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 September 30,
                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




Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act) ___ 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 November 10, 2006:
      30,309,901




















**QUIICK-MED
                TECHNOLOGIES, INC.**
              
              INDEX
                TO FORM 10-QSBPART
                I
            **FINANCIAL
                INFORMATION**
            PageItem
                1. Financial StatementsCondensed
                Balance Sheet as of September 30, 2006
                (unaudited)
            1Condensed
                Statements of Operations for the****three
                months ended September 30, 2006 (unaudited)
            2Condensed
                Statement of Changes in Stockholders’ Deficit for the three
                months****ended
                September 30, 2006 (unaudited)
            3Condensed
                Statements of Cash Flows for the three months ended
                September 30, 2006 (unaudited)
            4-5Notes
                to Condensed Financial Statements
            6-10Item
                2. Management’s Discussion and Analysis of Financial
                Condition and Results of Operations
            11-16Item
                3. Controls and Procedures
            17PART
                II
            **OTHER
                INFORMATION**Item
                1. Legal Proceedings
            18Item
                2. Unregistered Sales of Equity Securities and Use
                of
                Proceeds
            18Item
                3. Defaults Upon Senior
                Securities
            19Item
                4. Submission of Matters to a Vote of Security
                Holders
            19Item
                5. Other Information
            19Item
                6. Exhibits and Reports on Form
                8-K
            19SIGNATURES
            20









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




**ITEM
                1.**
            **FINANCIAL
                STATEMENTS**




**QUICK-MED
        TECHNOLOGIES, INC.**
 **CONDENSED
        BALANCE SHEET AS OF SEPTEMBER 30, 2006**
 **(UNAUDITED)**
 **ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                205,042Accounts
                    receivable
                
                
                105,689Total
                    current assets
                
                
                310,731Property
                    and equipment, net
                
                
                13,735Other
                    assets:Prepaid
                    expenses
                
                
                960Intangible
                    asset, net
                
                
                274,224Total
                    other assets
                
                
                275,184Total
                    assets
                
                $
                599,650**LIABILITIES
                    AND STOCKHOLDERS' DEFICIT**Current
                    liabilities:Accounts
                    payable
                
                $
                348,848Accrued
                    expenses
                
                
                6,842Short-term
                    note payable - director
                
                
                19,245Total
                    current liabilities
                
                
                374,935License
                    payable
                
                
                160,000Long-term
                    liability - note payable - director
                
                
                154,817Long-term
                    liability - convertible note payable - director
                
                
                1,268,625Total
                    liabilities
                
                
                1,958,377Commitments
                    and contingenciesStockholders'
                    deficit:Common
                    stock, $0.0001 par value; 100,000,000authorized
                    shares; 30,264,901 shares issuedand
                    outstanding
                
                
                3,026Additional
                    paid-in capital
                
                
                11,527,297Outstanding
                    stock options
                
                
                1,461,940Accumulated
                    deficit
                
                
                (14,350,990
                )Total
                    stockholders' deficit
                
                
                (1,358,727
                )Total
                    liabilities and stockholders' deficit
                
                $
                599,650







See
      accompanying notes to condensed financial statements.




-1-
 *Index*





**QUICK-MED
        TECHNOLOGIES, INC.**
 **CONDENSED
        STATEMENTSOF OPERATIONS FOR THE THREE
        MONTHS**
 **ENDED
        SEPTEMBER 30, 2006 AND 2005**
 **(UNAUDITED)**
  **2006**
                
                
                **2005**Revenues
                
                $
                466,427
                
                $
                357,849Expenses:Cost
                    of revenues
                
                
                93,312
                
                
                71,070Research
                    and development
                
                
                293,300
                
                
                346,230General
                    and administrative expenses
                
                
                237,641
                
                
                389,923Licensing
                    and patent expenses
                
                
                133,884
                
                
                58,810Depreciation
                    and amortization
                
                
                13,611
                
                
                11,766Total
                    expenses
                
                
                771,748
                
                
                877,799Loss
                    from operations
                
                
                (305,321
                )
                
                (519,950
                )Other
                    income (expense):Interest
                    income
                
                
                83
                
                
                2,855Interest
                    expense
                
                
                (22,247
                )
                
                (19,186
                )Other
                    income
                
                
                166,500
                
                
                -Loss
                    before income taxes
                
                
                (160,985
                )
                
                (536,281
                )Provision
                    (benefit) for income taxes
                
                
                -
                
                
                -Net
                    loss
                
                $
                (160,985
                )
                $
                (536,281
                )Net
                    loss per share (basic and diluted)
                
                $
                (0.01
                )
                $
                (0.02
                )Weighted
                    average commonshares
                    outstanding (basic and diluted)
                
                
                30,228,317
                
                
                29,855,261


See
        accompanying notes to condensed financial statements.






