**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**








**FORM
      10-QSB**








x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.  For
                the Quarter ended**July****31,
                2006**




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1943.  For the Transition period from
              ________________________ to
              ________________________




**Commission
      file number** **333-126394**







**BIOLOK
      INTERNATIONAL INC.**


(Name
      of
      registrant in its charter)




**DELAWARE**
            **65-0317138**(State
                or other jurisdiction of
              incorporation
                or organization)
            (IRS
                Employer
              Identification
                No.)**368
                S. Military Trail, Deerfield
                Beach, Florida**
            **33442**(Address
                of principal executive offices)
            (Zip
                Code)**Registrant's
                telephone number, including
                area code:**
            **(954)
                698-9998**




----------------------------





Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act 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





Check
      whether the issuer has filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. YES  o NO o




APPLICABLE
      ONLY TO CORPORATE ISSUERS





As
      of
      July 31, 2006, the Registrant had 15,666,838 Common Stock shares outstanding,
      at
      a par value $.01 per share.











**TABLE
      OF CONTENT**


**PART
                  I**
              **FINANCIAL
                  INFORMATION**Item
                  1.
              Financial
                  Statements
              3Condensed
                  Consolidated Statement of Operations for the three and nine months
                  ended
                  July 31, 2006 and 2005 (unaudited)Condensed
                  Consolidated Balance Sheets as of July 31, 2006 and October 31,
                  2005
                  (unaudited)Condensed
                  Consolidated Statements of Cash Flows for nine months ended July
                  31, 2006
                  and 2005 (unaudited)Notes
                  to Condensed Consolidated Financial StatementsItem
                  2.
              Management’s
                  Discussion and Analysis or Plan of Operations
              9Item
                  3.
              Controls
                  and Procedures
              13**PART
                  II**
              **OTHER
                  INFORMATION**Item
                  1.
              Legal
                  Proceedings
              14Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              14Item
                  3.
              Defaults
                  Upon Senior Securities
              15Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              15Item
                  5.
              Other
                  Information
              15Item
                  6.
              Exhibits
              16Signatures
              
              17Certifications
              
              18-21




**-------------------------------**





2




**PART
      I**   **FINANCIAL
      INFORMATION**  ****





**Item
      1.** **Financial
      Statements**





**BIOLOK
      INTERNATIONAL INC. and SUBSIDIARIES**


**Condensed
      Consolidated Statement of Operations**


**(Unaudited)**


Three
                  Months Ended
              
              Nine
                  Months EndedJuly
                  31,
              
              July
                  31,2006
              
              2005
                  *
              
              2006
              
              2005**Net
                  Sales**
              
              $
              2,447,215
              
              $
              1,875,044
              
              $
              6,736,665
              
              $
              5,159,408Cost
                  of Goods Sold
              
              
              806,416
              
              
              616,528
              
              
              2,078,366
              
              
              1,675,350**GROSS
                  PROFIT**
              
              
              1,640,798
              
              
              1,258,516
              
              
              4,658,299
              
              
              3,484,058Selling
              
              
              1,173,254
              
              
              498,284
              
              
              3,129,676
              
              
              1,350,899General
                  & Administrative Exp.
              
              
              972,160
              
              
              537,728
              
              
              2,302,214
              
              
              1,769,674Research
                  & Development exp.
              
              
              120,942
              
              
              100,134
              
              
              323,858
              
              
              290,2142,266,356
              
              
              1,136,146
              
              
              5,755,748
              
              
              3,410,787**Operating
                  Income (Loss)**
              
              
              (625,558
              )
              
              122,370
              
              
              (1,097,449
              )
              
              73,271Gain
                  on involuntary conversion
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              105,841Other
                  Income
              
              
              40
              
              
              -0-
              
              
              89
              
              
              -0-Net
                  Currency loss
              
              
              (2,641
              )
              
              -0-
              
              
              (2,046
              )
              
              -0-Interest
                  Expense
              
              
              (54,349
              )
              
              (36,323
              )
              
              (118,826
              )
              
              (127,111
              )Other
                  Expenses
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              (144
              )(56,950
              )
              
              (36,323
              )
              
              (120,783
              )
              
              (21,414
              )Income
                  (Loss) before Taxes
              
              
              (682,508
              )
              
              86,047
              
              
              (1,218,232
              )
              
              51,857Income
                  Taxes
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-**NET
                  INCOME (Loss)**
              
              $
              (682,508
              )
              $
              86,047
              
              $
              (1,218,232
              )
              $
              51,857Net
                  Income (Loss) per Common Share
              
              $
              (.04
              )
              $
              .00
              
              $
              (.08
              )
              $
              .00Diluted
                  Net Income (Loss) per Common Share
              
              $
              (.04
              )
              $
              .01
              
              $
              (.08
              )
              $
              .01Average
                  Common Shares Outstanding
              
              
              15,644,111
              
              
              15,289,609
              
              
              15,428,122
              
              
              11,715,348Diluted
                  Average Common Shares outstanding
              
              
              15,644,111
              
              
              15,289,609
              
              
              15,428,122
              
              
              11,715,348




See
      Notes
      to Condensed Consolidated Financial Statements.




