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





Transition
      report under Section 13 or 15(d) of the Exchange Act for the Transition Period
      from ________ to ________.





Commission
      file number 0-27545





QUICK-MED
      TECHNOLOGIES, INC.


(Exact
      Name of Small Business Issuer as Specified in Its Charter)







Nevada
            
            98-0204736(State
                or Other Jurisdiction of Incorporation or Organization)
            
            (I.R.S.
                Employer Identification No.)





3427
      SW 42 nd Way,
      Gainesville, Florida 32608


(Address
      of Principal Executive offices)





(352)
      379-0611


(Issuer’s
      Telephone Number, Including Area Code)





(Former
      Name, Former Address and Former Fiscal Year,


if
      Changed Since Last Report)





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. Yes x No







Applicable
      Only to Issuers Involved in Bankruptcy


Proceedings
      During the Preceding Five Years





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
      securities under a plan confirmed by court. Yes_______________  No_______________







Number
      of
      shares of common stock outstanding as of  May 5, 2006:
      30,213,588













**QUIICK-MEDTECHNOLOGIES,
                INC.**
              
              INDEX
                TO FORM 10-QSBPART
                I
            **FINANCIAL
                INFORMATION**Item
                1. Financial StatementsPageUnaudited
                Condensed Balance Sheet as of  March 31,
                2006
            1Unaudited
                Condensed Statements of Operations for the****three
                and nine months ended March 31, 2006 and
                2005
            2Unaudited
                Condensed Statement of Changes in Stockholders’ Deficit for the three
                months****ended March
                31, 2006
            3Unaudited
                Condensed Statements of Cash Flows for
                the nine months ended March 31, 2006 and 2005
            4-5Notes
                to Unaudited Condensed Financial
                Statements
            6-11Item
                2. Management’s Discussion and Analysis of Financial
                Condition and Results of Operations
            12Item
                3. Controls and Procedures
            21PART
                II
            OTHER
                INFORMATION
            22Item
                1. Legal Proceedings
            22Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            22Item
                3. Defaults Upon Senior Securities
            23Item
                4. Submission of Matters to a Vote of Security
                Holders
            23Item
                5. Other Information
            23Item
                6. Exhibits
            23SIGNATURES
            24


*Index*





**PART
                I**
            **FINANCIAL
                INFORMATION****ITEM
                1.**
            **FINANCIAL
                STATEMENTS**


**** ****





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      BALANCE SHEET AT MARCH 31, 2006**


**(UNAUDITED)**





**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            342,842Accounts
                receivable
            
            
            90,001Total
                current assets
            
            
            432,843Property
                and equipment, net
            
            
            15,263Other
                assets:Prepaid
                expenses
            
            
            6,606Intangible
                asset, net
            
            
            284,887Total
                other assets
            
            
            291,493Total
                assets
            
            $
            739,599**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Current
                liabilities:Accounts
                payable
            
            $
            109,609Accrued
                expenses
            
            
            6,842Accrued
                interest on note payable - director
            
            
            18,769Other
                current liabilities
            
            
            93,333Total
                current liabilities
            
            
            228,553License
              payable
            
            
            160,000Long-term liability - note payable - director
            
            
            1,268,625Total
                liabilities
            
            
            1,657,178Commitments
                and contingenciesStockholders'
                deficit:Common
                stock, $0.0001 par value; 100,000,000authorized
                shares; 30,213,588 shares issuedand
                outstanding
            
            
            3,022Additional
                paid-in capital
            
            
            11,494,437Outstanding
                stock options
            
            
            1,325,057Accumulated
                deficit
            
            
            (13,740,095
            )Total
                stockholders' deficit
            
            
            (917,579
            )Total
                liabilities and stockholders' deficit
            
            $
            739,599





See
      accompanying notes to condensed financial statements.




-1-
 *Index*





**QUICK-MEDTECHNOLOGIES,
      INC.**


**CONDENSED
      STATEMENTS OF OPERATIONS FOR THE THREE  AND NINE
      MONTHS**


**ENDED MARCH
      31, 2006 AND 2005**


**(UNAUDITED)**






**Three
                  Months Ended**
              
              **Nine Months
                  Ended****March 31,**
              
              **March 31,****2006**
              
              **2005**
              
              **2006**
              
              **2005**Revenues
              
              $
              301,584
              
              $
              49,316
              
              $
              934,141
              
              $
              84,969Expenses:Cost
                  of revenues
              
              
              41,272
              
              
              7,064
              
              
              154,450
              
              
              13,262General
                  and administrative expenses
              
              
              281,588
              
              
              232,816
              
              
              763,931
              
              
              641,342Research
                  and development
              
              
              221,946
              
              
              168,827
              
              
              639,947
              
              
              359,259Depreciation
                  and amortization
              
              
              12,744
              
              
              11,540
              
              
              37,253
              
              
              33,840Stock-based
                  compensation
              
              
              86,786
              
              
              151,182
              
              
              542,481
              
              
              413,469Total
                  expenses
              
              
              644,336
              
              
              571,429
              
              
              2,138,062
              
              
              1,461,172Loss
                  from operations
              
              
              (342,752
              )
              
              (522,113
              )
              
              (1,203,921
              )
              
              (1,376,203
              )Other
                  income (expense):Other
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              17,478Interest
                  income
              
              
              2,313
              
              
              5,238
              
              
              9,907
              
              
              5,238Interest
                  expense
              
              
              (18,769
              )
              
              (18,769
              )
              
              (57,140
              )
              
              (81,894
              )Loss
                  before income taxes
              
              
              (359,208
              )
              
              (535,644
              )
              
              (1,251,154
              )
              
              (1,435,381
              )Provision
                  (benefit) for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  loss
              
              $
              (359,208
              )
              $
              (535,644
              )
              $
              (1,251,154
              )
              $
              (1,435,381
              )Net
                  loss per share (basic and diluted)
              
              $
              (0.01
              )
              $
              (0.02
              )
              $
              (0.04
              )
              $
              (0.07
              )Weighted
                  average commonshares
                  outstanding (basic and diluted)
              
              
              30,167,140
              
              
              27,086,106
              
              
              30,004,626
              
              
              19,475,953





See
      accompanying notes to condensed financial statements.




-2-
 *Index*





**QUICK-MEDTECHNOLOGIES,
      INC.**


**CONDENSED
      STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**


**FOR
      THE THREE MONTHS ENDED MARCH 31, 2006**


**(UNAUDITED** **)**





**Additional****Common
                  Stock**
              
              
              **Paid-In**
              
              
              **Accumulated**
              
              
              **Outstanding****Shares**
              
              
              **Amount**
              
              
              **Capital**
              
              
              **Deficit**
              
              
              **Stock
                  Options**
              
              
              **Total**Balance,
                  December 31, 2005
              
              
              30,108,517
              
              
              3,011
              
              $
              11,408,501
              
              $
              (13,380,887
              )
              $
              1,244,219
              
              $
              (725,156
              )Stock
                  issued for cash
              
              
              100,000
              
              
              10
              
              
              79,990
              
              
              -
              
              
              -
              
              
              80,000Stock
                  options and warrants granted for services
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              80,838
              
              
              80,838Stock
                  issued for services
              
              
              5,071
              
              
              1
              
              
              5,946
              
              
              -
              
              
              -
              
              
              5,947Net
                  loss, March 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (359,208
              )
              
              -
              
              
              (359,208
              )Balance,
                  March 31, 2006
              
              
              30,213,588
              
              
              3,022
              
              $
              11,494,437
              
              $
              (13,740,095
              )
              $
              1,325,057
              
              $
              (917,579
              )





See
      accompanying notes to condensed financial statements.


