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**FORM      10-QSB**

**HYDROMER,      INC.**

|      New                Jersey         |                      22-2303576     |
|---------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------|
| (State                of incorporation)                                                                 |  (I.R.S.                Employer                                  |
|                                                                                                    |                    Identification No.)                  |

| 35                Industrial Pkwy, Branchburg, New Jersey |                        08876-3424        |
|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------|
| (Address                of principal executive offices)   | (Zip                Code)                                                                            |

| Registrant's                telephone number, including area code: |                       (908) 722-5000        |
|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|

|  . |  Yes |  x |  No |   ̈ |
|---------|-----------|---------|----------|--------------|

|  Class |  Outstanding                at December 31, 2005 |
|-------------|-------------------------------------------------------|
| Common      | 4,644,164                                             |

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INDEX

INDEX

|                                                                           | Page                No. |
|--------------------------------------------------------------------------------|-------------------------|
| Part                I - Financial Information                                  |                    |
|                                                                           |                    |
| Consolidated                Financial Statements                               |                    |
|                                                                           |                    |
| Balance                Sheets - December 31, 2005 & June 30, 2005          | 2                       |
|                                                                           |                    |
| Statements                of Income for the three months and six months ended  |                    |
| December                31, 2005 and 2004                                      | 3                       |
|                                                                           |                    |
| Statements                of Cash Flows for the six months ended               |                    |
| December                31, 2005 and 2004                                      | 4                       |
|                                                                           |                    |
| Notes                to Financial Statements                                   | 5                       |
|                                                                           |                    |
| Management's                Discussion and Analysis of the Financial Condition |                    |
| and                Results of Operations                                       | 6                       |
|                                                                           |                    |
|                                                                           |                    |
|                                                                           |                    |
| Part                II - Other Information                                     | 8                       |

| EXHIBIT                INDEX |
|------------------------------|
|                         |   |   |
| Exhibit                No.   | Description                of Exhibit |   |
| 33.1                         | SEC                Section 302 Certification - CEO                certification | 10 |
| 33.2                         | SEC                Section 302 Certification - CFO                certification | 11 |
|                         |   |   |
| 99.1                         | Certification                of Manfred F. Dyck, Chief Executive                Officer, pursuant |   |
|                         | to                18 U.S.C. Section 1350 | 12 |
| 99.2                         | Certificationof                Robert Y. Lee, Chief Financial Officer,                pursuant |   |
|                         | to                18 U.S.C. Section 1350 | 12 |

