U.S. 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 March 31, 2006

                           Commission File No. 0-17119

                         QUANTRX BIOMEDICAL CORPORATION
        (Exact 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)

                321 Norristown Road, Suite 230, Ambler, PA 19002
                                  215-540-4310
          (Address and telephone number of principal executive offices)

      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

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

      We had 30,577,294 shares of our $0.01 par value common stock outstanding
as of May 2, 2006.

      Transitional Small Business Disclosure Format (check one): |_| Yes |X| No

<PAGE>

                         PART I - Financial Information

ITEM 1.   Financial Statements

          Balance sheets as of March 31, 2006 and December 31, 2005...........4

          Statements of Operations for the three
          months ended March 31, 2006 and 2005................................5

          Statements of Cash Flows for the three
          months ended March 31, 2006 and 2005................................6

          Condensed Notes to the Financial Statements.........................7

ITEM 2.   Management's Discussion and Analysis of Financial Conditions
          and Results of Operations..........................................15

ITEM 3.   Controls and Procedures............................................16

                           PART II - OTHER INFORMATION

ITEM 1.   Legal Proceedings..................................................17

ITEM 2.   Unregistered Sales of Equity Securities; Use of Proceeds
          and Purchases of Equity Securities.................................17

ITEM 3.   Defaults on Senior Securities......................................17

ITEM 4.   Submission of Matters to a Vote of Security Holders................18

ITEM 5.   Other Information..................................................18

ITEM 6.   Exhibits and Reports on Form 8-K...................................19

Signatures...................................................................20


                                       2
<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

      The unaudited financial statements of QuantRx Biomedical Corporation as of
March 31, 2006 are  attached  hereto.  Our  financial  statements  are stated in
United  States  Dollars  and are  prepared  in  accordance  with  United  States
Generally Accepted Accounting  Principles.  It is the opinion of management that
the  interim  financial  statements  for the three  months  ended March 31, 2006
includes  all  adjustments  necessary  in order  to  ensure  that the  financial
statements are not  misleading.  These  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.


                                       3
<PAGE>

QUANTRX BIOMEDICAL CORPORATION
BALANCE SHEETS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  March 31,
                                                                    2006             December 31,
                                                                (unaudited)              2005
                                                               --------------       --------------
<S>                                                            <C>                  <C>
ASSETS

Current Assets:
          Cash and cash equivalents                            $    2,599,709       $      990,523
          Accounts receivable                                           4,280                   --
          Prepaid expenses                                             58,181              131,745
          Deferred financing costs, net                               342,009              124,134
          Deposits                                                      2,362                2,362
                                                               --------------       --------------
             Total Current Assets                                   3,006,541            1,248,764
                                                               --------------       --------------

          Investments                                               1,566,023                   --
          Equipment, net                                               15,482               10,437
          Intangible assets, net                                       61,523               62,729
                                                               --------------       --------------

             Total Assets                                      $    4,649,569       $    1,321,930
                                                               ==============       ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
          Accounts payable                                     $      808,093       $      126,408
          Accrued expenses                                            105,800               85,400
          Convertible notes payable, net of discount                  845,171               26,907
          Loans payable                                                28,500               28,500
                                                               --------------       --------------
             Total Current Liabilities                              1,787,564              267,215
                                                               --------------       --------------

Commitments and Contingencies                                              --                   --

Stockholders' Equity:
          Convertible preferred stock - $0.01 par value;
             25,000,000 shares authorized;                                 --               81,411
             Series A shares 9,750,000 designated - 0 and
             8,141,147 shares issued and outstanding,
             respectively
          Common stock - $0.01 par value;
             75,000,000 shares authorized;                            305,372              182,397
             30,537,294 and 18,239,773 shares issued and
             outstanding, respectively
          Additional paid-in capital                               26,943,158           23,612,630
          Accumulated deficit                                     (24,386,525)         (22,821,723)
                                                               --------------       --------------
             Total Stockholders' Equity                             2,862,005            1,054,715
                                                               --------------       --------------

             Total Liabilities and Stockholders' Equity        $    4,649,569       $    1,321,930
                                                               ==============       ==============
</TABLE>

