**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 ending **January
              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
            
            (IRS
                Employerincorporation
                or organization)
            
            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.





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). YES o NO
      x





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
      January 31, 2006, the Registrant had 15,318,337 Common Stock shares outstanding,
      at a par value $.01 per share.





Transitional
      Small Business Disclosure Format: YES
o  
NO
o

















**TABLE
      OF CONTENT**








PART
                I
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                Statements
            3Condensed
                Consolidated Statements of Operations for the three months ended
                January
                31, 2006 and 2005 (unaudited)Condensed
                Consolidated Balance Sheets for January 31, 2006 and October 31,
                2005
                (unaudited)Condensed
                Consolidated Statements of Cash Flows for the three months ended
                January
                31, 2006 and 2005 (unaudited)Notes
                to Condensed Consolidated Financial Statements (unaudited)Item
                2.
            Management's
                Discussion and Analysis or Plan of Operation
            9Item
                3.
            Controls
                and Procedures
            12PART
                II
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            13Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            13Item
                3.
            Defaults
                Upon Senior Securities
            13Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            13Item
                5.
            Other
                Information
            13Item
                6.
            Exhibits
            13Signatures
            13Certifications
            14
                - 17























2




**PART
      I**





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








**BIOLOK
      INTERNATIONAL INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statement of Operations** **(Unaudited)**





Three
                Months EndedJanuary 31,2006
            
            2005Net
                Sales
            
            $
            1,979,767
            
            $
            1,549,672Cost
                of Goods Sold
            
            
            628,945
            
            
            507,206GROSS
                PROFIT
            
            
            1,350,822
            
            
            1,042,466Selling
            
            
            858,541
            
            
            442,548Admin.
                & General Exp
            
            
            696,324
            
            
            463,896Research
                & Development
            
            
            132,187
            
            
            104,5801,687,052
            
            
            1,011,024Operating
                (Loss) Income
            
            
            (336,230
            )
            
            31,442Gain
                on involuntary conversion
            
            
            0
            
            
            105,841Interest
                Expense
            
            
            (24,793
            )
            
            (45,869
            )Other
                Income (Expense)
            
            
            49
            
            
            (144
            )(24,744
            )
            
            59,828Income
                (Loss) before Taxes
            
            
            (360,974
            )
            
            91,270Income
                Taxes
            
            
            0
            
            
            0NET
                (LOSS) INCOME
            
            $
            (360,974
            )
            $
            91,270Net
                (Loss) Income available to Common Shareholders
            
            $
            (360,974
            )
            $
            91,270Earnings
                per Share - Basic
            
            $
            (.02
            )
            $
            .01-
                Diluted
            
            $
            (.02
            )
            $
            .01Weighted
                average SharesOutstanding
                - Basic
            
            
            15,318,337
            
            
            7,319,873-
                Diluted
            
            
            15,318,337
            
            
            9,639,077







See
      Notes
      to unaudited Condensed Consolidated Financial Statements.


3


**BIOLOK
      INTERNATIONAL INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Balance Sheets** **(Unaudited)**




**January
                31,**
            
            **October
                31,****2006**
            
            **2005***ASSETSCurrent
                AssetsCash
            
            $
            307,629
            
            $
            545,762Accounts
                Receivable (Net of Allowance of $123,037 and $104,647)
            
            
            2,220,429
            
            
            2,237,511Inventory
            
            
            2,410,223
            
            
            2,278,993Other
                Current Assets
            
            
            505,998
            
            
            407,443Total
                Current Assets
            
            
            5,444,279
            
            
            5,469,709Net
                Machinery & Equipment, Net
            
            
            1,657,921
            
            
            1,581,507Other
                AssetsPatents
                & Related Intangibles, net
            
            
            276,847
            
            
            277,812Inventory
            
            
            267,194
            
            
            267,194Deposits
                and Other Assets
            
            
            34,952
            
            
            34,249Total
                Other Assets
            
            
            578,993
            
            
            579,255TOTAL
                ASSETS
            
            $
            7,681,193
            
            $
            7,630,471LIABILITIES
                & EQUITYCurrent
                LiabilitiesRevolving
                loans payable
            
