**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)


**[X]
      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**





**For
      the Quarterly Period Ended December 31, 2005**





**[
      ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF
      1934**





**For
      the Transition Period from _________ to _________**





**Commission
      file number: 0-32835**





**GAMMACAN
      INTERNATIONAL, INC.**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            **33-0956433**(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification No.)





**11
      Ben Gurion Street**


**54100
      Givat Shmuel, Israel**


(Address
      of principal executive offices)





**972
      3 5774475**


(Registrant's
      telephone number, including area code)





(Former
      name, former address and former fiscal year, if changed since last
      report)





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
      past 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
o





**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
      YEARS:**





Indicate
      by check mark whether the registrant filed all documents and reports required
      to
      be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
      after
      the distribution of securities under a plan confirmed by a court.   Yes
o   No
o





**APPLICABLE
      ONLY TO CORPORATE ISSUERS:**





State
      the
      number of shares outstanding of each of the registrant's classes of common
      equity, as of the latest practicable date: 28,453,732 shares issued and
      outstanding as of February 2, 2006.





**GAMMACAN
      INTERNATIONAL, INC.**





**FORM
      10-QSB**





**TABLE
      OF CONTENTS**





Page
                No.PART
                IItem 1.
                Financial Statements
            
            
            1Item 2.
                Management’s Discussion and Analysis of Financial Condition and Results of
                Operation
            
            
            11Item 3.
                Controls And Procedures
            
            
            16PART
                IIItem 1.
                Legal Proceedings
            
            
            17Item 2.
                Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            
            17Item 3.
                Defaults Upon Senior Securities
            
            
            17Item 4.
                Submission of Matters to a Vote of Security Holders
            
            
            17Item 5.
                Other Information
            
            
            17Item 6.
                Exhibits
            
            
            18











This
      Form
      10-QSB includes a number of forward-looking statements that reflect management's
      current views with respect to future events and financial performance. Those
      statements include statements regarding the intent, belief or current
      expectations of Gammacan and members of its management team as well as the
      assumptions on which such statements are based. Prospective investors are
      cautioned that any such forward-looking statements are not guarantees of future
      performance and involve risk and uncertainties, and that actual results may
      differ materially from those contemplated by such forward-looking statements.
      Readers are urged to carefully review and consider the various disclosures
      made
      in this report and in our other reports filed with the Securities and Exchange
      Commission. Important factors currently known to Management could cause actual
      results to differ materially from those in forward-looking statements. We
      undertake no obligation to update or revise forward-looking statements to
      reflect changed assumptions, the occurrence of unanticipated events or changes
      in the future operating results over time. Gammacan believes that its
      assumptions are based upon reasonable data derived from and known about its
      business and operations and the business and operations of Gammacan. No
      assurances are made that actual results of operations or the results of
      GammaCan's future activities will not differ materially from its
      assumptions.





2





**ITEM
      1. - FINANCIAL STATEMENTS**











**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)


INTERIM
      FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2005








TABLE
      OF
      CONTENTS








**Page****CONDENSED
                CONSOLIDATED FINANCIAL STATEMENTS:**Balance
                sheets
            
            
            2Statements
                of operations
            
            
            3Statements
                of changes in stockholders’ equity
            
            
            4Statements
                of cash flows
            
            
            5Notes
                to financial statements
            
            
            6-10










1




**GAMMACAN
      INTERNATIONAL INC.**




(A
      Development Stage Company)




CONDENSED
      CONSOLIDATED BALANCE SHEETS





(US
      $,
      except share data)


**December
                  31,**
              
              **September
                  30,****2005**
              
              **2005****(Unaudited)**
              
              **(Audited)****A
                  s s e t s****CURRENT
                  ASSETS:**Cash
                  and cash equivalents
              
              $
              1,991,211
              
              $
              713,342Prepaid
                  expenses
              
              
              52,661
              
              
              11,619Other
              
              
              25,858
              
              
              22,029T
                  o
                  t a l current assets
              
              
              2,069,730
              
              
              746,990**FUNDS
                  IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT**
              
              
              6,884
              
              
              7,528**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              9,810
              
              
              10,269T
                  o
                  t a l assets
              
              $
              2,086,424
              
              $
              764,787Liabilities
                  and stockholders' equity**CURRENT
                  LIABILITIES:**Accounts
                  payable
              
              $
              307,010
              
              $
              159,379Payroll
                  and related accruals
              
              
              40,094
              
              
              14,655T
                  o
                  t a l current liabilities
              
              
              347,104
              
              
              174,034**LIABILITY
                  FOR EMPLOYEE RIGHTS UPON RETIREMENT**
              
              
              11,016
              
              
              13,725**STOCKHOLDERS’
                  EQUITY:**Preferred
                  stock, $ 0.0001 par value (20,000,000 sharesauthorized;
                  none issued and outstanding)Common
                  stock, $ 0.0001 par value (100,000,000 authorized shares;
                  28,453,732 and 26,231,510 shares issued andoutstanding
                  as of December 31, 2005 and September 30, 2005,
                  respectively)
              
              
              2,845
              
              
              2,622Additional
                  paid-in capital
              
              
              2,945,198
              
              
              1,767,601Warrants
              
              
              925,793
              
              
              519,423Deficit
                  accumulated during the development stage
              
              
              (2,145,532
              )
              
              (1,712,618
              )T
                  o
                  t a l stockholders' equity
              
