UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

         For the quarterly period ended September 30, 2006

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

         For the transition period from _________to_________

                           Commission File No. 0-17119

                         QUANTRX BIOMEDICAL CORPORATION
-------------------------------------------------------------------------------
           (Name of Small Business Issuer as Specified in Its Charter)

                  Nevada                                      33-0202574
         -------------------------------              -------------------------
         (State or Other Jurisdiction of                   (I.R.S. Employer
         Incorporation or Organization)                 Identification Number)



               100 S. Main Street, Suite 300, Doylestown, PA 18901
  ----------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (267) 880-1595
 ------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

         Check whether the issuer (1) 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. [X] Yes [ ]
No

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

<PAGE>

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

         We had 30,679,538 shares of our $0.01 par value common stock
outstanding as of November 9, 2006.

         Transitional Small Business Disclosure Format (check one):
[ ] Yes [X] No


                                       2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.        Financial Statements

               Balance sheets as of September 30, 2006 (Unaudited) and
               December 31, 2005..............................................5

               Statements of Operations (Unaudited) for the three and
               nine months ended September 30, 2006 and 2005..................6

               Statements of Cash Flows (Unaudited) for the nine months
               ended September 30, 2006 and 2005..............................7

               Condensed Notes to the (Unaudited) Financial Statements........9

ITEM 2.        Management's Discussion and Analysis or Plan of Operation.....20

ITEM 3.        Controls and Procedures.......................................23

                        PART II - OTHER INFORMATION

ITEM 1.        Legal Proceedings.............................................24

ITEM 2.        Unregistered Sales of Equity Securities; and Use of Proceeds..24

ITEM 3.        Defaults Upon Senior Securities...............................25

ITEM 4.        Submission of Matters to a Vote of Security Holders...........25

ITEM 5.        Other Information.............................................25

ITEM 6.        Exhibits......................................................26

Signatures...................................................................27


                                       3

<PAGE>


                         PART I - FINANCIAL INFORMATION

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

THIS QUARTERLY REPORT ON FORM 10-QSB, INCLUDING EXHIBITS HERETO, CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE
WORDS "ANTICIPATES," "BELIEVES," "EXPECTS," "INTENDS," "FORECASTS," "PLANS,"
"ESTIMATES," "MAY," "FUTURE," "STRATEGY," OR WORDS OF SIMILAR MEANING. VARIOUS
FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN
THE FORWARD-LOOKING STATEMENTS; INCLUDING THOSE DESCRIBED IN "RISK FACTORS" IN
OUR ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2005. WE ASSUME
NO OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW
INFORMATION, ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER
FACTORS, EXCEPT AS REQUIRED BY LAW.

ITEM 1.  FINANCIAL STATEMENTS



                                       4

<PAGE>


QUANTRX BIOMEDICAL CORPORATION
BALANCE SHEETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                   September 30,  December 31,
                                                                                      2006           2005
                                                                                   (unaudited)
                                                                                  ------------    ------------
ASSETS

<S>                                                                               <C>             <C>
Current Assets:
       Cash and cash equivalents                                                  $    619,942    $    990,523
       Accounts receivable - affiliate                                                     586               -
       Interest receivable                                                               6,417               -
       Prepaid expenses                                                                225,314         131,745
       Deferred financing costs, net                                                   111,966         124,134
       Note receivable                                                                 200,000               -
       Deposits                                                                          2,564           2,362
                                                                                  ------------    ------------
           Total Current Assets                                                      1,166,789       1,248,764
                                                                                  ------------    ------------

Investments                                                                          2,195,023               -
Equipment, net                                                                          94,817          10,437
Intangible assets, net                                                                 107,861          62,729
Security deposits                                                                       10,310               -
                                                                                  ------------    ------------

           Total Assets                                                           $  3,574,800    $  1,321,930
                                                                                  ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
       Accounts payable                                                           $    159,318    $    126,408
       Accounts payable - affiliate                                                    241,023               -
       Accrued expenses                                                                298,848          85,400
       Convertible notes payable, net of discount                                    2,929,426          26,907
       Deferred revenue, current portion                                                83,333
       Loans payable                                                                         -          28,500
                                                                                  ------------    ------------
           Total Current Liabilities                                                 3,711,948         267,215
                                                                                  ------------    ------------

       Deferred revenue, long-term portion                                             397,402               -
                                                                                  ------------    ------------

           Total Liabilities                                                         4,109,350         267,215
                                                                                  ------------    ------------

Commitments and Contingencies                                                                -               -

Stockholders' Equity (Deficit):
       Convertible preferred stock - $0.01 par value; 25,000,000
           shares authorized; Series A shares 9,750,000                                      -          81,411
           designated - 0 and 8,141,147 shares issued and
           outstanding, respectively
       Common stock - $0.01 par value; 75,000,000 shares
           authorized; 30,679,538 and 18,239,773 shares issued                         306,795         182,397
           and outstanding, respectively
       Additional paid-in capital                                                   27,538,513      23,612,630
       Accumulated deficit                                                         (28,379,858)    (22,821,723)
                                                                                  ------------    ------------
           Total Stockholders' Equity (Deficit)                                       (534,550)      1,054,715
                                                                                  ------------    ------------

           Total Liabilities and Stockholders' Equity (Deficit)                   $  3,574,800    $  1,321,930
                                                                                  ============    ============
</TABLE>

     The accompanying condensed notes are an integral part of these interim
                             financial statements.


                                       5


<PAGE>



QUANTRX BIOMEDICAL CORPORATION
STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                              Three Months Ended September 30,  Nine Months Ended September 30,
                                                              -------------------------------   -------------------------------
                                                                    2006          2005              2006           2005
                                                                 (unaudited)    (unaudited)     (unaudited)     (unaudited)
<S>                                                             <C>             <C>             <C>             <C>
                                                                ------------    ------------    ------------    ------------
Revenues                                                        $     32,106    $     12,841    $     57,788    $     38,523
                                                                ------------    ------------    ------------    ------------

Operating expenses:
       Sales and marketing                                            67,468          29,634         229,911          29,634
       General and administrative                                    284,952         323,369         861,307         431,214
       Professional fees                                             192,484         146,033         609,206         260,563
       Research and development                                      176,488          33,885         436,778          96,940
       Amortization                                                    2,456           1,206           4,868           3,618
       Depreciation                                                    4,167             841           7,149           1,104
                                                                ------------    ------------    ------------    ------------
           Total operating expenses                                  728,015         534,968       2,149,219         823,073
                                                                ------------    ------------    ------------    ------------

Loss from operations                                                (695,909)       (522,127)     (2,091,431)       (784,550)
                                                                ------------    ------------    ------------    ------------

Other income (expense):
       Interest and dividend income                                   14,497           4,148          36,438           6,158
       Interest expense                                              (82,029)            (90)       (228,206)            (90)
       Amortization of debt discount to                           (1,080,366)              -      (2,952,519)              -
           interest expense
       Amortization of deferred financing                           (116,869)              -        (322,417)              -
           costs to interest expense
                                                                ------------    ------------    ------------    ------------
           Total other income (expense)                           (1,264,767)          4,058      (3,466,704)          6,068
                                                                ------------    ------------    ------------    ------------

Loss before income taxes                                          (1,960,676)       (518,069)     (5,558,135)       (778,482)

       Provision for income taxes                                          -               -               -               -
                                                                ------------    ------------    ------------    ------------


Net loss                                                        $ (1,960,676)   $   (518,069)   $ (5,558,135)   $   (778,482)
                                                                ============    ============    ============    ============


Basic and diluted net loss per common                           $      (0.06)   $      (0.03)   $      (0.19)   $      (0.05)
    share:

                                                                ============    ============    ============    ============

Weighted average shares used in per share calculation:
       Basic and diluted                                          30,648,305      16,488,183      28,646,617      15,053,614
</TABLE>


            The accompanying condensed notes are an integral part of
                      these interim financial statements.