-3-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE  NINE MONTHS ENDED MARCH 31, 2006 AND
      2005**


**(UNAUDITED)**








**2006**
            
            **2005**Cash
                flows from operating activities:Net
                loss
            
            $
            (1,251,154
            )
            $
            (1,435,381
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Depreciation
                and amortization
            
            
            37,253
            
            
            33,840Stock
                granted for services
            
            
            125,460
            
            
            284,123Stock-based
                compensation
            
            
            417,021
            
            
            129,346(Increase)
                decrease in:Accounts
                receivable
            
            
            (40,893
            )
            
            (26,632
            )Prepaid
                expenses
            
            
            5,830
            
            
            5,936Increase
                (decrease) in:Accounts
                payable
            
            
            3,168
            
            
            (138,611
            )Accrued
                interest
            
            
            (18,977
            )
            
            79,505Other current liabilities
            
            
            93,333
            
            
            9,333Net
                cash used in operating activities
            
            
            (628,959
            )
            
            (1,058,541
            )Cash
                flows from investing activities:Purchase
                of fixed assets
            
            
            (8,045
            )
            
            (11,755
            )Patents
            
            
            (7,767
            )
            
            (1,641
            )Net
                cash used in investing activities
            
            
            (15,812
            )
            
            (13,396
            )Cash
                flows from financing activities:Issuance
                of common stock for cash, net
            
            
            113,554
            
            
            1,897,000Proceeds
                from stock option exercise
            
            
            29,750
            
            
            -Increase
                in short-term notes payable - officer/director
            
            
            -
            
            
            10,417Repayments
                of short-term notes payable - officer/director
            
            
            -
            
            
            (89,626
            )Increase
                in notes payable - officer/director
            
            
            -
            
            
            450,000Net
                cash provided by financing activities
            
            
            143,304
            
            
            2,267,791Net
                (decrease) increase in cash and cash equivalents
            
            
            (501,467
            )
            
            1,195,854Cash
                and cash equivalents at beginning of period
            
            
            844,309
            
            
            19,805Cash
                and cash equivalents at end of period
            
            $
            342,842
            
            $
            1,215,659





See
      accompanying notes to condensed financial statements.




-4-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE NINE MONTHS ENDED MARCH 31, 2006 AND 2005
      (CONTINUED)**


**(UNAUDITED)**








**2006**
            
            **2005****Supplementary
                Information:**Cash
                paid for:Interest
            
            $
            57,140
            
            $
            5,370Income
                taxes
            
            $
            -
            
            $
            -Non-cash
                disclosures of investing andfinancing
                activities:Stock
                options granted to consultant
            
            $
            270,860
            
            $
            103,571Conversion
                of debt to equity
            
            $
            -
            
            $
            1,325,738





See
      accompanying notes to condensed financial statements.


-5-
 *Index*




**QUICK-MEDTECHNOLOGIES,
      INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**








***NOTE
      1 - SIGNIFICANT ACCOUNTING POLICIES***





Basis
      of Presentation




The
        accompanying unaudited condensed financial statements of Quick-Med Technologies,
        Inc. (the “Company”) have been prepared in accordance with generally accepted
        accounting principles for interim financial information and with the
        instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not
        include
        all the information and footnotes required by generally accepted accounting
        principles for complete financial statements. In the opinion of the management
        of the Company, the accompanying unaudited financial statements contain all
        the
        adjustments (which are of a normal recurring nature) necessary for a fair
        presentation. Operating results for the nine months ended March 31,
        2006 are not necessarily indicative of the results that may be expected for
        the
        year ending June 30, 2006. For further information, refer to the financial
        statements and the footnotes thereto contained in the Company’s Annual Report on
        Form 10-KSB for the year ended June 30, 2005, as filed with the Securities
        and
        Exchange Commission.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. The Company has negative cash flows from
        operations and an accumulated deficit that raises substantial doubt about
        its
        ability to continue as a going concern. The financial statements do not include
        any adjustments that might result from the outcome of this
        uncertainty.
 
 Cash
        and Cash Equivalents
 
 All
        highly liquid investments purchased with maturity of three months or less
        from
        the time of purchase are considered to be cash equivalents.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
 
 Intangible
        Assets
 
 The
        cost
        of obtaining license agreements along with the costs to defend the patents
        underlying the license agreements are capitalized and are amortized using
        the
        straight-line method over the estimated useful lives of the underlying license
        agreements. The costs of obtaining and maintaining new patents are capitalized
        and amortized using the straight-line method over the estimated useful lives
        of
        the patents. The cost of patents in process is not amortized until the patent
        is
        issued.
 
 Property
        and Equipment
 
 Property
        and equipment are stated at cost. Depreciation on property and equipment
        is
        computed using the straight-line method over the expected useful lives of
        the
        assets.
 
 Accounts
        Receivable and Allowance for Doubtful Accounts
 
 Accounts
        receivable as of March 31, 2006 represents amounts due from Engelhard
        Corporation and is reported in the balance sheet reduced by an allowance
        for
        doubtful accounts for estimated losses resulting from receivables not considered
        to be collectible.


-6-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**





***NOTE
      1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)***




Other
        Current Liabilities
 
 The
        other
        current liabilities consist of the refundable deposit received from Engelhard
        Corporation that is to be rebated to the customer if the sales target is
        reached within a short-term period of time, and the deferred revenue from
        the
        license fee for exclusivity.
 
 Research
        and Development Costs
 
 Research
        and development costs are expensed as incurred.
 
 Earnings
        Per Share
 
 Basic
        net
        earnings (loss) per common share are computed by dividing net earnings (loss)
        applicable to common shareholders by the weighted-average number of common
        shares outstanding during the period. Diluted net earnings (loss) per common
        share is determined using the weighted-average number of common shares
        outstanding during the period, adjusted for the dilutive effect of common
        stock
        equivalents, consisting of shares that might be issued upon exercise of common
        stock options and warrants of  4,896,394 at March 31, 2006. In periods when
        losses are reported, the weighted-average number of common shares outstanding
        excludes common stock equivalents, because their inclusion would be
        anti-dilutive.
 
 Revenue
        Recognition
  The
        Company recognizes the revenue of its royalties from the products sold by
        a
        cosmetic and personal care division of Engelhard Corporation under the master
        agreement for product development, manufacturing and distribution (the “Master
        Agreement”). The Company also recognizes the revenue from the non-refundable
        exclusivity license fee derived from Engelhard Corporation under the Master
        Agreement on a pro rata basis over the term of the related exclusive license
        agreement. Revenue from the research agreement is recognized on a pro rata
        basis
        over the term of the agreement.  Revenue
        from the small business innovation research program is recognized based on
        the
        research work performed in accordance with the program
        requirements.




***NOTE
      2 - STOCK OPTIONS AND WARRANTS***




The
        Company adopted a qualified equity incentive plan (the “Plan”) on March 4, 2001.
        Under the Plan the Company is authorized to grant up to 3,000,000 shares
        of
        common stock. On December 13, 2004, the shareholders approved the Plan and
        ratified the amendment to increase the total number of shares to be granted
        under the Plan from 3,000,000 to 4,000,000 effective November 1, 2004.
 
 In
        December 2004, the Financial Accounting Standards Board ("FASB") issued a
        final
        standard, SFAS 123R, "Share-Based Payment," ("SFAS 123R"), which requires
        companies to expense the value of employee stock options and similar awards.
        Under SFAS 123R, share-based payment awards result in a cost that will be
        measured at fair value on the grant date of the awards, based on the estimated
        number of awards that are expected to vest. Compensation cost for awards
        that
        vest would not be reversed if the awards expire without being exercised.
        SFAS
        123R is effective for the Company beginning in the quarter ended September
        30,
        2005 and applies to all outstanding and unvested share-based payment awards
        at
        the adoption date. The Company adopted the modified prospective approach
        as its
        implementation method under this pronouncement. The fair value of stock options
        was determined using the Black-Scholes option-pricing model. The fair value
        of
        the restricted stock awards was based on the closing price of the Company's
        Common Stock on the date of grant. For the nine months ended March 31,
        2006, the Company recorded costs related to this pronouncement, which include
        the effects of any grants made during the period, of approximately $542,000
        or
        $0.02 per share on a basic and diluted basis.
  On
        September 9, 2005, the Board of Directors (the “Board”) granted 130,000 shares
        of restricted common stock as payment for the services rendered by the board
        members for the year ended June 30, 2005
        and
        all shares were immediately vested. In addition, the Board granted 710,000
        stock
        options and 175,000 warrants to our employees and directors and consultants,
        respectively, in recognition of individual performance for the year ended
        June
        30, 2005. The stock options and warrants were vested one-third immediately,
        one-third will be vested on July 1, 2006 and the remaining one-third will
        be
        vested on July 1, 2007, assuming the person receiving the equity awards is
        employed by the Company at the time of vesting. The exercise price of those
        stock options and warrants is $0.80 per share, which was the closing price
        of
        the common stock on the date of grant. The weighted average grant date fair
        value of options
        was $0.72 per share based on the Black-Scholes option-pricing model. The
        options
        and warrants expire five years from the date of grant.
 
 The
        weighted average grant date fair value of options granted during the nine
        months ended March 31, 2006 were estimated on the date of grant using the
        Black-Scholes option-pricing model with the assumptions noted in the following
        table. Expected volatilities are based on historical volatility of common
        stock,
        and other factors. The expected term of the options represents the period
        of
        time that options granted are expected to be outstanding and is derived from
        historical terms and other factors.


