**U.S.      Securities and Exchange Commission**

**Washington      D.C. 20549 **

**FORM      10-QSB**

**(Mark      One)**

**[      X ] QUARTERLY REPORT PURSUANT TO SECTION 13 **

**OR      15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**[      ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) **

**OF      THE EXCHANGE ACT **

**BOVIE      MEDICAL CORPORATION **

| Delaware                                         | 11-2644611                                       |
|--------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction      | (IRS                Employer Identification No.) |
| Of                incorporation or organization) |                                             |
|                                             |                                             |

----

| **BOVIE                  MEDICAL CORPORATION**                |
|---------------------------------------------------------------|
| **INDEX                  TO FORM 10-QSB**                     |
| **FOR                  THE QUARTER ENDED SEPTEMBER 30, 2006** |
|                                                          |   |   |
|                                                          |   |   |
| Contents                                                      |   | Page |
| Part                  I:                                      | Financial                  Information | 3 |
| Item                  1:                                      | Consolidated                  Financial Statements |   |
|                                                          |   |   |
|                                                          | Consolidated                  Balance Sheet - September 30, 2006and                  December 31, 2005 | 3 |
|                                                          |   |   |
|                                                          | Consolidated                  Statements of Operations for theThree                  and Nine Months Ended September 30, 2006 and 2005 | 5 |
|                                                          |   |   |
|                                                          | Consolidated                  Statement of Shareholders' Equity for                  the period January 1, 2005 to September 30, 2006 | 6 |
|                                                          |   |   |
|                                                          | Consolidated                  Statements of Cash Flows for theNine                  Months Ended September 30, 2006 and 2005 | 7 |
|                                                          |   |   |
|                                                          | Notes                  to Financial Statements | 9 |
| Item                  2:                                      | Management's                  Discussion and Analysis | 13 |
|                                                          |   |   |
| Item                  3:                                      | Controls                  and Procedures | 21 |
|                                                          |   |   |
| Part                  II.                                     | Other                  Information | 22 |
|                                                          |   |   |
| Item                  1:                                      | Legal                  Proceedings | 22 |
| Item                  2:                                      | Unregistered                  Sales of Equity Securities and use of Proceeds | 22 |
| Item                  3:                                      | Defaults                  Upon Senior Securities | 22 |
| Item                  4:                                      | Submission                  of Matters to Vote of Security Holders | 22 |
| Item                  5:                                      | Other                  Information | 22 |
| Item                  6:                                      | Exhibits | 22 |
|                                                          | Signatures | 23 |

----

**PART      I. FINANCIAL INFORMATION**

**ITEM      1: CONSOLIDATED FINANCIAL STATEMENTS**

| **BOVIE                MEDICAL CORPORATION**                                                           |
|--------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                BALANCE SHEET**                                                          |
| **SEPTEMBER                30, 2006 AND DECEMBER 31, 2005**                                            |
|                                                                                                   |
| **Assets**                                                                                             |
|                                                                                                   |
|                                                                                                   | (Unaudited) | (Audited) |
|                                                                                                   | September                30, 2006 | December                31, 2005 |
|                                                                                                   |   |   |
| Current                assets:                                                                         |   |   |
|                                                                                                   |   |   |
| Cash                                                                                                   | $                2,309,492 | $                1,295,266 |
| Trade                accounts receivable (net)                                                         | 3,016,709 | 2,316,761 |
| Inventories                                                                                            | 3,377,987 | 2,996,832 |
| Prepaid                expenses                                                                        | 424,447 | 335,492 |
| Deferred                tax asset                                                                      | 386,200 | 386,200 |
|                                                                                                   |   |   |
| Total                current assets                                                                    | 9,514,835 | 7,330,551 |
|                                                                                                   |   |   |
| Property                and equipment, (net)                                                           | 3,163,142 | 2,595,641 |
|                                                                                                   |   |   |
| Other                assets:                                                                           |   |   |
|                                                                                                   |   |   |
|                                                                                                   |   |   |
| Brand                name/trademark (net)                                                              | 1,509,662 | 1,509,662 |
| Purchased                technology (net)                                                              | 316,084 | 33,663 |
| License                rights (net)                                                                    | 250,000 | 280,000 |
| Deposits                                                                                               | 21,215 | 21,215 |
|                                                                                                   |   |   |
|                                                                                                   | 2,096,961 | 1,844,540 |
|                                                                                                   |   |   |
|                                                                                                   | $                14,774,938 | $                11,770,732 |
|                                                                                                   |
| The                accompanying notes are an integral part of the financial                statements. |