                                       6

<PAGE>


QUANTRX BIOMEDICAL CORPORATION
STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                         Nine Months Ended September 30,
                                                                                      -----------------------------------
                                                                                          2006                  2005
                                                                                        (unaudited)          (unaudited)
                                                                                      --------------    -----------------
<S>                                                                                <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net loss                                                                    $    (5,558,135)      $     (778,482)
       Adjustments to reconcile net loss to net cash used by operating
       activities:
           Depreciation and amortization                                                     12,017                4,722
           Interest expense related to amortization of non-cash discount,
           non-cash beneficial conversion feature and deferred financing costs            3,274,936              -
           Non-cash stock-based compensation expense                                        157,137              196,048
           Non-cash fair value of warrants issued for consulting                            219,000              -
           Non-cash fair value of common stock issued for consulting                         65,000              -
           Non-cash fair value of warrants issued for purchased R&D                         100,010              -
           (Increase) decrease in:
                Accounts receivable                                                         (7,002)              -
                Prepaid expenses                                                           (93,570)             (39,004)
                Deposits                                                                   (10,512)              (2,112)
           Increase (decrease) in:
                Accounts payable                                                             91,555              102,725
                Accrued expenses                                                            213,448             (75,954)
                Deferred revenue                                                            480,735              -
                                                                                      --------------    -----------------

           Net cash used by operating activities                                        (1,055,381)            (592,057)
                                                                                      --------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of fixed assets                                                            (91,530)             (10,884)
       Payment for patent under licensing agreement                                        (50,000)              -
       Cash paid for purchase of investments                                            (1,954,000)              -
       Increase in note receivable                                                        (200,000)              -
                                                                                      --------------    -----------------

           Net cash used by investing activities                                        (2,295,530)             (10,884)
                                                                                      --------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from issuance of convertible notes                                        3,155,000              -
       Proceeds from sale of common stock and warrants, net of issuance costs               -                  1,009,450
       Proceeds from exercise of warrants to common stock                                    57,430               17,500
       Cash financing costs paid for issuance of convertible notes                        (167,200)              -
       Decrease in payables related to debt financing costs                                (56,400)              -
       Repayment of loans payable                                                           (8,500)              (5,000)
                                                                                      --------------    -----------------

           Net cash provided by financing activities                                      2,980,330            1,021,950
                                                                                      --------------    -----------------

       Net increase (decrease) in cash and cash equivalents                               (370,581)              419,009

       Cash and cash equivalents, beginning of period                                       990,523              108,471
                                                                                      --------------    -----------------

       Cash and cash equivalents, end of period                                    $        619,942      $       527,480
                                                                                   =================    =================

Supplemental cash flow disclosures:
       Interest expense paid in cash                                               $            445      $            90
       Income tax paid                                                             $        -            $       -

Supplemental disclosure of non-cash activities:
       Fair value of warrants issued to placement agents for debt financing costs  $        143,049      $       -



                                       7

<PAGE>

<CAPTION>

                                                                                         Nine Months Ended September 30,
                                                                                      -----------------------------------
                                                                                          2006                  2005
                                                                                        (unaudited)          (unaudited)
                                                                                      --------------    -----------------
<S>                                                                                <C>                   <C>
       Fair value of warrants issued with convertible notes                        $      1,131,663      $       -
       Fair value of convertible note beneficial conversion feature                $      2,023,337      $       -
       Fair value of common stock issued to satisfy loans payable                  $         20,000      $       -
       Issuance of common stock pursuant to conversion of convertible
        note payable                                                               $         50,000      $       -
       Issuance of common stock for accrued interest pursuant to
       conversion of convertible note payable                                      $          2,244     $        -
       Conversion of preferred stock to common stock                               $         81,411      $         3,750
       Issuance of preferred stock for accounts payable                            $        -            $        10,240
       Increase in payables due to investment in FluoroPharma, Inc.:
         Investment in FluoroPharma, Inc.                       $1,995,023
         Less: cash paid through September 30, 2006             $1,754,000
                                                                                   $        241,023      $       -
       Increase in payables related to debt financing costs                        $                     $        56,400
</TABLE>


     The accompanying condensed notes are an integral part of these interim
                             financial statements.


                                       8

<PAGE>


QUATNTRX BIOMEDICAL CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
-------------------------------------------------------------------------------



Description of Business

         QuantRx Biomedical Corporation (the "Company" or "QuantRx"), is focused
on the development, acquisition and commercialization, either directly or in
collaboration with strategic partners, of proprietary medical diagnostic
technology platforms. QuantRx is also commercializing a number of proprietary
products that meet feminine health needs based on the Miniform PAD technology.

         The Company has developed three proprietary platforms: The Miniform, a
disposable technology with current applications in the incontinence and
hemorrhoidal over-the-counter (OTC) markets; RapidSense(R), a point-of-care
diagnostic technology; and, PadKit(R), a diagnostic sample collection
technology. The Company's strategy is to commercialize its products through
partners or distributors, contracting the manufacturing to third party partners
while maintaining control over the manufacturing process.

1.       Basis of Presentation

         The interim financial statements are unaudited; however, in the opinion
of management, they include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of financial position and results of
operations for the periods reported. The interim financial statements have been
prepared pursuant to the rules and regulations of the SEC. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations,
although QuantRx believes that the disclosures included herein are adequate to
make the information presented not misleading.

         Operating results for the periods presented are not necessarily
indicative of future results. These interim financial statements should be read
in conjunction with the financial statements and notes to financial statements
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2005.

         Certain amounts from prior periods have been reclassified to conform to
the current period presentation. This reclassification has resulted in no
changes to the Company's accumulated deficit or net losses presented.

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements and fair
valuations of share-based payments. Actual results may differ from estimated
amounts.

                                       9

<PAGE>

2.       Net Loss Per Share

         The Company computes net income (loss) per common share in accordance
with Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share." Net income (loss) per share is based upon the weighted average number of
outstanding common shares and the dilutive effect of common stock equivalents,
such as options and warrants to purchase common stock, convertible preferred
stock and convertible notes, if applicable, that are outstanding. Basic and
diluted earnings per share were the same at the reporting dates of the
accompanying financial statements, as including common stock equivalents in the
calculation of diluted earnings per share would have been antidilutive.