-7-
 *Index*




**QUICK-MED
      TECHNOLOGIES, INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**




*NOTE
      2 - STOCK OPTIONS AND WARRANTS
      (CONTINUED)*




Assumptions
      utilized to value options are as follows:





Risk-free
                interest rate
            4.75%
                to 6%Expected
                life (years)
            5Expected
                volatility
            50%
                to 138%Expected
                dividends
            None





Prior
        to
        July 1, 2005, the Company had elected to account for the stock options granted
        to employees under the Accounting Principles Board Opinion No. 25, “Accounting
        for Stock Issued to Employees,” and related interpretations.
 
 Under
        APB
        No.25, the difference between the option price and the fair value of the
        underlying shares resulted in a stock option compensation expense, which
        was
        prospectively recorded in the income statement over two fiscal years. The
        Company accounts for stock options granted to consultants under Financial
        Accounting Standards Board Statement No. 123, “Accounting for Stock-Based
        Compensation.” During 2002, 50,000 options were granted to a consultant vesting
        over a three-year period. Using the Black Scholes model $57,250 of compensation
        expense was recorded on the financial statements. The total stock-based
        compensation expense for the nine months period ended March 31, 2005
        was $413,469.
 
 The
        Company’s net loss and loss per share using the fair value methodology for
        employee share-based compensation for the three months and six months
        ended March 31, 2005 would have been as follows:


**March 31,
                  2005****Three
                  Months**
              
              
              **Nine
                  Months**Net
                  lossAs
                  reported
              
              $
              (535,644
              )
              $
              (1,435,381
              )Pro
                  forma
              
              $
              (535,644
              )
              $
              (1,466,831
              )Loss
                  per shareAs
                  reported
              
              $
              (0.02
              )
              $
              (0.07
              )Pro
                  forma
              
              $
              (0.02
              )
              $
              (0.08
              )


During
      2002, 1,140,000 unqualified options were granted under the Plan. The exercise
      price for 990,000 and 150,000 of the options are $2.84 and $0.95, respectively,
      of the average trading price of the Company’s stock during the first 30 days
      after commencement of the stock trading on the Over the Counter (“OTC”) Market.
      The vesting provisions for 100,000 of the options are immediate and the
      remainder of the 1,040,000 options vested one-third on January 15, 2002, one
      third on January 15, 2003, and one-third on January 15, 2004. All the options
      expire five years after the grant date.





In
      July
      2003, 1,231,500 unqualified options were granted under the Plan to employees,
      directors, and service providers. The exercise price of $0.55 for the 1,231,500
      options was the closing trading price at the grant date and they were vested
      immediately. All the options expire five years after the grant date.





In
      August
      2004, 585,000 unqualified options under the Plan were granted to directors,
      employees and service providers. The exercise price of $0.17 for the 585,000
      options was the average of the closing trading prices from July 1 to 15, 2004,
      and they were vested immediately. All the options expire five years after the
      grant date. On August 24, 2005, 175,000 options were exercised at $0.17 per
      share for an aggregate price of $29,750.





On
      October 1, 2004, the Company granted 50,000 unqualified options to a consultant,
      one third of which was vested immediately, one third was vested on July 1,
      2005
      and the remaining one third will be vested on July 1, 2006. The exercise price
      of these options was the closing trading price at the grant date. Using the
      Black Scholes option pricing model, $4,333 of compensation expense was recorded
      during this  period. All the options expire five years after the grant
      date. On June 29, 2005, 16,666 options were exercised at $0.15 per share or
      an
      aggregate price of approximately $2,500.


-8-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**





On
      February 21, 2005, the Company granted 10,000 unqualified options to a
      consultant, 7,000 options of which were vested immediately, and the remaining
      3,000  vested on a pro rata basis over the 12 months period. The exercise
      price of these options was the average closing trading price of the fifteen
      (15) days prior to the grant date. Using the Black Scholes option pricing model,
      $598 of compensation expense was recorded in this period. All the options expire
      five years after the grant date.





A
      summary
      of options as of March 31, 2006 and 2005 is shown below:


**March
                  31, 2006**
              
              
              **March
                  31, 2005****Number**
              
              
              **Weighted-Average**
              
              
              **Number**
              
              
              **Weighted-Average****of 
                  Shares**
              
              
              **Exercise
                  Price**
              
              
              **of 
                  Shares**
              
              
              **Exercise
                  Price**Outstanding
                  at beginning of period
              
              
              3,069,834
              
              $
              1.73
              
              
              2,983,500
              
              $
              2.17Granted
              
              
              710,000
              
              
              0.80
              
              
              642,500
              
              
              0.17Exercised
              
              
              (175,000
              )
              
              0.17
              
              
              -
              
              
              -Forfeited
              
              
              -
              
              
              -
              
              
              (720,000
              )
              
              1.70Expired
              
              
              (825,000
              )
              
              2.61
              
              
              -
              
              
              -Outstanding
                  at end of period
              
              
              2,779,834
              
              $
              1.33
              
              
              2,906,000
              
              $
              1.73Exercisable
                  at end of period
              
              
              2,306,501
              
              
              
              
              
              2,889,333Available
                  for issuance at end of period
              
              
              1,045,166
              
              
              
              
              
              1,110,667





During
      the nine months ended March 31, 2006, the Company issued common stock
      warrants to consultants in recognition of their performance. These warrants
      were
      accounted for in accordance with the provisions of SFAS 123R. The vesting
      provisions were vested one third immediately on September 9, 2005, one third
      to
      be vested on July 1, 2006, and one third to be vested on July 1, 2007. The
      warrants were valued on the date of grant using the Black- Scholes
      option-pricing model.





Assumptions
      utilized to value warrants are as follows:





Risk-free
                interest rate
            4.75
                % to 6.00%Expected
                life (years)
            5Expected
                volatility
            50%
                to 138%Expected
                dividends
            None


The
      following is a summary of warrants granted, exercised, canceled and outstanding
      involving the grants as shown below:





**March 31,
                2006**
            
            **March 31,
                2005****Number**
            
            **Weighted-Average**
            
            **Number**
            
            **Weighted-Average****of
                Shares**
            
            **Exercise
                Price**
            
            **of
                Shares**
            
            **Exercise
                Price**Outstanding
                at beginning of period
            
            
            718,048
            
            $
            0.24
            
            
            567,500
            
            
            0.20Granted
            
            
            178,346
            
            
            0.72
            
            
            112,500
            
            
            0.27Exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Forfeited
            
            
            -
            
            
            -
            
            
            -
            
            
            -Expired
            
            
            -
            
            
            -
            
            
            -
            
            
            -Outstanding
                at end of period
            
            
            896,394
            
            $
            0.35
            
            
            680,000
            
            $
            0.21Exercisable
                at end of period
            
            
            621,394
            
            
            
            
            
            510,835





-9-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**NOTE
      3 - STOCKHOLDERS’ DEFICIT**





In
        July
        and August 2005, the Company issued a total of 54,118 shares of restricted
        common stock for an aggregate purchase price of $33,553 or $0.62 per share
        for
        cash.
 
 In
        August
        2005, the Company issued 175,000 shares of restricted common stock for an
        aggregate exercise price of $29,750 or $0.17 per share resulting from the
        exercise of a stock option.
 
 In
        September 2005, the Company issued 130,000 shares of restricted common stock
        for
        the payment of services rendered by the members of the Board of Directors.
        In
        addition, the Company granted stock options and warrants of 710,000 and 175,000
        respectively to employees and consultants at the exercise price of $0.80
        per share as performance bonus according to the vesting schedule. Further,
        the
        Company issued 5,556 shares of restricted common stock for payment of services
        provided by a consultant.
 
 In
        November and December 2005, the Company issued 13,324 shares of restricted
        common stock for payment of services provided by two consultants.
 
 In
        February 2006, the Company issued 100,000 shares of restricted common stock
        for
        an aggregate purchase price of $80,000 or $0.80 per share for cash.
  In
          January, February and March 2006, the Company issued 5,947 shares of restricted
          common stock for payment of services provided by a
          consultant.





***NOTE
      4 - RELATED PARTY TRANSACTIONS***




For
      the nine months ended March 31, 2006 and 2005, the Company received $0
      and $450,000 respectively, from the Company’s Chairman. The funding received in
      2005 was part of the convertible note payable as described below. The short
      term
      notes to our Chairman were subsequently consolidated into a long term
      convertible note as described below.