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


                                       4
<PAGE>

QUANTRX BIOMEDICAL CORPORATION
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                            Three Months Ended March 31,
                                                                        -----------------------------------
                                                                             2006                  2005
                                                                         (unaudited)           (unaudited)
                                                                        --------------       --------------
<S>                                                                     <C>                  <C>
Revenues from licensing                                                 $       12,841       $       12,841
                                                                        --------------       --------------

Operating expenses:
      Sales and marketing                                                       84,978                   --
      General and administrative                                               222,827               13,364
      Professional fees                                                        259,709               11,361
      Research and development                                                  35,253               33,016
      Amortization                                                               1,206                1,206
      Depreciation                                                               1,236                   --
                                                                        --------------       --------------
          Total operating expenses                                             605,209               58,947
                                                                        --------------       --------------

Loss from operations                                                          (592,368)             (46,106)
                                                                        --------------       --------------

Other income (expense):
      Interest income                                                            2,663                   --
      Interest expense                                                         (64,459)                  --
      Amortization of debt discount to interest expense                       (818,264)                  --
      Amortization of deferred financing costs to interest expense             (92,374)                  --
                                                                        --------------       --------------
          Total other income (expense)                                        (972,434)                  --
                                                                        --------------       --------------

Loss before income taxes                                                    (1,564,802)             (46,106)

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

Net loss                                                                $   (1,564,802)      $      (46,106)
                                                                        ==============       ==============

Basic and diluted net loss per common share:
      Basic                                                             $        (0.06)      $          nil
                                                                        ==============       ==============

      Diluted                                                           $        (0.06)      $          nil
                                                                        ==============       ==============

Weighted average shares used in per share calculation:
      Basic                                                                 24,661,539           13,906,198
      Diluted                                                               24,661,539           13,906,198
</TABLE>

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


                                       5
<PAGE>

QUANTRX BIOMEDICAL CORPORATION
STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                             Three Months Ended March 31,
                                                                                        -------------------------------------
                                                                                              2006                   2005
                                                                                          (unaudited)           (unaudited)
                                                                                        ---------------       ---------------
<S>                                                                                     <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net loss                                                                         $    (1,564,802)      $       (46,106)
       Adjustments to reconcile net loss to net cash used by operating activities:
           Depreciation and amortization                                                          2,442                 1,206
           Interest expense related to amortization of non-cash discount,
           non-cash beneficial conversion feature and deferred financing costs                  910,638                    --
           Non-cash stock-based compensation expense                                             16,613                    --
           (Increase) decrease in:
                Accounts receivable                                                              (4,280)                   --
                Prepaid expenses                                                                 73,564                 3,297
           Increase (decrease) in:
                Accounts payable                                                                 75,663                    --
                Accrued expenses                                                                 20,400                    --
                                                                                        ---------------       ---------------

           Net cash used by operating activities                                               (469,762)              (41,603)
                                                                                        ---------------       ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of fixed assets                                                                  (6,282)                   --
       Purchase of investment                                                                (1,566,023)                   --
       Increase in payables relating to investment acquired                                     566,023                    --
                                                                                        ---------------       ---------------

           Net cash used by investing activities                                             (1,006,282)                   --
                                                                                        ---------------       ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from exercise of warrants to common stock                                        57,430                    --
       Proceeds from issuance of convertible notes                                            3,155,000                    --
       Cash financing costs due for issuance of convertible notes                              (167,200)                   --
       Increase in payables for debt issuance costs                                              40,000                    --
                                                                                        ---------------       ---------------

           Net cash provided by financing activities                                          3,085,230                    --
                                                                                        ---------------       ---------------

       Net increase (decrease) in cash and cash equivalents                                   1,609,186               (41,603)

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

       Cash and cash equivalents, end of period                                         $     2,599,709       $        66,868
                                                                                        ===============       ===============

Supplemental cash flow disclosures:
       Interest expense paid in cash                                                    $           314       $            --
       Income tax paid                                                                  $            --       $            --

Supplemental disclosure of non-cash activities:
       Fair value of warrants issued to placement agents for debt financing costs       $       143,049       $            --
       Fair value of warrants issued with convertible notes                             $     1,131,663       $            --
       Fair value of embedded beneficial conversion derivative feature                  $     2,023,337       $            --
</TABLE>

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


                                       6
<PAGE>

QUATNTRX BIOMEDICAL CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
March 31, 2006

Organization of the Company and Significant Accounting Policies

Organization

      QuantRx   Biomedical   Corporation  (the  "Company"  or  "QuantRx")  is  a
bio-medical company that seeks to develop,  acquire and commercialize on its own
or with other commercial partners  proprietary medical technology  platforms and
products for diagnostics and treatment of medical needs.