3




**BIOLOK
      INTERNATIONAL INC. and SUBSIDIARIES**


**Unaudited
      Condensed Consolidated Balance Sheets**




July
                  31,
              
              October
                  31,2006
              
              2005**ASSETS**Current
                  AssetsCash
              
              $
              157,233
              
              $
              545,762Accounts
                  Receivable (Net of Allowance of $143,727 and $104,647)
              
              
              2,846,641
              
              
              2,237,511Inventory
              
              
              2,802,163
              
              
              2,278,993Other
                  Current Assets
              
              
              632,515
              
              
              407,443Total
                  Current Assets
              
              
              6,438,552
              
              
              5,469,709Net
                  Property, plant & equipment
              
              
              1,667,589
              
              
              1,581,507Other
                  AssetsPatents
                  & related costs, net
              
              
              334,247
              
              
              277,812Inventory
              
              
              239,385
              
              
              267,194Other
                  Assets and Deposits
              
              
              31,794
              
              
              34,249605,426
              
              
              579,255**TOTAL
                  ASSETS**
              
              $
              8,711,567
              
              $
              7,630,471**LIABILITIES
                  & EQUITY**Current
                  LiabilitiesRevolving
                  Loan payable
              
              $
              2,466,990
              
              $
              592,000Notes
                  & Loans payable
              
              
              55,681
              
              
              103,584Capital
                  Leases - current
              
              
              101,909
              
              
              71,655Accounts
                  Payable
              
              
              307,196
              
              
              259,800Accrued
                  expenses
              
              
              328,113
              
              
              286,913Total
                  Current Liabilities
              
              
              3,259,889
              
              
              1,313,952Long-Term
                  LiabilitiesCapital
                  Leases
              
              
              213,133
              
              
              208,594Notes
                  and loans payable
              
              
              83,945
              
              
              113,475Total
                  Long-Term Liabilities
              
              
              297,078
              
              
              322,069Total
                  Liabilities
              
              
              3,556,967
              
              
              1,636,021**STOCKHOLDERS’
                  EQUITY**Preferred
                  Stock - authorized 500,000 par value $.75;
              
              
              -0-
              
              
              -0-Common
                  Stock - authorized 20,000,000, par value $.01; outstanding 15,666,838,
                  and
                  15,318,338 shares;
              
              
              156,668
              
              
              153,183Treasury
                  Stock (17,327 common Shares), at cost
              
              
              (7,277
              )
              
              (7,277
              )Paid-in
                  Capital
              
              
              7,056,471
              
              
              6,681,574Retained
                  Earnings
              
              
              (2,051,263
              )
              
              (833,030
              )Total
                  Equity
              
              
              5,154,600
              
              
              5,994,450**TOTAL
                  LIABILITIES & EQUITY**
              
              $
              8,711,567
              
              $
              7,630,471




See
      Notes
      to Condensed Consolidated Financial Statements.




4




**BIOLOK
      INTERNATIONAL INC. and SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows**


**(Unaudited)**


Nine
                  Months EndedJuly 31,2006
              
              2005**OPERATING
                  ACTIVITIES:**Net
                  Income
              
              $
              (1,218,232
              )
              $
              51,857Adjustments
                  to reconcile net income to net cash provided by (used in) operating
                  activities:Depreciation
                  & amortization
              
              
              249,705
              
              
              181,875Provision
                  for uncollectible accounts
              
              
              39,080
              
              
              30,605Issuance
                  of Common Stock for service
              
              
              378,382
              
              
              539,589Options
                  expense (amortization)
              
              
              -0-
              
              
              50,476Change
                  in Current assets & liabilities:(Incr.)
                  decr. in accts. rec.
              
              
              (648,210
              )
              
              (736,117
              )(Incr.)
                  decr. in inventories
              
              
              (495,362
              )
              
              (283,383
              )(Incr.)
                  decr. in Other current assets
              
              
              (225,072
              )
              
              (164,406
              )(Incr.)
                  decr. in deposits & other assets
              
              
              2,455
              
              
              (1,158
              )Incr.
                  (decr.) in A/P & Accr. exp.
              
              
              88,596
              
              
              84,417Net
                  Cash provided by (used in) OperatingActivities
              
              
              (1,851,128
              )
              
              (246,245
              )**INVESTING
                  ACTIVITIES:**Investment
                  in Patents & related intangibles
              
              
              (78,906
              )
              
              (77,312
              )Insurance
                  Settlement
              
              
              -0-
              
              
              105,841Purchase
                  of Property, plant & equipment
              
              
              (208,315
              )
              
              (272,423
              )Net
                  Cash used in Investing Activities
              
              
              (287,221
              )
              
              (243,894
              )**FINANCING
                  ACTIVITIES:**Net
                  proceeds (payments)-revolving loan payable
              
              
              1,874,990
              
              
              (1,400,143
              )Proceeds
                  from Stock sale
              
              
              -0-
              
              
              3,447,000Proceeds
                  from exercise of Options
              
              
              -0-
              
              
              4,500Payments
                  on capital leases
              
              
              (70,207
              )
              
              (66,761
              )Payment
                  of notes & loan payable
              
              
              (77,433
              )
              
              (75,957
              )Due
                  to Stockholders
              
              
              -0-
              
              
              -0-Net
                  Cash provided by Financing Activities
              
              
              1,727,350
              
              
              1,908,639**NET
                  INCREASE IN CASH**
              
              $
              (388,529
              )
              $
              1,418,500Cash
                  - Beginning of Period
              
              
              545,762
              
              
              24,133Cash
                  - End of Period
              
              $
              157,233
              
              $
              1,442,633**SUPPLEMENTAL
                    DISCLOSURE OF CASH FLOW INFORMATION:**Interest
                  Paid
              
              $
              118,826
              
              $
              127,111Income
                  Taxes Paid
              
              $
              -0-
              
              $
              -0-**NON
                  CASH FINANCING AND INVESTING ACTIVITIES:**Capital
                  Lease obligations
              
              $
              105,000
              
              $
              114,759Note
                  Payable issued for equipment
              
              $
              -0-
              
              $
              162,250




See
      Notes
      to Condensed Consolidated Financial Statements.