         As of September 30, 2006, the Company had 1,360,000 common stock
options, 3,705,447 common stock warrants, and convertible debt of $3,980,000
subject to beneficial conversion of 3,980,000 shares outstanding. The above
options, warrants, and convertible securities were deemed to be antidilutive for
the three and nine months ended September 30, 2006.

         As of September 30, 2005, the Company had 1,060,000 common stock
options, 3,037,567 common stock warrants, 8,141,147 shares of convertible
preferred stock and 180,000 preferred stock warrants outstanding. The above
options, warrants, and convertible securities were deemed to be antidilutive for
the three and nine months ended September 30, 2005.

3.       Share-Based Payments

         Effective January 1, 2005, QuantRx adopted SFAS No. 123(R),
"Share-Based Payment," using the modified prospective method of application.
SFAS 123(R) establishes the accounting for transactions in which an entity
exchanges equity securities for services and requires companies to expense the
estimated fair value of these awards over the requisite service period. QuantRx
uses the Black-Scholes method in determining fair value.

4.       Recent Accounting Pronouncements

         In September 2006, the Financial Accounting Standard Board (FASB)
issued SFAS No. 157, "Fair Value Measurements," to clarify how to measure fair
value and to expand disclosures about fair value measurements. Implementation is
required in the first quarter of 2008 with any changes to the fair values of
assets or liabilities to be reported generally in net income or in accumulated
comprehensive income for the period. QuantRx has not yet evaluated the potential
impact of these new requirements.

         In June 2006, the FASB issued FASB Interpretation No. (FIN) 48,
"Accounting for Uncertainty in Income Taxes--An Interpretation of FASB Statement
No. 109," which prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 will be effective in 2007. QuantRx
has not yet evaluated the potential impact of adopting FIN 48 on its financial
statements.

         In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid Financial Instruments, an Amendment of FASB Standards No. 133 and 140."
This statement established the accounting for certain derivatives embedded in
other instruments. It simplifies



                                       10
<PAGE>

accounting for certain hybrid financial instruments by permitting fair
value remeasurement for any hybrid instrument that contains an embedded
derivative that would otherwise require bifurcation under SFAS No. 133 as well
as eliminating a restriction on the passive derivative instruments that a
qualifying special-purpose entity may hold under SFAS No. 140. This statement
allows a public entity to irrevocably elect to initially and subsequently
measure a hybrid instrument that would be required to be separated into a host
contract and derivative in its entirety at fair value (with changes in fair
value recognized in earnings) so long as that instrument is not designated as a
hedging instrument pursuant to the statement. SFAS No. 140 previously prohibited
a qualifying special-purpose entity from holding a derivative financial
instrument that pertains to a beneficial interest other than another derivative
financial instrument. This statement is effective for fiscal years beginning
after September 15, 2006. Management believes the adoption of this statement
will have no impact on the Company's financial condition or results of
operations.

         In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections," which replaces Accounting Principles Board Opinion No. 20,
"Accounting Changes", and SFAS No. 3, "Reporting Accounting Changes in Interim
Financial Statements - An Amendment of APB Opinion No. 28". SFAS No. 154
provides guidance on accounting for and reporting changes in accounting
principles and error corrections. SFAS No. 154 requires that changes in
accounting principle be applied retrospectively to prior period financial
statements and is effective for fiscal years beginning after December 15, 2005.
The Company does not expect SFAS No. 154 to have a material impact on its
financial position, results of operations, or cash flows.


                                       11
<PAGE>

5.       Other Balance Sheet Information

         Components of selected captions in the accompanying balance sheets
consist of:

<TABLE>
<CAPTION>
                                                                -------------------------      --------------------------
                                                                   September 30, 2006              December 31, 2005
                                                                -------------------------      --------------------------
<S>                                                             <C>                            <C>
PREPAID EXPENSES:
Prepaid consulting                                              $                160,417       $             -
Prepaid consulting - affiliate                                                 -                                  81,694
Prepaid insurance                                                                 32,876                          25,478
Prepaid legal                                                                      7,500                          15,000
Prepaid rent                                                                       9,654                           2,014
Prepaid travel                                                                     7,707                           6,691
Other                                                                              7,160                             868
                                                                -------------------------      --------------------------

PREPAID EXPENSES                                                $                225,314       $                 131,745
                                                                =========================      ==========================


DEFERRED FINANCING COSTS:
Deferred financing costs                                        $                438,164       $                 127,915
Less: accumulated amortization                                                   326,198                           3,781
                                                                -------------------------      --------------------------

DEFERRED FINANCING COSTS, NET                                   $                111,966       $                 124,134
                                                                =========================      ==========================


EQUIPMENT:
Computers and office equipment                                  $                 66,990       $                  12,564
Machinery and equipment                                                           37,103                     -
Less: accumulated depreciation                                                     9,276                           2,127
                                                                -------------------------      --------------------------

EQUIPMENT, NET                                                  $                 94,817       $                  10,437
                                                                =========================      ==========================


ACCRUED EXPENSES:
Professional fees                                               $                 64,200       $                  72,200
Accrued interest                                                                 227,617                     -
Other                                                                              7,031                          13,200
                                                                -------------------------      --------------------------

ACCRUED EXPENSES                                                $                298,848       $                  85,400
                                                                =========================      ==========================


SHORT-TERM CONVERTIBLE NOTES PAYABLE, NET:
Short-term convertible notes payable                            $              3,980,000       $                 875,000
Less: discount for warrants and conversion feature, net                        1,050,574                         848,093
                                                                -------------------------      --------------------------

SHORT-TERM CONVERTIBLE NOTES PAYABLE, NET                       $              2,929,426       $                  26,907
                                                                =========================      ==========================
</TABLE>



                                       12
<PAGE>

6.       Note Receivable

         In April 2006, QuantRx advanced $200,000 to Rockland Technimed, Ltd.
("Rockland") through a 7% convertible promissory note due twelve months from the
date of issuance. Rockland, a privately held Delaware corporation, is a
development stage company focused on the research and development of tissue
viability imaging diagnostics using magnetic resonance imaging (MRI) scanners.
This technology may be of interest to QuantRx as it is developed further.
QuantRx has accrued interest of $3,500 and $6,417 for the three and nine months
ended September 30, 2006, respectively. The note is convertible at QuantRx'
discretion prior to maturity into 10% of Rockland's outstanding capital stock on
a fully diluted and as converted basis. In the event of default, QuantRx has the
option to receive 20% of Rockland's outstanding capital stock on a fully diluted
and as converted basis to satisfy the note.

7.       Investments

FluoroPharma, Inc.