      QuantRx  is a  biomedical  company  that  is  committed  to the  research,
development,  acquisition and  commercialization,  directly or in  collaboration
with other commercial partners,  of proprietary medical technology platforms and
products  for  diagnostics  and  treatment  of medical  needs.

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

1.    Basis of Presentation

      The  interim  financial  data are  unaudited;  however,  in the opinion of
management, the interim data include all adjustments,  consisting only of normal
recurring  adjustments,  necessary  for a fair  statement of the results for the
interim periods.  The financial statements included herein have been prepared by
QuantRx  pursuant to the rules and regulations of the SEC.  Certain  information
and footnote  disclosures  normally included in financial statements prepared in
accordance with generally accepted accounting  principles 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  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.

2.    Net Loss Per Share

      The Company computes net income (loss) per common share in accordance with
Statement of Financial  Accounting  Standards 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


                                       7
<PAGE>

common stock  equivalents in the calculation of diluted earnings per share would
have been antidilutive.

      As of March 31, 2006,  the Company had  1,060,000  common  stock  options,
3,657,747 common stock warrants,  and convertible debt of $4,030,000  subject to
beneficial  conversion  of  4,030,000  shares  outstanding.  The above  options,
warrants,  and convertible  securities  were deemed to be  antidilutive  for the
Company's quarter ending March 31, 2006.

      As of March 31,  2005,  the  Company  had 210,000  common  stock  options,
1,795,413 common stock warrants, 7,492,135 shares of convertible preferred stock
and  1,204,012  preferred  stock  warrants  (convertible  into an  aggregate  of
13,044,221  common  shares)  outstanding.   The  above  options,  warrants,  and
convertible  securities were deemed to be antidilutive for the Company's quarter
ending March 31, 2005.

3.    Use of Estimates

      The  process  of  preparing   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.
Accordingly, upon settlement, actual results may differ from estimated amounts.

4.    Recent Accounting Pronouncements

      In March 2006, the Financial  Accounting  Standards Board issued Statement
of  Financial  Accounting  Standards  No.  156,  "Accounting  for  Servicing  of
Financial  Assets, an Amendment of FASB Statement No. 140,"  (hereinafter  "SFAS
No. 156").  This statement  requires an entity to recognize a servicing asset or
servicing liability each time it undertakes an obligation to service a financial
asset by entering into a servicing contract in any of the following  situations:
a transfer of the servicer's  financial  assets that meets the  requirements for
sale accounting;  a transfer of the servicer's  financial assets to a qualifying
special-purpose  entity in a  guaranteed  mortgage  securitization  in which the
transferor retains all of the resulting securities and classifies them as either
available-for-sale  securities  or  trading  securities;  or an  acquisition  or
assumption of an obligation to service a financial asset that does not relate to
financial assets of the servicer or its consolidated  affiliates.  The statement
also  requires  all  separately   recognized   servicing  assets  and  servicing
liabilities to be initially  recorded at fair value,  if practicable and permits
an entity to choose either the  amortization or fair value method for subsequent
measurement  of each class of servicing  assets and  liabilities.  The statement
further  permits,  at its  initial  adoption,  a  one-time  reclassification  of
available-for-sale  securities to trading securities by entities with recognized
servicing  rights,   without  calling  into  question  the  treatment  of  other
available-for-sale  securities  under  Statement  No.  115,  provided  that  the
available-for-sale  securities  are  identified in some manner as offsetting the
entity's  exposure  to changes in fair value of  servicing  assets or  servicing
liabilities  that a servicer  elects to  subsequently  measure at fair value and
requires  separate  presentation of servicing  assets and servicing  liabilities
subsequently  measured at fair value in the statement of financial  position and
additional  disclosures  for all  separately  recognized  servicing  assets  and
servicing  liabilities.  This statement is effective for fiscal years  beginning
after September 15, 2006,  with early adoption  permitted as of the beginning of
an entity's fiscal year. Management believes the adoption of this statement will
have no impact on the Company's financial condition or results of operations.