-2-
 *Index*




**QUICK-MED
        TECHNOLOGIES, INC.**
 **CONDENSED
        STATEMENT OF CHANGES IN STOCKHOLDERS’
DEFICIT**
 **FOR
        THE THREE MONTHS ENDED SEPTEMBER 30, 2006**
 **(UNAUDITED)**
  **Additional****Common
                    Stock**
                
                **Paid-In**
                
                **Accumulated**
                
                **Outstanding****Shares**
                
                **Amount**
                
                **Capital**
                
                **Deficit**
                
                **Stock
                    Options**
                
                **Total**Balance,
                    June 30, 2006
                30,221,215
                
                3,022
                
                $11,506,487
                
                $(14,190,005)
                
                $
                    1,399,959
                
                $(1,280,537)Stock
                    options granted for services
                -
                
                -
                
                -
                
                -
                
                66,314
                
                66,314Stock
                    issued for services
                10,352
                
                1
                
                11,480
                
                -
                
                -
                
                11,481Exercise
                    of stock options
                33,334
                
                3
                
                9,330
                
                -
                
                (4,333)
                
                5,000Net
                    loss, September 30, 2006
                -
                
                -
                
                -
                
                (160,985)
                
                -
                
                (160,985)Balance,
                    September 30, 2006
                30,264,901
                
                3,026
                
                $11,527,297
                
                $(14,350,990)
                
                $
                    1,461,940
                
                $(1,358,727)




See
        accompanying notes to condensed financial statements.






-3-
 *Index*




**QUICK-MED
        TECHNOLOGIES, INC.**
 **CONDENSED
        STATEMENTS OF CASH FLOWS**
 **FOR
        THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**
 **(UNAUDITED)**
  **2006**
                
                
                **2005**Cash
                    flows from operating activities:Net
                    loss
                
                $
                (160,985
                )
                $
                (536,281
                )Adjustments
                    to reconcile net loss to netcash
                    provided by (used in) operating activities:Depreciation
                    and amortization
                
                
                13,611
                
                
                11,766Stock
                    granted for services
                
                
                11,481
                
                
                109,000Stock-based
                    compensation
                
                
                66,314
                
                
                235,799(Increase)
                    decrease in:Accounts
                    receivable
                
                
                (60,688
                )
                
                (173,695
                )Prepaid
                    expenses
                
                
                4,020
                
                
                2,580Increase
                    (decrease) in:Accounts
                    payable
                
                
                129,900
                
                
                20,590Accrued
                    interest
                
                
                380
                
                
                19,186Net
                    cash provided by (used in) operating activities
                
                
                4,033
                
                
                (311,055
                )Cash
                    flows from investing activities:Purchase
                    of fixed assets
                
                
                -
                
                
                (3,611
                )Patents
                
                
                (10,000
                )
                
                (663
                )Net
                    cash used in investing activities
                
                
                (10,000
                )
                
                (4,274
                )Cash
                    flows from financing activities:Issuance
                    of common stock for cash, net
                
                
                -
                
                
                33,553Proceeds
                    from stock option exercise
                
                
                5,000
                
                
                29,750Proceeds
                    from note payable - officer
                
                
                7,000
                
                
                -Repayment
                    of note payable - officer
                
                
                (7,000
                )
                
                -Increase
                    in notes payable - director
                
                
                21,867
                
                
                -Net
                    cash provided by financing activities
                
                
                26,867
                
                
                63,303Net
                    increase (decrease) in cash and cash equivalents
                
                
                20,900
                
                
                (252,026
                )Cash
                    and cash equivalents at beginning of period
                
                
                184,142
                
                
                844,309Cash
                    and cash equivalents at end of period
                
                $
                205,042
                
                $
                592,283




See
        accompanying notes to condensed financial statements.