5




**BIOLOK
      INTERNATIONAL INC. AND SUBSIDIARIES**


**Notes
      to Condensed Consolidated Financial Statement**


**(Unaudited)**








**Note
      A - Basis of Presentation**





The
      financial statements represent the activities of all the accounts of BioLok
      International Inc. (the “Company” or “BioLok”) and its subsidiaries. The
      consolidated results include the activities of Orthogen Corporation a research
      and development company; and, Micro-Lok Mexico, Bio-Lok Chile and Bio-Lok
      Australia established sales and marketing entities. All inter-company balances
      and transactions have been eliminated in consolidation.





The
      accompanying condensed consolidated financial statements are unaudited and
      have
      been prepared by the Company in accordance with the rules and regulations of
      the
      Securities and Exchange Commission. Accordingly, certain information and
      footnote disclosures usually found in financial statements prepared in
      accordance with generally accepted accounting principles have been condensed
      or
      omitted. The financial statements should be read in conjunction with the
      consolidated financial statements and related notes included in the Company's
      Form 10-KSB, as filed with the United States Securities and Exchange Commission
      on January 15, 2006.





The
      accompanying condensed consolidated financial statements reflect all adjustments
      (consisting of normal recurring adjustments) which, in the opinion of
      management, are necessary to present fairly the financial position and results
      of operations for the interim periods presented. The results of operations
      for
      an interim period are not necessarily indicative of the results of operations
      for a full fiscal year.





**Note
      B - Recent Accounting Statements**





The
      Company adopted SFAS No. 123 (revised 2004) under the modified prospective
      application method. Under this application, the Company records stock-based
      compensation expense for all awards granted on or after the date of adoption
      and
      for the portion of previously granted awards that remained unvested at the
      date
      of adoption. Stock-based compensation cost is measured at the grant date, based
      on the fair value of the award, and is recognized as expenses over the period
      during which the employee is required to provide service in exchange for the
      award.





**Note
      C - Nature of Business**





BioLok
      is
      a manufacturer and distributor, domestically and internationally, of the **BioLok
      Precision Dental Implant System.** The line
      consists of a number of select implants (both screw and cylinder), related
      prosthetic parts, devices, associated tools, and irrigated drills and reamers.
      The Company markets its product line domestically direct to the end user and
      internationally via select distributors and majority-owned
      entities.





Revenues
      are attributable to the distribution and sale of products which BioLok
      manufactures, or which are purchased for resale and are recognized when products
      are shipped.





**Note
      D - Line of Credit**





On
      March
      26, 2003, the Company executed a new revolving loan agreement with CommerceBank,
      N.A., for a maximum loan amount of $2,000,000. On July 28, 2006, the Company
      entered into an extension to July 28, 2007, of its current CommerceBank N.A.
      and
      EximBank US insurance guarantee for international inventory and receivables
      totaling $2,500,000; a separate domestic receivables credit line totaling
      $250,000; and, the continuation of its existing term debt agreement entered
      into
      in 2001. The Company pledged essentially all of its assets as collateral to
      secure the loan arrangement. The interest rate is at the prime rate in effect
      plus 1.0%, with the domestic revolving loan remaining at 2.0%. To provide added
      security for the revolving loan, the Company has obtained EximBank credit
      guarantees on select international receivables at a cost of $.80, per $100
      of
      sales as invoices are issued and reported.




6




**Note
      E - Net Income (Loss) Per Share**





The
      Company’s basic and diluted net income per share amounts have been computed by
      dividing the results by the weighted average number of outstanding common
      shares. For the three and nine months ended July 31, 2006 and 2005, the Company
      reported a net loss and, as such, common share equivalents were not included
      in
      the computation of diluted net income per share.





**Note
      F - Segment Accounting**




Statement
      of Financial Accounting Standards No. 131, “Disclosures about Segments of an
      Enterprise and Related Information” (“SFAS 131”), requires that a public
      business enterprise disclose financial and other information about its business
      segments as a part of the consolidated financial statements.




The
      Company has only one product line, consisting of its “Bio-Lok Precision Dental
      Implant System,” which is sold both domestically and internationally. It is
      practical to report by geographic area net sales only, which are herewith for
      the quarter and year to date.


Three
                  Months Ended
              
              Nine
                  Months EndedJuly
                  31,
              
              July
                  31,2006
              
              2005
              
              2006
              
              2005Net
                  Sales - International
              
              
              
              
              $
              1,786,232
              
              $
              1,353,540
              
              $
              4,900,218
              
              $
              3,780,860Domestic
              
              
              
              
              
              660,983
              
              
              521,504
              
              
              1,836,447
              
              
              1,378,548Total
                    Net Sales
              
              
              
              
              $
              2,447,215
              
              $
              1,875,044
              
              $
              6,736,665
              
              $
              5,159,408


**Note
      G - Shipping and Handling**





Amounts
      billed to customers for shipping and handling expenses are included in revenue
      at the time the related product revenue is recognized. The costs incurred
      related to shipping and handling expenses are included in cost of goods
      sold.





**Note
      H - Equity**





On
      June
      7, 2006, the Company issued 348,500 common stock shares as follows: (i) 20,500
      shares of common stock in conjunction to its 401(k) Plan participation for
      the
      year 2005;(ii) 178,000 shares of common stock to officers and an employee for
      services in 2005; and, (iii) 150,000 shares of common stock to two individuals
      for performance based grants earned per the acquisition of Orthogen Corporation
      in 2000.





**(A)
      Stock Warrants** In
      conjunction with the private placement the Company has issued warrants for
      the
      purchase of 500,000 shares of common stock at a price of $.75 per share
      exercisable for a period of five years expiring March 2, 2010.