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INDEX

**HYDROMER,      INC. and CONSOLIDATED SUBSIDIARY**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                                                                          | December                  31,**2005**UNAUDITED | June                  30,2005AUDITED                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Assets**                                                                                                                                                                                                                                                                                                                                                    |                                           |                                                                                                                                                  |   |   |
| Current                  Assets:                                                                                                                                                                                                                                                                                                                              |                                           |                                                                                                                                                  |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                                                                                                                    | **$**                                          | **451,883****.**                                                                                                                                      | $ | 1,376,656.. |
| Short-term                  investments                                                                                                                                                                                                                                                                                                                       |                                           | **397,968****.**                                                                                                                                      |   | **-** |
| Trade                  receivables less allowance for doubtful accounts of $32,753 as                  ofDecember                  31, 2005 and June 30, 2005                                                                                                                                                                                                 |                                           |  **987,297****.**                                                                                                                                |   |  1,220,258.. |
| Inventory                                                                                                                                                                                                                                                                                                                                                     |                                           | **1,111,337****.**                                                                                                                                    |   | 1,094,927.. |
| Prepaid                  expenses                                                                                                                                                                                                                                                                                                                             |                                           | **100,670****.**                                                                                                                                      |   | 126,762.. |
| Deferred                  tax asset                                                                                                                                                                                                                                                                                                                           |                                           | **34,589.**                                                                                                                                           |   | 91,989.. |
| Other                                                                                                                                                                                                                                                                                                                                                         |                                           | **47,492****.**                                                                                                                                       |   | 14,841.. |
| Total                  Current Assets                                                                                                                                                                                                                                                                                                                         |                                           | **3,131,236****.**                                                                                                                                    |   | 3,925,433.. |
| Property                  and equipment, net                                                                                                                                                                                                                                                                                                                  |                                           | **3,252,116****.**                                                                                                                                    |   | 3,276,258.. |
| Deferred                  tax asset, non current                                                                                                                                                                                                                                                                                                              |                                           | **                                      250,000** |   | - |
| Intangible                  assets, net                                                                                                                                                                                                                                                                                                                       |                                           | **805,247****.**                                                                                                                                      |   | 780,140.. |
| Goodwill,                  net                                                                                                                                                                                                                                                                                                                                |                                           | **238,172****.**                                                                                                                                      |   | 238,172.. |
|  Total                  Assets                                                                                                                                                                                                                                                                                                                           |  **$**                                    |  **7,676,771****.**                                                                                                                              |  $ |  8,220,003                    |
|                                                                                                                                                                                                                                                                                                                                                          |                                           |                                                                                                                                                  |   |   |
| **Liabilities                  and Stockholders’ Equity**                                                                                                                                                                                                                                                                                               |                                           |                                                                                                                                                  |   |   |
| Current                  Liabilities:                                                                                                                                                                                                                                                                                                                         |                                           |                                                                                                                                                  |   |   |
| Accounts                  payable                                                                                                                                                                                                                                                                                                                             | **$**                                          | **464,964****.**                                                                                                                                      | $ | 466,993.. |
| Short-term                  borrowings                                                                                                                                                                                                                                                                                                                        |                                           | **284,933****.**                                                                                                                                      |   | 206,663.. |
| Accrued                  expenses                                                                                                                                                                                                                                                                                                                             |                                           | **194,696****.**                                                                                                                                      |   | 280,944.. |
| Bonus                  payable                                                                                                                                                                                                                                                                                                                                |                                           | **-**                                                                                                                                                 |   | 77,267.. |
| Current                  portion of deferred revenue                                                                                                                                                                                                                                                                                                          |                                           | **188,151****.**                                                                                                                                      |   | 161,317.. |
| Current                  portion of mortgage payable                                                                                                                                                                                                                                                                                                          |                                           | **195,805****.**                                                                                                                                      |   | 178,029.. |
| Income                  Taxes payable                                                                                                                                                                                                                                                                                                                         |                                           | **2,328****.**                                                                                                                                        |   | - |
| Total                  Current Liabilities                                                                                                                                                                                                                                                                                                                    |                                           | **1,330,877****.**                                                                                                                                    |   | 1,371,213.. |
| Deferred                  tax liability                                                                                                                                                                                                                                                                                                                       |                                           | **243,864****.**                                                                                                                                      |   | 243,864.. |
| Long-term                  portion of deferred revenue                                                                                                                                                                                                                                                                                                        |                                           | **139,071****.**                                                                                                                                      |   | 176,979.. |
| Long-term                  portion of mortgage payable                                                                                                                                                                                                                                                                                                        |                                           | **2,196,342****.**                                                                                                                                    |   | 2,295,292.. |
| Total                  Liabilities                                                                                                                                                                                                                                                                                                                            |                                           | **3,910,154****.**                                                                                                                                    |   | 4,087,348.. |
|  Stockholders’                  Equity                                                                                                                                                                                                                                                                                                             |                                           |                                                                                                                                                  |   |   |
| Preferred                  stock - no par value, authorized 1,000,000 shares, no shares issued                  and outstanding                                                                                                                                                                                                                               |                                           |  -                                                                                                                                               |   |  - |
| Common                  stock - no par value, authorized 15,000,000 shares;as                  of December 31, 2005, 4,655,081 shares issued and 4,644,164 shares                  outstanding; as of June 30, 2004, 4,608,904       shares                  issued and 4,597,987                  shares outstanding |                                           |   **3,639,315****.**                                                                                                                        |   |   3,631,615.. |
| Contributed                  capital                                                                                                                                                                                                                                                                                                                          |                                           | **577,750****.**                                                                                                                                      |   | 577,750.. |
| Accumulated                  deficit                                                                                                                                                                                                                                                                                                                          |                                           | **(444,308)**                                                                                                                                         |   | (70,570). |
| Treasury                  stock, 10,917 common shares at cost                                                                                                                                                                                                                                                                                                 |                                           | **(6,140)**                                                                                                                                           |   | (6,140). |
| Total                  Stockholders’ Equity                                                                                                                                                                                                                                                                                                             |                                           | **3,766,617****.**                                                                                                                                    |   | 4,132,655.. |
| Total                  Liabilities and Stockholders’ Equity                                                                                                                                                                                                                                                                                             | **$**                                          | **7,676,771****.**                                                                                                                                    | $ | 8,220,003.. |