In
      September 2003, the Company negotiated a successor agreement with its Chairman
      regarding the line of credit, which expired July 1, 2003 totaling $1,300,200,
      excluding interest. The line of credit of $750,000 and the short term borrowing
      of $550,200 were consolidated into a single convertible note for up to
      $1,500,000 excluding accrued interest, at an interest rate of 6% and due July
      1,
      2004. The maturity date of the note was extended until July 1, 2006. The
      convertible note is secured by the assets and revenues of the Company and is
      senior to all other debt obligations. The note plus accrued interest will be
      convertible, in full or in part, at the option of the holder for a term of
      up to
      5 years beginning at September 1, 2003 at a conversion rate of $0.38 per share.
      The conversion rate was determined as 115% above the average share price over
      the prior 20 trading days ($0.33 per share). The note has an anti-dilution
      provision in the event that the Company sells stock to other investors at less
      than $0.20 per share. This convertible note agreement is made contingent upon
      the agreement of the holder to provide additional funding to the Company by
      purchasing restricted common stock at prices to be agreed to by the
      Company or other means. In August 2004, the Board of Directors granted the
      Chairman the right to consolidate the short-term debt and its related accrued
      interest into the convertible note under the same terms. The Chairman exercised
      the right to consolidate all outstanding short term notes and accrued interest
      into the long-term convertible note under the same terms. In January 2006,
      the
      Chairman agreed to extend the maturity date of the note until October 1,
      2007.


The
      Chairman converted $500,000 and $826,087 of the convertible note into 1,315,790
      and 2,173,913 shares of restricted common stock on November 30 and December
      31,
      2004, respectively, in accordance with the terms of the Stock Purchase
      Agreement. These amounts were converted at a conversion price applicable to
      the
      convertible debt of $0.38 per share. At March 31, 2006, the convertible
      note outstanding balance was $1,268,625, convertible into 3,338,487 shares
      of
      restricted common stock.


During
        the period ended March 31, 2006, the Company paid the accrued interest on
        the convertible note of $56,932 in accordance with the Board of Directors
        written resolution (without the Chairman’s participation) to clarify and confirm
        the interest payment terms. Under the terms of the note, the Company will
        pay
        the interest on the note for the previous quarter within 10 business days
        subsequent to the end of the quarter.
 
 During
        the nine months ended March 31, 2005, the Company borrowed a total of
        $460,417 through: (a) $450,000 borrowed from its Chairman, and (b) $10,417
        borrowed from its President. In addition, the Company repaid a total of $89,626
        to the President.




-10-
 *Index*


**QUICK-MED
        TECHNOLOGIES, INC.**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **(UNAUDITED)**




**NOTE
      5 - CONTINGENCIES**




In
      connection with the Master Agreement with Engelhard Corporation, the Company
      signed a product development and distribution agreement for Ilomastat (the
      “Product Agreement”). The Product Agreement requires Engelhard to obtain at
      least one significant sales contract within one year of the effective
      distribution date, as defined, that results in the realization of a combined
      annualized net profit run rate milestone of at least $1 million per annum by
      May
      2005. On April 18, 2005, the Company sent a notice to cure to Engelhard for
      the
      noncompliance on the one significant sales contract provision and to determine
      the achievability of the key profit milestones.





On
      September 19, 2005, the Company sent a notice of material default and
      termination to Engelhard, for breach of its contractual obligations under
      the Master Agreement and the Product Agreement (collectively the
      “Agreements”). Engelhard failed to reach at least two critical milestones (1) to
      develop at least one significant sales contract within one year of the effective
      distribution date and (2) to have the Company realize a combined
      annualized net profit of $1 million per year by May 2005. In accordance with
      the
      termination procedure provided for in the Agreements, the Agreements were
      to terminate in their entirety thirty (30) days from Engelhard’s receipt of
      the termination notice if Engelhard did not cure its material
      breaches within that time period . Engelhard has not yet cured such
      breaches.  However, in October 2005, the Company agreed to extend the
      agreement through a tolling agreement.




In
      March
      31, 2006, Engelhard and the Company signed a non-binding letter of intent
      (“LOI”) and the term sheet to enter into a definitive
      agreement. During this negotiation period, as Engelhard is generating sales,
      it
      continues to pay the Company a minimum monthly royalty fee or the
      actual royalty fee, whichever is greater.


The
        Company can give no assurance that the negotiation of  a new
        agreement will be successful. Should a new agreement not be reached with
        Engelhard, our future revenues will be adversely affected.
  During
        the nine month period ended March 31,
        2006, the revenues generated under the Agreements represented more than ninety
        (90%) percent of the Company's total revenues.
  -11-
 *Index*







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







The
        following discussion should be read in conjunction with our financial statements
        and related notes appearing elsewhere in this Form 10-QSB and our Annual
        Report
        on Form 10-KSB for our fiscal year ended June 30, 2005. The terms “Quick-Med”,
        "the Company," "we," "our" or "us" refer to Quick-Med Technologies, Inc.,
        a
        Nevada corporation.  This discussion contains forward-looking statements
        based on our current expectations, assumptions, and estimates. The words
        or
        phrases "believe," "expect," "may," "anticipates," or similar expressions
        are
        intended to identify "forward-looking statements." Actual results could differ
        materially from those projected in the forward-looking statements as a result
        of
        a number of risks and uncertainties pertaining to our business, including
        without limitation: (a) because we have a limited operating history and our
        technologies are still evolving, we may not be able to successfully manage
        our
        business or achieve profitability; (b) our technology and product development
        processes, which include regulatory approvals, are lengthy and expensive
        and
        there is no assurance that will have sufficient resources to complete
        development related to these processes; (c) our history of losses make it
        difficult for you to evaluate our current and future business and prospects
        and
        future financial results; (d) there is no assurance that our technologies
        or
        products will be accepted in the marketplace; (e) we do not currently carry
        product liability insurance; and therefore, should we be subject to a product
        liability claim, our financial condition may be adversely affected; (f) we
        have
        negative cash flow from operations and an accumulated deficit that raises
        substantial doubt about our ability to continue as a going concern; (g) our
        future business is dependent upon third parties to market, manufacture, and
        distribute our technologies and/or products or jointly developed products;
        (h)
        our operations are currently funded by the revenues and our equity
        financings in November 30 and December 31, 2004; however, there are no
        assurances that these revenues and  equity financings  will be
        sufficient to ensure our future financial performance; (i) we have substantial
        debt obligations due to our Chairman of the Board, who previously funded
        our
        operations,  that are secured by our assets and revenues and are senior
        obligations; (k) there is no assurance that we will be able to
        attract and retain highly skilled scientific, technical and management
        personnel, who are critical to our success;and (l) other risk factors
        discussed in our annual report for the fiscal year ended June 30, 2005 and
        other
        periodic filings, which may be accessed at http://www.sec.gov.  Statements
        made herein are as of the date of the filing of this Form 10-QSB with the
        Securities and Exchange Commission and should not be relied upon as of any
        subsequent date. Unless otherwise required by applicable law, we do not
        undertake, and we specifically disclaim any obligation, to update any
        forward-looking statements to reflect occurrences, developments, unanticipated
        events or circumstances after the date of such statement.
  **Overview**
  Quick-Med
          is a life sciences company focused on developing proprietary, broad-based
          technologies in the consumer, healthcare, and industrial markets. We call
          one of
          these technologies, “NIMBUSTM”, which stands for “Novel Intrinsically MicroBonded
          Utility Substrate”. NIMBUSTM is a family of advanced polymers that are
          bio-engineered to have antimicrobial, super-absorbent, hemostatic or other
          properties with applications across a variety of markets. Our other leading
          technology is called “MultiStat TM” ,
          a
          family of advanced patent methods and compounds, which we believe may be
          highly
          effective in skin care therapy applications.
  Our
          strategy is to further develop our core technologies as well as develop
          future
          technologies. We will attempt to commercialize these technologies through
          strategic licensing partnership agreements, joint ventures, or co-development
          agreements. We do not intend to manufacture or distribute final products;
          instead, we will seek partnership arrangements and/or license agreements
          with
          third parties to develop products that use our technologies and who will
          perform
          the manufacturing, marketing, and distribution functions associated with
          our
          technologies.


-12-
 *Index*




Our
      business model has attempted and will continue to attempt to develop the
      following revenue segments:




·
            License
                fees;


·
            Profit
                sharing revenues;


·
            Research
                and development fees paid to us in connection with joint development
                agreements; and


·
            Government
                research and development grants.




Our
      potential revenues will be derived from government agencies and the following
      types of companies in connection with our NIMBUSTM technology:




·
            Healthcare
                and medical;


·
            Apparel;


·
            Cosmetic;


·
            Personal
                care companies; and


·
            Building
                materials industry.