**(B)
      Stock Options** The
      Company adopted the 2003 Stock Option Plan during its second quarter of fiscal
      year ending 2003. It authorized the Company to issue 2,500,000 shares of common
      stock under this plan. To date, under the Plan, 1,862,000 stock options have
      been issued to officers and employees of the Company. During the year ended
      2003
      the Company elected to account for the stock options under the Financial
      Accounting Standards Board Statement No. 123, “Accounting for Stock-Based
      Compensation.” During the quarters ending July 31, 2006 and 2005, the Company
      recognized no compensation expense. As of March 2005 all options issued and
      outstanding had been expensed by the Company.




7




On
      March
      1, 2005, all options issued and outstanding were exercisable and the Board
      of
      Directors approved a cashless exercise of all options to common stock. To effect
      the exercise of the 3,147,000 options outstanding and exercisable, 2,841,793
      shares of common stock where issued and 305,207 shares of common stock were
      foregone and utilized for the payment of the shares at their respective exercise
      prices.





A
      summary
      of the stock options activity for the nine month ended July 31, 2006, is
      represented below:





Number
                of Options
            
            Weighted
                Average
              Exercise
                PriceStock
                Options**Balance
                at beginning of period**
            
            
            400,000
            
            $
            -Granted
            
            
            -
            
            
            -Granted
            
            
            150,000
            
            
            -Expired
            
            
            -
            
            
            -Balance
                at end of period
            
            
            250,000
            
            $
            -Options
                exercisable at end of period
            
            
            -0-
            
            $
            -





The
      following table summarizes information about performance options at July 31,
      2006:





Exercise
              Prices
            Number
              Outstanding
                at
              July
                31,2006
            Weighted
              Average
              Remaining
              Contractual
                Life
            
            Weighted
              Average
              Exercise
              Price
            Number
              Exercisableat
              July
                31, 2006
            
            Weighted
              Average
              Exercise
              Price$
            (*)
            250,000
            -
            $
            -
            -
            $
            -





(*)
      Performance based options consisting of 125,000 shares to each of two
      individuals (aggregating 250,000 shares) that represented the sellers of
      Orthogen Corporation to the Company; subsequent to the acquisition one
      individual became an employee and the other a consultant.





**Note
      I - Legal Matters**





The
      Company from time-to-time is a party to various legal proceedings. In the
      opinion of management, none of the proceedings are expected to have a material
      impact on the Company’s financial position or results of
      operations.





**Note
      J - Liquidity**





During
      the quarter ended July 31, 2006, net income totaled a loss of $682,508, and
      the
      Company realized a reduction of cash flow from operations of $1,846,414; the
      Company had an accumulated deficit of $2,051,263, positive working capital
      of
      $3,178,663 and positive stockholders’ equity of $5,154,600.





As
      of
      July 31, 2006, the Company had $157,233 in cash, $283,010 available under its
      revolving line of credit, $2,846,641 in net accounts receivable, and $2,802,163
      in current inventory. The Company had accounts payable, accrued expenses and
      other payables in the aggregate of $635,309, revolving loans payable of
      $2,466,990 and notes and loans payable - current and capital leases current
      of
      $157,590.




As
      of
      March 2, 2005, the Company realized an equity infusion net of closing fees
      totaling $3,447,000 from the issue and closing of a private placement (see
      Note-G Equity - for details).





In
      February 2005 the Company realized $4,500 from the exercise of options.
      Individuals exercised 30,000 options for the exchange of 30,000 common stock
      shares at a cost of $.10 and $.25 per share.




8




The
      Company incurred a net loss for the first nine months of 2006 as a direct result
      of sales and marketing increases, which are expected to generate added revenues
      in the near future.





The
      ability of the Company to implement its business plan is dependent on the
      Company’s ability to hire qualified individuals to meet its sales and marketing
      objectives. With the completion of the private placement the Company believes
      that it has sufficient cash to reach its objectives over the following two
      years. However, there is no guarantee that the current financing arrangements
      will continue indefinitely. If adequate funds are not available either through
      operations or financing arrangements, the Company may be required to delay
      or
      scale back the growth of operations, product and service development efforts.





**Note
      K - Notes Payable**





On
      July
      28, 2006, CommerceBank N.A. in conjunction with EximBank extended the Company’s
      line of credit to July 28, 2007 (see Note C second paragraph for full
      details).





On
      January 30, 2005 the Company entered into a loan agreement for the financing
      of
      two added CNC machines. Two machines where financed over 48 months and maintain
      the Companies manufacturing capacity to meet growth objectives.





In
      May
      2005 the Company entered into a lease agreement for the financing of a CNC
      machine. The machine was leased over a forty eight (48) month period. The
      machine was obtained to meet the Company’s manufacturing requirements.





**Note
      L - Subsequent Events**





On
        September 7, 2006, the Company entered into an Agreement and Plan of Merger
        (the
“Merger Agreement”) with Tumbler Holdings, Inc. (“Tumbler”), an affiliate of
        HealthpointCapital Partners II, L.P. (“HealthpointCapital”), and Tumbler Merger
        Corp., a wholly-owned subsidiary of Tumbler (“Merger Sub”). Pursuant to the
        Merger Agreement, and upon the terms and subject to the conditions thereof,
        Merger Sub has agreed to commence a cash tender offer (the “Offer”) for all of
        the issued and outstanding shares of common stock, par value $0.01 per share,
        of
        the Company at a purchase price of $2.15 per share (the “Offer Price”). As soon
        as practicable after the consummation of the Offer, Merger Sub will merge
        with
        and into the Company (the “Merger”) and the Company will become an indirect
        wholly-owned subsidiary of HealthpointCapital. In the Merger, the remaining
        stockholders of the Company, other than such stockholders who have validly
        exercised their appraisal rights under the Delaware General Corporation Law,
        will be entitled to receive the Offer Price.
 