                                       8
<PAGE>

      In  February  2006,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 155,  "Accounting  for Certain
Hybrid Financial  Instruments,  an Amendment of FASB Standards No. 133 and 140,"
(hereinafter  "SFAS No. 155").  This  statement  established  the accounting for
certain derivatives embedded in other instruments.  It simplifies 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,  with early  adoption
permitted as of the beginning of an entity's  fiscal year.  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 Financial  Accounting Standards Board issued Statement of
Financial   Accounting   Standards  No.  154,   "Accounting  Changes  and  Error
Corrections,"  (hereinafter "SFAS No. 154") 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  principle  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 consolidated financial position, results of operations, or cash flows.

      In  December  2004,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 153, "Exchanges of Nonmonetary
Assets - an Amendment of APB Opinion No. 29", (hereinafter "SFAS No. 153"). This
statement  eliminates  the  exception  to fair  value for  exchanges  of similar
productive  assets  and  replaces  it  with a  general  exception  for  exchange
transactions that do not have commercial substance, defined as transactions that
are not  expected  to result in  significant  changes  in the cash  flows of the
reporting  entity.  This  statement is effective  for financial  statements  for
fiscal years  beginning after June 15, 2005. The Company has determined that the
adoption of the  statement had no immediate  impact on the  Company's  financial
condition or results of operations.

      In  December  2004,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial Accounting Standards No. 123 (R), "Share-Based  Payments"
(hereinafter  "SFAS No. 123 (R)").  This  statement  replaces FASB Statement No.
123, "Accounting for Stock-Based  Compensation",  and supersedes APB Opinion No.
25,  "Accounting  for Stock Issued to Employees".  SFAS No. 123 (R)  establishes
standards for the accounting for  share-based  payment  transactions in which an
entity exchanges its equity instruments for goods or services. It also addresses
transactions  in which an entity  incurs  liabilities  in exchange  for goods or
services that are based on the fair value of the entity's equity  instruments or
that may be settled by the issuance of those equity instruments.  This statement
covers a wide range of share-based  compensation  arrangements  including  share
options,


                                       9
<PAGE>

restricted share plans,  performance-based  award, share appreciation rights and
employee  share  purchase  plans.  SFAS No. 123 (R) requires a public  entity to
measure the cost of  employee  services  received  in  exchange  for an award of
equity  instruments based on the fair value of the award on the grant date (with
limited  exceptions).  That cost will be  recognized  in the entity's  financial
statements  over the period  during  which the  employee  is required to provide
services in exchange for the award.  The Company has adopted SFAS 123 (R) and as
of March 31, 2006 recognized an expense  related to stock based  compensation of
$16,613.

5.    Related Party Transactions

      William Fleming, an 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. The Company paid and expensed a total of $28,400 for these
services  in the  first  quarter  of 2005 and $0 in the first  quarter  of 2006,
respectively.  In addition to the fees,  reimbursable  travel expenses were also
paid under this contract. The total amount paid for these expenses was $6,663 in
the  first  quarter  of 2005 and $0 in the  first  quarter  of 2006.  This was a
temporary arrangement while the Company was setting up its banking,  credit card
company, and payroll service company relationships.

      Shalom Hirschman, a 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 in 2005,  prior to his
appointment  to the board.  Fees paid and  expensed  for these  services  by the
Company during the quarter ended March 31, 2006 were $12,000.  The agreement was
entered into subsequent to the quarter ended March 31, 2005, therefore there was
no expense related to this agreement in the quarter ended March 31, 2005.

      Shalom Hirschman,  a member of the Company's board of directors 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.  The
warrants  were  issued  pursuant to an  agreement  to secure  financing  for the
Company.

      The Company has a temporary  arrangement  in which it leases  office space
from Trident Group, LLC, of which Walter Witoshkin,  the current chief executive
officer of the Company, is a principal.  In addition to a monthly rental payment
for office space,  the Company  reimburses  Trident for related office expenses.
The Company  entered into the agreement in the second quarter of 2005. The total
amount  expensed by the Company  under this  arrangement  for the quarter  ended
March 31, 2006 was $3,723.  The  arrangement  commenced  after the quarter ended
March 31, 2005,  therefore there was no expense related to this  arrangement for
the quarter ended March 31, 2005.