              
              1,728,304
              
              
              577,028T
                  o
                  t a l liabilities and stockholders’ equity
              
              $
              2,086,424
              
              $
              764,787








**The
      accompanying notes are an integral part of the financial
      statements.**


2




**GAMMACAN
      INTERNATIONAL INC.**




(A
      Development Stage Company)







CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS





(US
      $,
      except share data)




**Period
                  from****October
                  6,****Three
                  months ended**
              
              **1998*
                  to****December
                  31,**
              
              **December
                  31,****2005**
              
              **2004**
              
              **2005****Unaudited**
              
              **Unaudited**
              
              **Unaudited****RESEARCH
                  AND DEVELOPMENT COSTS**
              
              $
              225,161
              
              $
              51,366
              
              $
              938,081**GENERAL
                  AND ADMINISTRATIVE****EXPENSES**
              
              
              212,775
              
              
              192,510
              
              
              1,238,416**FINANCIAL
                  INCOME**
              
              
              (8,058
              )
              
              (2,013
              )
              
              (28,761
              )**FINANCIAL
                  EXPENSES**
              
              
              3,036
              
              
              871
              
              
              10,171432,914
              
              
              242,734
              
              
              2,157,907**MINORITY
                  INTERESTS IN LOSSES OF A SUBSIDIARY**
              
              
              -
              
              
              -
              
              
              (12,375
              )**NET
                  LOSS FOR THE PERIOD**
              
              $
              (432,914
              )
              $
              (242,734
              )
              $
              (2,145,532
              )**BASIC
                  AND DILUTED LOSS PER 1000****COMMON
                  SHARES**
              
              $
              (16.13
              )
              $
              (9.44
              )**WEIGHTED
                  AVERAGE NUMBER OF COMMON****SHARES
                  USED IN COMPUTING BASIC AND****DILUTED
                  LOSS PER COMMON SHARE**
              
              
              26,847,065
              
              
              25,710,510





*
      Incorporation date, see note 1a.





**The
      accompanying notes are an integral part of the financial
      statements.**





3




**GAMMACAN
      INTERNATIONAL INC. AND SUBSIDIARY**




**(A
      Development Stage Company)**


CONDENSED
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


(US
      $,
      except share data)





**Deficit****accumulated****Common**
            
            
            
            **Additional**
            
            **during****Common**
            
            **Stock**
            
            
            
            **paid-in**
            
            **development****Stock**
            
            **Amount**
            
            **Warrants**
            
            **capital**
            
            **stage**
            
            **Total****Beginning
                balance**
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Stock
                issued for cash onOctober
                6, 1998
            
            
            1,650,000
            
            
            165
            
            
            
            
            
            (155
            )
            
            
            
            
            10Stock
                issued for cash onOctober
                9, 1998
            
            
            2,722,500
            
            
            272
            
            
            
            
            
            (107
            )
            
            
            
            
            165Stock
                issued for cash onOctober
                10, 1998
            
            
            198,000
            
            
            20
            
            
            
            
            
            100
            
            
            
            
            
            120Stock
                issued for services onDecember
                1, 1998
            
            
            9,900,000
            
            
            990
            
            
            
            
            
            2,010
            
            
            
            
            
            3,000Stock
                issued for cash onApril
                7, 1999
            
            
            561,000
            
            
            56
            
            
            
            
            
            284
            
            
            
            
            
            340Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,444
            )
            
            (3,444
            )**Balance
                at September 30, 1999**
            
            
            15,031,500
            
            
            1,503
            
            
            
            
            
            2,132
            
            
            (3,444
            )
            
            191Stock
                issued for cash onSeptember
                30, 2000
            
            
            41,250,000
            
            
            4,125
            
            
            
            
            
            875
            
            
            
            
            
            5,000**Balance
                at September 30, 2000**
            
            
            56,281,500
            
            
            5,628
            
            
            
            
            
            3,007
            
            
            (3,444
            )
            
            5,191Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,108
            )
            
            (3,108
            )**Balance
                at September 30,****2001**
            
            
            56,281,500
            
            
            5,628
            
            
            
            
            
            3,007
            
            
            (6,552
            )
            
            2,083Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,231
            )
            
            (4,231
            )**Balance
                at September 30, 2002**
            
            
            56,281,500
            
            
            5,628
            
            
            
            
            
            3,007
            
            
            (10,783
            )
            
            (2,148
            )Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            7,025
            
            
            
            
            
            7,025Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,857
            )
            
            (4,857
            )**Balance
                at September 30, 2003**
            
            
            56,281,500
            
            
            5,628
            
            
            
            
            
            10,032
            
            
            (15,640
            )
            
            20Cancellation
                of shares atJune
                8, 2004
            
            
            (32,284,988
            )
            
            (3,228
            )
            
            
            
            
            3,228Stock
                based compensation
            
            
            
            
            
            
            
            
            
            
            
            62,600
            
            
            
            
            
            62,600Common
                stock and warrantsissued
                for cash on August 13,
            
            
            1,224,998
            
            
            122
            
            
            139,494
            
            
            779,134
            
            
            
            
            
            918,7502004Gain
                on issuance of subsidiaryStock
                on August 17, 2004 tothird
                party
            
            
            
            
            
            
            
            
            
            
            
            86,625
            
            
            
            
            
            86,625Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (498,446
            )
            
            (498,446
            )**Balance
                at September 30, 2004**
            
            
            25,221,510
            
            
            2,522
            
            
            139,494
            
            
            941,619
            
            
            (514,086
            )
            