         In March 2006, QuantRx purchased 1,096,170 shares of FluoroPharma, Inc.
("FluoroPharma") common stock for cash of $1,000,000 and a payable of $566,023.
Contemporaneously, QuantRx negotiated the purchase of an additional 300,000
shares from private investors for $429,000 in cash. This purchase was finalized
in April 2006. The remaining outstanding payable at September 30, 2006 of
$241,023 is reflected in current liabilities on QuantRx' balance sheet. As of
September 30, 2006, QuantRx owned approximately 43.4% of the issued and
outstanding capital stock of FluoroPharma. FluoroPharma, Inc. is a privately
held molecular imaging company based in Boston, Massachusetts, which is engaged
in the discovery, development and commercialization of proprietary products for
the positron emission tomography. The investment in FluoroPharma is intended to
strategically expand QuantRx' diagnostic platforms.

         Under the investment agreement, QuantRx has the option to acquire
additional shares of FluoroPharma through a series of staged investments. Such
staged investments will take the form of cash at increasing valuations upon
FluoroPharma's achievement of certain milestones with respect to the successful
completion of Phase I and Phase II FDA trials for certain compounds being
developed by FluoroPharma. The final staged investment to wholly acquire
FluoroPharma will be settled in QuantRx' common stock. Any subsequent investment
in FluoroPharma by QuantRx will be consummated pursuant to the terms and subject
to the conditions set forth in separate definitive agreements.

         The investment in FluoroPharma of $1,995,023 is accounted for in
accordance with the equity method of accounting. Since FluoroPharma's
liabilities exceeded assets on the date of investment, the entire investment is
recorded as equity method goodwill. In accordance with Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets," equity
method goodwill is not amortized or tested for impairment in accordance with
this standard. QuantRx reviews the equity method goodwill in accordance with
Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock," under which QuantRx would recognize an impairment
loss when there is a loss in the value of the equity method investment which is
deemed to be other than a temporary decline. No impairment was recognized in the
three and nine months ended September 30, 2006.


                                       13
<PAGE>

         At September 30, 2006, FluoroPharma's condensed financial information
was estimated as follows: total assets, $351,000; total liabilities, $254,000;
and stockholders' equity, $97,000. Quarterly expenses and net losses for the
three and nine months ended September 30, 2006 were $250,000 and $1,331,000,
respectively.

         In connection with the purchase, QuantRx received an option to purchase
an additional 260,000 shares of FluoroPharma common stock at an exercise price
of $0.75. FluoroPharma has outstanding options and warrants which, if exercised
together with our option, would reduce the Company's ownership percentage to
approximately 41.1% on a fully diluted and as converted basis. Genomics USA,
Inc.

Genomics USA, Inc.

         In May 2006, QuantRx purchased 112,875 shares of Genomics USA, Inc.
("GUSA") common stock for $200,000. As of September 30, 2006, QuantRx owned
approximately 10% of the issued and outstanding capital stock of GUSA on a fully
diluted and as converted basis. GUSA, a privately held Illinois corporation, is
a technology company focused on the development of Micro-Array Detection for
DNA. This technology may strategically expand QuantRx' diagnostic platforms, and
the Company intends to explore the possibility of further investment.

         QuantRx uses the cost method to account for this investment since
QuantRx does not control nor have the ability to exercise significant influence
over operating and financial policies. In accordance with the cost method, the
investment is recorded at cost and impairment is considered in accordance with
the Company's impairment policy. No impairment was recognized in the three and
nine months ended September 30, 2006.

8.       Intangible Assets

Intangible assets as of the balance sheet dates consisted of the following:

<TABLE>
<CAPTION>
                                           -------------------------      --------------------------
                                              September 30, 2006              December 31, 2005
                                           -------------------------      --------------------------
<S>                                        <C>                            <C>
INTANGIBLES:
Patents                                    $                 82,028       $                  82,028
Patent under licensing                                       50,000                     -
Less: accumulated amortization                               24,167                          19,299
                                           -------------------------      --------------------------

INTANGIBLES, NET                           $                107,861       $                  62,729
                                           =========================      ==========================
</TABLE>

Patent under Licensing

         In the second quarter of 2006, QuantRx entered into a patent license
agreement with The Procter & Gamble Company, effective July 1, 2006. The
agreement licenses patent rights and know-how for certain hemorrhoid treatment
pads and related coatings. The term of the agreement is five years with a five
year automatic renewal option. In consideration of this agreement, QuantRx paid
a one-time, non-refundable engagement fee, and will pay royalties based on
future net sales of such licensed products.

         The Company has capitalized this engagement fee and will amortize the
capitalized cost over the expected term of the patent license agreement.
Amortization of $1,250 in connection with this




                                       14
<PAGE>

licensed patent was recognized in the third quarter of 2006. All
royalties due pursuant to the terms of the agreement will be expensed as
incurred. Impairment will be considered in accordance with the Company's
impairment policy. No impairment was recognized as of September 30, 2006.

9.       Convertible Debt

         On February 15, 2006, QuantRx closed on $4,030,000 of 8% unsecured
convertible promissory notes due December 31, 2006, to certain private
accredited investors, of which $3,155,000 were issued in the first quarter of
2006, with the remainder issued in the fourth quarter of 2005. Also, investors
received vested warrants with a five year term to purchase an aggregate of
854,500 shares of QuantRx common stock at an exercise price of $1.50 (valued at
$1,339,694), of which 723,250 warrants (valued at $1,131,663) were issued in the
first quarter of 2006, with the remainder issued in the fourth quarter of 2005.

         These convertible notes are automatically convertible into shares of
QuantRx common stock upon completion of a "qualified" equity financing (or
financings) with aggregate gross proceeds of at least $2,000,000. Under the
terms of the convertible notes, holders of the notes will be deemed to have
tendered 110% of their aggregate outstanding principal balance and accrued
interest for purchase of securities in the qualified equity financing, entitling
the holders to all rights afforded to purchasers in such financing ("automatic
conversion feature"). Alternatively, the convertible notes allow the holders to
convert their outstanding principal and accrued interest into common stock at a
price of $1.00 per common share no earlier than six months after the issuance of
the promissory notes ("beneficial conversion feature"). Either conversion would
result in the satisfaction of all of QuantRx' obligations under the convertible
notes.

         In the event QuantRx does not complete a qualified financing and
holders do not voluntarily convert, QuantRx must repay the outstanding principal
balance and accrued and unpaid interest on December 31, 2006. Accrued interest
may be payable at QuantRx' option in cash or common stock.

         In accordance with APB Opinion No. 14, "Accounting for Convertible Debt
and Debt Issued with Stock Purchase Warrants," QuantRx allocated $1,339,694 of
the principal amount of the 8% convertible promissory notes to the warrants as
original issue discount, which represented the relative fair value of the
warrants at the dates of issuance.