Recent
      Developments




During
        fiscal year 2006, through our agreement with Engelhard Corporation (“Engelhard”)
        (EC.NYSE), a Fortune 500 material sciences corporation, products that have
        incorporated our MultiStatTM technologies are now being commercialized through
        various skin care and anti-aging products, including such products being
        sold at
        retail stores and television shopping networks such as Bath and Body Works® and
        QVC under Patricia Wexler M.D. cosmetic skincare product line and Elizabeth
        Arden® under Ceramide Plump Perfect product line. Revenues
        derived from the royalties generated by sales of MustistatTM - related
        products increased to $884,974 in the nine months ended March 31, 2006
        from $66,303 in the nine months ended March 31, 2005.
  Our
        agreement with Engelhard calls for financial milestones within specified
        dates,
        which had not been met as of  March 31, 2006. We previously served
        Engelhard with notices of default and termination while continuing good faith
        efforts to resolve open matters.  Engelhard has notified us of its desire
        to successfully resolve these matters and we are currently in negotiation
        to
        reach a satisfactory agreement.  On March 31, 2006, we completed
        negotiation of
        a term
        sheet and signed a non-binding letter of intent to enter into a definitive
        agreement based on these terms.However, there is no assurance that
        these negotiations will be successful. Should our agreement with Engelhard
        be
        terminated, our future revenues will be adversely affected. See Results of
        Operations for further discussions.
  Uncertainties
      and Trends




Our
      revenues are dependent now and in the future upon the following factors:




·
            Acceptance
                of our technologies, products or future products in the marketplace;


·
            Our
                partner’s ability to develop, market and distribute our technologies under
                a strategic partnership agreement;


·
            Demand
                for products or future products that utilize our
                technologies;


·
            Our
                ability to secure license or profit sharing agreements and secure
                government research and development grants;


·
            Our
                ability to market our technologies and services to health care, apparel,
                cosmetic, and personal care companies;


·
            Our
                ability to successfully conduct laboratory and clinical testing of
                our
                technologies and potential products; and


·
            Our
                ability to obtain regulatory approval of our future
                products.





Uncertainties
      or trends that may affect our business also include the possibility that known
      or unknown competitors may develop products with similar applications to our
      proposed products that may prove to be superior in performance and/or price
      to
      our products.





**Capital
      Expenditures and Requirements**





From
      2000
      to 2006, we have spent approximately $378,000 on the acquisition of patents
      and
      exclusive license agreements. We owe an additional $160,000 to Dr. Richard
      Galardy which is due when certain milestones are met in connection with a
      September 2000 license agreement we have with Dr. Galardy and Dr. Damian
      Grobeny. This license agreement provides that we compensate Dr. Galardy and
      Dr.
      Grobeny with our common stock and cash for the exclusive license of the
      llomastat technology invented by them.





We
      do not
      expect any significant additions to property, plant and equipment.





**Critical
      Accounting Policies and Estimates**





The
      preparation of our financial statements requires us to make estimates and
      assumptions that affect the reported amounts. The estimates and assumptions
      are
      evaluated on an on-going basis and are based on historical experience and on
      various other factors that are believed to be reasonable. Estimates and
      assumptions include, but are not limited to, fixed asset lives, intangible
      assets, income taxes, and contingencies. We base our estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. We believe the following
      critical accounting policies affect its more significant judgments and estimates
      used in the preparation of the financial statements. Our accounting for stock
      compensation requires us to estimate the value of the  shares
      issued and the value of intangible assets require us to continually assess
      whether such assets are impaired.


-13-
 *Index*





**Results
      of Operations**





***Comparison
      of Nine Months Ended March 31, 2006 and
      2005***




Revenues. During the nine months ended March 31, 2006 we had $934,141 of
        revenues, compared to $84,969 of revenues for the nine months
        ended March 31, 2005, representing a 999% increase in our revenues. Our
        revenues during the nine months ended March 31, 2006 consisted of: (a)
        $884,974, which represented our royalties from the product sales ($803,307)
        and
        the license fee for exclusivity ($81,667) by a cosmetic and personal care
        division of Engelhard Corporation (“Engelhard”), in connection with a master
        agreement we have with Engelhard for product development, manufacturing and
        distribution;  (b) $2,500 which represented a pro rata share of the fees
        related to a research agreement unrelated to our core technologies, which
        was
        completed in July 2005; and (c) $46,667, which represented the revenue earned
        from the small business innovation research program. Our revenues during
        the nine months ended March 31, 2005 consisted of: (a) $66,303, which
        represented our royalties from the product sales by a cosmetic and personal
        care
        division of Engelhard Corporation; and (b) $18,666, which represented a pro
        rata
        share of the fees related to the research agreement with Johnson & Johnson
        Wound Management, a division of ETHICON INC., a subsidiary of Johnson &
Johnson (J.NYSE), completed in June 2005.
 
 In
        connection with the master agreement with Engelhard, in August 2002 we signed
        a
        product development and distribution agreement for Ilomastat with Engelhard
        (the
“Product Agreement”). The Product Agreement requires Engelhard to: (a) obtain at
        least one significant sales contract within one year of the effective
        distribution date, as defined; and (b) our realizing a combined annualized
        net
        profit run rate milestone of at least $1 million per annum by May 2005. On
        April
        18, 2005, we sent a notice to cure to Engelhard for the noncompliance on
        the one
        significant sales contract provision and to determine the achievability of
        the
        key profit milestones.
 
 On
        September 19, 2005, we sent a notice of material default and termination
        to
        Engelhard informing Engelhard of its breaches of contract under the master
        agreement and the Product Agreement (collectively the “Agreements”),
        specifically Engelhard’s failure to: (1) develop at least one significant sales
        contract within one year of the effective distribution date; and (2) have
        us
        realizing a combined annualized net profit of $1 million per year by May
        2005.
        The Agreements were to terminate in their entirety thirty (30) days from
        Engelhard’s receipt of the termination notice if Engelhard did not cure its
        material breaches within that time period . Engelhard has not yet cured
        such breaches.  However, in October 2005, we agreed to extend the
        Agreements through a tolling agreement.
  On
          March
          31, 2006, we and Engelhard completed negotiation of a term sheet and signed
          a non-binding letter of intent to enter into a definitive agreement
          based on these terms. During this negotiation
          period, Engelhard continues to make sales and pays
 us royalties as specified in the term sheet. However, we
          can give no assurance that the negotiation of a new agreement will be
          successful.  If the new agreement with Engelhard   is
          not  reached, our future revenues will be adversely
          affected.
 
 Operating
        Losses. Operating losses for the nine months ended March 31, 2006 decreased by
        13% or $172,282 to ($1,203,921) for the nine months ended March 31,
        2006 from ($1,376,203) for the nine months ended March 31, 2005. The
        decrease in operating loss was primarily due to an increase in revenues of
        $849,172 offsetting an increase in expenses of $676,890 for the nine months
        ended March 31, 2006. The increase in expenses was primarily due to the
        following: (a) an increase of $280,688 or 78% increase in research and
        development expenses; (b)  an increase of $141,188 or 1,065% in cost of
        revenues; (c) an increase of $129,012 or 31% in non-cash stock-based
        compensation; and (d) an increase of $122,589 or 19% in general and
        administrative expenses for those comparable prior periods, as described
        in more
        detail below.
 
 Non-Cash
        Stock-Based Compensation. Non-Cash
        Stock-Based Compensation increased $129,012 or 31 %
        to
        $542,481 for the nine months ended March 31, 2006, from $413,469 for
        the nine months ended March 31, 2005. This increase in non-cash stock
        based compensation was attributed to several factors. First, we issued 125,000
        more options to our employees, directors and consultants in fiscal year 2006,
        710,000 stock options in 2006 compared to approximately 585,000 stock options
        issued in fiscal year 2005. Second, the fair market value of the stock options
        issued in fiscal year 2006 with an exercise price of $0.80 per share was
        higher
        than the fair market value of those issued in fiscal year 2005 with an exercise
        price $0.17, resulting in the recognition of a higher compensation expense
        in 2006. Third, effective July 1, 2005, we adopted Statement of Financial
        Accounting Standards (“ SFAS”)
        123R, "Share-Based Payment," ("SFAS 123R"), which requires companies to
        recognize as expense the fair value of employee stock options and similar
        awards. Prior to July 1, 2005, the
        Company elected to account for the stock options granted to employees under
        the
        Accounting Principles Board Opinion (‘APB”) No. 25, “Accounting for Stock Issued
        to Employees,” and related interpretations. Under APB No. 25, no compensation
        was recorded for stock options granted to the employees as long as the exercise
        price of the stock options equals the market value of the common stock at
        the
        date of grant. Hence, we recognized a higher compensation expense of
        approximately $154,160 in the 2006 period when compared with the prior
        period. Fourth, in both fiscal year 2006 and 2005 we paid our directors for
        their services with our restricted common stock. Although the number of shares
        granted in 2006 was fewer than 2005, the value of the shares granted was
        approximately $23,000 higher in 2006 than 2005.  Finally, this increase was
        offset by the fact that we issued approximately 24,000 of  our 
restricted shares for services to consultants in fiscal year 2006 as
        compared to approximately 676,000 restricted shares issued to consultants
        in the
        comparable prior period.