 The
        obligation of Merger Sub to accept for payment and pay for the shares tendered
        in the Offer is subject to a number of conditions described in the Merger
        Agreement, including Merger Sub’s ownership, following such acceptance, of at
        least a majority of all then-outstanding shares of the Company’s common stock,
        calculated on a fully-diluted basis.
 
 The
        closing of the Merger is subject to customary closing conditions.
 
 Upon
        completion of the acquisition, BioLok will become an indirect, wholly-owned
        subsidiary of HealthpointCapital and will continue to operate from its Deerfield
        Beach, Florida, headquarters.




**Item
      2.** **Management's
      Discussion and Analysis or Plan of Operations**





**CRITICAL
      ACCOUNTING POLICIES**





Financial
      Reporting Release No. 60, which was recently released by the U.S. Securities
      and
      Exchange Commission, encourages all companies to include a discussion of
      critical accounting policies or methods used in the preparation of financial
      statements. Our financial statements include a summary of the significant
      accounting policies and methods used in the preparation of our financial
      statements.





Management
      believes the following critical accounting policies affect the significant
      judgments and estimates used in the preparation of the financial statements.





**Revenue
      Recognition.** Revenues
      are recognized at the time of shipment of the respective merchandise. Revenues
      in the accompanying financial statements are presented net of returns and
      allowances, sales discounts, advertising and promotions.





**Use
      of Estimates.** Management's
      discussion and analysis of financial condition and results of operations is
      based upon the financial statements having been prepared in accordance with
      generally accepted accounting principles. The preparation of these financial
      statements required management to make estimates and judgments
      that affect the reported amounts of assets, liabilities, revenues, and expenses,
      and related disclosure of contingent assets and liabilities. On an ongoing
      basis, management evaluates these estimates, including those related to
      valuation allowance for deferred tax assets, estimated useful life of fixed
      assets and the carrying value of long-term assets, intangible assets and
      allowances for sales returns, obsolete and slow moving inventory and reserves
      for customer liabilities. Management bases these estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying value of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.




9




**RESULTS
      OF OPERATION (Three Months ended July 31, 2006, compared to the Three Months
      ended July 31, 2005)**





**Volume**   The
      net
      sales (revenues) for the quarter increased by 30.4% over the prior year
      comparable quarter. The domestic market increased by 27% and the international
      market increased by 32% over the comparable prior year quarter. The growth
      reflects improved market penetration.





**Cost
      of Goods Sold**   As
      a
      percent of sales, cost of goods sold totaled 31% which reflected no comparable
      change to the comparable prior year quarter.





**Gross
      Profit**   Gross
      profit for the period increased by 30% over the prior year comparable quarter.
      Gross margin percentages increased by 1 point to 69% for the comparable prior
      year quarter due to continued and increasing product promotional activities.
      Margins are expected to continue range from 67% to 72% over the next two years
      due to continued effort by management to develop the markets.





**Selling
      Expenses**   Selling
      expenses for the quarter increased by 135% over the prior year comparable
      quarter and are a direct result of an increased sales staff, cost increases
      due
      to sales growth, and continued market and marketing development. Marketing
      expense incurred reflect the largest increase of expenses for the quarter which
      management anticipates will improve market penetration in both the implant
      and
      bone regeneration markets in the short run.





**General
      and Administrative Expenses**   General
      and administrative expenses increased by 81% over the comparable quarter of
      2005. The increase in expenses was due to staff additions to support the growth,
      royalty expenses incurred and added general costs incurred due to growth.





**Research
      and Development Expenses**  Research
      and development expenses increased 21% for the quarter over the comparable
      quarter in 2005. Increased costs incurred were for ongoing studies and research
      being completed, general staff cost increases and existing product
      development.




**Operating
      Income**   Results
      from operations decreased by $748,928 compared to the same quarter of 2005.
      The
      lower result achieved is directly due to management’s investment in market and
      sales development, and bringing new products to market.





**Other
      Income/Expenses**   No
      material other income was realized for the current quarter. Interest expense
      increased by 50% over the comparable prior year quarter as a result of higher
      borrowings outstanding on the revolving line of credit.





**Net
      Income (Loss)**   Net
      loss
      realized for the quarter totaled $682,508 compared to income of $86,047 for
      the
      same prior year quarter. The decrease was due to the continued sales growth
      and
      marketing development instituted.





10





**RESULTS
      OF OPERATION (Nine Months ended July 31, 2006, compared to the Nine Months
      ended
      July 31, 2005)**





**Volume**   Net
      sales
      (revenues) for the nine months ending July 31, 2005, increased by 30.6% over
      the
      comparable prior year period. The increase in sales is attributable to growth
      of
      both the domestic and international markets. The domestic market increased
      by
      33% and the international market by 30% over the comparable nine month periods.
      The growth reflects improved market penetration in all areas, generated from
      an
      expanded product base and improved sales effort.





**Cost
      of Goods Sold**   Cost
      of
      goods sold for the nine months was 24% over the comparable prior year period.
      Expense increases incurred were for costs incurred in relation to sales activity
      and reflected no material change over the same period prior year.




**Gross
      Profit**   Gross
      profit for the nine month period increased by 33% over the comparable prior
      year
      period, and the related gross margin percentage increased from 68% to 69%.
      The
      increase is the result of increased sales activity generating improved
      manufacturing margins.





**Selling
      Expenses**   Selling
      expenses for the nine months increased by 132% over the comparable prior year
      period. The increase is attributable to higher sales staff expenses, increased
      travel expenses, and market and marketing development costs incurred. Overall,
      increases are expected in the future and are primarily attributed to continued
      sales staff additions, increased market presence and promotional activities
      instituted.