----

| **BOVIE                MEDICAL CORPORATION**                                                                                                                                                                     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                BALANCE SHEET**                                                                                                                                                                    |
| **SEPTEMBER                30, 2006 AND DECEMBER 31, 2005**                                                                                                                                                      |
| **(CONTINUED)**                                                                                                                                                                                                  |
|                                                                                                                                                                                                             |
| Liabilities                and Stockholders' Equity                                                                                                                                                              |
|                                                                                                                                                                                                             |   |   |
|                                                                                                                                                                                                             | (Unaudited) | (Audited) |
|                                                                                                                                                                                                             | September                30, 2006 | December                31, 2005 |
| Current                liabilities:                                                                                                                                                                              |   |   |
|                                                                                                                                                                                                             |   |   |
| Accounts                payable                                                                                                                                                                                  | $                921,937 | 868,212 |
| Accrued                expenses and other liabilities                                                                                                                                                            | 775,909 | 471,006 |
| Deferred                revenue                                                                                                                                                                                  | 109,636 | 141,586 |
| Notes                payable                                                                                                                                                                                     | 203,241 | 348,328 |
|                                                                                                                                                                                                             |   |   |
| Total                current liabilities                                                                                                                                                                         | 2,010,723 | 1,829,132 |
|                                                                                                                                                                                                             |   |   |
| Minority                interest                                                                                                                                                                                 | 125,000 | 140,000 |
|                                                                                                                                                                                                             |   |   |
| Stockholders'                equity:                                                                                                                                                                             |   |   |
|                                                                                                                                                                                                             |   |   |
| Preferred                stock, par value $.00110,000,000                shares authorized0                issued and outstanding on September 30, 2006 and December 31,                2005                     | -- | -- |
|                                                                                                                                                                                                             |   |   |
| Common                stock par value $.001; 40,000,000 shares authorized, issued and                outstanding 14,704,438 shares and 14,040,728 shares on September                30, 2006                and |   |   |
| December                31, 2005 respectively                                                                                                                                                                    | 14,722 | 14,059 |
| Additional                paid in capital                                                                                                                                                                        | 21,107,143 | 20,530,090 |
| Accumulated                deficit                                                                                                                                                                               | (8,482,650) | (10,742,549) |
|                                                                                                                                                                                                             |   |   |
| Total                stockholders' equity                                                                                                                                                                        | 12,639,215  | 9,801,600 |
|                                                                                                                                                                                                             |   |   |
| Total                liabilities and stockholders' equity                                                                                                                                                        | $14,774,938  | $11,770,732 |
|                                                                                                                                                                                                             |   |   |
| The                accompanying notes are an integral part of the financial statements.                                                                                                                          |