            $
            1,088,000
            
            $
            592,000Notes
                & loans payable - current portion
            
            
            91,767
            
            
            103,584Capital
                lease - current portion
            
            
            96,360
            
            
            71,655Accounts Payable
            
            
            157,477
            
            
            259,800Accrued
                expenses & other Payables
            
            
            248,952
            
            
            286,913Total
                Current Liabilities
            
            
            1,682,556
            
            
            1,313,952Long-Term
                LiabilitiesCapital
                leases - non-current
            
            
            265,514
            
            
            208,594Notes
                and loans payable - non-current
            
            
            99,647
            
            
            113,475Total
                Long-Term Liabilities
            
            
            365,161
            
            
            322,069Total
                Liabilities
            
            
            2,047,717
            
            
            1,636,021STOCKHOLDERS’
                EQUITYPreferred Stock - authorized 500,000 par value $.75;
            
            
            -0-
            
            
            -0-Common
                Stock - authorized 20,000,000, par value $.01; issued and outstanding
                15,318,337 shares
            
            
            153,183
            
            
            153,183Treasury
                Stock (17,327 common shares)
            
            
            (7,277
            )
            
            (7,277
            )Paid-in
                Capital
            
            
            6,681,574
            
            
            6,681,574Accumulated
                Deficit
            
            
            (1,194,004
            )
            
            (833,030
            )Total
                Equity
            
            
            5,633,476
            
            
            5,994,450TOTAL
                LIABILITIES & EQUITY
            
            $
            7,681,193
            
            $
            7,630,471




See
      Notes
      to Unaudited Condensed Consolidated Financial Statements.




4


**BIOLOK
      INTERNATIONAL INC. AND SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows (Unaudited)**


Three
                Months Ended
              January
                31,2006
            
            2005OPERATING
                ACTIVITIES:Net
                (Loss) Income
            
            $
            (360,974
            )
            $
            91,270Adjustments
                to reconcile net (loss) income to net cash used in operating
                activities:Provision
                for doubtful accounts
            
            
            18,390
            
            
            64,975Depreciation
                and amortization
            
            
            77,932
            
            
            54,886Gain
                on involuntary conversion
            
            
            0
            
            
            (105,841
            )Option
                expense (amortization)
            
            
            0
            
            
            28,938Change
                in Current assets & liabilities:(Incr.)
                decr. in accts. rec
            
            
            (1,308
            )
            
            (205,028
            )(Incr.)
                decr. in inventories
            
            
            (131,233
            )
            
            (65,027
            )(Incr.)
                decr. in prepaid & other current assets
            
            
            (98,552
            )
            
            (5,918
            )(Incr.)
                decr. in deposits & other assets
            
            
            (702
            )
            
            3,000Incr.
                (decr.) in A/P & Accr. exp
            
            
            (140,284
            )
            
            60,767Net
                Cash used in Operating Activities
            
            
            (636,731
            )
            
            (77,978
            )INVESTING
                ACTIVITIES:Investment
                in patents
            
            
            (5,868
            )
            
            (4,859
            )Insurance
                settlement from involuntary Conversion
            
            
            0
            
            
            93,568Purchase
                of Property, Plant & Equipment
            
            
            (42,513
            )
            
            (35,289
            )Net
                Cash (used in) provided by Investing Activities
            
            
            (48,381
            )
            
            53,420FINANCING
                ACTIVITIES:Net
                proceeds from revolving loan
            
            
            496,000
            
            
            167,037Repayment
                on Capital leases
            
            
            (23,375
            )
            
            (31,811
            )Proceeds
                on exercise of stock options
            
            
            0
            
            
            2,000Payment
                on notes payable
            
            
            (25,645
            )
            
            (25,455
            )Net
                Cash provided by Financing Activities
            
            
            446,980
            
            
            111,771NET
                (DECREASE) INCREASE IN CASH
            
            $
            (238,133
            )
            $
            87,213Cash
                - Beginning of Period
            
            
            545,762
            
            
            24,133Cash
                - End of Period
            
            $
            307,629
            
            $
            111,346SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONInterest
                Paid
            
            $
            24,793
            
            $
            45,869Income
                Taxes Paid
            
            $
            -0-
            
            $
            -0-


SUPPLEMENTAL
      DISCLOSURE OF NON-CASH ACTIVITES


During
        the three months ended January 31, 2006, the Company acquired $105,000 of
        equipment through a capital lease obligation.