            569,549Common
                stock and warrantsissued
                for cash on November 11,2004
            
            
            978,000
            
            
            97
            
            
            367,892
            
            
            766,630
            
            
            
            
            
            1,134,619Common
                stock and warrantsissued
                for cash on January 25,2005
            
            
            32,000
            
            
            3
            
            
            12,037
            
            
            24,760
            
            
            
            
            
            36,800Issuance
                of warrants to Consultants'
            
            
            
            
            
            
            
            
            
            
            
            34,592
            
            
            
            
            
            34,592Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,198,532
            )
            
            (1,198,532
            )**Balance
                at September 30, 2005**
            
            
            26,231,510
            
            $
            2,622
            
            $
            519,423
            
            $
            1,767,601
            
            $
            (1,712,618
            )
            $
            577,028Common
                stock and warrantsissued
                for cash on October 31,2005
            
            
            666,666
            
            
            67
            
            
            82,784
            
            
            367,149
            
            
            
            
            
            450,000Common
                stock and warrantsissued
                for cash on December 20,2005
            
            
            1,555,556
            
            
            156
            
            
            323,586
            
            
            776,258
            
            
            
            
            
            1,100,000Benefit
                component in employees and consultants stock option plan
            
            
            
            
            
            
            
            
            
            
            
            34,190
            
            
            
            
            
            34,190Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (432,914
            )
            
            (432,914
            )**Balance
                at December 31, 2005 (unaudited)**
            
            
            28,453,732
            
            $
            2,845
            
            $
            925,793
            
            $
            2,945,198
            
            $
            (2,145,532
            )
            $
            1,728,304





**The
      accompanying notes are an integral part of the financial
      statements.**


4




**GAMMACAN
      INTERNATIONAL INC. AND SUBSIDIARY**


(A
      Development Stage Company)




CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


(US
      $)


**Period
                  from****October
                  6,****Three
                  months ended**
              
              **1998*
                  to****December
                  31,**
              
              **December
                  31,****2005**
              
              **2004**
              
              **2005****Unaudited**
              
              **Unaudited**
              
              **Unaudited****CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (432,914
              )
              $
              (242,734
              )
              $
              (2,145,532
              )Adjustments
                  required to reconcile net loss to net cash usedin
                  operating activities:Income
                  and expenses not involving cash flows:Depreciation
              
              
              843
              
              
              285
              
              
              3,436Common
                  stock issued for services
              
              
              -
              
              
              -
              
              
              3,000Minority
                  interests in losses of a subsidiary
              
              
              -
              
              
              -
              
              
              (12,375
              )Write
                  off of in process research and development
              
              
              -
              
              
              -
              
              
              100,000Benefit
                  component in employees and consultants stock option plan
              
              
              34,190
              
              
              -
              
              
              131,382Changes
                  in operating assets and liabilities:Increase
                  in prepaid expenses
              
              
              (41,042
              )
              
              (41,632
              )
              
              (52,661
              )Increase
                  in other current assets
              
              
              (3,829
              )
              
              (8,089
              )
              
              (25,858
              )Increase
                  (decrease) in current liabilities
              
              
              173,070
              
              
              (11,540
              )
              
              346,104Increase
                  (decrease) in liability for employee rights upon
                  retirement
              
              
              (2,709
              )
              
              -
              
              
              11,016Net
                  cash used in operating activities
              
              
              (272,391
              )
              
              (303,710
              )
              
              (1,641,488
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES -**funds
                  in respect of employee rights upon retirement
              
              
              644
              
              
              
              
              
              (12,218
              )Purchase
                  of property and equipment
              
              
              (384
              )
              
              (7,512
              )
              
              (7,912
              )Net
                  cash provided by (used) in investment activities
              
              
              260
              
              
              (7,512
              )
              
              (20,130
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Contribution
                  to additional paid in capital
              
              
              
              
              
              
              
              
              12,319Issuance
                  of common stock and warrants
              
              
              1,550,000
              
              
              1,134,619
              
              
              3,640,510Net
                  cash provided by financing activities
              
              
              1,550,000
              
              
              1,134,619
              
              
              3,652,829**INCREASE
                  IN CASH AND CASH EQUIVALENTS**
              
              
              1,277,869
              
              
              823,397
              
              
              1,991,211**BALANCE
                  OF CASH AND CASH EQUIVALENTS********AT****BEGINNING
                  OF PERIOD**
              
              
              713,342
              
              
              705,868**BALANCE
                  OF CASH AND CASH EQUIVALENTS****AT
                  END OF PERIOD**
              
              $
              1,991,211
              
              $
              1,529,265
              
              $
              1,991,211





*
      Incorporation date, see note 1a.


**The
      accompanying notes are an integral part of the financial
      statements.**


5




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


**NOTE
      1 - SIGNIFICANT ACCOUNTING POLICIES:**




**a.**  **General:**





GammaCan
      International Inc. (A Development Stage Company; "the Company") was incorporated
      on October 6, 1998, under the laws of the State of Delaware, under the name
      of
      San Jose International, Inc. The Company has no significant revenues and no
      material operations and in accordance with Statement of financial Accounting
      Standard (“SFAS”) No. 7 “Accounting and Reporting by Development Stage
      enterprises”, the Company is considered a development stage
      company.





On
      August
      19, 2004, the name of the company was changed from "San Jose International,
      Inc." into "GammaCan International, Inc.".