**General
      and Administrative Expenses**   General
      and administrative expenses increased by 30% over the comparable prior year
      nine
      months period. The increased expenses are attributed to continual operational
      support of market development, staff costs, system requirements, professional
      fees, bad debt expense allowance due to receivables outstanding growth, royalty
      expenses incurred due to higher sales realized, and stock expenses incurred
      for
      the payment of services to officers, employees and third parties.





**Research
      and Development Expenses**  Research
      and development expenses for the nine months increased by 12% over the
      comparable period prior year. The increased costs are attributable to higher
      costs incurred for staff, ongoing studies for marketing use and research on
      product development.




**Operating
      Income**   Results
      from operations for the nine months totaled a loss of $1,097,449 compared to
      a
      gain of $73,271 for the same period prior year. The lower results achieved
      are a
      direct result of increased costs incurred to obtain increased market share
      and
      stock issued for services.





**Other
      Income/Expenses**   Other
      income realized was negligible compared to the insurance proceeds realized
      on an
      involuntary conversion of equipment in 2005. Interest expense decreased by
      7%
      over the comparable prior year period due to lower average debt outstanding
      in
      the first three quarters of 2005.





**Net
      Income (Loss)**   Net
      loss
      for the nine months totaled a loss of $1,218,232 compared to gain of $51,857
      for
      the same prior year period. The reduced results are due to costs incurred in
      developing the Company’s marketing and sales effort to realize management’s
      objectives.




**LIQUIDITY
      AND CAPITAL RESOURCES**





On
      November 26, 2001, the Company entered into an equipment loan of $300,000 with
      CommerceBank NA at an interest rate of 7.5% for a term of five years. The loan
      was collateralized with existing equipment and repayable over the initial 12
      months at interest only and equal payments over the remaining 48
      months.




11




On
      July
      28, 2006, the Company entered into an extension to July 28, 2007, of its current
      CommerceBank N.A. and EximBank US insurance guarantee for international
      inventory and receivables totaling $2,500,000. The Company also entered into
      a
      separate domestic receivables credit line with CommerceBank N.A. totaling
      $250,000 and is still amortizing an existing term debt agreement entered into
      in
      2001. The Company pledged essentially all of its assets as collateral to secure
      the loan arrangement and the international revolving loan is in turn 90%
      guaranteed by EximBank. The interest rate is at the prime rate in effect plus
      1.0%, with the domestic revolving loan remaining at 2.0%. To provide added
      security for the above revolving loan, the Company also has obtained EximBank
      credit guarantees on select international receivables at a cost of $.80, per
      $100 as invoices are issued and reported.





The
      Company completed a private placement for 5,000,000 shares of common stock
      on
      March 2, 2005, for $3.75 million ($0.75 per share). The cost of this placement
      was $225,000 of which $30,000 had been expensed in prior periods as retainer
      fees and the issuance of warrants to purchase 500,000 shares, and $108,000
      was
      due to other expenses directly related to the solicitation and issue of the
      private placement shares. The financing was led by healthcare venture capital
      firm Radius Ventures, with other accredited institutional and individual
      investors also participating.





The
      Company realized $4,500 from the exercise of two options for the issue of 30,000
      shares of common stock.





The
      Company’s current ratio decreased to 1.98 on July 31, 2006, down from 4.16 on
      July 31, 2005, the decrease is attributed to the continued growth in receivables
      and inventory, and increased borrowing to support the growth. For the nine
      months ended July 31, 2006, the Company’s revolving loan payable increased by
      $1,874,990 and the Company had $283,010 of credit line available.





In
      an
      effort to increase sales related to the Company’s business, the Company has
      actively been developing its sales force. To date, a Vice President Domestic
      Sales and Vice President Marketing have been hired, and sales staff positions
      are in the process of being filled continually.





Future
      financing may not be available on a timely basis, in sufficient amounts or
      on
      terms acceptable to the Company. Future financing in the form of equity
      transactions may result in dilution of equity. Any additional debt financing
      may
      contain additional covenants.




**OUTLOOK**





Operations
      for the first nine months of 2006 resulted in a net loss of $1,218,232, which
      was due to costs incurred for the continued growth of both domestic and
      international markets, market and marketing development and stock issued.
      Management expects to operate at a loss over the next 18 months due to
      continued market development and expansion of the sales staff both domestic
      and
      international.




**FORWARD-LOOKING
      STATEMENTS**





Certain
      statements in this Form 10-QSB are forward-looking statements within the meaning
      of the Private Securities Litigation Reform Act of 1995. Such statements imply
      continued financial improvement of the Company by its management. The Company
      wishes to caution readers not to place undue reliance on any such
      forward-looking statements, which speak as of the date made, and to advise
      readers that various factors, including regional and national economic
      conditions, substantial changes in levels of market interest rates, credit
      and
      other risks of manufacturing, distributing or marketing activities, and
      competitive and regulatory factors, could affect
      the Company’s financial performance and could cause the Company’s actual results
      for future periods to differ materially from those anticipated by any
      forward-looking statements.




12




The
      Company does not undertake, and specifically disclaims any obligation, to update
      any forward-looking statements to reflect the occurrence of anticipated or
      unanticipated events or circumstances after the date of such statements, whether
      as a result of new information, future events or otherwise.




