit

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Shareholders’ Deficit

4. Shareholders’ Deficit

Common Stock

In January 2013, the Company issued 3,000,000 shares of restricted common stock to two vendors for services. The fair value of the vested portion of these shares was determined to be $55,149. In June 2013, the Company issued 1,000,000 shares of restricted common stock to one vendor for services. The fair value of the vested portion of these shares was determined to be $42,345.

During the nine months ended September 30, 2013, holders of Convertible Debentures with a face value of $297,146 converted their debentures into 4,592,636 shares of restricted common stock. In addition, associated with these debentures, the Company paid $33,988 in accrued interest by issuing 472,746 shares of restricted common stock.

In April 2013, a shareholder converted 500,000 shares of Series C Convertible Preferred stock into 500,000 shares of restricted common stock.

In September 2013, the Company issued a nine month unsecured note with a face value of $45,000 and 500,000 restricted shares of common stock to an affiliate of the Company in exchange for $54,325 in cash. The imputed annual rate of interest was calculated to be 18.4% and is to be repaid in nine equal monthly installments. Of the 500,000 shares issued, 312,500 shares were issued for debt issuance costs in an amount of $15,625 which is being amortized as interest expense over the life of the note and 187,500 shares were issued for cash in an amount of $9,375.

Warrants

During the nine months ended September 30, 2013, in conjunction with the sale of Convertible Debentures, the Company issued five year common stock purchase warrants to acquire 12,653,479 shares to holders of the Debentures and as compensation to Agents. These warrants have exercise prices ranging from $0.0745 to $0.1287 per share.

In addition, during the nine months ended September 30, 2013, the holders of common stock purchase warrants to acquire 1,515,151 shares at an exercise price of $0.1287 exchanged their warrants for new warrants to acquire 2,837,873 shares at an exercise price of $0.0745 under the exchange provisions of their Convertible Debentures.

The balance of all warrants outstanding as of September 30, 2013 is as follows:

			Weighted
			Average
			Exercise
Warrants	Shares		Price
Outstanding at January 1, 2013		59,066,992	$	0.18
Granted		16,737,575	$	0.08
Exchanged cancelled		(1,515,151)	$	0.13
Exchanged issued		2,837,873	$	0.08
Cancelled		-	$	-
Exercised		-	$	-
Outstanding at September 30, 2013		77,127,289	$	0.15
Exercisable at September 30, 2013		77,127,289	$	0.15

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Balances of Debentures (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Balance at beginning of period	$ 1,129,473	$ 0
Issuance of debentures for cash	1,372,000	3,186,000
Original issue discount	72,211	167,685
Debentures surrendered in exchange transactions	(300,002)	0
Debentures issued in exchange transactions	325,261	0
Debentures converted to common stock	(263,158)	(2,224,212)
Convertible debt	2,335,785	1,129,473
Less unamortized costs of financing	259,715	520,851
Convertible debt, net of unamortized costs	2,076,070	608,622
Convertible debt in default	$ 1,588,733	$ 0

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Significant Accounting Policies [Line Items]
Options outstanding	19,491,667	19,491,667
Number of shares exercisable	12,821,771
Common stock shares available	6,453,333
Non-vested stock options period granted expected to be recognized	4 years
Closing market price per share	$ 0.04
Total unrecognized estimated employee compensation cost related to non-vested stock options granted	$ 556,464
Equity Incentive Plan 2011
Significant Accounting Policies [Line Items]
Shares of common stock reserved under EIP	15,000,000
Number of shares exercisable	12,821,771
Stock Plan 2001
Significant Accounting Policies [Line Items]
Options outstanding as a percentage of outstanding shares	12.00%
Non-vested stock options period granted expected to be recognized	4 years