At
      this
      point in the development stage, the company's focus is to demonstrate efficacy
      of IVIg cancer immunotherapy in human clinical trials. In July 2005, the company
      commenced Phase 2 clinical trials in humans to demonstrate clinical efficacy
      of
      IVIg immunotherapy in three major cancers: colon, prostate and melanoma. These
      Phase 2 clinical trials are being conducted at three medical centers in Israel
      and preliminary results are anticipated during the first half of 2006. The
      Phase
      2 clinical trial is due to be completed by October 2006.





The
      financial statements have been prepared assuming the Company will continue
      as a
      going concern. See note 2.





**b.**  **Accounting
      principles**





The
      accompanying unaudited financial statements of the Company and the subsidiary
      GammaCan Ltd. ("the Subsidiary") have been prepared in accordance with
      accounting principles generally accepted in the United States for interim
      financial information and with the instructions to Form 10-QSB and Item 310
      of
      Regulation S-B. Accordingly, they do not include all of the information and
      footnotes required by accounting principles generally accepted in the United
      States for complete financial statements.





In
      the
      opinion of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. Operating
      results for the three-month period ended December 31, 2005, are not necessarily
      indicative of the results that may be expected for the year ended September
      30,
      2006. For further information, refer to the financial statements and footnotes
      thereto included in the consolidated annual report on Form 10-KSB for the year
      ended September 30, 2005.





**c.**  **Use
      of estimates in the preparation of financial statements**





The
      preparation of the financial statements in conformity with U.S. GAAP requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosure of contingent assets and liabilities
      at
      the financial statement date and the reported expenses during the reporting
      periods. Actual results could differ from those estimates.














6




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


**NOTE
      1 - SIGNIFICANT ACCOUNTING POLICIES** (continued):





**d.**  **Principles
      of consolidation**





The
      consolidated financial statements include the accounts of the Company and its
      subsidiary GammaCan Ltd. All material intercompany transactions and balances
      have been eliminated in consolidation.





**e.**  **Cash
      equivalents**





The
      company considers all short term, highly liquid investments, which include
      short-term deposits with original maturities of three months or less from the
      date of purchase that are not restricted as to withdrawal or use and are readily
      convertible to known amounts of cash, to be cash equivalents.





**f.**  **Loss
      per share**




Basic
      and
      diluted net losses per common share are presented in accordance with FAS No.
      128
“Earning per share” (“FAS128”), for all periods presented. Outstanding stock
      options and warrants have been excluded from the calculation of the diluted
      loss
      per share because all such securities are anti-dilutive for all periods
      presented. The total number of common stocks options and warrants excluded
      from
      the calculations of diluted net loss was 3,967,775 for the three months ended
      December 31, 2005 (3,652,998 for the three months ended December 31,
      2004).





**g.**  **Stock
      based compensation**







The
      Company accounts for employee stock based compensation in accordance with
      Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to
      Employees” (“APB 25”) and related interpretations. In accordance with FAS 123 -
“Accounting for Stock-Based Compensation” (“FAS 123”), the Company discloses pro
      forma data assuming the Company had accounted for employee stock option grants
      using the fair value-based method defined in FAS 123.




As
      to
      services from consultants, the Company applies EITF 96-18 “Accounting for Equity
      Instruments That Are Issued to Other Than Employees for Acquiring, or in
      Conjunction with Selling, Goods or Services”.


7




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


**NOTE
      1 - SIGNIFICANT ACCOUNTING POLICIES** (continued) **:**









The
      following table illustrates the pro - forma effect on net loss and loss per
      common share assuming the Company had applied the fair value recognition
      provisions of FAS 123 to its stock-based employee compensation:




**Three
                months ended December 31,****2005**
            
            **2004**Net
                loss as reported
            
            $
            (432,914
            )
            $
            (242,734
            )Add:
                pro forma stock based employee compensationexpense
                determined under fair valuemethod
                for all awards, net of related tax effects
            
            
            (58,361
            )
            
            (231,504
            )Recognize
                the reversal of the pro forma stock based employee compensation
                expensedetermined
                under fair value method due to forfeitureof
                awards granted to employees
            
            
            79,676
            
            
            -Pro
                forma net loss
            
            $
            (411,599
            )
            $
            (474,238
            )Net
                loss per 1000 common shares:Basic
                and diluted loss per 1000 shares - as reported
            
            $
            (16.13
            )
            $
            (9.44
            )Basic
                and diluted loss per 1000 shares - pro forma
            
            $
            (15.33
            )
            $
            (18.45
            )





**h.**  **Reclassifications**




Certain
      figures in respect of prior years have been reclassified to conform to the
      current year presentation.





**NOTE
      2 - GOING CONCERN**





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. The Company has net losses for the period
      from
      inception (October 6, 1998) through December 31, 2005 of $2,145,532. The
      Company's continuation as a going concern is dependent on its ability to meet
      its obligations, to obtain additional financing as may be required and
      ultimately to attain profitability. These financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.





**NOTE
      3 - STOCK TRANSACTIONS:**





**a.**
                On
                    October 31, 2005, the company entered into subscription agreement
                    for the
                    sale of 666,666 units at a purchase price of $0.75 per unit for
                    a total
                    consideration of $500,000. Each unit comprising one share of
                    the Company's
                    common stock and one common share purchase warrant exercisable
                    for three
                    years. Every 2 warrants can be exercisable to one Share at a
                    price of
                    $1.00 per Share.