**RISK
      FACTORS**





Forward-looking
      statements are based on expectations, forecasts and assumptions by our
      management and involve a number of risks, uncertainties, and other factors
      that
      could cause actual results to differ materially from those stated, including,
      and without limitation:





-
            decline
                in sales due to slowing economic growth, geo-political events or
                other
                factors;


-
            lower-than-anticipated
                market acceptance of new products;


-
            increased
                safety, testing and evaluation of US FDA and ISO
                requirements;


-
            changes
                in interest rates;


-
            higher
                prices for or reduced availability of energy and raw
                materials;


-
            inability
                to access debt or security markets at reasonable rates or sufficientamounts; -
            inability to consummate the Merger; -
            personnel and business risks associated
              with
              any potential uncertainty regarding the
              Merger;


-
            higher-than-expected
                credit losses;


-
            increased
                price competition for implants and prosthetic
                parts;




The
      risk
      factors detailed above may not be all inclusive but represent reasonable
      expectations or assumptions made by management in preparing the forward-looking
      statements.




**Item
      3.** **Controls
      and Procedures**





**Management
      Assessment of Internal Controls**  **** It
      is
      management’s responsibility to establish and maintain an adequate control
      structure and procedures for financial reporting. Management believes that
      its
      internal control structures and procedures for financial reporting as of the
      end
      of the most recent quarter and fiscal year are sufficient to meet all of the
      obligations of the financial reporting process required of it by the Security
      Exchange Act of 1934.





**Disclosure
      Controls and Procedures**   The
      Company maintains controls and procedures designed to ensure that it is able
      to
      collect the information it is required to disclose in the reports it files
      with
      the Securities and Exchange Commission, and to process, summarize and disclose
      this information within the time periods specified in the rules of the
      Securities and Exchange Commission. The Chief Executive and Chief Financial
      Officers believe that these procedures are effective to ensure that the Company
      is able to collect, process and disclose the information it is required to
      disclose in the reports it files with the Securities and Exchange Commission
      within the required time periods.





**Internal
      Controls**   The
      Company maintains a system of internal controls designed to provide reasonable
      assurance that transactions are executed in accordance with management’s general
      or specific authorization and that transactions are recorded as necessary (1)
      to
      permit preparation of financial statements in conformity with generally accepted
      accounting principles, and (2) to maintain accountability for assets; access
      to
      assets is permitted only in accordance with management’s general or specific
      authorization; and the recorded accountability for assets is compared with
      the
      existing assets at reasonable intervals and appropriate action is taken with
      respect to any difference.





13




Since
      the
      date of the most recent evaluation of the Company’s internal controls by the
      Chief Executive and Chief Financial Officers, there have been no significant
      changes in such controls or in other factors that could have significantly
      affected those controls, including any corrective actions with regard to
      significant deficiencies and material weaknesses.





**PART
      II.        OTHER
      INFORMATION**





**Item
      1.** **Legal
      Proceedings**





From
      time-to-time the Company is a participant to business disputes arising in the
      normal course of its business operations. The Company’s management believes that
      none of these actions, standing alone or in the aggregate is currently material
      to the Company’s operations or financial condition.




**Item
        1A.** **Risk
        Factors**
 
 As
        a
        result of the proposed acquisition
        of the Company by an affiliate ofHealthpointCapital,
        the following additional risk factors are material updates to the section
        entitled “Risks and Uncertainties” contained in the Company’s Annual Report on
        Form 10-KSB for the year ended October 31, 2005:
  **The
        completion of the proposed Merger is subject to customary closing
        conditions.**
  The
        completion of the Merger is conditioned upon obtaining stockholder approval,
        absence of material adverse change with respect to the business of the Company,
        the continued accuracy of the representations and warranties of the Company
        in
        the Merger Agreement and other customary conditions. Failure of any of these
        conditions could delay and may possibly prevent the completion of the
        Merger.
  **If
        the proposed Merger is not completed, the Company will have incurred substantial
        costs that may adversely affect the Company’s financial results and
        operations.**
  The
        Company has incurred and will continue to incur substantial costs in connection
        with the proposed Merger. These costs are primarily associated with the fees
        of
        attorneys and accountants. In addition, the Company has diverted significant
        management resources in an effort to complete the Merger and is subject to
        restrictions contained in the Merger Agreement on the conduct of its business.
        If the Merger is not completed, the Company will have incurred significant
        costs, including the diversion of management resources, for which it will
        have
        received little or no benefit.
  If
        the
        Merger is not completed, the Company may experience negative reactions from
        the
        financial markets, collaborative partners, customers and employees. Each
        of
        these factors may adversely affect the Company’s financial results and
        operations.




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





None.





**Item
      3.** **Defaults
      Upon Senior Securities**





None.





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





At
      the
      last Annual Stockholders Meeting held on June 3, 2005, the following items
      where
      approved by the solicitation of proxies and stockholders present at the
      meeting:





1.
                Election
                    of the following individuals as
                    Directors:




- elected for two
              years
            Bruce
                L. Hollander
              Ingo
                K. Kozak
              Neil
                H. Smith- elected for one year
            Daniel C. Lubin
              Cary
                A. Shapoff (resigned 12/05)
              Harold
                Weisman, Esq.





2.
                Election
                    of the continued engagement of the CPA Firm of Daszkal Bolton
                    LLP as the
                    Company’s independent auditors for fiscal year 2005 and quarters of
                    2006.





Election
      results for both matters listed above where approved by a majority of
      stockholders present or voted by proxy. Of the proxies mailed 65% were returned,
      34% not returned and voted by the Company’s Secretary, and 1% were returned due
      to non-deliverability. A total of 15,289,609 shares were outstanding as of
      the
      record date of the close of business on April 12, 2005.