During
      the three months ended January 31, 2005, the Company acquired $162,250 of
      equipment through the assumption of long-term debt.


During
      the three months ended January 31, 2005, the Company recorded a gain on
      involuntary conversion of assets in the amount of $105,841 of which $121,569
      of
      the proceeds to be received was included in other assets.




See
      Notes
      to unaudited 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 ('SEC'). 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
      balance sheet at October 31, 2005, has been derived from the audited financial
      statements at that date but does not include all of the information and
      footnotes required by generally accepted accounting principals for complete
      financial statements.  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 SEC on January 31, 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 screw implants, related prosthetic parts,
      devices, associated tools, and irrigated drills and reamers. The Company markets
      its product line domestically direct to the end user, internationally via select
      distributors and majority owned entities.





Revenues
      are attributable to the distribution and sale of its manufactured or purchased
      for resale products 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. The Company pledged substantially
      all of its assets as collateral to secure the loan arrangement. The interest
      rate is the prime rate in effect plus 2%. To provide added security for the
      loan, the Company also has obtained EximBank credit guarantees on the Company’s
      inventory allocated for international sales and qualified international
      receivables as invoices are issued and assigned. The principal under the line
      of
      credit is due on demand with an annual financial review date of December 31.





6


On
      December 30, 2004, the Company entered into an extension to December 31, 2005,
      of its current CommerceBank N.A. and EximBank US insurance guarantee for
      international inventory and receivables totaling $2,500,000 up from $2,000,000.
      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 substantially 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 at 2.0%. The Company’s revolving credit line with
      CommerceBank N.A. has been extended to April 1, 2006, by both the Bank and
      EximBank US to complete the review and documentation to extend the line of
      credit of $2,750,000, as requested by the Company, to December 31,
      2006.





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


The
      Company’s basic and diluted net income (loss) per share amounts have been
      computed by dividing the results by the weighted average number of outstanding
      common shares. For the three months ended January 31, 2006, the Company reported
      a net loss therefore no common shares equivalent (400,000
      of purchase options and 500,000 of warrants outstanding)were included in
      diluted net loss per common share because the effect would be anti-dilutive.
      For
      the three months ended January 31, 2005, the Company reported net income and
      as
      such, common shares equivalent were included in the computation of diluted
      net
      income per common 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 has been included
      within this report for the quarter.





Results
                of Operationsfor
                Three Month EndedJanuary
                31,2006
            
            2005International
            
            $
            1,459,264
            
            $
            1,106,215Domestic
            
            
            520,503
            
            
            443,457Total
                Net Sales
            
            $
            1,979,767
            
            $
            1,549,672





**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**


**(A)
      Stock Warrants**  In
      conjunction with the private placement consummated in 2005, the Company 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 ended 2003. The Company is authorized 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 quarter ended January 31,
      2006, the Company recognized no expenses then all options outstanding had been
      fully expensed in March 2005; for the comparable quarter ending January 31,
      2005, the Company recognized $28,938 of compensation expenses.





7


A
      summary
      of the stock options issued as of January 31, 2006, is presented
      below:





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





The
      following table summarizes information about stock options at January 31,
      2006:





Exercise
                Prices
            
            Number
                Outstanding at
              January
                31, 2006
            
            Weighted
                Average Remaining Contractual Life
            
            Weighted
                Average Exercise Price
            
            Number
                Exercisable at
              January
                31, 2006
            
            Weighted
                Average Exercise Price$(*)
            
            
            400,000
            
            
            -
            
            $
            -
            
            
            -
            
            $
            -





(*)
      Performance based options consisting of 200,000 shares to each of two
      individuals (aggregating 400,000 shares) who sold Orthogen Corporation to the
      Company; subsequent to the acquisition one individual became an employee and
      the
      other a consultant.