-14-
 *Index*




Research
        and Development Expense. Research
        and development expense increased by $280,688 or 78% to $639,947 for
        the nine months ended March 31, 2006, from $359,259 for the nine
        months ended March 31, 2005, as a result of increased research projects,
        additional hiring of scientists and personnel that increased our research
        staff
        from 2 to 6 persons, and increased usage of scientific consulting
        services.
 
 General
        and Administrative Expense .
        General
        and administrative expense increased by $122,589 or 19% to $763,931 for
        the nine months period ended March 31, 2006, from $641,342 for
        the nine months period ended March 31, 2005. This increase in our
        general and administrative expenses is primarily attributed to increased
        business development expenses, legal fees for patent related work, , our
        corporate governance expenses, our patent maintenance fees, additional
        consulting expenses incurred in  fiscal year 2006, and promotional and
        sales expenses related to product sales under the master agreement for product
        development, manufacturing and distribution as mentioned above.
 
 Other
        Income. During the nine months ended March 31, 2005, we had
        $17,478 in other income, which represented a gain from a debt settlement
        of the
        legal fees owed by us to a law firm. This law firm entered into a bankruptcy
        proceeding. We reached a settlement agreement with the trustee for the estate
        of
        the law firm at the amount less than the carrying liability. There was no
        such
        gain in the nine months ended March 31, 2006.
 
 Interest
        Income. During
        the nine months ended March 31, 2006, we had $9,907 in interest
        income , which
        represented interest earned on our certificate of deposits and money market
        account funded by the equity financings during the period.  We had
        $5,238 in interest income the comparable 2005 period, which also
        represented interest earned on interest bearing accounts funded by the equity
        financings for a shorter period of time beginning November 2004 to March
        31,
        2005.
 
 Interest
        Expense. Interest
        expense for the nine months period ended March 31, 200 decreased
        $24,754 or 30% to $57,140 compared to $81,894 for the nine months period
        ended March 31, 2005. This decrease was due to a decrease of $800,000 or
        38% in the average outstanding loan balance due to our Chairman of the Board,
        to
        approximately $1,300,000, compared to approximately $2,100,000 average
        outstanding balance for the comparable 2005 period.
  Net
        Loss. Net loss
        for the nine month period ended March 31, 2006 was ($1,251,154) or
        ($0.04) per share compared to ($1,435,381) or ($0.07) per share for
        the nine month period ended March 31, 2005. This decrease is primarily
        attributable to an increase in revenues, offset by the increases in non-cash
        stock-based compensation, research and development expenses, and general
        and
        administrative expense.


-15-




***Comparison
        of Three Months Ended March 31, 2006 and 2005***
  Revenues. During
          the three months ended March 31, 2006 we had $301,584 of revenues, compared
          to $49,316 of revenues for the three months ended March 31, 2005,
          representing a 512% increase in our revenues. Our revenues during the three
          months ended March 31, 2006 consisted of $254,917, which represented our
          royalties from the product sales ($237,417) and the license fee for exclusivity
          ($17,500)  by a cosmetic and personal care division of Engelhard, in
          connection with a master agreement we have with Engelhard for product
          development, manufacturing and distribution; and $46,667, which represented
          the
          revenue earned from the small business innovation research program. Our
          revenues
          for the three months ended March 31, 2005, consisted of: (a) $35,316, which
          represented our royalties from the product sales by a cosmetic and personal
          care
          division of Engelhard; and (b) $14,000, which represented a pro rata share
          of
          the fees related to the research agreement with Johnson & Johnson Wound
          Management, completed in June 2005.
 
 Operating
          Losses. Operating losses for the three months ended March 31, 2006 decreased by 34%
          or $179,361
          to ($342,752) for the three months ended March 31, 2006 from ($522,113) for
          the three months ended March 31, 2005. The decrease in operating loss was
          primarily due to an increase in revenues of $252,268 offsetting an increase
          in
          expenses of $72,907 for the three months ended March 31, 2006. The increase
          in expenses was primarily due to: (a) an increase of $53,119 or 31% increase
          in
          research and development ; (b) an increase of $34,208 or 484% in cost of
          revenues ; (c) $48,772 or 21% in general and administrative expenses; and
          (d) offset by a reduction of  expenses $64,394 or 43% in non-cash
          stock-based compensation for those comparable prior periods.
 
 Non-Cash
          Stock-Based Compensation. Non-Cash
          Stock-Based Compensation decreased $64,396 or 43 %
          to
          $86,786 for the three months ended March 31, 2006, from $151,182 for the
          three months ended March 31, 2005. This decrease in non-cash stock based
          compensation was primarily attributed to a reduction in a number of shares
          issued to consultants for services rendered from approximately
          212,000 shares issued during the three month period ended March 31,
          2005 to approximately 5,000 shares issued during the period ended March 31,
          2006.   The decrease was offset by first, we issued more options to
          our employees, directors and consultants in fiscal year 2006 than  fiscal
          year 2005; second, the fair market value of the stock options issued in
          fiscal year 2006 with an exercise price of $0.80 per share was higher than
          the
          fair market value of those issued in fiscal year 2005 with an exercise
          price $0.17, resulting in the recognition of a higher compensation expense
          in
          2006. Third, effective July 1, 2005, we adopted Statement of Financial
          Accounting Standards (“ SFAS”)
          123R, "Share-Based Payment," ("SFAS 123R"), which requires companies to
          recognize as expense the fair value of employee stock options and similar
          awards. Prior to July 1, 2005, the
          Company elected to account for the stock options granted to employees under
          the
          Accounting Principles Board Opinion (‘APB”) No. 25, “Accounting for Stock Issued
          to Employees,” and related interpretations. Under APB No. 25, no compensation
          was recorded for stock options granted to the employees as long as the
          exercise
          price of the stock options equals the market value of the common stock
          at the
          date of grant. Hence, we recognized a higher compensation expense when
          compared with the prior period.





-16-




Research
        and Development Expense. Research
        and development expense increased by $53,119 or 31% to $221,946 for the three
        months ended March 31, 2006, from $168,827 for the three months
        ended March 31, 2005, as a result of increased research projects,
        additional hiring of scientists and personnel that increased our research
        staff
        from 2 to 6 persons, and increased usage of scientific consulting
        services.
 
 General
        and Administrative Expense .
        General
        and administrative expense increase by $48,772 or 21% to $281,588 for the
        three
        months period ended March 31, 2006, from $232,816 for the three months
        period ended March 31, 2005. This increase in our general and
        administrative expenses is primarily attributed to the increased in business
        development activities,  increase in legal fees for patent related work, ,
        our corporate governance expenses, our patent maintenance fees, additional
        consulting expenses incurred in 2006, and promotional and sales expenses
        related
        to product sales under the master agreement for product development,
        manufacturing and distribution as mentioned above.
  Interest
        Income. During
        the three months ended March 31, 2006, we had $2,313 in interest income as
        compared to $5,238 in the comparable period.  The interest
        income represented interest earned on our certificate of deposits and money market
        account funded by the equity financings and revenues received during the
        period.
  Interest
        Expense. Interest
        expense for the three months period ended March 31, 2006 remained
        unchanged as compared to the three months period ended March 31, 2005.
        The average outstanding loan balance due to our Chairman during the three
        months
        ended March 31, 2006 and 2005 was the same.
  Net
        Loss. Net loss
        for the three months period ended March 31, 2006 was ($359,208) or ($0.01)
        per share compared to ($535,644) or ($0.02) per share for the three months
        period ended March 31, 2005. This decrease is primarily attributable to
        increases in revenues, offset by increases in research and development
        expenses, general and administrative expense, cost of revenues, and a
        decrease in  non-cash stock-based compensation.






-17-
 *Index*





**Liquidity
      and Capital Resources**




Our
        auditors have issued a going concern opinion on our audited financial statements
        for the fiscal years ended June 30, 2005 and 2004 since during those periods
        we
        experienced recurring losses and negative cash flows from operations as well
        as
        a net capital deficiency. These matters raise substantial doubt about our
        ability to continue as a going concern.
 