In
      connection with the subscription agreement the company paid $50,000 cash fee
      to
      a third party which assisted in securing the agreement, as well as issued 66,666
      units, each comprising of one common share purchase warrant exercisable for
      three years. Every warrant can be exercisable to one Share at a price of $1.50
      per Share.





8




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


**NOTE
      3 - STOCK TRANSACTIONS** (continued) **:**





The
      value
      allocated to all warrants estimated by using the Black Scholes option-pricing
      model is $82,784. The value was based on the following assumptions: dividend
      yield of 0%; expected volatility of 80%; risk-free interest rates of 4.4%;
      and
      expected lives of 3 years.





**b.**
            On
                October 6, 2005, 350,000 options were granted under the Stock Option
                Plan.
                The exercise price has been determined at $0.93 per share which was
                equivalent to 90% of the traded market price on the date of grant.


The
      options may be exercised after vesting and only in accordance with the
      following:


1.
            30,000
                options - On the first anniversary commencing the grant
                date.


2.
                320,000
                    options - On the last day of each of the 36 months following
                    the first
                    anniversary of the grant date, the options shall vest in equal
                    monthly
                    installments





The
      fair
      value of the above options on the date of grant estimated by using Black Scholes
      option-pricing model is $283,262. The value was based on the following
      assumptions: dividend yield of 0%; expected volatility of 80%; risk-free
      interest rates of 4.5%; and expected lives of 7.59 years.





**c.**
            On
                October 20, 2005, 30,000 options were granted under the Stock Option
                Plan.
                The exercise price has been determined at $1.35 per share which was
                equivalent to the traded market price on the date of
                grant





The
      options may be exercised after vesting and only in accordance with the
      following:


1.
                25%
                    of the options - On the first anniversary commencing the grant
                    date


2.
                75%
                    of the options - On the last day of each of the 36 months following
                    the
                    first anniversary of the grant date, the options shall vest in
                    equal
                    monthly installments




The
      fair
      value of the above options on the date of grant estimated by using Black Scholes
      option-pricing model is $32,637.  The
      value
      was based on the following assumptions: dividend yield of 0%; expected
      volatility of 85%; risk-free interest rates of 4.5%; and expected lives of
      7.85
      years.





**d.**
            On
                December 20, 2005, the company entered into subscription agreement
                for the
                sale of 1,333,334 units at a purchase price of $0.75 per unit for
                a total
                consideration of $1,000,000. Each unit comprising one share of the
                Company's common stock and one common share purchase warrant exercisable
                for three years. Every warrant can be exercisable to one Share at
                a price
                of $1.20 per Share.





In
      connection with the subscription agreement the company paid $100,000 cash fee
      to
      third parties who assisted in securing the agreement, as well as issued 133,332
      units, each comprising of one common share purchase warrant exercisable for
      three years. 66,666 warrants can be exercisable to 66,666 Share at a price
      of
      $1.25 per Share, and 66,666 warrants can be exercisable to 66,666 Share at
      a
      price of $1.50 per Share.








9




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


**NOTE
      3 - STOCK TRANSACTIONS** (continued) **:**





The
      value
      allocated to all warrants estimated by using the Black Scholes option-pricing
      model is $294,443. The value was based on the following assumptions: dividend
      yield of 0%; expected volatility of 81%; risk-free interest rates of 4.4%;
      and
      expected lives of 3 years.





**e.**
            On
                December 20, 2005, the company entered into subscription agreement
                for the
                sale of 222,222 units at a purchase price of $0.90 per unit for a
                total
                consideration of $200,000. Each unit comprising one share of the
                Company's
                common stock and one common share purchase warrant exercisable for
                three
                years. Every 2 warrants can be exercisable to one Share at a price
                of
                $1.15 per Share.





The
      value
      allocated to all warrants estimated by using the Black Scholes option-pricing
      model is $29,143. The value was based on the following assumptions: dividend
      yield of 0%; expected volatility of 81%; risk-free interest rates of 4.4%;
      and
      expected lives of 3 years.





**f.**
            On
                December 21, 2005, 250,000 options were granted under the Stock Option
                Plan. The exercise price has been determined at $1.34 per share which
                was
                equivalent to the traded market price on the date of grant. As to
                the
                exercise terms of the options - see note
                3c.





The
      fair
      Value of the above mentioned options on the date of the grant estimated by
      using
      the Black Scholes option-pricing model is $269,449. The value was based on
      the
      following assumptions: dividend yield of 0%; expected volatility of 85%;
      risk-free interest rates of 4.5%; and expected lives of 7.85 years.





**NOTE
      4 - SUBSEQUENT EVENTS**





On
      January 12, 2006, 50,000 options were granted under the Stock Option Plan.
      The
      exercise price has been determined at $1.10 per share which was equivalent
      to
      the traded market price on the date of grant. As to the exercise terms of the
      options - see note 3c.





The
      fair
      Value of the above mentioned options on the date of the grant estimated by
      using
      the Black Scholes option-pricing model is $44,165. The value was based on the
      following assumptions: dividend yield of 0%; expected volatility of 85%;
      risk-free interest rates of 4.5%; and expected lives of 7.85 years.







10




**GAMMACAN
      INTERNATIONAL INC.**


(A
      Development Stage Company)




NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)





**ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





As
      used
      in this current report, the terms "we", "us", "our", and "Gammacan" mean
      Gammacan International, Inc. and our subsidiary, Gammacan, Ltd., unless
      otherwise indicated.