         The beneficial conversion feature described above is not considered a
derivative instrument pursuant to the scope exception in paragraph 11(a) of SFAS
133,"Accounting for Derivative Instruments and Hedging Activities," since the
contract is indexed to QuantRx' stock and classified as additional paid-in
capital. Equity classification of this beneficial conversion feature is met
through the requirements of EITF 00-19, "Accounting for Derivative Financial
Instruments to, and Potentially Settled in, a Company's Own Stock," paragraphs
12-32. QuantRx measured the intrinsic value of the beneficial conversion feature
($3,697,444) based upon the effective conversion price, which is defined by EITF
00-27, "Application of Issue 98-5 to Certain Convertible Instruments," as the
allocated proceeds divided by the number of shares to be received on conversion.
This intrinsic value was limited to the remaining proceeds of $2,690,306 and
recorded as original issue discount, of which $2,023,337 relates to the
convertible notes issued in the first quarter of 2006, with the remainder
related to the notes issued in the fourth quarter of 2005. The remaining
intrinsic value of $1,007,138 represents the excess of the aggregate fair value
of the instruments that the holder would receive at conversion over the proceeds
received.


                                       15
<PAGE>

         The automatic conversion feature qualifies as a contingent conversion
option in accordance with EITF 98-5 and 00-27 since execution of the automatic
conversion feature is contingent upon a qualified equity financing and is not
within the control of QuantRx. The intrinsic value of the automatic conversion
feature will not be recognized until and unless such financing occurs (the
triggering event); which will then enable QuantRx to measure the intrinsic value
associated with the automatic conversion feature.

         In association with this debt, QuantRx issued warrants for services to
purchase 135,680 shares of common stock at $1.50 per share valued at $214,564,
of which 90,560 warrants valued at $143,049 were issued in the first quarter of
2006, with the remainder issued in the fourth quarter of 2005. QuantRx also
incurred cash commissions of $223,600 in connection with the private placement
to various placement agents resulting in total deferred debt offering cost of
$438,164, of which $310,249 relates to the notes issued in the first quarter of
2006, with the remainder related to notes issued in the fourth quarter of 2005.

         The fair value of the warrants issued to placement agents and the cash
commissions have been recorded as deferred financing costs. The total original
issue discount related to the warrants issued to the investors and the
beneficial conversion feature and the deferred financing costs are being
amortized to interest expense over the term of the convertible promissory notes
in accordance with EITF 00-27, paragraph 19. Interest expense, including
amortization of original issue discount and deferred financing costs, related to
the 8% convertible promissory notes was $1,279,104 for the quarter ended
September 30, 2006 and $3,502,537 for the nine months ended September 30, 2006.
The Black-Scholes option pricing model was used to calculate the fair values of
all of the above warrants.

         In August 2006, one investor exercised his right to convert his $50,000
promissory note and accrued interest to common shares pursuant to the terms of
the agreement. On September 30, 2006, convertible promissory notes of $3,980,000
remained outstanding.

10.      Deferred Revenue

         On July 7, 2006 ("the effective date"), QuantRx and Synova Healthcare,
Inc. ("Synova") entered into a distribution agreement pursuant to which Synova
will act as the exclusive distributor of specified hemorrhoid products of
QuantRx in the United States. The initial term of the agreement shall commence
on the effective date and, unless sooner terminated as provided in the
agreement, shall continue in effect for a period of five years following the
month in which Synova makes first shipment of products to its initial customers.
Management has estimated the effective term of the agreement to be six years
from the effective date. The territory covered by the distribution agreement
will be expanded to include Canada and Mexico if Synova meets specified minimum
sales milestones during the first year of the distribution agreement's term.
Exclusivity is conditioned on Synova achieving specified minimum annual sales
milestones.

         QuantRx received an up-front, non-refundable payment of $500,000 upon
execution of the distribution agreement, which has been recorded as deferred
revenue and is being amortized into revenue over the expected term of the
agreement, which is six years.



                                       16
<PAGE>

         QuantRx recognized revenue of $19,265 in the quarter ended September
30, 2006 in connection with the distribution agreement. As of September 30, 2006
deferred revenue related to the distribution agreement was $480,735, of which
$83,333 is considered current.

11.      Preferred Stock and Warrants

         Effective February 13, 2006, holders of all outstanding shares of the
Series A convertible preferred stock of QuantRx exercised their rights under the
terms of the Series A preferred stock to convert all of their outstanding shares
of Series A preferred stock into shares of QuantRx' common stock. Each share of
Series A preferred stock was converted into 1.5 shares of QuantRx' common stock,
resulting in the issuance by QuantRx of 12,211,721 common shares. As of the date
hereof, there are no shares of Series A preferred stock outstanding.
Additionally, warrants to purchase 180,000 shares Series A preferred stock were
submitted and exchanged for warrants to purchase 180,000 shares of common stock,
with the same terms as the original warrants. 12. Common Stock, Options and
Warrants

12.     Common Stock, Options and Warrants

         In the third quarter of 2006, QuantRx issued 52,244 common shares upon
conversion of $50,000 convertible debt and related accrued interest of $2,244.
The conversion was made at the holder's option pursuant to the terms of the
convertible note.

         In the second quarter of 2006, 50,000 common shares were issued to
CEOcast, Inc., an investor relations consulting firm, pursuant to a one-year
consulting agreement. The common shares were valued at $1.30 per share, the
closing price on the date of issuance, for a total valuation of $65,000. The
fair value of these issued common shares will be expensed pursuant to the terms
of the agreement.

         In the second quarter of 2006, the Company issued 150,000 common stock
warrants with a five-year term to purchase 150,000 shares of common stock at an
exercise price of $2.00. The warrants were issued pursuant to a one-year
consulting agreement, and the fair value of $219,000 for these warrants will be
expensed over the one-year term of the agreement.

         In the second quarter of 2006, the Company issued 68,500 common stock
warrants with a five-year term to purchase 68,500 shares of common stock at an
exercise price of $2.00. The warrants were issued as payment for purchased
research and development data, and the fair value of $100,010 for these warrants
was recorded as research and development expense in the second quarter of 2006.

         In the second quarter of 2006, execution of a settlement of a loan in
the amount of $20,000 resulted in the issuance of 40,000 shares of common stock
in complete payment of the loan. The shares were issued at $0.50 per share,
which was the market value of the shares at the time the negotiation of the
terms of the settlement had been concluded.

         In the first quarter of 2006, 85,800 common stock warrants were
exercised and exchanged for 85,800 shares of common stock, $0.01 par value,
resulting in proceeds to the Company of $57,430. The exercise prices ranged from
$0.20 to $0.85.




                                       17
<PAGE>

         In the first quarter of 2006, 723,250 common stock warrants with an
exercise price of $1.50 and a term of five years were issued to investors in
conjunction with the issuance of convertible promissory notes.

         In the first quarter of 2006, 90,560 common stock warrants with an
exercise price of $1.50 and a term of five years were issued to placement agents
for services related to the debt financing closed February 15, 2006. Incentive
and Non-Qualified Stock Option Plan

Incentive and Non-Qualified Stock Option Plan

         Options granted under the Company's Incentive and Non-Qualified Stock
Option Plan had an aggregate fair value of $85,575 for the three months and
$443,325 for the nine months ended September 30, 2006. Pursuant to SFAS 123(R),
this amount is recorded as compensation expense over the vesting period, or, for
performance based awards, the expected service term. Total compensation cost
related to the Incentive and Non-Qualified Stock Option Plan was $68,260 and
$157,137 for the three and nine months ended September 30, 2005 and 2006,
respectively.