 Total
        cash on hand at March 31, 2006 was $342,842, as compared with
        a December 31, 2005 balance of $476,751.
  Equity
        Financing and our Cash Requirements
  On
        November 30, 2004, we completed an agreement to sell 5,000,000 shares of
        our
        restricted common stock to Phronesis Partners, L.P. (“Phronesis”), a Delaware
        limited partnership, for $1,000,000 before commission and expenses (the ”Stock
        Purchase Agreement”). On November 30, 2004, we received $880,000 net of
        commission and expenses of $120,000. In connection with the Stock Purchase
        Agreement, our Chairman of the Board, Mr. Granito, converted $500,000 of
        the
        convertible debt we owed to him into 1,315,790 shares of our restricted common
        stock at a conversion price applicable to the convertible debt of $0.38 per
        share. In connection with the Stock Purchase Agreement, Phronesis and we
        completed a Warrant Agreement, in which we granted Phronesis certain warrants
        to
        purchase shares of our restricted common stock at an exercise price as defined
        in the Warrant Agreement. The Warrant Agreement expired on February 5, 2005
        and
        provided for a maximum investment of $1,000,000 by Phronesis through the
        exercise of warrants. On December 31, 2004, Phronesis and we agreed to amend
        the
        exercise price for the warrant price to $0.46 per share. All other terms
        of the
        Stock Purchase Agreement and the Warrant Agreement remained the same. On
        the
        same date, Phronesis exercised its warrant to purchase 2,173,913 shares of
        our
        restricted common stock at a per share price of $0.46, or an aggregate purchase
        price of $1,000,000 before commission of $70,000.
 
 In
        connection with the exercise of the warrant and in accordance with the terms
        of
        the Stock Purchase Agreement, Mr. Granito, our Chairman of the Board,
        immediately converted $826,087 of his convertible debt owed by us into 2,173,913
        shares of our restricted common stock (equal to the number of shares acquired
        by
        Phronesis) at a conversion price applicable to the convertible debt of $0.38
        per
        share.
 
 In
        February 2005, we issued 150,000 shares of restricted common stock for an
        aggregate purchase price of $87,000 in cash.
  In
        June
        2005, we issued 16,666 shares of restricted common stock for aggregate exercise
        price of $2,500 in cash from an exercise of an employee stock
        option.
  In
        July
        2005, we issued 40,322 shares of restricted common stock for an aggregate
        purchase price of $25,000 in cash.
  In
        August
        2005, we issued 13,795 shares of restricted common stock for an aggregate
        purchase price of $8,553 in cash.
  In
        August
        2005, we issued 175,000 shares of restricted common stock for an aggregate
        exercise price of $29,750 in cash from an exercise of a stock
        option.
  In
        February 2006, we issued 100,000 shares of restricted common stock for an
        aggregate purchase price of $80,000 in cash.
  Based
        on
        our cash position at March 31, 2006, we cannot continue to satisfy our
        current cash requirements for a period of twelve (12) months through our
        existing capital. We anticipate total estimated patent related legal fees,
        operating and research and development expenditures of approximately $156,000
        per month or an aggregate of approximately $1,872,000 over the next twelve
        (12)
        months, in the following areas:
 -18-
 *Index*




·
            Research
                and development expenditures of approximately $75,000 per month or
                an
                aggregate of $900,000 that will consist of the following estimated
                monthly
                expenditures: (a) $45,000 in payroll for scientists; (b) $15,000
                for
                outside research and development expenditures; and (c) $15,000 for
                chemical supplies, and laboratory operating expenses, including rent
                expense.


·
            Patent
                related legal fees of approximately $20,000 per month or an aggregate
                of
                $240,000; and


·
            Operating
                expenses of approximately $54,000 per month or an aggregate of $648,000,
                including officer and director insurance, general liability insurance,
                rent, consulting fees, utilities, legal and accounting fees, and
                payroll.


·
            Financing
                expense of approximately $7,000 per month or an aggregate of $84,000
                for
                interest payments of the outstanding note due to our Chairman of
                the
                Board.




Our
        current cash balance of $342,842 as of March 31, 2006, coupled with
        collections on accounts receivable of $90,001  will satisfy our cash
        requirements for only approximately three (3) months.
  If
        needed, we intend to raise additional cash by means of equity and or debt
        financing. Additionally, we plan to implement cash conservation strategy
        by
        extinguishing obligations through share-based payments and reducing our use
        of
        consulting services. There are no assurances that any planned equity offering
        and/or debt financing will be successful or sufficient to meet our cash
        requirements if that our cash conservation strategy will be
        successful.
  As
        of March 31, 2006, we have notes outstanding to our Chairman of the Board
        totaling $1,268,625. During the year ended June 30, 2005, the short-term
        note
        with our Chairman of the Board was consolidated with the long-term convertible
        note under the same terms. The maturity date was extended to July 1, 2006
        from
        July 1, 2004. Subsequently, the maturity date was extended to October 1,
        2007.
        On November 30 and December 31, 2004, a total of $1,326,087 of the long-term
        convertible note was converted into 3,489,703 shares of our restricted common
        stock. Our President’s note payable is a short-term note with no specific
        repayment terms. During the year ended June 30, 2005, we repaid in full our
        President’s note payable. During the quarter ended December 31, 2005, we paid
        the accrued interest of $56,932 on our notes outstanding to our Chairman.
        In
        January and April 2006, we paid the quarterly interest payment of $19,186
        and $18,769, respectively, on our notes to our Chairman.
  If
        we are
        unable to successfully repay or restructure our loan to our Chairman of the
        Board or our other outstanding liabilities as they become due, we may have
        to
        liquidate our business and undertake any or all the steps outlined below.


·
            Significantly
                reduce, eliminate or curtail our business, operating and research
                and
                development activities so as to reduce operating costs;


·
            Sell,
                assign or otherwise dispose of our assets, if any, to raise cash
                or to
                settle claims by creditors, including our Chairman of the
                Board;


·
            Pay
                our liabilities in order of priority, if we have available cash to
                pay
                such liabilities;


·
            If
                any cash remains after we satisfy amounts due to our creditors, distribute
                any remaining cash to our shareholders in an amount equal to the
                net
                market value of our net assets;


·
            File
                a Certificate of Dissolution with the State of Nevada to dissolve
                our
                corporation and close our business;


·
            Make
                the appropriate filings with the Securities and Exchange Commission
                so
                that we will no longer be required to file periodic and other required
                reports with the Securities and Exchange Commission, if, in fact,
                we are a
                reporting company at that time; and


·
            Make
                the appropriate filings with the National Association of Security
                Dealers
                to affect a delisting of our stock.




Based
        upon our cash requirements for our plan of operations and our current dividend
        policy of investing any available cash in our operations.  We do not
        currently plan to distribute any cash to our stockholders.
  If
        we
        have any liabilities that we are unable to satisfy and we qualify for protection
        under the U.S. Bankruptcy Code, we may voluntarily file for reorganization
        under
        Chapter 11 or liquidation under Chapter 7. Our creditors may also file a
        Chapter
        7 or Chapter 11 bankruptcy action against us. If our creditors or we file
        for
        Chapter 7 or Chapter 11 bankruptcy, our creditors will take priority over
        our
        stockholders. If we fail to file for bankruptcy under Chapter 7 or Chapter
        11
        and we have creditors, such creditors may institute proceedings against us
        seeking forfeiture of our assets, if any.


-19-
 *Index*




We
        do not
        know and cannot determine which, if any, of these actions we will be forced
        to
        take. If any of these foregoing events occur, you could lose your entire
        investment in our shares of common stock.
  At March
        31, 2006, we had  working capital of $204,290, that primarily consists of:
        (a) cash of $342,842; (b) accounts receivable of $90,001; (c) accrued interest
        on the stockholder loan totaling $18,769 (d) accounts payable of $116,451,
        and
        (e) the short-term other current liabilities of $93,333. At March
        31, 2006, we had a stockholders’ deficit of $917,579, a substantial
        portion of which is due to non-cash stock compensation expense and non-cash
        interest expense from the notes payable conversions.
  Cash
        used in operating activities was $628,959 for the nine months
        ended March 31, 2006. Net cash used in investing activities was
        $15,812.   Net cash provided by financing activities was $143,304 of
        which $113,554 was from the sale of our restricted common stock and $29,750
        from
        the exercise of 175,000 stock options.
   To
        date,
        we have funded our activities principally from  (a) revenues of
        approximately $1,020,000; (b) issuance of common stock to an
        institutional investor for net proceeds of $1,810,000 and accredited investors
        for net proceeds of $167,000; (c) loans from our Chairman of the Board totaling
        $850,000; (d) other stockholder loans totaling $2,673,105, including
        related accrued interest, and (e) a $650,000 bridge loan from a merchant
        banking
        firm. All of these funds have been loaned with 6% interest per annum. The
        loan
        from the investment-banking firm was converted in November 2002 into restricted
        common stock at $1.00 per share.
  During
        the year ended June 30, 2005, we borrowed a total of approximately $460,417
        through: (a) $450,000 from our Chairman under the long-term note as described
        above, and (b) $10,417 from our President, which was subsequently paid in
        full
        in 2005.
  In
        December 2004, approximately $13,267 of accounts payable was settled through
        the
        issuance of 66,335 shares of restricted common stock.