----

| **BOVIE                MEDICAL CORPORATION**                                                           |
|--------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                STATEMENTS OF OPERATIONS**                                               |
| **FOR                THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 AND FOR                THE**   |
| **NINE                MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**                                       |
|                                                                                                   | **(UNAUDITED)** |   |
|                                                                                                   |   |   |
|                                                                                                   | Three                Months Ended September 30, | Nine                Months September 30, |
|                                                                                                   | 2006 | 2005 | 2006 | 2005 |
|                                                                                                   |   |   |   |   |
| Sales                                                                                                  | $                6,999,054 | $                5,038,908 | $                19,751,250 | $                14,839,711 |
| Cost                of sales                                                                           | 4,118,252 | 2,924,168 | 11,743,121 | 9,489,840 |
|                                                                                                   |   |   |   |   |
| Gross                Profit                                                                            | 2,880,802 | 2,114,740 | 8,008,129 | 5,349,871 |
|                                                                                                   |   |   |   |   |
| Costs                and expenses:                                                                     |   |   |   |   |
| Research                and development                                                                | 261,923 | 303,850 | 631,674 | 657,939 |
| Professional                services                                                                   | 154,264 | 126,846 | 400,945 | 361,495 |
| Salaries                and related costs                                                              | 647,002 | 447,210 | 1,847,328 | 1,469,673 |
| Selling,                general and administrative                                                     | 952,453 | 1,038,418 | 2,789,005 | 2,653,983 |
| Development                joint venture                                                               | 34,506 | 34,890 | 112,506 | 88,772 |
|                                                                                                   |   |   |   |   |
|                                                                                                   | 2,050,148 | 1,951,214 | 5,781,458 | 5,231,862 |
|                                                                                                   |   |   |   |   |
| Gain                from operations                                                                    | 830,654 | 163,526 | 2,226,671 | 118,009 |
|                                                                                                   |   |   |   |   |
| Other                income (expense):                                                                 |   |   |   |   |
| Interest                (net of expense)                                                               | 28,872 | 5,594 | 50,795 | 16,797 |
|                                                                                                   |   |   |   |   |
| Net                income before minority interest and income tax                                      |  859,526 |  169,120 |  2,277,466 |  134,806 |
|                                                                                                   |   |   |   |   |
|                                                                                                   |   |   |   |   |
| Minority                interest                                                                       | 5,000 | 2,500 | 15,000 | 7,500 |
| Provision                for income tax                                                                | (                292,239) | (                66,300) | (                774,338) | (                54,000) |
| Realized                benefit of loss carryforward                                                   |  284,672 |  66,300 |  741,771 |  54,000 |
|                                                                                                   |   |   |   |   |
| Net                income                                                                              | $                856,959 | $                171,620 | $                2,259,899 | $                142,306 |
|                                                                                                   |   |   |   |   |
| Earnings                per share                                                                      |   |   |   |   |
|                                                                                                   |   |   |   |   |
| Net                income:                                                                             |   |   |   |   |
| Basic                                                                                                  | .06 | .01 | .16 | .01 |
| Diluted                                                                                                | .05 | .01 | .13 | .01 |
|                                                                                                   |   |   |   |   |
| Weighted                average number of shares outstanding                                           | 14,610,828 | 13,928,162 | 14,351,324 | 13,907,579 |
|                                                                                                   |   |   |   |   |
| Weighted                average number of shares outstanding adjusted for dilutive securities          | 17,483,781 | 15,925,494 | 16,895,099 | 16,020,454 |
|                                                                                                   |   |   |   |   |
|                                                                                                   |   |   |   |   |
| The                accompanying notes are an integral part of the financial                statements. |

----

| **BOVIE                MEDICAL CORPORATION**                                                 |
|----------------------------------------------------------------------------------------------|
| **CONSOLIDATED                STATEMENTS OF SHAREHOLDERS’ EQUITY**                     |
| **FOR                THE PERIOD ENDED JANUARY 1, 2005 TO SEPTEMBER 30,                2006** |
|                                                                                         |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         | Options | Common | Paid-in |   |   |
|                                                                                         | Outstanding | Shares | Value | Capital | Deficit | Total |
|                                                                                         |   |   |   |   |   |   |
| January                1, 2005                                                               | 3,951,200 | 13,862,128 | $                13,881 | $20,391,407 | $(11,148,757) | $9,256,531 |
|                                                                                         |   |   |   |   |   |   |
| Options                granted                                                               | 475,500 | -- | -- | -- | -- | -- |
|                                                                                         |   |   |   |   |   |   |
| Options                exercised                                                             | (178,600) | 178,600 | 178 | 138,683 | -- | 138,861 |
|                                                                                         |   |   |   |   |   |   |
| Options                forfeited                                                             | (                31,230) | -- | -- | -- | -- | -- |
|                                                                                         |   |   |   |   |   |   |
| Income                for period                                                             | -- | -- | -- | -- | 406,208 | 406,208 |
|                                                                                         |   |   |   |   |   |   |
| December                31, 2005                                                             | 4,168,870 | 14,040,728 | $                14,059 | $20,530,090 | $                (10,742,549) | $9,801,600 |
|                                                                                         |   |   |   |   |   |   |
| Options                exercised                                                             | (                663,710) | 663,710 | 663 | 493,362 | -- | 494,025 |
|                                                                                         |   |   |   |   |   |   |
| Options                forfeited                                                             | (                22,360 ) |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |
| Stock                based compensation                                                      |   |   |   | 20,390 |   | 20,390 |
|                                                                                         |   |   |   |   |   |   |
| Stock                options issued to acquire assets                                        |   |   |   |  63,301 |   |  63,301 |
|                                                                                         |   |   |   |   |   |   |
| Income                for period                                                             | -- | -- | -- | -- | 2,259,899 | 2,259,899 |
|                                                                                         |   |   |   |   |   |   |
| September                30, 2006                                                            | 3,482,800 | 14,704,438 | $                14,722 | $                21,107,143 | $                (8,482,650) | $12,639,215 |