         In the third quarter of 2006, 75,000 qualified common stock options
were granted to an executive officer and issued from the Company's Incentive and
Non-Qualified Stock Option Plan. The options were issued with an exercise price
of $1.15, have a term of ten years and vest January 1, 2007. The fair value of
these options is $85,575.

         In the second quarter of 2006, a total of 225,000 qualified common
stock options were granted to executive officers and issued from the Company's
Incentive and Non-Qualified Stock Option Plan. The options were issued with an
exercise price of $1.60, and have a term of ten years. Of the options granted in
the second quarter, 25,000 vested immediately, with the remaining 200,000
vesting when certain sales milestones have been reached. The Company estimates
that these milestones will be reached over an expected service term of five
years. The fair value of these options is $357,750.

13.      Related Party Transactions

         One Company officer, who is also a member of the Company's board of
directors, served as a consultant to the Company on various business, strategic,
and technical issues during the first half of 2005. The Company paid and
expensed a total of $0 and $35,500 for these services in the three and nine
months ended September 30, 2005, respectively and $0 in 2006. In addition to the
fees, reimbursable travel expenses were also paid under this contract. The total
amount paid for these expenses was $0 and $7,669 in the three and nine months
ended September 30, 2005, respectively, and $0 in 2006.

         Another member of the Company's board of directors serves as a
consultant to the Company on various business, strategic, and technical issues.
The Company entered into an agreement for these services effective in the third
quarter of 2005, prior to his appointment to the board. Fees paid and expensed
for these services by the Company during the three and nine months ended
September 30, 2006 were $12,000 and $36,000, respectively, and $16,000 for the
three and nine months ended September 30, 2005. In addition to the contract fees
paid, reimbursable expenses totaling $506 were accrued in the quarter ended
September 30, 2005.



                                       18
<PAGE>

         This same individual was issued 500,000 common stock warrants in the
first quarter of 2005, prior to his appointment to the board. The warrants have
an exercise price of $0.01 and were issued pursuant to an agreement to secure
financing for the Company.

         The Company had a temporary arrangement in which it leased office space
from Trident Group, LLC, of which the current chief executive officer of the
Company is a principal. In addition to a monthly rental payment for office
space, the Company reimbursed Trident for related office expenses. The Company
entered into the agreement in the second quarter of 2005 and terminated it in
the third quarter of 2006. The Company expensed $1,903 and $10,040 under this
arrangement for the three and nine months ended September 30, 2006,
respectively, and $5,007 and $8,472 for the three and nine months ended
September 30, 2005, respectively.

         The Company had an agreement with Trident Group, LLC whereby a
principal member of Trident provided various consulting services to the Company.
The Company entered into the agreement in the second quarter of 2005, prior to
the consultant's appointment to chief executive officer of QuantRx. The total
amount of the contracted services was $10,000, which was expensed and paid in
the second quarter of 2005. In addition to the fees, reimbursed travel expenses
were also paid under this contract. The total amount paid for these expenses was
$1,051 and $8,909 for the three and nine months ended September 30, 2005,
respectively.

14.      Commitments and Contingencies Operating Leases

Operating Leases

         QuantRx leases office space and research and development lab space
under operating leases that expire at various times through 2011. Some of these
leases contain cancellation clauses, subject to a termination fee, and include
allocations for common expenses subject to future adjustment. Rent expense
related to operating leases was approximately $21,410 and $45,034 for the three
and nine months ended September 30, 2006, versus $10,603 and $21,324 for the
three and nine months ended September 30, 2005, respectively. In connection with
some of these facility leases, the Company has made security deposits totaling
$10,310, which are included in long-term assets in the Balance Sheet. Future
minimum lease obligations, inclusive of potential termination fees, for
operating leases as of September 30, 2006 are estimated as follows:


Remainder of 2006                                         $       28,961
2007                                                             117,529
2008                                                             122,264
2009                                                             101,453
2010                                                              57,240
2011                                                              43,875
                                                          ---------------

TOTAL MINIMUM PAYMENTS                                    $      471,432
                                                          ===============
Executive Employment Contracts

         The Company has entered into an employment contract with a key Company
executive that provides for the continuation of salary to the executive if
terminated for reasons other than cause, as defined in those agreements. At
September 30, 2006, the future employment contract commitment for such key
executive based on this termination clause was approximately $240,000.

15.      Significant Events




                                       19
<PAGE>

         In the third quarter of 2006, QuantRx entered into an operating lease
for its new corporate headquarters located at 100 S. Main Street, Suite 300,
Doylestown, PA 18901.

         In the third quarter of 2006, QuantRx entered into an operating lease
for new laboratory facilities located in Portland, Oregon.

         On May 25, 2006, QuantRx common stock returned to the OTC Bulletin
Board, marking a significant financial milestone.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN
         OF OPERATION

         The following discussion of our financial condition should be read in
conjunction with the financial statements and notes to financial statements
included elsewhere in this filing. The following discussion (as well as
statements in Item 1 above and elsewhere) contains forward-looking statements
within the meaning of the Private Securities Litigation Act of 1995 that involve
risks and uncertainties. Some or all of the results anticipated by these
forward-looking statements may not occur. Forward-looking statements involve
known and unknown risks and uncertainties including but not limited to, trends
in the biotechnology, healthcare, and pharmaceutical sectors of the economy;
competitive pressures and technological developments from domestic and foreign
genetic research and development organizations, which may affect the nature and
potential viability of our business strategy; private or public sector demand
for products and services similar to what we plan to commercialize. We disclaim
any intention or obligation to publicly announce the results of any revisions to
any of the forward-looking statements contained herein to reflect future events
or developments.

         Unless otherwise indicated or the context otherwise requires, all
references in this report to "we," "our," "ours," "us," the "Company" or similar
terms refer to QuantRx Biomedical Corporation, a Nevada corporation.

OVERVIEW

         QuantRx Biomedical Corporation (the "Company" or "QuantRx"), is focused
on the development, acquisition and commercialization, either directly or in
collaboration with strategic partners, of proprietary medical diagnostic
technology platforms. QuantRx is also commercializing a number of proprietary
products that meet feminine health needs based on the Miniform PAD technology.

         The Company has developed three proprietary platforms: The Miniform, a
disposable technology with current applications in the incontinence and
hemorrhoidal over-the-counter (OTC) markets; RapidSense(R), a point-of-care
diagnostic technology; and, PadKit(R), a diagnostic sample collection
technology. The Company also holds significant positions in FluoroPharma, Inc.,
a company developing diagnostic imaging products for the PET market, and
Genomics USA, Inc., a company which is developing clinically optimized
Micro-Array technology. The Company's strategy is to commercialize our products
through partners or distributors, contracting the manufacturing to third party
partners while maintaining control over the manufacturing process.