-4-
 *Index*




**QUICK-MED
        TECHNOLOGIES, INC.**
 **CONDENSED
        STATEMENTS OF CASH FLOWS**
 **FOR
        THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
        (CONTINUED)**
 **(UNAUDITED)**
  **2006**
                
                
                **2005****Supplementary
                    Information:**Cash
                    paid for:Interest
                
                $
                -
                
                $
                -Income
                    taxes
                
                $
                -
                
                $
                -Non-cash
                    disclosures of investing andfinancing
                    activities:Stock
                    options granted for services
                
                $
                66,314
                
                $
                149,399




See
        accompanying notes to condensed financial statements.






-5-
 *Index*




**QUICK-MED
        TECHNOLOGIES, 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 three months ended September 30,
        2006
        are not necessarily indicative of the results that may be expected for the
        year
        ending June 30, 2007. 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, 2006, 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 continuing losses from
        operations, negative working capital 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 September 30, 2006 represents amounts due from Engelhard
        Corporation, which was subsequently aquired by BASF Catalysts, LLC, a
        wholly-owned subsidiary of BASF (“BASF”), 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)***
 Research
        and Development Costs
 
 Research
        and development costs are expensed as incurred.
 
 Earnings
        Per Share
 
 Basic
        net
        loss per common share are computed by dividing net loss applicable to common
        shareholders by the weighted-average number of common shares outstanding
        during
        the period. Diluted net 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. The
        weighted-average numbers of common shares outstanding exclude common stock
        equivalents of 6,785,805 and 6,204,703 for the periods ended September 30,
        2006
        and 2005, respectively, because their inclusions would be
        anti-dilutive.
 
 Revenue
        Recognition
  The
        Company recognizes the revenue of its royalties from the sale of products
        by a
        cosmetic and personal care division of Engelhard Corporation, subsequently
        aquired by BASF Catalysts, LLC, a wholly-owned subsidiary of BASF, 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.
 
 Concentration
        of credit risk of financial instruments
 
 Financial
        instruments that potentially subject the Company to credit risk consist of
        cash
        equivalents and accounts receivable. As of September 30, 2006, the Company’s
        cash levels exceeded the federally insured limit of $105,042, but were
        maintained with a high quality institution and management is regularly
        monitoring its cash position. As of September 30, 2006, all of the Company’s
        accounts receivable is due from Engelhard Corporation. The credit risk of
        the
        receivable is considered limited given the customer credit rating and the
        receivable balance was collected subsequent to September 30, 2006.
 
 
 ***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.
 
 The
        Company adopted Financial Accounting Standards Board ("FASB") standard SFAS
        123R, "Share-Based Payment," ("SFAS 123R") on July 1, 2005, and adopted the
        modified prospective approach as its implementation method to its outstanding
        and unvested share-based payment awards at that time. 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 three months ended
        September 30, 2006, the Company recorded costs related to this pronouncement,
        which include the effects of any grants made during the period, of approximately
        $77,795 or $0.0 per share on a basic and diluted basis.
   -7-
 *Index*




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




***NOTE
        2 - STOCK OPTIONS AND WARRANTS (CONTINUED)***
 
 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 was 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 three
        months ended September 30, 2005 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.
 
 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
 
 During
        the quarter ended September 30, 2006, the Company has not finalized the amount
        of the share-based payment for the board members for their services. In
        addition, the Company has not made the final determination on the amount
        share-based payments to the employees and consultants.
  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 was 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 fiscal year 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. On September 15, 2006, 33,334 options
        were exercised at $0.15 per share or an aggregate price of approximately
        $5,000.
   -8-
 *Index*




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




***NOTE
        2 - STOCK OPTIONS AND WARRANTS (CONTINUED)***
 
 A
        summary
        of options as at September 30, 2006 and 2005 is shown below:




**September
                  30, 2006**
              
              **September
                  30, 2005****Number**
              
              **Weighted-Average**
              
              **Number**
              
              **Weighted-Average****of
                  Shares**
              
              **Exercise
                  Price**
              
              **of
                  Shares**
              
              **Exercise
                  Price**Outstanding
                  at beginning of period
              2,779,834
              
              $
                  1.33
              
              3,069,834
              
              $
                  1.73Granted
              -
              
              -
              
              710,000
              
              0.80Exercised
              (33,334)
              
              0.15
              
              (175,000)
              
              0.17Expired
                  or forfeited
              -
              
              -
              
              (825,000)
              