6.    Other Balance Sheet Information

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


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                   March 31, 2006         December 31, 2005
                                                                  -----------------       ------------------
<S>                                                               <C>                     <C>
Prepaid expenses:
Prepaid consulting - affiliate                                    $          25,136       $           81,694
Prepaid insurance                                                            16,210                   25,478
Prepaid legal                                                                15,000                   15,000
Prepaid rent                                                                  1,189                    2,014
Prepaid travel                                                                   --                    6,691
Other                                                                           646                      868
                                                                  -----------------       ------------------

Prepaid expenses                                                  $          58,181       $          131,745
                                                                  =================       ==================

Deferred financing costs:
Deferred financing costs                                          $         438,164       $          127,915
Less: accumulated amortization                                               96,155                    3,781
                                                                  -----------------       ------------------

Deferred financing costs, net                                     $         342,009       $          124,134
                                                                  =================       ==================

Equipment:
Computers and office equipment                                    $          18,845       $           12,564
Less: accumulated depreciation                                                3,363                    2,127
                                                                  -----------------       ------------------

Equipment, net                                                    $          15,482       $           10,437
                                                                  =================       ==================

Short-term convertible notes payable, net:
Short-term convertible notes payable                              $       4,030,000       $          875,000
Less: discount for warrants and conversion feature, net                   3,184,829                  848,093
                                                                  -----------------       ------------------

Short-term convertible notes payable, net                         $         845,171       $           26,907
                                                                  =================       ==================

Accrued expenses:
Professional fees                                                 $          97,100       $           72,200
Other                                                                         8,700                   13,200
                                                                  -----------------       ------------------

Accrued expenses                                                  $         105,800                   85,400
                                                                  =================       ==================
</TABLE>


                                       11
<PAGE>

7.    Investment in FluoroPharma, Inc.

      In March 2006,  QuantRx purchased  1,096,170 shares of FluoroPharma,  Inc.
common stock for $1,566,023.  As of March 31, 2006, QuantRx owned  approximately
34% of the issued and outstanding  common shares 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's
diagnostic platforms.

      The  investment in  FluoroPharma  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 first quarter of 2006.

      At March 31, 2006,  FluoroPharma's  condensed  financial  information  was
estimated as follows:  total assets,  $1,130,000;  total liabilities,  $217,000;
stockholders' equity, $913,000; quarterly expenses and net loss, $430,000.

      Under  the  investment  agreement,  QuantRx  may in the  future  acquire a
majority interest in 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.  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.

      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. Additionally, FluoroPharma has outstanding options and warrants which, if
exercised  together with our option would  maintain our ownership  percentage of
approximately 34%.

8.    Convertible Debt

      On February 15, 2006,  the Company  closed on $4,030,000 of 8% convertible
promissory notes to certain private  accredited  investors,  of which $3,155,000
were issued in the quarter ended March 31, 2006,  with the  remainder  issued in
2005.  These  notes are  non-conventional  convertible  debts  giving  rise to a
related  embedded  derivative  subject  to net  share  settlement  as an  equity
derivative.  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 quarter ended March 31, 2006,  with the remainder
issued in 2005.


                                       12
<PAGE>

      In association with this debt, the Company 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 quarter  ended
March 31, 2006,  with the  remainder  issued in 2005.  The Company 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 quarter ended March 31, 2006,
with the remainder related to notes issued in 2005.

      The outstanding  principal and interest on the promissory notes is payable
by QuantRx on or before December 31, 2006. Interest on the outstanding principal
amount of the promissory  notes will accrue at a rate of 8% per annum.  The note
agreements  contain  provisions  which  would  allow the  Company to  "net-share
settle" any payment of the  principal of these notes and accrued  interest.  The
outstanding  principal amount of the promissory notes and all accrued but unpaid
interest will automatically be exchanged into any of QuantRx's securities issued
in a  qualified  equity or  equity  based  financing  or  combination  of equity
financings  with gross proceeds  totaling at least  $2,000,000.  For purposes of
determining the number of equity securities,  including warrants, to be received
by the holders of the 8% convertible  promissory notes upon such exchange,  such
holders will be deemed to have tendered 110% of the outstanding principal amount
of the  promissory  notes and all accrued but unpaid  interest as payment of the
purchase price in such qualified  financing.  Upon such conversion,  the holders
will  automatically be deemed to be purchasers in the qualified  financing,  and
will be granted all rights afforded such  purchasers.  Upon  consummation of the
qualified  financing,  the 8% convertible  promissory notes will cease to exist,
and all of QuantRx's obligations under such promissory notes will terminate.