                                       20
<PAGE>

         In March 2006, QuantRx purchased 1,096,170 shares of FluoroPharma, Inc.
("FluoroPharma") common stock for cash of $1,000,000 and a payable of $566,023.
Contemporaneously, QuantRx negotiated the purchase of an additional 300,000
shares from private investors for $429,000 in cash. This purchase was finalized
in April 2006. As of September 30, 2006, QuantRx owned approximately 43.4% of
the issued and outstanding capital stock of FluoroPharma. FluoroPharma is a
privately held molecular imaging company based in Boston, Massachusetts, which
is engaged in the discovery, development and commercialization of proprietary
products for the positron emission tomography. The investment in FluoroPharma is
intended to strategically expand QuantRx' diagnostic platforms.

         In May 2006, QuantRx purchased 112,875 shares of Genomics USA, Inc.
("GUSA") common stock for $200,000. As of September 30, 2006, QuantRx owned
approximately 10% of the issued and outstanding capital stock of GUSA on a fully
diluted and as converted basis. GUSA, a privately held Illinois corporation, is
a technology company focused on the development of Micro-Array Detection for
DNA. This technology may strategically expand QuantRx' diagnostic platforms, and
the Company intends to explore the possibility of further investment.

         On July 7, 2006 ("the effective date"), QuantRx and Synova Healthcare,
Inc. ("Synova") entered into a distribution agreement pursuant to which Synova
will act as the exclusive distributor of specified hemorrhoid products of
QuantRx in the United States. The initial term of the agreement shall commence
on the effective date and, unless sooner terminated as provided in the
agreement, shall continue in effect for a period of five years following the
month in which Synova makes first shipment of products to its initial customers.
The territory covered by the distribution agreement will be expanded to include
Canada and Mexico if Synova meets specified minimum sales milestones during the
first year of the distribution agreement's term. Exclusivity is conditioned on
Synova achieving specified minimum annual sales milestones. QuantRx' patented
PAD technology is an innovative Miniform PAD that also has patented applications
in feminine hygiene, drug delivery, and medical sample collection. The addition
of the key technology recently acquired by QuantRx under a technology license
agreement with The Procter and Gamble Company, when added to the PAD technology
platform, significantly expanded QuantRx' ability to effectively enter and
successfully compete in its targeted Over-the-Counter markets. QuantRx received
an up-front payment of $500,000 in consideration of the distribution agreement
and the agreement contains certain minimum sales milestones.

RESULTS OF OPERATIONS

         Net revenues for the three months ended September 30, 2006 and 2005 was
$32,106 and $12,841, respectively, and for the nine months ended September 30,
2006 and 2005, was $57,788 and $38,523, respectively. Revenues of $12,841 and
$38,523 for the three and nine months ended September 30, 2005 and 2006,
respectively, was related to a licensing agreement for RapidSense(R) technology.
Revenue of $19,265 in the three and nine months ended September 30, 2006 was
recognized and amortized from deferred revenue in connection with an up-front
engagement fee received pursuant to a distribution agreement with Synova.

         Sales and marketing expense for the three and nine months ended
September 30, 2006 was $67,468 and $229,911, respectively as compared to $29,634
for the three and nine months ended September 30, 2005. The current period
expense reflects expenses related to the addition of sales and marketing staff,
as well as expenses related to the development of an overall comprehensive
business



                                       21
<PAGE>

plan and strategy for the Company. Sales and marketing expenses include
stock-based compensation expense for the three and nine month period ended
September 30, 2006 of $7,950 and $15,900, respectively.

         General and administrative expense, including professional fees, for
the three and nine months ended September 30, 2006 was $477,436 and $1,470,513,
respectively, as compared to $469,402 and $691,777 for the three and nine months
ended September 30, 2005, respectively. The increase in the nine months ended
September 30, 2006 primarily reflects increased Company staffing and their
related travel requirements, legal and accounting expenses related to regulatory
requirements, legal fees related to enhancing our patent positions, consulting
expenses related to strategic advisory services regarding potential
acquisitions, and investor and public relations fees. The increase in the
quarter ended September 30, 2006 primarily reflects increased Company staffing
and their related travel requirements, and investor and public relations fees,
offset by decreased stock-based compensation expense and decreased legal,
financial consulting and accounting fees.

         Research and development expense for the three and nine months ended
September 30, 2006, was $176,488 and $436,778, respectively, as compared to
$33,885 and $96,940, respectively, for the three and nine months ended September
30, 2005. The increase primarily reflects technical consulting expenses
(including expenses related to warrants issued in connection with a consulting
agreement in the second quarter of 2006), and ongoing contracted product
development. Additionally, in the second quarter of 2006, the Company issued
common stock warrants fair valued at $100,010 for the purchase of technological
data regarding point-of-care diagnostic technology, which assisted in the
enhancement of our RapidSense(R) technology.

         Amortization expense was $2,456 and $4,868 for the three and nine
months ended September 30, 2006 and $1,206 and $3,618 for the three and nine
months ended September 30, 2005, respectively. Amortization expense reflects
straight line amortization over seventeen years of Company patent acquisition
costs, and beginning in the third quarter of 2006, amortization of licensed
patent costs over ten years.

         Depreciation expense for the three and nine months ended September 30,
2006, was $4,167 and $7,149, respectively, as compared to $841 and $1,104 for
the three and nine months ended September 30, 2005, respectively. Depreciation
expense reflects straight-line depreciation over three to five years of
computers and office equipment recorded at an historical cost of $66,990 and
straight-line depreciation over seven years of machinery and equipment recorded
at an historical cost of $37,103.

         The Company's net loss for the three and nine months ended September
30, 2006, was $1,960,676 and $5,558,135 as compared to $518,069 and $778,482 for
the three and nine months ended September 30, 2005. Outside of interest expense
for amortization of non-cash discount, non-cash beneficial conversion feature,
and deferred finance costs related to the Company's outstanding short-term
convertible notes, this increased loss reflects expenses related to the
development and enhancement of our technology, staffing requirements,
professional fees, and expenses related to investor and public relations.
Interest expense for amortization of non-cash discount, non-cash beneficial
conversion feature, and deferred finance costs related to the Company's
outstanding short-term convertible notes, was $1,197,235 and $3,274,936 for the
three and nine months ended September 30, 2006, respectively.


                                       22
<PAGE>

 LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2006, QuantRx had cash and cash equivalents of
$619,942, as compared to cash and cash equivalents of $990,523 as of December
31, 2005. The net decrease in cash of $370,581 for the nine months ended
September 30, 2006, is primarily attributed to investments of $1,754,000 in
FluoroPharma, Inc. and $200,000 in Genomics USA, Inc., and the advance of
$200,000 to Rockland Technimed, Ltd. through a 7% convertible promissory note,
as well as net operating cash used of $1,055,381. These decreases are offset by
financing activities, primarily the issuance of convertible promissory notes
with proceeds of $3,155,000. QuantRx has used these gross proceeds as well as
its revenues to fund current operating expenses and investments intended to
strategically expand our platforms and technologies.