              2.61Outstanding
                  at end of period
              2,746,500
              
              $
                  1.33
              
              2,779,834
              
              $
                  1.33Exercisable
                  at end of period
              2,568,998
              
              
              
              2,306,501Available
                  for issuance at end of period
              1,220,166
              
              
              
              1,045,166




On
        September 9, 2005, 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 was 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
                6.00%Expected life (years)
                5Expected volatility
                138%Expected dividends
                None
 
 The
        following is a summary of warrants granted, exercised, canceled and outstanding
        involving the grants as shown below:
  **September
                    30, 2006**
                
                **September
                    30, 2005****Number**
                
                **Weighted-Average**
                
                **Number**
                
                **Weighted-Average****of
                    Shares**
                
                **Exercise
                    Price**
                
                **of
                    Shares**
                
                **Exercise
                    Price**Outstanding
                    at beginning of period
                913,968
                
                $
                    0.37
                
                718,048
                
                0.24Granted
                8,102
                
                1.11
                
                178,346
                
                0.72Exercised
                -
                
                -
                
                -
                
                -Expired
                    or forfeited
                -
                
                -
                
                -
                
                -Outstanding
                    at end of period
                922,070
                
                $
                    0.37
                
                896,394
                
                $
                    0.35Exercisable
                    at end of period
                878,320
                
                
                
                559,715








-9-
 *Index*






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




***NOTE
        3 - STOCKHOLDERS’ EQUITY (DEFICIT)***
 
 In
        September 2005, the Company issued 33,334 shares of restricted common stock
        for
        an aggregate exercise price of approximately $5,000 or $0.15 per share resulting
        from the exercise of a stock option.
 
 In
        July,
        August and September 2006, the Company issued 3,773 shares of restricted
        common
        stock for payment of services provided by a consultant.
 
 In
        September 2006 the Company issued 6,579 shares of restricted common stock
        for
        payment of services provided by a consultant for services rendered for the
        quarter ended September 30, 2006.
 
 
 ***NOTE
        4 - RELATED PARTY TRANSACTIONS***
 
 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 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 15% 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. 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 September 30, 2006, the convertible
        note
        outstanding balance was $1,268,625, convertible into 3,338,487 shares of
        restricted common stock.
 
 During
        the period ended September 30, 2006, the Company did not pay the accrued
        interest on the convertible note of $19,186 but issued a note payable for
        the
        same amount to the Chairman. The terms of this note payable is discussed
        above.
        At September 30, 2006, the Company had an accrued interest of $19,245
        outstanding due to the Chairman.
 
 In
        addition, the Company received from the Company’s Chairman during the period
        ended September 30, 2006. The Company issued a note payable to the Chairman
        or
        $19,186 with an 8% interest rate per annum and a maturity date of January
        1,
        2008.
 
 During
        the period ended September 30, 2006, the Company received a short-term loan
        in
        the amount of $7,000 from an officer of the Company, which was repaid by
        September 30, 2006.
   -10-
 *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, 2006. 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) we have negative cash flow from operations and
      an
      accumulated deficit that raises substantial doubt about our ability to continue
      as a going concern; (e) our future business is dependent upon third parties
      to
      market, manufacture, and distribute our technologies and/or products or jointly
      developed products; (f) there is no assurance that our technologies or products
      will be accepted in the marketplace; (g) 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; (h) our operations
      are
      currently funded by our revenues and our prior debt and equity financings;
      however, there are no assurances that these revenues and financings will be
      sufficient to ensure our future financial performance; (i) we have substantial
      debt obligations due to our Chairman of the Board, who had funded our
      operations, debt obligations that are secured by our assets and revenues and
      are
      senior obligations; and (j) 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 (k) other risk factors discussed
      in our annual report for the fiscal year ended June 30, 2006 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**





We
      are a
      life sciences company focused on developing proprietary, broad-based
      technologies in medical and consumer healthcare markets. Our two core
      technologies under development are: (1) MultiStatTM, a family of advanced
      patented methods and compounds shown to be effective in skin therapy
      applications; and (2) Novel Intrinsically MicroBonded Utility Substrate
      (NIMBUSTM), a family of advanced polymers bio-engineered to have antimicrobial,
      super-absorbent, and other properties that can be used in a wide range of
      applications. Currently, MultiStatTM has been developed in a cosmetic product
      line with the anti-aging products under launch. MultiStatTM is also being
      employed in a drug product line as a post-injury treatment for mustard gas
      exposure, with the initial product currently at a developmental state of
      development in partnership with the U.S. Army. Our NIMBUSTM technology has
      initially been targeted at (a) medical device, including advanced wound dressing
      products, and (b) several enhanced consumer products, including order-controlled
      products (e.g. apparel or hygiene), and antibacterial related products. In
      each
      instance, we intend to form joint ventures or joint development partnerships
      with leading firms in the respective industry to co-develop and commercialize
      its products.