----

|                                                                                                   |
|--------------------------------------------------------------------------------------------------------|
| **BOVIE                MEDICAL CORPORATION**                                                           |
| **CONSOLIDATED                STATEMENT OF CASH FLOWS**                                                |
| **INCREASE                (DECREASE) IN CASH AND CASH EQUIVALENTS**                                    |
| **FOR                THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND                2005**                |
| **(UNAUDITED)**                                                                                        |
|                                                                                                   |   |   |
|                                                                                                   |  2006 |  2005 |
|                                                                                                   |   |   |
| **Cash                flows from operating activities**                                                |   |   |
| Net                income                                                                              | $                2,259,899 | $                142,306 |
| Adjustments                to reconcile net income                                                     |   |   |
| to                net cash provided by (used in) operating activities:                                 |   |   |
| Depreciation                and amortization                                                           | 394,106 | 344,292 |
| Loss                on disposals of fixed assets                                                       | 6,727 |   |
| Stock-based                compensation                                                                | 20,390 | -- |
| Stock-based                expense for Henvil asset purchase                                           | 20,886 | -- |
|                                                                                                   |   |   |
| Changes                in current assets and liabilities:                                              |   |   |
| Receivables                                                                                            | (                699,948) | (                331,421) |
| Inventories                and repair parts                                                            | (                381,155) | (                760,468) |
| Prepaid                expenses                                                                        | 1,045 | 110,265 |
| Other                receivable                                                                        | -- | (                55,000) |
| Accounts                payable                                                                        | 53,725 | 98,051 |
| Customer                deposits                                                                       | -- | 78,588 |
| Accrued                expense                                                                         | 304,903 | 111,115 |
| Deferred                revenue                                                                        |  (                31,950) |  (                6,610) |
|                                                                                                   |   |   |
|                                                                                                   |   |   |
| Net                cash provided (applied) by operating activities                                     | 1,948,628 | (                268,882) |
|                                                                                                   |   |   |
| **Cash                flows from investing activities**                                                |   |   |
| Increase                in fixed assets                                                                | (                929,253) | (                781,621) |
| Increase                in deposits                                                                    | -- | (                2,000) |
| Increase                in purchased technology                                                        | (                264,088) | (                2,001) |
|                                                                                                   |   |   |
| Net                cash used in investing activities                                                   | (1,193,341) | (                785,622) |
|                                                                                                   |   |   |
| **Cash                flows from financing activities**                                                |   |   |
| Decrease                in mortgage payable                                                            | (348,328) | (                23,748) |
| Increase                in notes payable                                                               | 132,067 | -- |
| Decrease                in notes payable                                                               | (18,825) | -- |
| Common                shares purchased                                                                 | 494,025 | 50,363 |
|                                                                                                   |   |   |
| Net                cash provided in financing activities                                               | 258,939 | 26,615 |
|                                                                                                   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                    | 1,014,226 | (1,027,889) |
|                                                                                                   |   |   |
| Cash                and cash equivalents, beginning of period                                          | 1,295,266 | 2,294,746 |
|                                                                                                   |   |   |
| Cash                and cash equivalents, end of period                                                | $                2,309,492 | $                1,266,857 |
|                                                                                                   |   |   |
|                                                                                                   |
| The                accompanying notes are an integral part of the financial                statements. |

----

**BOVIE      MEDICAL CORPORATION **

**CONSOLIDATED      STATEMENT OF CASH FLOWS**

**INCREASE      (DECREASE) IN CASH AND CASH EQUIVALENTS**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**

|                    | 2006                    | 2005                    |
|------------------------------|-------------------------|-------------------------|
|                         |                    |                    |
| Interest                paid | $                15,969 | $                16,524 |
| Income                taxes  | 25,000                  | 17,692                  |