**Note
      I - Liquidity**


During
      the quarter ended January 31, 2006, the Company realized a net loss totaling
      $360,974, and realized a reduction of cash flow from operations of $636,731;
      the
      Company had an accumulated deficit of $1,194,004, positive working capital
      of
      $3,761,723 and positive stockholders’ equity of $5,633,476.





As
      of
      January 31, 2006, the Company had $307,629 in cash, $2,220,429 in net accounts
      receivable, and $2,410,223 in current inventory. The Company had accounts
      payable, accrued expenses and other payables in the aggregate of $406,430,
      revolving loans payable of $1,088,000, and notes and loans payable - current
      and
      capital leases current of $188,127. The Company as of January 31, 2006, had
      a
      total availability of fund against its revolving line of credit totaling
      $1,838,454.





The
      Company incurred a net loss for the first quarter 2006 as a direct result of
      sales and marketing increases, which are expected to generate added revenues.
      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 in 2005, the Company
      believes that it has sufficient cash to meet its objectives over the following
      eighteen (18) months.




8




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 its growth
      of
      operations, product and service development efforts.





**Note
      J - Notes Payable**


In
      November 2005 the Company entered into a lease agreement for the financing
      of
      two CNC machines for $105,000. The machines were leased over forty eight (48)
      months and were acquired to increase manufacturing capacity.





On
      December 31, 2005, the Company’s revolving line of credit with CommerceBank N.A.
      in conjunction with EximBank was extended to April 1, 2006 (also see Note C
      -
      for added details).











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





**CRITICAL
      ACCOUNTING ESTIMATES**


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 estimates 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 for the three months ended January
      31,
      2006 and 2005 are presented net of returns and allowances, sales discounts,
      advertising and promotions. The increase in revenues for the three months ended
      January 31, 2006 was primarily due to increased marketing and sales promotional
      efforts by the Company.





**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
      accounting principles generally accepted in the United States of America. 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 the deferred tax asset, estimated useful life of fixed
      assets and the carrying value of long-lived assets, intangible assets and
      allowances for sales returns, obsolete and slow moving inventory and reserve
      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 OPERATIONS (3 Months ended January 31, 2006, compared to the Three Months
      ended January 31, 2005)**





**Volume**   The
      net
      sales (revenues) for the quarter increased by 28% over the prior year comparable
      quarter. The domestic market increased by 17% and the international market
      increased by 32% over the comparable prior year quarter. The growth reflects
      improved market penetration both domestically and internationally. Growth in
      the
      first quarter of the past years has been historically the lowest quarter due
      to
      the holiday periods and summer in the southern hemisphere.





**Cost
      of Goods Sold**   As
      a
      percent of sales cost of goods sold decreased by 1% over the comparable prior
      year quarter. Cost incurred in relation to the sales activity reflected no
      material change.




**Gross
      Profit**   Gross
      profit for the period increased by 30% over the prior year comparable quarter;
      gross margin percentages increased by 1% for the quarter due to a continued
      increase in market penetration.





**Selling
      Expenses**   Selling
      expenses for the quarter increased by 94% over the prior year comparable quarter
      and are a direct result of an increased sales staff, and cost increases due
      to
      sales growth and continued market development.





**Administrative
      & General Expenses**   Administrative
      and general expenses increased by 50% over the comparable quarter of 2005.
      The
      increased expenses incurred for the quarter compared to the same quarter prior
      year was due to higher staff and staff costs, professional fees and royalty
      expenses incurred.




**Research
      and Development Expenses**   Research
      and development expenses increased by 26% over the comparable quarter of 2005.
      The increased expenses incurred for the quarter was due to continued research
      and studies being completed for the Laser-Lok TM technology and the BoneGen-TR product in final development.





**Operating
      Income (Loss)**   Results
      from operations decreased to a loss of $(336,230) compared with income of
      $31,442 for the same quarter of 2005. The lower results are directly due to
      management’s investment in market and sales development, new product development
      and introduction of same into the dental industry.