      In the event QuantRx does not complete a qualified financing, QuantRx will
repay the entire  principal  balance  then  outstanding  on December  31,  2006.
Interest on the outstanding  principal balance of the notes shall be computed on
the basis of the actual  number of days elapsed and a year of three  hundred and
sixty  (360) days and shall be payable on the  maturity  date by the  Company in
cash or,  at the  option of the  Company,  in  shares  of the  Company's  equity
securities.  Commencing  six months after the date of issuance of the promissory
notes, a holder may elect to convert the outstanding  balance of such promissory
note into shares of QuantRx's common stock at a price per share of $1.00.

      The  Company  allocated  $1,339,694  of  the  principal  amount  of the 8%
convertible  promissory notes to the warrants as original issue discount,  which
represented  the fair  value  of the  warrants  at the  dates  of  issuance.  In
accordance  with SFAS No. 133 and EITF 00-19,  the Company  determined  that the
notes contained an embedded  equity  derivative.  The  derivative,  which is the
embedded beneficial  conversion feature, is only subject to net share settlement
and is accounted for as an equity  derivative under EITF 00-19. The Company also
allocated  $2,690,306 of the principal  amount of the 8% convertible  promissory
notes  to the  embedded  derivative  of the  beneficial  conversion  feature  as
original issue discount,  of which $2,023,337 relates to the notes issued in the
quarter ended March 31, 2006, with the remainder  related to the notes issued in
2005. The embedded  derivative  beneficial  conversion feature was calculated in
accordance with guidance from EITF 98-5 and 00-27 concerning the intrinsic value
of conversion  features.  Accordingly,  the value of the discount was limited to
the value of the underlying  debt after the effects of allocating  fair value to
the warrants.  The discounts  have been recorded as additional  paid-in  capital
from the derivative transactions.


                                       13
<PAGE>

      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.
Interest expense, including amortization of original issue discount and deferred
financing costs, related to the 8% convertible promissory notes was $974,875 for
the quarter ended March 31, 2006.

9.    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's common stock. Each share of
Series A  preferred  stock was  converted  into 1.5 shares of  QuantRx's  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.

10.   Common Stock and Warrants

      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.

      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.

11.   Subsequent Events

      In April  of 2006,  QuantRx  acquired  an  additional  300,000  shares  of
FluoroPharma,  Inc. common stock at a purchase price of $1.43 per share,  for an
aggregate  purchase price of $429,000.  These additional shares were acquired in
private  transactions  with  individual   investors.   This  purchase  increased
QuantRx's  share of issued  and  outstanding  common  stock of  FluoroPharma  by
approximately   10%,   bringing  the  total  shares  owned  of  FluoroPharma  to
approximately 44%.

      In the second quarter of 2006, a loan payable in the amount of $20,000 was
settled with the issuance of 40,000 common shares,  $0.01 par value.  The shares
were issued at $0.50 per share.


                                       14
<PAGE>

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

Overview

      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.

Results of Operations

      Net revenue  from  licensing  for the quarter  ended March 31,  2006,  was
$12,841,  as  compared to $12,841 for the  quarter  ended  March 31,  2005.  The
revenue was related to a licensing agreement for a Rapid-Sense product.

      Sales and  marketing  expense  for the  quarter  ended  March 31, 2006 was
$84,978,  as compared to $0.00 for the quarter ended March 31, 2005. The current
period  expense  reflects  expenses  related  to the  addition  of a  sales  and
marketing employee and expenses related to business development.

      General and administrative  expense,  including professional fees, for the
quarter  ended  March 31,  2006 was  $482,536,  as  compared  to $24,725 for the
quarter ended March 31, 2005.  The current year expense  primarily  reflects the
expenses related to the addition of two full time employees, part time employees
used as business needs require, office and warehouse space, legal and accounting
expenses to assist in bringing the Company to a current  status with  regulatory
requirements,  legal fees related to our patents, consulting expenses related to
strategic  advisory  services  regarding  potential  acquisitions,  and includes
stock-based compensation expense of $16,613.