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INDEX

**HYDROMER,      INC. and CONSOLIDATED SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF INCOME**

|                                                                                                 |        |  Three                      Months Ended |        |  Six                      Months Ended |
|------------------------------------------------------------------------------------------------------|-------------|-----------------------------------------------|-------------|---------------------------------------------|
|                                                                                                 |        |  December                      31,       |        |  December                      31,     |
|                                                                                                 |        | **2005****UNAUDITED**                         |        | 2004UNAUDITED                               |   | **2005****UNAUDITED** |   | 2004UNAUDITED |
| **Revenues**                                                                                         |        |                                          |        |                                        |   |   |   |   |
| Sale                      Sale of productsServService                      revenues                  | **$**       | **1,161,379****245,481**                      | $           | 1,202,592303,683                            | $ | **2,216,129****490,764** | $ | 2,273,755585,312 |
| RoyRoyalties                      and Contract Revenues                                              |        | **476,272**                                   |        | 675,421                                     |   | **1,037,443** |   | 1,268,959 |
| **Total                      Revenues**                                                              |        |  **1,883,132**                           |        |  2,181,696                             |   |  **3,744,336** |   |  4,128,026 |
|  **Expenses**                                                                                   |        |                                          |        |                                        |   |   |   |   |
| Cost                      of Sales                                                                   |        |  **803,384**                             |        |  757,406                               |   |  **1,620,732** |   |  1,456,163 |
| Operating                      Expenses                                                              |        |  **1,242,355**                           |        |  1,302,102                             |   |  **2,624,089** |   |  2,579,886 |
| Other                      Expenses                                                                  |        | **32,221**                                    |        | 25,780                                      |   | **65,784** |   | 47,560 |
| (Benefit)                      Provision for Income Taxes                                            |        |  **(66,241)**                            |        |  39,618                                |   |  **(192,531)** |   |  11,012 |
|  **Total                      Expenses**                                                        |        | **2,011,719**                                 |        | 2,124,906                                   |   | **4,118,074** |   | 4,094,621 |
|  **Net                      (Loss) Income**                                                     |  **$** |  **(128,587)**                           |  **$** |  56,790                                |  **$** |  **(373,738)** |  **$** |  33,405 |
| (Loss)                      Earnings Per Common Share                                                | **$**       | **(0.03)**                                    | **$**       | 0.01                                        | **$** | **(0.08)** | **$** | 0.01 |
|  Weighted                      Average Number of Common                      Shares Outstanding |        |   **4,643,217**                     |        |   4,613,150                       |   |   **4,634,362** |   |   4,605,569 |