We
      specialize in the research and development of biomedical products and devices
      for antimicrobial applications. We conduct research efforts or collaborate
      with
      third parties as necessary to develop products and administer the patent
      process. We do not expect to produce nor directly market its products. Instead,
      we intend to partner with clients for those activities.





Our
      business strategy is to further develop and execute commercialization strategies
      for each of our broad technologies. We will seek to generate revenue through
      four sources:





(1)
            Licenses
                of proprietary technology to industry partners;


(2)
            Contracts
                with government agencies;


(3)
            Sales
                of product (compounds); and,


(4)
            Research
                and development support agreements.





We
      expect
      that the majority of future revenue will be generated via licenses, royalties
      and profit-sharing agreements. We believe that our intellectual property is
      the
      value driver and, as such, manufacturing, sales and distribution are and will
      be
      conducted either through client partners or outsourced.





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





·
            Healthcare
                and medical;


·
            Apparel;


·
            Cosmetic;
                and


·
            Personal
                care companies.





-11-
 *Index*




Uncertainties
      and Trends





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




·  Acceptance
      of our 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 related agreements and
                secure
                government research and development grants;


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


·
            Our
                ability to successfully conduct laboratory and clinical testing of
                our
                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, which 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 $410,000 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
      Grobeiny. This license agreement provides that we compensate Dr. Galardy and
      Dr.
      Grobeny with our common stock and cash for the exclusive license of the
      Ilomastat 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.






-12-
 *Index*





**Results
      of Operations**





***Comparison
      of Three Months Ended September 30, 2006 and 2005***





Revenues. During
      the three months ended September 30, 2006 we had $466,427 of revenues, compared
      to $357,849 of revenues for the three months ended September 30, 2005,
      representing a 30% increase in our revenues. Our revenues during the three
      months ended September 30, 2006 consisted of $466,427, which represented our
      royalties from the product sales and the license fee for exclusivity by a
      cosmetic and personal care division of BASF Catalysts, LLC, a wholly-owned
      subsidiary of BASF (“BASF”), in connection with a master agreement we have with
      BASF for product development, manufacturing and distribution. Our revenues
      during the three months ended September 30, 2005 consisted of: (a) $355,349,
      which represented our royalties from the product sales by a cosmetic and
      personal care division of BASF Catalysts, LLC; and (b) $2,500 which represented
      a pro rata share of the fees related to a research agreement unrelated to our
      core technologies.





Operating
      Losses. Operating losses for the three months ended September 30, 2006 decreased by
      41%
      or $214,629 to ($305,321) for the three months ended September 31, 2006 from
      ($519,950) for the three months ended September 30, 2005. The decrease in
      operating losses was primarily due to an increase in revenues of $108,578 and
      an
      decrease in expenses of $106,051 for the three months ended September 30, 2006.
      The decrease in expenses was primarily due to the following: (a) a decrease
      of
      $52,930 or 15% in research and development expenses; (b) an decrease of $152,282
      or 39% in general and administrative expenses; offset by (c) an increase 75,074
      or 128% in licensing and patent expenses; and (d) an increase of $22,242 or
      31%
      in cost of revenues for those comparable prior periods, as described in more
      detail below.





Research
      and Development Expense. Research
      and development expense decreased by $52,930 or 15% to $293,300 for the three
      months ended September 30, 2006, from $346,230 for the three months ended
      September 30, 2005. The decrease in research and development expense is
      primarily attributable to a decrease of $83,750 in share-based compensation
      expense as we did not issue any new stock options to our employees during the
      quarter ended September 30, 2006. This decrease was offset by an increase of
      $30,820 in our research and development expense as a result of increased
      research projects, an additional hiring of a scientist, and increased usage
      of
      scientific consulting services.