**Item
      5.** **Other
      Information**





**Proposed
        Merger**
 
 On
        September 7, 2006, the Company entered into an Agreement and Plan of Merger
        (the
“Merger Agreement”) with Tumbler Holdings, Inc. (“Tumbler”), an affiliate of
        HealthpointCapital Partners II, L.P. (“HealthpointCapital”), and Tumbler Merger
        Corp., a wholly-owned subsidiary of Tumbler (“Merger Sub”). Pursuant to the
        Merger Agreement, and upon the terms and subject to the conditions thereof,
        Merger Sub has agreed to commence a cash tender offer (the “Offer”) for all of
        the issued and outstanding shares of common stock, par value $0.01 per share,
        of
        the Company at a purchase price of $2.15 per share (the “Offer Price”). As soon
        as practicable after the consummation of the Offer, Merger Sub will merge
        with
        and into the Company (the “Merger”) and the Company will become an indirect
        wholly-owned subsidiary of HealthpointCapital. In the Merger, the remaining
        stockholders of the Company, other than such stockholders who have validly
        exercised their appraisal rights under the Delaware General Corporation Law,
        will be entitled to receive the Offer Price.
 
 The
        obligation of Merger Sub to accept for payment and pay for the shares tendered
        in the Offer is subject to a number of conditions described in the Merger
        Agreement, including Merger Sub’s ownership, following such acceptance, of at
        least a majority of all then-outstanding shares of the Company’s common stock,
        calculated on a fully-diluted basis.
 
 The
        closing of the Merger is subject to customary closing conditions.
  In
          addition, the Company has agreed, among other things and subject to certain
          exceptions as described in the Merger Agreement, (i) to conduct its business
          in
          the ordinary course consistent with past practice during the interim period
          between the execution of the Merger Agreement and consummation of the Merger,
          (ii) not to engage in certain transactions during such period and (iii)
          to cause
          a special stockholder meeting to be held to consider approval of the Merger
          and
          the other transactions contemplated by the Merger Agreement.
  The
          Merger Agreement prohibits the Company from soliciting or entertaining
          alternative business acquisition proposals, subject to certain exceptions
          for
          proposals that are determined in good faith to constitute or to be reasonably
          likely to constitute a superior proposal. The Merger Agreement also contains
          certain termination rights for both the Company and Tumbler.  Either party
          may terminate the Merger Agreement if the Merger is not consummated on
          or before
          October 31, 2006, if the Merger is not approved by the Company’s stockholders or
          upon other customary events.  Tumbler may terminate the Merger Agreement if
          the Company’s Board of Directors changes or does not reaffirm its recommendation
          of the Merger.  Upon termination of the Merger Agreement under specified
          circumstances, the Company may be required to pay Tumbler a termination
          fee of
          $1,155,000, plus Tumbler’s expenses up to $250,000.
  *Stockholders
          Support Agreement*
 
 In
          connection with the Merger Agreement, and in order to induce Tumbler and
          Merger
          Sub to enter into the Merger Agreement, officers and directors Bruce L.
          Hollander and Ingo K. Kozak; officer Patricio Nilo; and directors Daniel
          C.
          Lubin, Harold Alexander, Neil H. Smith, and Harold Wiesman, in their respective
          capacities as stockholders of the Company (or, in the case of Mr. Lubin,
          in his
          capacity as the managing partner of a stockholder (Radius Ventures, LLC)),
          concurrently with the execution and delivery of the Merger Agreement, entered
          into Stockholders Support Agreements, each effective as of September 7,
          2006
          (the “Stockholders Support Agreements”), with Merger Sub, pursuant to which the
          stockholders agreed, among other things, to tender the shares held by them
          in
          the Offer and to give Merger Sub their proxy to vote such shares in favor
          of
          adoption of the Merger Agreement, all upon the terms and subject to the
          conditions set forth in such Stockholders Support Agreements.


14




**Item
      6. Exhibits**


2.1
              Agreement
                  and Plan of Merger, dated September 7, 2006, by and among Tumbler
                  Holdings, Inc., Tumbler Merger Corp. and BioLok International
                  Inc.*4.1
              Form
                  of Stockholders Support Agreement by and between BioLok International
                  Inc.
                  and certain stockholders of BioLok International Inc. and each
                  director.*21
              Subsidiaries
                  of Registrant included in the Consolidated Financial Statements
                  of the
                  Issuer are:Name
                  of entity
              State
                  or CntryOrthogen
                  Corporation
              New
                  JerseyMicro-Lok
                  Mexico S.A.CE C.V.
              Mexico
                  DFBio-Lok
                  Chile S.A.
              ChileBio-Lok
                  Int’l. Pty. Inc.
              Australia31.1
              Certification
                  of Chief Executive Officer Pursuant to Rule 13a-15(e)or 15d - 15(e)
                  of the
                  Securities Exchange Act of 1934, as Adopted Pursuant to Section
                  302 of the
                  Sarbanes-Oxley Act of 2002.31.2
              Certification
                  of Chief Financial Officer Pursuant to Rule 13a-15(e) or 15d -
                  15(e) of
                  the Securities Exchange Act of 1934, as Adopted Pursuant to Section
                  302 of
                  the Sarbanes-Oxley Act of 2002.32.1
              Certification
                  Of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.32.2
              Certification
                  Of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.




*  Previously
        filed as an exhibit to Form 8-K filed on September 8, 2006.
 ___________




**SIGNATURES**





**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.**




BIOLOK
      INTERNATIONAL INC .


(Registrant)





September 15, 2006
              Date
            By/s/
                Bruce L.
                Hollander
              Bruce
                L. Hollander,
              President
                and Chief Executive OfficerSeptember 15, 2006
              Date
            By /s/
                Ingo K.
                Kozak
              Ingo
                K Kozak,
              Vice
                President Finance and Administration and
              Chief
                Financial Officer




15