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**NOTE      1. INTERIM FINANCIAL INFORMATION**

**NOTE      2. INVENTORIES**

|                           | September                30, 2006 | December                31, 2005 |
|--------------------------------|-----------------------------------|----------------------------------|
|                           |                              |                             |
| Raw                materials   | $1,307,296                        | $                1,139,730       |
| Work                in process | 1,406,072                         | 1,267,991                        |
| Finished                goods  | 664,619                           | 589,111                          |
|                           |                              |                             |
| Total                          | $                3,377,987        | $                2,996,832       |

**NOTE      3. INTANGIBLE ASSETS**

|                                            | September                30, 2006 | December                31, 2005 |
|-------------------------------------------------|-----------------------------------|----------------------------------|
| Goodwill                acquired:               |                              |                             |
| Trade                name (life indefinite)     | $                1,509,662        | $                1,509,662       |
|                                            |                              |                             |
| Other                intangibles:               |                              |                             |
|                                            |                              |                             |
| License                rights (20 yr life)      | 400,000                           | 400,000                          |
| Less:                Accumulated amortization   | (                150,000)         | (                120,000)        |
| Net                carrying amount              | 250,000                           | 280,000                          |
|                                            |                              |                             |
| Purchased                technology (5 yr life) | $                587,267          | $                280,764         |
| Less:                Accumulated amortization   | (271,183)                         | (247,101)                        |
|                                            |                              |                             |
| Net                carrying amount              | $                316,084          | $                33,663          |
|                                            |                              |                             |

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**NOTE      4. NEW ACCOUNTING PRONOUNCEMENTS**

***FASB      Interpretation No. 46R, Consolidation of Variable Interest Entities - An      Interpretation of ARB51***

*Variable      Interest Entities (VIEs)*
*Special      Purpose Entities (SPEs)*

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**NOTE      4. NEW ACCOUNTING PRONOUNCEMENTS (Continued)**

***Accounting      for Stock-Based Compensation***

|                                      |   | September                30, 2006 |   |
|-------------------------------------------|--------|-----------------------------------|--------|
|                                      |   |                              |   |
| Cost                of Sales              |   | $                1,101            |   |
| Research                and Development   |   | 6,725                             |   |
| Salaries                and related costs |   | 12,564                            |   |
|                                      |   |                              |   |
| Total                                     |   | $                20,390           |   |

**NOTE      5. SHAREHOLDERS’ EQUITY**

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**NOTE      6. EARNINGS PER SHARE**

| Nine                months ended September 30                |
|--------------------------------------------------------------|
|                                                         | 2006 | 2005 |
| Net                income                                    | $                2,260 | $                142 |
|                                                         |   |   |
| Basic-weighted                average shares outstanding     | 14,351 | 13,908 |
|                                                         |   |   |
| Effect                of dilutive potential securities       | 2,544 | 2,112 |
|                                                         |   |   |
| Diluted                - weighted average shares outstanding | 16,895 | 16,020 |
|                                                         |   |   |
| Basic                EPS                                     | $                .16 | $                .01 |
|                                                         |   |   |
| Diluted                EPS                                   | $                .13 | $                .01 |

**NOTE      7. Endoscopic Modular Instruments**

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS**

*Executive      Level Overview*

*Outlook      for 2006*

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**Result      of Operations (to be read in conjunction with the profit and loss      statement)**