General
      and Administrative Expense .
      General
      and administrative expense decreased by $152,282 or 39% to $237,641 for the
      three months period ended September 30, 2006, from $389,923 for the three months
      period ended September 30, 2005. This
      decrease in our general and administrative expenses is primarily attributed
      to a
      decrease of $183,254 in share-based compensation expense as we paid our
      directors and consultants for their services with our restricted common stock
      in
      2005, while we have not finalized the payment amount for our directors’ services
      during the quarter ended September 30, 2006. This decreased was partially offset
      by an increase of $30,972 in business development expenses, our corporate
      governance expenses, 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.





Licensing
      and Patent Expense .
      Licensing and patent expense increased by $75,074 or 128% to $133,884 for the
      period ended September 30, 2006 from $58,810 for the period ended September
      30,
      2005. This increase was primarily due to increased ultilization of the
      consulting legal patent services and legal licensing services including
      licensing negotiation.





Other
      Income. During
      the three months ended September 30, 2006, we had $166,500 in other income,
      which represented a payment from a
      cosmetic and personal care division of BASF Catalysts, LLC, a wholly-owned
      subsidiary of BASF (“BASF”) for the
      transfer of all
      right, title and interest of the formulations utilized our proprietary compound,
      that were customized by BASF for the customers held by us back to BASF. However,
      we did not transfer the intellectual property rights of our proprietary
      compound. There was no such transaction during the three months ended September
      30, 2005.





Interest
      Income. During
      the three months ended September 30, 2006, we had $83 in interest
      income , a
      decrease of $2,772 or 97% from $2,855 for the three months ended September
      30,
      2005. The amounts represented interest earned on our certificate of deposits
      and
      money market account funded by the revenues and or equity financings during
      the
      periods.





Interest
      Expense. Interest
      expense for the three months ended September 30, 2006 increased $3,061 or 16%
      to
      $22,247 compared to $19,186 the three months ended September 30, 2005. This
      increase was due to an increase of approximately $150,000 or 12% in the average
      outstanding loan balance due to our Chairman of the Board, to approximately
      $1,420,000, compared to approximately $1,270,000 average outstanding balance
      for
      the comparable 2005 period.




Net
      Loss. Net loss
      for the three months ended September 30, 2006 was ($160,985) or ($0.01) per
      share compared to ($536,281) or ($0.02) per share for the three months ended
      September 30, 2005. This decrease is primarily attributable to an increase
      in
      revenues, a one-time payment for the transfer of the intellectual property
      as
      described above, a decrease in non-cash stock-based compensation, offset by
      the
      increases in research and development expenses, general and administrative
      expense, and licensing and patent expenses.





-13-
 *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, 2006 and 2005 as we have experienced
      recurring losses and negative cash flows from operations in these periods.
      In
      addition, we have a net capital deficiency. These matters raise substantial
      doubt about our ability to continue as a going concern.





Total
      cash on hand at September 30, 2006 was $205,042 as compared with $184,142 at
      June 30, 2006. Further, we collected approximately $105,689 from BASF related
      to
      the outstanding receivable balance at September 30, 2006. In September 2006,
      we
      received confirmation of the SBIR Phase II grant which we believe will provide
      us approximately $770,000 over the next two years.





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, and we completed a
      Warrant Agreement with Phronesis, 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.





In
      September 2006, we issued 33,334 shares of common stock for aggregate exercise
      price of $5,000 in cash from an exercise of an employee stock
      option.





Based
      on
      our cash position at September 30, 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 $149,000
      per month or an aggregate of approximately $1,788,000 over the next twelve
      (12)
      months, in the following areas:





·
            Research
                and development expenditures of approximately $75,000 per month or
                an
                aggregate $900,000 over the next twelve (12) months, which will consist
                of
                the following estimated monthly expenditures: (a) $50,000 in payroll
                for
                scientists; (b) $10,000 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
                $240,000 annually; and


·
            Operating
                expenses of approximately $54,000 per month or an aggregate $648,000
                over
                the next twelve (12) months, including officer and director insurance,
                general liability insurance, rent, consulting fees, utilities, legal
                and
                accounting fees, and payroll.





Our
      current cash balance of $205,042 as of September 30, 2006, coupled with
      collection on accounts receivable of $105,689 will satisfy our cash requirements
      for approximately two (2) months assuming no further receipt of revenues.