All
      dollar amounts refer to US dollars unless otherwise indicated.





We
      currently have no revenue from operations, we are in a start-up phase with
      our
      existing assets and we have no significant assets, tangible or intangible.
      There
      can be no assurance that we will generate revenues in the future, or that we
      will be able to operate profitably in the future, if at all. We have incurred
      net losses in each fiscal year since inception of our operations.





Our
      initial focus over the next several years is to demonstrate efficacy of IVIG
      cancer immunotherapy in human clinical trials. Efficacy is the ability of a
      drug
      or other treatment to produce the desired result when taken by its intended
      users. If ultimately proven to be successful, and there can be no assurance
      that
      it will be, we could be well-positioned to enter a licensing agreement with
      a
      major pharmaceutical partner for commercial market development and sales.





Since
      July 2005, we have been conducting a Phase 2 clinical trial in humans to
      demonstrate clinical efficacy of IVIG immunotherapy in three major cancers:
      colon, prostate and melanoma. To date, 28 patients have been enrolled, out
      of
      which 24 have actually received the IVIG treatment. This phase 2 clinical trial
      is being conducted at three medical centers in Israel and preliminary results
      will likely be available during the first half of 2006. The trial is due to
      be
      completed by October 2006, but we will probably continue to monitor patients
      for
      a number of years after the trial in order to collect additional evidence of
      efficacy and potential benefits or adverse effects of the IVIG
      treatment . If
      successful or promising, and at this preliminary stage there is no assurance
      they will be, results of these clinical trials will be used to enter into
      discussions with a major pharmaceutical partner and plasma based product
      manufacturers to work with us to potentially commercialize the IVIG products.
      This commercialization will include pivotal, Phase 3 clinical trials in
      accordance with regulatory requirements. Such trials may be long-term trials
      and
      may require substantial financial resources that we do not presently possess.





We
      expect
      that it will take a number of years to receive final approval and registration
      of an IVIg preparation for use as an anti-cancer reagent. However, the company's
      strategy is to collaborate with a suitable IVIg manufacturer and license them
      the rights to use IVIg as an anti-cancer agent, wherefore the company's expected
      revenue stream is not entirely dependent upon the registration of the IVIg
      products.





We
      are
      also contemplating to conduct additional clinical trials to test new
      formulations of IVIG and to test IVIG immunotherapies for different cancers
      at
      different stages of disease progression with varying dosages and routes of
      administration. Our goal is to partner with a pharmaceutical company to conduct
      these further Phase 2 and Phase 3 trials, in order to attain broad-based
      regulatory approval.





**Long
      Term Business Strategy**





As
      noted
      previously, if IVIG shows significant promise thorough clinical trials, we
      plan
      to ultimately seek a strategic commercial partner, or partners, with extensive
      experience in commercialization and marketing of cancer drugs and or therapeutic
      proteins. It is envisaged that the partner, or partners, would be responsible
      for ensuring regulatory approvals and registrations in a timely manner and
      for
      the penetration of the IVIG immunotherapies to the market. This planned
      strategic partnership, or partnerships, could provide a marketing and sales
      infrastructure for our products as well as financial and operational support
      for
      global trials and other FDA requirements concerning future clinical development.
      Our future strategic partner, or partners, could also provide capital and
      expertise that would enable the partnership to develop new formulations of
      IVIG
      cancer immunotherapy suitable for patients at different stages of disease
      progression as well as IVIg derivatives.





11


**Other
      Research and Development Plans**





In
      addition to conducting early-stage clinical trials, we plan to conduct research
      to develop alternative delivery systems, to determine the optimal dosage for
      different patient groups and to investigate alternative sources of
      immunoglobulin other than human plasma. We plan to conduct research to isolate
      the fraction of IVIG, which is responsible for its anti-metastatic effects
      and
      to develop a potential synthetic version of IVIG. These formulations will be
      suitable for:





·
            Low-dose,
                preventative therapy for disease-free, high-risk individuals,


·
            Strong
                dose for use in conjunction with surgery and other cancer treatments,
                and


·
            Maintenance
                dose for use to prevent recurrence of cancer
                growth.


·
            Others





Our
      plan
      is to patent any successful inventions resulting from our further research
      activities.





**Other
      Strategic Plans**





We
      are
      considering in-licensing and other means of obtaining additional lead molecules
      for our product portfolio. The aim of this is to create a well-balanced product
      portfolio including lead molecules in different stages of development and
      addressing different medical needs.





**Critical
      accounting policies and estimates**





Management's
      discussion and analysis of the financial condition and results of operations
      is
      based upon the consolidated financial statements, which have been prepared
      in
      accordance with accounting principals generally accepted in the United States
      of
      America. The preparation of these financial statements requires us to make
      estimates and judgments that affect the reported amounts of assets and
      liabilities, expenses and related disclosure of contingent assets and
      liabilities. On an on-going basis, we evaluate our estimates and judgments.
      We
      base our estimates on various factors, including historical experience that
      we
      believe to be reasonable under the circumstances, the results of which form
      the
      basis for making judgments about the carrying values of assets and liabilities
      that are not readily apparent from other resources. Actual results may differ
      from these estimates under different assumptions or conditions.





We
      believe the following critical accounting policies affect our more significant
      judgments and estimates used in the preparation of our consolidated financial
      statements.