**Other
      Income/Expenses**   Interest
      expense decreased by 46% over the comparable quarter prior year. The lower
      interest expense incurred was due to lower borrowings outstanding on the
      revolving line of credit and equipment coming off lease. The 2005 insurance
      recovery realized was due to an involuntary conversion of equipment.





**Net
      (Loss) Income**   Net
      loss
      for the quarter was $(360,974) compared to a net income of $91,270 for the
      three
      months ended January 31, 2005. Adjusting 2005 for the gain realized in the
      first
      quarter for an involuntary conversion the 2005 results would have been a loss
      of
      $(14,571). The decrease was primarily due to sales staff increases for the
      quarter. Losses are expected to be maintained for the next two (2) quarters
      as
      management continues to develop its sales and marketing operations to gain
      market penetration both domestically and internationally.








**LIQUIDITY
      and CAPITAL RESOURCES**





On
      December 31, 2005, the Company attained an extension to April 1, 2006, 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. The Company has pledged substantially 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%.





10











The
      Company’s current ratio increased to 3.24 on January 31, 2006, from 1.29 on
      January 31, 2005, due to growth. For the first quarter 2006, the Company’s
      revolving loan payable increased by $496,000 and this increase was due to
      domestic and international market development and domestic sales staff growth
      initiated by management.





Management
      plans to continue its efforts to increase sales at a comparable rate for the
      remainder of fiscal year 2006 with expense increases over the prior year for
      added management and sales staff.





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. The
      Company anticipates having adequate capital and liquidity for the next 18
      months.





The
      Company completed a Private Placement for 5,000,000 shares of common stock
      on
      March 2, 2005, for $3.75 million or $0.75 per share. Cost of this placement
      was
      $225,000 and the issuance of warrants to purchase 500,000 shares. The financing
      was led by healthcare venture capital firm Radius Ventures with other accredited
      institutional and individual investors also participating.








**OUTLOOK**





Net
      income objectives for the first quarter 2006 resulted in a lower loss than
      budgeted by $155,191 which was totally due to lower hiring costs and marketing
      expenses incurred. Management anticipated staying within plan and a loss or
      breakeven is expected to continually be realized over the next twelve to
      eighteen months.





The
      Company is committed to the continued expansion of its US sales staff and
      anticipates to hire an additional six (6) new salespeople by fiscal year end
      2006, bringing the total US sales staff to eighteen (18). Additionally, added
      international markets are and have been developed and are anticipated to come
      on-line in the coming months.





Our
      financial condition remains strong, and in addition to the internal objectives
      we are exploring acquisition opportunities with a synergistic product mix.
      To
      accomplish these objectives the Company may seek added capital later this year.







**FORWARD-LOOKING
      STATEMENTS**





Certain
      statements in this Form 10-QSB are forward-looking statements as defined in
      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.





11


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.








**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 orother
                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;


-
            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 SEC, and to process, summarize and disclose this information within the
      time
      periods specified in the rules of the SEC. 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 SEC 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.





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.








12


**PART
      II.**





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





None





**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 Securities Holders**





None





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





None





**Item
      6. Exhibits**




31.1
            Certification
                of Chief Executive Officer pursuant to Rule13a-15(e)
                or 15d - 15(e) of Securities Exchange Act of 1934,as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Actof
                2002.


31.2
            Certification
                of EVP-Finance & Administration and CFOpursuant
                to Rule 13a-15(e) or 15d - 15(e) of SecuritiesExchange
                Act of 1934, as adopted pursuant to Section 302 ofthe
                Sarbanes-Oxley Act of 2002.


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


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







**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)Date: March
                15, 2006
              By:
              /s/
                Bruce L. HollanderBruce
                L HollanderPresident
                and Chief Executive Officer
 
 Date: March
                15, 2006
              By:
              /s/
                Ingo K KozakIngo
                K. KozakEVP
                  - Finance & Administration and
                Chief
                  Financial Officer


13