-20-
 *Index*




**ITEM
                  3.**
              **CONTROLS
                  AND PROCEDURES**




*Evaluation
      of Disclosure Controls and Procedures*




Based
      on
      our management’s evaluation, with the participation of our Principal Executive
      Officer and Chief Financial Officer, of our disclosure controls and procedures
      (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
      "Exchange Act")), our Principal Executive Officer and our Chief Financial
      Officer have concluded that as of  March 31, 2006, the end of the
      period covered by this Quarterly Report on Form 10-QSB, such disclosure controls
      and procedures are effective to ensure that information required to be disclosed
      by us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms.







*Changes
      in Internal Controls over Financial Reporting*




As
      of the
      end of our quarter ended March 31, 2006, there was no change in the our
      internal control over financial reporting that has materially affected, or
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.


-21-
 *Index*





**PART
      II**


**OTHER
      INFORMATION**





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








We
      are subject to disputes and litigation in the ordinary course of our
      business.  None of these matters, in the opinion of our management, is
      material or likely to result in a material effect on us based upon information
      available at this time.





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




On January
      31, 2006, we issued 1,936 shares of our common stock to Ms. Sally MacKay in
      exchange for approximately $1,820, which we owed to Ms. MacKay for services
      rendered to us. The shares granted to Ms. MacKay were valued at price of $0.94
       per share, for an aggregate price of approximately $1,820. We relied upon
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”)
      for the offer and sale. We believed that Section 4(2) was available because
      the
      offer and sale did not involve a public offering and there was not general
      solicitation or general advertising involved in the offer or sale. We placed
      restrictive legends on the stock certificate representing the shares issued
      to
      Ms. MacKay stating that the securities were not registered under the Securities
      Act and are subject to restrictions on their transferability and
      resale.




On
      February 6, 2006, we sold 50,000 shares of common stock to Mr. Richard Eiferman
      for a price of $0.80 per share or in aggregate of $40,000 in cash. We relied
      upon Section 4(2) of the Securities Act for the offer and sale. We believed
      that
      Section 4(2) was available because the offer and sale did not involve a public
      offering and there was no general solicitation or general advertising involved
      in the offer or sale. We placed restrictive legends on the certificates
      representing these securities issued to Mr. Eiferman stating that the securities
      were not registered under the Securities Act and are subject to restrictions
      on
      their transferability and resale.




On
      February 6, 2006, we sold 50,000 shares of common stock to Richard Eiferman
      Trust for a price of $0.80 per share or in aggregate of $40,000 in cash. We
      relied upon Section 4(2) of the Securities Act for the offer and sale. We
      believed that Section 4(2) was available because the offer and sale did not
      involve a public offering and there was no general solicitation or general
      advertising involved in the offer or sale. We placed restrictive legends on
      the
      certificates representing these securities issued to Mr. Eiferman stating that
      the securities were not registered under the Securities Act and are subject
      to
      restrictions on their transferability and resale.




On February
      28, 2006, we issued 1,830
      shares of our common stock to Ms. Sally MacKay in exchange for approximately
      $1,739, which we owed to Ms. MacKay for services rendered to us. The shares
      granted to Ms. MacKay were valued at price of $0.95 per share, for an aggregate
      price of approximately $1,739.  We relied upon Section 4(2) of the
      Securities Act for the offer and sale. We believed that Section 4(2) was
      available because the offer and sale did not involve a public offering and
      there
      was not general solicitation or general advertising involved in the offer or
      sale. We placed restrictive legends on the stock certificate representing the
      shares issued to Ms. MacKay stating that the securities were not registered
      under the Securities Act and are subject to restrictions on their
      transferability and resale.




On March
        31, 2006, we issued 1,305 shares
        of our common stock to Ms. Sally MacKay in exchange for approximately $2,389,
        which we owed to Ms. MacKay for services rendered to us. The shares granted
        to
        Ms. MacKay were valued at price of $1.83 per share, for an aggregate price
        of
        approximately $2,389.  We relied upon Section 4(2) of the Securities Act
        for the offer and sale. We believed that Section 4(2) was available because
        the
        offer and sale did not involve a public offering and there was not general
        solicitation or general advertising involved in the offer or sale. We placed
        restrictive legends on the stock certificate representing the shares issued
        to
        Ms. MacKay stating that the securities were not registered under the Securities
        Act and are subject to restrictions on their transferability and
        resale.




During
        the period ended March 31, 2006, we issued warrants to GSP Consulting,
        Inc. (“GSP”) entitling GSP to acquire up to 7,989 shares of common stock at an
        exercise prices ranging from $0.94 to $1.83 per share, the then-current market
        values of our common stock. These warrants were issued to GSP as partial
        payment
        for services rendered to us by GSP from January to March 2006. We
        relied upon Section 4(2) of the Securities Act for the offer and sale. We
        believed that Section 4(2) was available because the offer and sale did not
        involve a public offering and there was not general solicitation or general
        advertising involved in the offer or sale. We placed restrictive legends
        on the
        warrant certificates representing the warrants issued to GSP stating that
        the
        securities were not registered under the Securities Act and are subject to
        restrictions on their transferability and resale.






-22-
 *Index*




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





None.





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




None.


**Item
      5. Other Information.**




None





**Item
      6. Exhibits**





Exhibits





2.1
            Merger
                Agreement dated March 19, 2001 between Above Average Investments
                Ltd. and
                Quick- Med Technologies, Inc. (1)


2.2
            Amendment
                to Merger Agreement (1)


3.1
            Articles
                of Incorporation (1)


3.2
            Bylaws
                (1)


10.1
            Quick-Med
                Technologies' MMP License Agreement
                (1)


10.2
            Quick-Med
                Technologies Stock Option Plan (1)


10.3
            Cooperative
                Research and Development Agreement - The U.S. Army Medical Research
                Institute of Chemical Defense (1)


10.4
            Financing
                Agreement - Euro Atlantic Capital Corporation
                (1)


10.5
            Consulting
                Agreement - Gregory Schultz (1)


10.5.1
            Consulting
                Agreement - Christopher T. Batich
                (1)


10.5.2
            Consulting
                Agreement - Bruce Mast (1)


10.5.3
            Consulting
                Agreement - William Toreki (1)


10.6
            Note
                issued to Michael R. Granito by Quick-Med Technologies
                (1)


10.7
            Employment
                Agreement - Gerard Bencen (1)


10.8
            Research
                and Development Agreement - The Collaborative Group
                (2)


10.9
            Agreement
                Between Noville and Quick-Med Technologies, Inc.
                (3)


10.10
            Agreement
                between United States Army Medical Research Acquisition Activity
                and
                Quick-Med Technologies, Inc. (4)


31.1
            Certification
                of Principal Executive Officer Pursuant to Rule 13a-15(e) and 15d-15(e),
                filed herewith.


31.2
            Certification
                of Chief Financial Officer Pursuant to Rule 13a-15(e) and 15d-15(e),
                filed
                herewith.


32.1
            Certification
                of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
                filed
                herewith.


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





99.3
            Assignment
                of Patent for Wound Care (1)


99.4
            Assignment
                of Patent for Mustard Gas (1)


99.5
            Assignment
                of Patent for Anti-wrinkle cream
                (1)


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


(1)
            
            Incorporated
                by reference to the Company's registration statement on Form SB-2
                (file
                no. 333-41672)


(2)
            
            Incorporated
                by reference to the Company's Annual Report on Form 10-KSB for the
                year
                ended September 30, 2002


(3)
            
            Incorporated
                by reference to the Company’s Quarterly Report on Form 10-QSB for the
                three- month period ended September 30,
                2003.


(4)
            
            Incorporated
                by reference to the Company’s Quarterly Report on Form 10-QSB for the
                three- month period ended September 30,
                2005.


-23-
 *Index*




**SIGNA****TURES**








In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.





Quick-Med
                Technologies, Inc.___________________________(Registrant)





Date
            May
                12, 2006
            By:
                /s/ David S. LernerDavid
                S. LernerPresident
                and Principal Executive Officer





Date
            May
                12, 2006
            By:
                /s/ Nam H. NguyenNam
                H. NguyenChief
                Financial Officer




-
      24
      -