-14-
 *Index*




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
      September 30, 2006, we have a long-term note payable outstanding to our Chairman
      of the Board totaling $135,631 including accrued interest at the 8% interest
      rate per annum and a maturity date of October 1, 2007. In addition, 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. 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. At June 30, 2006, the accrued interest on the long term
      note to our Chairman was $18,864. On July 1, 2006, we issued a short-term note
      to our Chairman for the outstanding accrued interest amount of $18,864 at the
      8%
      interest rate per annum. On October 1, 2006, we issued a long-term note payable
      to our Chairman for the outstanding accrued interest amount of $19,186,
      representing the interest on the convertible note for the quarter ended
      September 30, 2006, at the 8% interest rate per annum with a maturity date
      of
      January 1, 2008. In August 2006, we issued a short term note payable of $7,000
      to an officer at the 8% interest rate per annum and we repaid the note payable
      in full in September 2006.





If
      we are
      unable to successfully repay or restructure our loan to our Chairman of the
      Board, 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 to our operations, we do not 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.





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.




At September
      30, 2006, we had a negative working capital of $64,204 that primarily consists
      of: (a) cash of $205,042; (b) accounts receivable of $105,689; (c) accrued
      interest on the stockholder loan totaling $19,245 (e) accounts payable of
      $348,848, and (d) the accrued expenses of $6,842.  At September 30,
      2006, we had a stockholders’ deficit of $1,358,727, a substantial portion of
      which is due to non-cash stock compensation expense and non-cash interest
      expense from the notes payable conversions.





Cash
      provided by operating activities was $4,033 for the three months
      ended September 30, 2006. Net cash used in investing activities was
      $10,000.   Net cash provided by financing activities was $26,867 of
      which $5,000 from the exercise of 33,334 stock options, the borrowing and
      repayment of $7,000 to an officer, and the issuance of a note payable of $21,867
      to our Chairman.





-15-
 *Index*




To
      date,
      we have funded our activities principally from our revenues, our borrowings
      and
      the issuance of shares of restricted common stock including: (a) revenues of
      approximately $1,690,000; (b) investments from an institutional investor
      for net proceeds of $1,810,000 and accredited investors for net proceeds of
      $167,000; (c) financings from our Chairman of the Board totaling $850,000;
      (d)
      stockholder loans totaling $2,806,055 including related accrued interest, and
      (e) a $650,000 bridge loan from a merchant banking firm. All of these funds
      have
      been loaned with interest rates ranging from 6% to 8% 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 three months ended September 30, 2006, we borrowed a total of approximately
      $26,867 through: (a) $19,867 from our Chairman as described above, and (b)
      $7,000 from one of the officers, which was subsequently paid in full in
      September 2006.





**Contractual
      Obligations and Commercial Commitments**




Prior
      to
      November 2006, we had a consulting agreement with Gerald M. Olderman, PhD.
      to
      serve as our Vice President of Research and Development and Commercialization
      (“VP of R&D and Commercialization”) and he served in this capacity since
      July 2000. On November 10, 2006, we entered into an employment agreement with
      Dr. Olderman to continue his service as our Vice President of R & D and
      Commercialization that was effective as of November 10, 2006.





His
      base
      compensation will increase to $11,000 per month or $132,000 per annum from
      $10,000 monthly consulting fee or $120,000 per annum. His annual base salary
      is
      subject to adjustment by the Compensation Committee of the Board of Directors
      (“Board”) based on new revenue streams and increases in our shareholder value.
      In addition, Dr. Olderman is entitled to a signing bonus of $100,000 in cash.
      This signing bonus will vest as follows: $25,000 is vested immediately, $25,000
      will vest upon service through February 1, 2007, $25,000 will vest upon service
      through May 1, 2007, and $25,000 will vest upon service through August 1, 2007.
      Further, we will grant Dr. Olderman 45,000 shares of restricted common stock.
      We
      may defer the payment of the signing bonus up to two (2) years from the
      effective date depending upon our cash flow availability.





Dr.
      Olderman will receive insurance benefits in accordance with our applicable
      health and disability insurance. He will be reimbursed for all travel and other
      expenses actually and properly incurred in connection with performance of his
      duties. Dr. Olderman will be entitled to 4 weeks of paid vacation and three
      additional days for every additional year of employment. The timing of vacations
      will be subject to the reasonable direction of the Chairman of the Board of
      Directors.