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INDEX

**HYDROMER,      INC. and CONSOLIDATED SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                                              |        | Six                    Months EndedDecember                    31, |
|---------------------------------------------------------------------------------------------------------------------------------------------------|-------------|--------------------------------------------------------------------|
|                                                                                                                                              |        | **2005****UNAUDITED**                                              |   | **2004****UNAUDITED** |
| **Cash                    Flows From Operating Activities:**                                                                                      |        |                                                               |   |   |
| Net                    (Loss) Income                                                                                                              | **$**       | **(373,738)**                                                      | $ | **33,405** |
| Adjustments                    to reconcile net (loss) income to net cash provided by (used for)                    operating activities     |        |                                                               |   |   |
| Depreciation                    and amortization                                                                                                  |        | **113,085**** **                                              |   | **97,452** |
| Deferred                    income taxes                                                                                                          |        | **(192,600)**                                                      |   | **(6,581)** |
| Changes                    in Assets and Liabilities                                                                                              |        |                                                               |   |   |
| Trade                    receivables                                                                                                              |        | **232,961**                                                        |   | **(137,467)** |
| Inventory                                                                                                                                         |        | **(16,410)**                                                       |   | **(84,936)** |
| Prepaid                    expenses                                                                                                               |        | **26,092**                                                         |   | **38,019** |
| Patents                    and Trademark                                                                                                          |        | **(25,107)**                                                       |   | **(91,424)** |
| Other                    assets                                                                                                                   |        | **(37,986)**                                                       |   | **(43)** |
| Accounts                    payable and accrued liabilities                                                                                       |        | **(176,618)**                                                      |   | **109,216** |
| Income                    taxes payable                                                                                                           |        | **2,328**                                                          |   | **(48,207)** |
|  Net                    Cash Used for Operating Activities                                                                                   |        |  **(447,993)**                                                |   |  **(90,566)** |
|  **Cash                    Flows From Investing Activities:**                                                                                |        |                                                               |   |   |
| Cash                    purchases of property and equipment                                                                                       |        | **(88,943)**                                                       |   | **(291,584)** |
| Cash                    purchases of short-term investments                                                                                       |        | **(392,633)**                                                      |   |     - |
|  Net                    Cash Used for Investing Activities                                                                              |        |  **(481,576)**                                           |   |  **(291,584)**  |
| **Cash                    Flows From Financing Activities:**                                                                                      |        |                                                               |   |   |
| Net                    borrowings against Line of Credit                                                                                          |        | **78,270**                                                         |   | **521,629** |
| Repayment                    of long-term borrowings                                                                                              |        | **(81,174)**                                                       |   | **(44,731)** |
| Proceeds                    from the issuance of common stock                                                                                     |        | **7,700**                                                          |   | **16,000** |
|                                   Net Cash Provided by Financing Activities |        | **4,796**                                                          |   | **492,898** |
| **Net                    (Decrease) Increase in Cash and Cash                    Equivalents:**                                              |        | **(924,773)**                                                      |   | **110,748** |
| Cash                    and Cash Equivalents at Beginning of Period                                                                               |        | **1,376,656**                                                      |   | **142,476** |
|  Cash                    and Cash Equivalents at End of Period                                                                               |  **$** |  **451,883**                                                  |  $ |  **253,224** |

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INDEX

**HYDROMER,      INC. and CONSOLIDATED SUBSIDIARY**

|                                 | Polymer                Research                        | Medical                Products                        | Corporate                Overhead                      |  Total                                            |
|--------------------------------------|--------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
| 2005                                 |                                                        |                                                        |                               |                                                        |
| Revenues                             | $                  2,203,554  | $                  1,540,782  |                                                        | $                  3,744,336  |
| Expenses                             | (1,812,623)                                       | (1,771,260)                                       | $    (726,722)                | (4,310,605)                                       |
| Pre-tax                Loss          | $    390,931                  | $    (230,478)                | $    (726,722)                | $    (566,269)                |
|                                 |                                                   |                                                   |                                                   |                                                   |
| 2004                                 |                                                   |                                                   |                                                   |                                                   |
| Revenues                             | $                  2,613,612  | $                  1,514,414  |                                                   | $                  4,128,026  |
| Expenses                             | (1,674,740)                                       | (1,682,874)                                       | $    (725,995)                | (4,083,609)                                       |
| Pre-tax                Income (Loss) | $                  938,872    | $                  (168,460)  | $                  (725,995)  | $                  44,417     |
|                                 |                                                   |                                                   |                                                   |                                                   |

|     | 2005      | 2004      |
|----------|-----------|-----------|
| Domestic | 84%  | 82%  |
| Foreign  | 16%  | 18%  |

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INDEX

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF THE**

**FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

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INDEX

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INDEX

| a)             | Exhibits                - none                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| b)   | Reports                on form 8-K - There were four Form 8-K’s filed during the quarter                ending                                 December 31, 2005. Two announced supply agreements, one on a new                FDA                510(k)                clearance and one announcing the earnings for the quarter                endingSeptember                30, 2005. |

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INDEX

**SIGNATURES**

|   | HYDROMER,                  INC.                |
|--------|------------------------------------------------|
|   |                                           |
|   |                                           |
|   | /s/                  Robert Y. Lee   |
|   | Robert                  Y. Lee                 |
|   | Chief                  Financial Officer       |

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INDEX