         In the future QuantRx expects to expand operations with the use of
additional financing and increased revenues from
operations.

OFF-BALANCE SHEET ARRANGEMENTS

         We have not entered into any transactions with unconsolidated entities
in which we have financial guarantees, subordinated retained interests,
derivative instruments or other contingent arrangements that expose us to
material continuing risks, contingent liabilities or any other obligations under
a variable interest in an unconsolidated entity that provides us with financing,
liquidity, market risk or credit risk support.

ITEM 3.  CONTROLS AND PROCEDURES

(a)      Evaluation of Disclosure Controls and Procedures

         The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our SEC reports
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is
communicated to our management including our Chief Executive Officer and Chief
Financial Officer as appropriate. With the supervision and with the
participation of our management, including the chief executive officer and chief
financial officer, we have evaluated the effectiveness of our disclosure
controls and procedures (as defined under Exchange Act Rules 13a-15(e) and
15(d)-15(e)), as of the end of the period covered by this report. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that these disclosure controls and procedures were effective as of
September 30, 2006.

(b)      Changes in Internal Control over Financial Reporting

         During the period covered by this Quarterly Report on Form 10-QSB,
there were no changes in our internal control over financial reporting that have
materially affected, or are reasonably likely to affect, our internal control
over financial reporting.

         Given the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that misstatements due to error or fraud
will not occur or that all control issues and instances of fraud, if any, will
have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of



                                       23
<PAGE>

simple error or mistake. Further, the design of a control system must
reflect the fact that there are resource constraints, and that the benefits of a
controls must be considered relative to their costs. The design of any system of
controls is also based in part on certain assumptions regarding the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.



                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         As of the date hereof, the Company has no pending or threatened
litigation.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES, AND USE OF PROCEEDS

         In the third quarter of 2006, QuantRx issued 52,244 common shares upon
conversion of $50,000 convertible debt and related accrued interest of $2,244.
The conversion was made at the holder's option pursuant to the terms of the
convertible note.

         In the third quarter of 2006, 75,000 qualified common stock options
were granted to an executive officer and issued from the Company's Incentive and
Non-Qualified Stock Option Plan. The options were issued with an exercise price
of $1.15, have a term of ten years and vest January 1, 2007.

         In the second quarter of 2006, 50,000 common shares, $0.01 par value,
were issued to CEOcast, Inc., an investor relations consulting firm, pursuant to
a one-year consulting agreement. The common shares were valued at $1.30 per
share, the closing price on the date of issuance, for a total valuation of
$65,000, and will be expensed pursuant to the terms of the agreement.

         In the second quarter of 2006, the Company issued 150,000 common stock
warrants with a five-year term to purchase 150,000 shares of common stock at an
exercise price of $2.00. The warrants were issued pursuant to a one-year
consulting agreement, and the fair value of $219,000 for these warrants will be
expensed over the one-year term of the agreement.

         In the second quarter of 2006, the Company issued 68,500 common stock
warrants with a five-year term to purchase 68,500 shares of common stock at an
exercise price of $2.00. The warrants were issued as payment for purchased
research and development data, and the fair value of $100,010 for these warrants
was recorded as research and development expense.

         In the second quarter of 2006, a note in the amount of $20,000 was
negotiated and a settlement agreement resulted in the issuance of 40,000 shares
of common stock in complete payment of the note. The shares were issued at $0.50
per share.

         In the second quarter of 2006, a total of 225,000 qualified common
stock options were granted to executive officers and issued from the Company's
Incentive and Non-Qualified Stock Option Plan. The options were issued with an
exercise price of $1.60, and have a term of ten years.


                                       24
<PAGE>

ITEM 3.  DEFAULTS ON SENIOR SECURITIES

         Not applicable.

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

              Our Annual Meeting of Stockholders was held on July 3, 2006 (1) to
elect three Class I members of the Board of Directors to serve for one-year
terms and one Class II member of the Board of Directors to serve for a two-year
term; and (2) to ratify the appointment of Williams & Webster, P.S. as
independent accountants for the year ended December 31, 2006. The three Class I
directors who were so elected were William Fleming, Evan Levine and Shalom
Hirschman. The one Class II director so elected was Walter Witoshkin.

         The number of affirmative votes, negative votes and the number of votes
withheld for the directors so elected were:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                           NUMBER OF              NUMBER OF     NUMBER OF
                   NAMES                                  AFFIRMATIVE               VOTES         VOTES
                                                             VOTES                AGAINST       WITHHELD
------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                                    <C>
              William Fleming                              12,997,555                 -           28
                Evan Levine                                12,997,555                 -           28
              Shalom Hirschman                             12,997,555                 -           28
              Walter Witoshkin                             12,987,555                 -         10,028

              The number of affirmative votes, negative votes and the number of
abstentions with respect to the ratification of the appointment of Williams &
Webster, P.S. were as follows:
------------------------------------------------------------------------------------------------------------
                                                           NUMBER OF              NUMBER OF     NUMBER OF
                   NAMES                                  AFFIRMATIVE               VOTES      ABSTENTIONS
                                                             VOTES                AGAINST
------------------------------------------------------------------------------------------------------------
      Ratification of Williams & Webster, P.S.             12,987,555                 28        10,000
</TABLE>


ITEM 5.  OTHER INFORMATION

         Not applicable.



                                       25
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)      Exhibit Index

 Exhibit        Description
 -------        -----------
   10.1**       Distribution Agreement, dated as of July 7, 2006, between
                Synova Healthcare, Inc. and the Company.

   31.1         Certification of Chief Executive Officer required under Rule
                13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act
                of 1934, as amended.

   31.2         Certification of Chief Financial Officer required under Rule
                13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act
                of 1934, as amended.

  32.1*         Certification of Chief Executive Officer required under Rule
                13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act
                of 1934, as amended, and 18 U.S.C. Section 1350.

  32.2*         Certification of Chief Financial Officer required under Rule
                13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act
                of 1934, as amended, and 18 U.S.C. Section 1350.

    o   The certifications attached as Exhibits 32.1 and 32.2
        accompany this Quarterly Report on Form 10-QSB pursuant to
        Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be
        deemed "filed" by QuantRx Biomedical Corporation for purposes
        of Section 18 of the Exchange Act.

    **  Portions of this exhibit have been omitted pursuant to a request for
        confidential treatment pursuant to Rule 24b-2 under the Securities
        Exchange Act of 1934, as amended.



                                       26
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                         QuantRx Biomedical Corporation

Date:   November 14, 2006                 By:  /s/ Walter Witoshkin
                                              ---------------------------------
                                          Walter Witoshkin
                                          Chief Executive Officer
                                          (Principal Executive Officer)


Date:   November 14, 2006                 By:  /s/ Sasha Afanassiev
                                              ---------------------------------
                                          Sasha Afanassiev
                                          Chief Financial Officer
                                          (Principal Financial Officer and
                                          Principal Accounting Officer)




                                       27