|                                                                |                         |                            | Percentage                   |                            |                    | Percentage                 |
|---------------------------------------------------------------------|------------------------------|---------------------------------|------------------------------|---------------------------------|-------------------------|----------------------------|
|                                                                |                         |                            | Change                  in   |                            |                    | Change                  in |
|                                                                | 3rd                  Quarter | Dollar                  amounts | Nine                  months | Dollar                  amounts |
|                                                                |                         |                            |                         |                            |                    |                       |
|                                                                | 2006                         | 2005                            |                         | 2006                            | 2005                    |                       |
|                                                                | %                            | %                               | %                            | %                               | %                       | %                          |
|                                                                |                         |                            |                         |                            |                    |                       |
| Sales                                                               | 100.0                        | 100.0                           | 39.0                         | 100.0                           | 100.0                   | 33.0                       |
| Cost                  of sales                                      | 59.0                         | 58.0                            | 41.0                         | 60.0                            | 64.0                    | 24.0                       |
| Gross                  profit                                       | 41.0                         | 42.0                            | 36.0                         | 40.0                            | 36.0                    | 50.0                       |
|                                                                |                         |                            |                         |                            |                    |                       |
| Other                  costs:                                       |                         |                            |                         |                            |                    |                       |
| R                  & D                                          | 4.0                          | 6.0                             | (                  14.0)     | 3.0                             | 4.0                     | (                  4.0)    |
| Professional                  fees                                  | 2.0                          | 2.0                             | 22.0                         | 2.0                             | 2.0                     | 11.0                       |
| Salaries                                                            | 9.0                          | 9.0                             | 45.0                         | 9.0                             | 10.0                    | 26.0                       |
| SGA                                                                 | 13.0                         | 21.0                            | (                  8.0)      | 14.0                            | 18.0                    | 5.0                        |
| Equity                  in loss of Unconsolidated affiliate         | 1.0                          | 1.0                             | (                  1.0)      | 1.0                             | 1.0                     | 27.0                       |
|                                                                |                         |                            |                         |                            |                    |                       |
| Total                  other costs                                  | 29.0                         | 39.0                            | 5.0                          | 29.0                            | 35.0                    | 11.0                       |
|                                                                |                         |                            |                         |                            |                    |                       |
| Gain/                  from operations                              | 12.0                         | 3.0                             | 408.0                        | 11.0                            | 1.0                     | 1,787.0                    |
|                                                                |                         |                            |                         |                            |                    |                       |
| Other                  income                                       | 0.0                          | 0.0                             | 416.0                        | 0.0                             | 0.0                     | 202.0                      |
|                                                                |                         |                            |                         |                            |                    |                       |
| Net                  Income before Minority Interest and Income Tax | 12.0                         | 3.0                             | 408.0                        | 11.0                            | 1.0                     | 1,589.0                    |
|                                                                |                         |                            |                         |                            |                    |                       |
| Minority                  Interest                                  | 0.0                          | 0.0                             | 100.0                        | 0.0                             | 0.0                     | 100.0                      |
| Income                  tax expense                                 | (                  4.0)      | (                  1.0)         | 341.0                        | (4.0)                           | (                  0.0) | 1,334.0                    |
| Income                  tax benefit                                 | 4.0                          | 1.0                             | 329.0                        | 4.0                             | 0.0                     | 1,274.0                    |
|                                                                |                         |                            |                         |                            |                    |                       |
| Net                  earnings                                       | 12.0                         | 3.0                             | 399.0                        | 11.0                            | 1.0                     | 1,488.0                    |
|                                                                |                         |                            |                         |                            |                    |                       |

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

| The                table below sets forth domestic/international and product line sales                information for the third quarter of 2006 and 2005. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                       |   |   |   |   |
| Net                Sales (in thousands)                                                                                                                    |   |   | Percentage                change | Increase/ |
|                                                                                                                                                       | 2006 | 2005 | 2006/2005 | (Decrease) |
| Domestic/international                sales:                                                                                                               |   |   |   |   |
| Domestic                                                                                                                                                   | $                6,160 | $                4,138 | 49.0 | 2,022 |
| International                                                                                                                                              | 839 | 901 | (                7.0) | (                -62) |
|                                                                                                                                                       |   |   |   |   |
| Total                net sales                                                                                                                             | $                6,999 | $                5,039 | 39.0 | 1,960 |
|                                                                                                                                                       |   |   |   |   |
| Product                line sales:                                                                                                                         |   |   |   |   |
| Electrosurgical                                                                                                                                            | $                5,041 | $                3,388 | 49.0 | 1,653 |
| Cauteries                                                                                                                                                  | 1,465 | 1,429 | 3.0 | 36 |
| Other                                                                                                                                                      | 493 | 222 | 17.0 | 72 |
|                                                                                                                                                       |   |   |   |   |
| Total                net sales                                                                                                                             | $                6,999 | $                5,039 | 39.0 | 1,960 |