      Research and development expense for the quarter ended March 31, 2006, was
$35,253,  as  compared to $33,016 for the  quarter  ended  March 31,  2005.  The
current year expense  primarily  reflects  technical  consulting  expenses,  and
ongoing contracted product development.


                                       15
<PAGE>

      Amortization  expense for the quarter ended March 31, 2006, was $1,206, as
compared to $1,206 for the quarter  ended March 31, 2005.  Amortization  expense
reflects  straight line  amortization  over  seventeen  years of Company  patent
acquisition costs.

      Depreciation  expense for the quarter ended March 31, 2006, was $1,236, as
compared to $0.00 for the quarter  ended March 31,  2005.  Depreciation  expense
reflects  straight  line  depreciation  over  three  years of  office  equipment
recorded at an historical cost of $18,845.

      The  Company's  net  loss  for the  quarter  ended  March  31,  2006,  was
$1,564,802  as compared to $46,106 for the quarter  ended March 31,  2005.  This
increased  loss  reflects the  additional  expense of returning the Company to a
fully operating company.

Liquidity and Capital Resources

      As of March 31, 2006, QuantRx had cash and cash equivalents of $2,599,709,
as compared to cash and cash equivalents of $990,523 as of December 31, 2005 Our
net  increase in cash of  $1,609,186  for the three months ended March 31, 2006,
primarily  relates to our  financing  activities,  which  includes  proceeds  of
$3,155,000 from the issuance of convertible promissory notes. QuantRx has used a
portion of these  proceeds  as well as its  revenues to fund  current  operating
expenses  which  include the  additional  expense of returning  the Company to a
fully operating company.

      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

      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 principal  executive officer and principal  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,  the  principal
executive  officer and principal  financial  officer have  concluded  that these
disclosure controls and procedures were effective as of March 31, 2006.

      The Company's  management is responsible for  establishing and maintaining
adequate internal control over financial  reporting,  as such term is defined in
Exchange Act Rules  13a-15(f) and 15d-15(f).  Under the supervision and with the
participation of our management,  including our


                                       16
<PAGE>

principal  executive officer and principal  financial  officer,  we conducted an
evaluation  of  the   effectiveness  of  our  internal  control  over  financial
reporting.  Based on our evaluation,  our management concluded that our internal
control over financial reporting was effective as of March 31, 2006.

      All internal control systems,  no matter how well designed,  have inherent
limitations. Management therefore is continuing to improve on the design of such
controls.

                           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,  Use of Proceeds and Purchases
of Equity Securities

      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's common stock. Each share of
series A  preferred  stock was  converted  into 1.5 shares of  QuantRx's  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.

      In the first quarter of 2006,  85,800 common stock warrants were exercised
and exchanged for 85,800 shares of our 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.

      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.

      In March, 2006, QuantRx purchased  1,096,170 shares of FluoroPharma,  Inc.
common stock for $1,566,023.  As of March 31, 2006, QuantRx owned  approximately
34% of the issued and outstanding common shares of FluoroPharma.

ITEM 3. Defaults on Senior Securities

      Not applicable.


                                       17
<PAGE>

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

      Not applicable.

ITEM 5. Other Information

      Not applicable.


                                       18
<PAGE>

ITEM 6. Exhibits and Reports on Form 8-K

      (a)   Exhibit Index

Exhibit     Description
-------     -----------

31.1        Certification  of Principal  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 Principal  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 Principal  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 Principal  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.

* 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.


                                       19
<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: May 15, 2006                          By:  /s/ Walter Witoshkin
                                                --------------------------------
                                            Walter Witoshkin, CEO
                                            (Principal Executive Officer)


Date: May 15, 2006                          By:  /s/ Sasha Afanassiev
                                                --------------------------------
                                            Sasha Afanassiev, CFO
                                            (Principal Financial Officer)

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

                                        QuantRx Biomedical Corporation


Date: May 15, 2006                           By: /s/ Walter Witoshkin
                                             Walter Witoshkin, CEO
                                             (Principal Executive Officer)


                                       20