**Going
      concern assumption**


The
      financial statements have been prepared assuming the Company will continue
      as a
      going concern. Through December 31, 2005, the Company has incurred losses in
      an
      aggregate amount of $2,145,532. Such losses have resulted from the Company’s
      activities as a development stage company. We estimate that the cash reserves
      available on December 31, 2005 will be sufficient to cover the planned expenses
      through September 30, 2006. The Company's continuation as a going concern is
      dependent on its ability to meet its obligations, to obtain additional financing
      as may be required and ultimately to attain profitability.


12




**Valuation
      of options and warrants**


We
      granted options to purchase common shares of our company to employees and
      consultants as well as issue warrants in connection with fund raising. The
      fair
      value of the options and warrants is estimated by using the Black Scholes
      option-pricing model, and is based on certain assumptions regarding the expected
      dividends, expected volatility, expected life of the options and warrant and
      the
      risk free interest rate.




**Results
      of Operations**





Three
      months ended December 31, 2005 and 2004





The
      following table summarizes certain statement of operations data for the company
      for the three months period ended December 31, 2005 and 2004 (in
      US$):





Three
                months ended December 30,2005
            
            2004Research
                and development costs
            
            $
            225,161
            
            $
            51,366General
                and administrative expenses
            
            
            212,775
            
            
            102,510Financial
                (income) expense, net
            
            
            (5,022
            )
            
            (1,142
            )Net
                loss for the period
            
            $
            (432,914
            )
            $
            (242,734
            )





Research
      and development costs.


Research
      and development expenses are the costs incurred in the process of our
      pre-clinical trial and clinical trial.





During
      the three months ended December 31, 2005 and December 31, 2004 the research
      and
      development expenses included, among other, the clinical trial and pre-clinical
      trial expenses, the consultants compensation, costs related to the registered
      patents as well as salaries and related expenses.





During
      the three months ended December 31, 2005 the research and development expenses
      totaled $225,161, compared to $51,366 during the three months ended December
      31,
      2004. The increase in costs is due to the conducted Phase 2 trial whereas during
      the three months ended December 31, 2004 the costs were related to the
      pre-clinical activity.





General
      and administrative expenses


The
      general and administrative expense includes the salaries and related expenses
      of
      the company's management, consulting, legal and professional fees, traveling,
      business development costs as well as insurance expenses.





For
      the
      three months ending December 31, 2005 the General and administrative expense
      totaled $212,775 compared to $102,510 for the three months ended December 31,
      2004. Costs incurred related to general and administrative in the three months
      ended December 31, 2005 reflect an increase in activities as well as increased
      number of employees as compared to the three months period ending December
      31,
      2004.


13





Financial
      income/expense, net


During
      the three months ending December 31, 2005 and December 31, 2004 the company
      generated interest income on available cash and cash equivalents balance.





**Liquidity
      and Capital Recourses**


**Financing
      activities**


Through
      December 31, 2005, the Company has incurred losses in an aggregate amount of
      $2,145,532. We have financed our operation from private placement of common
      stock. Through December 31, 2005 we raised a total of $3,652,829, net of
      transaction cost, through private placements and we anticipate that additional
      financing will be through similar sources. Our financing activates for the
      three
      months period ending December 31, 2005 include the following.





On
      October 31, 2005, the company entered into subscription agreement for the sale
      of 666,666 units at a purchase price of $0.75 per unit for a total consideration
      of $500,000.





On
      December 20, 2005, the company entered into subscription agreement for the
      sale
      of 1,333,334 units at a purchase price of $0.75 per unit for a total
      consideration of $1,000,000.





On
      December 20, 2005, the company entered into subscription agreement for the
      sale
      of 222,222 units at a purchase price of $0.90 per unit for a total consideration
      of $200,000.





**Employee's
      stock options plan**


On
      October 6, 2005 we granted options to purchase up to 350,000 common shares
      of
      our company at an exercise price of $0.93 to Mr. Chaime Orlev.





On
      October 20, 2005 we granted options to purchase up to 30,000 common shares
      of
      our company at an exercise price of $1.35 to an employee.





On
      December 21, 2005 we granted options to purchase up to 250,000 common shares
      of
      our company at an exercise price of $1.34 to an employee.





On
      January 12, 2006 we granted options to purchase up to 50,000 common shares
      of
      our company at an exercise price of $1.10 to an employee.





**Summary
      of financing activities**


Through
      December 31, 2005 we raised approximately $3.6 Million through private
      placements of our securities. As of the December 31, 2005 the cash and cash
      equivalents totaled $1,991,211. We anticipate that these reserves will be
      sufficient to fund operation through September 30, 2006. Continuation of our
      current operations after utilizing the mentioned reserves during the year ending
      September 30, 2006, is dependent upon obtaining financial support from investors
      until profitable results are achieved.








14





**Planned
      Expenditures**


The
      estimate expenses referenced herein are in accordance with the business plan.
      As
      the technology is still in the development stage, it can be expected that there
      will be changes in some budgetary items. Our planned expenditures for the next
      12 months include:





**Category**
            
            **Amount**Research
                &Development
            
            $
            1,135,000Marketing
                and Business Development
            
            $
            170,000General
                & Administrative Expenses
            
            $
            1,026,000**Total**
            
            **$**
            **2,331,000**





We
      are
      considering an additional clinical trial to demonstrate clinical efficacy of
      IVIG, sourced from a specific population, of Melanoma patients .
      We will
      begin initial process of this trial during 2006. The decision to proceed past
      the initial process will be based on several major factors, one of which is
      the
      ability of our company to attract sufficient financing on acceptable terms.
      If
      we decide to continue this additional trial past the
      initial process, we anticipate that our related clinical trial costs over the
      next 12 months would increase by approximately $1,680,000.