| The                table below sets forth domestic/international and product line sales                information for the nine months of 2006 and 2005. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                     |   |   |   |   |
| Net                Sales (in thousands)                                                                                                                  |   |   | Percentage                change | Increase/ |
|                                                                                                                                                     | 2006 | 2005 | 2006/2005 | (Decrease) |
| Domestic/international                sales:                                                                                                             |   |   |   |   |
| Domestic                                                                                                                                                 | $                17,278 | $                12,330 | 40.0 | 4,948 |
| International                                                                                                                                            | 2,473 | 2,510 | (                1.0) | (                37) |
|                                                                                                                                                     |   |   |   |   |
| Total                net sales                                                                                                                           | $                19,751 | $                14,840 | 33.0 | 4,911 |
|                                                                                                                                                     |   |   |   |   |
| Product                line sales:                                                                                                                       |   |   |   |   |
| Electrosurgical                                                                                                                                          | $                13,435 | $                8,613 | 56.0 | 4,822 |
| Cauteries                                                                                                                                                | 4,343 | 4,031 | 8.0 | 312 |
| Other                                                                                                                                                    | 1,973 | 2,196 | (                10.0) | (                223) |
|                                                                                                                                                     |   |   |   |   |
| Total                net sales                                                                                                                           | $                19,751 | $                14,840 | 33.0 | 4,911 |

**Nine      months ended September 30, 2006 compared to nine months ended September 30,      2005**

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**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

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**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**Results      of Operations- Three months ended September 30, 2006 and September 30,      2005**

**Marketing      and Sales**

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**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**Product      Development**

**Reliance      on Collaborative, Manufacturing and Selling Arrangements**

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**Liquidity      and Capital Resources**

|                                              |  As                of September 30, |   | Payment                Period |   |
|---------------------------------------------------|------------------------------------------|--------|-------------------------------|--------|
|                                              | 2006                                     | 2007   | 2008                          | 2009   | 2010 |
| Current                debt                       | 137                                      | 66     | -0-                           | -0-    | -0- |
| Operating                leases                   | 36                                       | 135    | 115                           | -0-    | -0- |
| Unconditional                purchase obligations | 1,009                                    | 3,026  | -0-                           | -0-    | -0- |

|                                                                        |   |      |   | Amount                of Commitment  |   |
|-----------------------------------------------------------------------------|--------|-----------|--------|--------------------------------------|--------|
|                                                                        |   | Total     |   | Expiration                Per Period |   |
|                                                                        |   | Amount    |   | Less                than             |   | In                excess of |   |
|                                                                        |   | Committed |   | 1                year                |   | 1                year |   |
| Secured                revolving credit agreement and other lines of credit |   | $         | 1.5    |                                 | $      | 1.5 |   |   | -0- |   |

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**Critical      Accounting Estimates**

----

** **
**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS(CONTINUED)**

**ITEM      3. CONTROLS AND PROCEDURES**

----

**BOVIE      MEDICAL CORPORATION**

**NOTES      TO FINANCIAL STATEMENTS**

** **

**PART      II. OTHER INFORMATION **

**ITEM      1. LEGAL PROCEEDINGS**

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

**ITEM      3. DEFAULTS ON SENIOR SECURITIES HOLDERS**

**ITEM      4. SUBMISSION OF MATTERS TO VOTE BY SECURITY HOLDERS**

**ITEM      5. OTHER INFORMATION**

**ITEM      6. EXHIBITS**

| 31.1   | Certifications                of Andrew Makrides, President and Chief Executive Officer of Registrant                pursuant to Rule 13a-14 adopted under the Securities Exchange Act                of 1934,                as amended, and Section 302 of the Sarbanes-Oxley Act of                2002. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                        |
| 31.2   | Certifications                of Gary D. Pickett, Chief Financial Officer of Registrant pursuant                to Rule                13a-14 adopted under the Securities Exchange Act of 1934, as amended,                and                Section 302 of the Sarbanes-Oxley act of 2002.               |
|   |                                                                                                                                                                                                                                                                                                        |
| 32.1   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002.                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                        |
| 32.2   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002.                                                                                                                                        |

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| /s/Andrew                Makrides                        |
|----------------------------------------------------------|
| Chief                Executive Officer - Andrew Makrides |
|                                                     |
|                                                     |
| /s/Gary                D. Pickett                        |
| Chief                Financial Officer- Gary D. Pickett  |