The
      Board
      may not approve any change of control unless the acquiring corporation assumes
      responsibility for this Agreement and all payments due hereunder. In addition,
      all options, warrants and common stock under this Agreement shall become
      immediately vested upon such change of control.





Dr.
      Olderman agrees to sign a confidentiality, non-competition and non-solicitation
      agreement.





The
      term
      of the agreement shall be for one year and shall automatically renew unless
      the
      Board of Directors acts to terminate the Agreement. Dr. Olderman may terminate
      this Agreement by giving us one month’s notice. We may terminate the Agreement
      without just cause provided that we pay Dr. Olderman a settlement payment of
      12
      months of monthly compensation plus immediate vesting of all stock options
      previously granted. Mr. Olderman will be deemed to be terminated without just
      cause if we unilaterally change his level of responsibility and compensation
      or
      if we appoint any individual other than Dr. Olderman to the position of Vice
      President of R & D and Commercialization. Dr. Olderman agrees to tender his
      resignation and release us from all obligations to pay any further amounts
      in
      consideration of the settlement payment.





We
      shall
      be entitled to terminate the Agreement and Dr. Olderman’s employment for just
      cause without any notice. Just cause includes: (1) alcohol or other substance
      abuse and failure to seek competent abuse counseling within 30 days notice
      from
      the Board; (2) conviction of a felony for any crime involving moral turpitude,
      fraud, theft or embezzlement in connection with his duties; and (3) material
      breach of this Agreement or our Bylaws that continues for 30 days after notice
      from the Board.








-16-
 *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 September 30, 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 September 30, 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.










-17-
 *Index*








**PART
      II**


**OTHER
      INFORMATION**





**Item1.
      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
      July
      31, 2006, we issued 461 shares of our common stock to Ms. Sally MacKay in
      exchange for approximately $650, which we owed to Ms. MacKay for services
      rendered to us. The shares granted to Ms. MacKay were valued at price of $1.41
      per share, for an aggregate price of approximately $650. 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
      August
      31, 2006, we issued 1,608 shares of our common stock to Ms. Sally MacKay in
      exchange for approximately $1,576, which we owed to Ms. MacKay for services
      rendered to us. The shares granted to Ms. MacKay were valued at price of $0.98
      per share, for an aggregate price of approximately $1,576. 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
      September 30, 2006, we issued 1,704 shares of our common stock to Ms. Sally
      MacKay in exchange for approximately $1,755, which we owed to Ms. MacKay for
      services rendered to us. The shares granted to Ms. MacKay were valued at price
      of $1.03 per share, for an aggregate price of approximately $1,755. 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
      September 30, 2006, we issued a warrant to GSP Consulting, Inc. (“GSP”)
      entitling GSP to acquire up to 8,102 shares of common stock at an exercise
      price
      ranging from $0.98 to $1.41 per share, the then-current market value of our
      common stock. This warrant was issued to GSP as partial payment for services
      rendered to us by GSP from July to September 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 certificate representing
      the
      warrant issued to GSP stating that the securities were not registered under
      the
      Securities Act and are subject to restrictions on their transferability and
      resale.




On
      September 30, 2006, we issued 6,579 shares of our common stock to Mr. Dennis
      Everhart in exchange for approximately $7,500, which we owed to Mr. Everhart
      for
      services rendered to us. The shares granted to Mr. Everhart were valued at
      price
      of $1.14 per share, for an aggregate price of approximately $7,500. 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 Mr. Everhart stating that the securities
      were
      not registered under the Securities Act and are subject to restrictions on
      their
      transferability and resale.




-18-
 *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**





Exhibits2.1
            Merger
                Agreement dated March 19, 2001 between Above AverageInvestments
                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
            Amendment
                to Research and Development Agreement with Engelhard
                (2)10.2
            Employment
                Agreement - Gerald M. Olderman31.1
            Certification
                of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a),
                filed herewith.31.2
            Certification
                of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a),
                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)





NOTES:


(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 Form 8-K filed on August 11,
                2006







-19-
 *Index*





**SIGNATURES**








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
            November
                14, 2006
            By:
                /s/ David S. LernerDavid
                S. LernerPresident
                and Principal Executive Officer





Date
            November
                14, 2006
            By:
                /s/ Nam H. NguyenNam
                H. NguyenChief
                Financial Officer





-20-
 *Index*