**Related
      party transactions**


Mr.
      Yair
      Aloni, a director of our company, and Professor Yehuda Shoenfeld, M.D., the
      Chief Scientist of our subsidiary, Gammacan, Ltd., are authorized signatories
      of
      ARP Biomed Ltd. for the Intellectual Property Purchase and Sale Agreement we
      entered into with ARP Biomed Ltd. on June 11, 2004. Mr. Aloni is the Chief
      Executive Officer of ARP.





On
      June
      6, 2005, the Company and Gammacan, Ltd. appointed Vered Caplan as acting Chief
      Executive Officer of both companies, effective July 2, 2005. Vered Caplan will
      devote approximately 70% of her business time to the affairs of Gammacan, Ltd.
      and the Company. Vered Caplan shall receive a salary of $6,475 per
      month.





***Forward
      Looking Statements***





This
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations includes a number of forward-looking statements that reflect
      management's current views with respect to future events and financial
      performance. Those statements include statements regarding the intent, belief
      or
      current expectations of Gammacan and members of its management team as well
      as
      the assumptions on which such statements are based. Prospective investors are
      cautioned that any such forward-looking statements are not guarantees of future
      performance and involve risk and uncertainties, and that actual results may
      differ materially from those contemplated by such forward-looking statements.
      Readers are urged to carefully review and consider the various disclosures
      made
      in this report and in our other reports filed with the Securities and Exchange
      Commission. Important factors currently known to Management could cause actual
      results to differ materially from those in forward-looking statements. We
      undertake no obligation to update or revise forward-looking statements to
      reflect changed assumptions, the occurrence of unanticipated events or changes
      in the future operating results over time. Gammacan believes that its
      assumptions are based upon reasonable data derived from and known about its
      business and operations and the business and operations of Gammacan. No
      assurances are made that actual results of operations or the results of
      GammaCan's future activities will not differ materially from its
      assumptions.


15


**ITEM
      3. CONTROLS AND PROCEDURES**





Evaluation
      of Disclosure Controls and Procedures. As of December 31, 2005, the Company’s
      management carried out an evaluation, under the supervision of the Company’s
      Chief Executive Officer and the Chief Financial Officer, of the effectiveness
      of
      the design and operation of the Company’s system of disclosure controls and
      procedures pursuant to the Securities and Exchange Act , Rule 13a-15(d) and
      15d-15(d) under the Exchange Act.  Based upon that evaluation, the Chief
      Executive Officer and Chief Financial Officer concluded that the Company’s
      disclosure controls and procedures were effective, as of the date of their
      evaluation, for the purposes of recording, processing, summarizing and timely
      reporting material information required to be disclosed in reports filed by
      the
      Company under the Securities Exchange Act of 1934.





Changes
      in internal controls. There were no changes in the Company’s internal controls
      over financial reporting, that occurred during the period covered by this report
      that have materially affected, or are reasonably likely to materially effect,
      the Company’s internal control over financial reporting


16


**PART
      II**





**ITEM
      1**  **LEGAL
      PROCEEDINGS**





From
      time
      to time the Company is subject to litigation incidental to its business. Such
      claims, if successful, could exceed applicable insurance coverage. The Company
      is not currently a party to any material legal proceedings.





**ITEM
      2**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





On
      October 31, 2005 the company entered into subscription agreements for the sale
      of 666,666 units to an offshore investor at a purchase price of $0.75 per unit
      for a total consideration of $500,000. Each unit comprising one share of the
      Company's common stock and one common share purchase warrant exercisable for
      three years for 1⁄2 (half) a share at a price of $1.00 per Share.





On
      December 20, 2005 the company entered into a subscription agreement for the
      sale
      of 1,333,334 units to an accredited investor at a purchase price of $0.75 per
      unit for a total consideration of $1,000,000. Each unit comprising one share
      of
      the Company's common stock and one common share purchase warrant exercisable
      for
      three years for one share at a price of $1.20 per share.





On
      December 20, 2005 the company entered into a subscription agreement for the
      sale
      of 222,222 units to an accredited investor at a purchase price of $0.90 per
      unit
      for a total consideration of $200,000. each unit comprising one share of the
      Company's common stock and one common share purchase warrant exercisable for
      three years for 1⁄2 (half) a share at a price of $1.15 per share.





For
      each
      sale of these units we relied on either the exemption from registration provided
      for accredited investors pursuant to Rule 506 of Regulation D, or Regulation
      S
      promulgated under the Securities Act ** of
      1933,
      as amended.





**ITEM
      3**  **DEFAULTS UPON SENIOR SECURITIES**





Not
      applicable.




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





Not
      applicable.





**ITEM
      5**  **OTHER
      INFORMATION**




Not
      applicable. ****











17








**ITEM
      6**  **EXHIBITS**





31.1
      -
      Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule
      15d-14(a), promulgated under the Securities and Exchange Act of 1934, as
      amended




31.2
      -
      Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule
      15d 14(a), promulgated under the Securities and Exchange Act of 1934, as
      amended





32.1
      -
      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)





32.2
      -
      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)








In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.











**GAMMACAN
              INTERNATIONAL, INC.**February
              2, 2006
            By:
            /s/
              *CHAIME
              ORLEV*Chaime Orlev,Chief
              Financial Officer







18