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 December 31,
                2005





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 February 6, 2006:
      30,208,517













**QUIICK-MEDTECHNOLOGIES,
                INC.**
              
              INDEX
                TO FORM 10-QSBPART
                I
            **FINANCIAL
                INFORMATION**Item
                1. Financial StatementsUnaudited
                Condensed Balance Sheet as of December 31, 2005
            1Unaudited
                Condensed Statements of Operations for the****three
                and six months ended December 31, 2005 and 2004
            2Unaudited
                Condensed Statement of Changes in Stockholders’ Deficit for the three
                months****ended
                December 31, 2005
            3Unaudited
                Condensed Statements of Cash Flows for the six
                months ended December 31, 2005 and 2004
            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 and Reports on Form
                8-K
            23SIGNATURES
            24


*Index*





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


**** ****





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      BALANCE SHEET AT DECEMBER 31, 2005**


**(UNAUDITED)**





**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            476,751Accounts
                receivable
            
            
            147,767Total
                current assets
            
            
            624,518Property
                and equipment, net
            
            
            13,774Other
                assets:Prepaid
                expenses
            
            
            8,232Intangible
                asset, net
            
            
            291,149Total
                other assets
            
            
            299,381Total
                assets
            
            $
            937,673**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Current
                liabilities:Accounts
                payable
            
            $
            97,343Accrued
                expenses
            
            
            6,842Accrued
                interest on note payable - director
            
            
            19,186Other
                current liabilities
            
            
            110,833Total
                current liabilities
            
            
            234,204License
              payable
            
            
            160,000Long-term liability - note payable - director
            
            
            1,268,625Total
                liabilities
            
            
            1,662,829Commitments
                and contingenciesStockholders'
                deficit:Common
                stock, $0.0001 par value; 100,000,000authorized
                shares; 30,108,517 shares issuedand
                outstanding
            
            
            3,011Additional
                paid-in capital
            
            
            11,408,501Outstanding
                stock options
            
            
            1,244,219Accumulated
                deficit
            
            
            (13,380,887
            )Total
                stockholders' deficit
            
            
            (725,156
            )Total
                liabilities and stockholders' deficit
            
            $
            937,673





See
      accompanying notes to condensed financial statements.




-1-
 *Index*





**QUICK-MEDTECHNOLOGIES,
      INC.**


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


**ENDED
      DECEMBER 31, 2005 AND 2004**


**(UNAUDITED)**






**Three
                  Months Ended**
              
              **Six
                  Months Ended****December
                  31,**
              
              **December
                  31,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Revenues
              
              $
              274,708
              
              $
              14,639
              
              $
              632,557
              
              $
              35,653Expenses:Cost
                  of revenues
              
              
              42,108
              
              
              1,995
              
              
              113,178
              
              
              6,198General
                  and administrative expenses
              
              
              250,407
              
              
              259,866
              
              
              482,341
              
              
              441,637Research
                  and development
              
              
              199,770
              
              
              88,927
              
              
              418,001
              
              
              159,712Depreciation
                  and amortization
              
              
              12,744
              
              
              11,212
              
              
              24,510
              
              
              22,300Stock-based
                  compensation
              
              
              110,897
              
              
              34,481
              
              
              455,696
              
              
              262,287Total
                  expenses
              
              
              615,926
              
              
              396,481
              
              
              1,493,726
              
              
              892,134Loss
                  from operations
              
              
              (341,218
              )
              
              (381,842
              )
              
              (861,169
              )
              
              (856,481
              )Other
                  income (expense):Other
                  income
              
              
              -
              
              
              17,478
              
              
              -
              
              
              17,478Interest
                  income
              
              
              4,739
              
              
              -
              
              
              7,594
              
              
              -Interest
                  expense
              
              
              (19,186
              )
              
              (31,301
              )
              
              (38,372
              )
              
              (60,735
              )Loss
                  before income taxes
              
              
              (355,665
              )
              
              (395,665
              )
              
              (891,947
              )
              
              (899,738
              )Provision
                  (benefit) for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  loss
              
              $
              (355,665
              )
              $
              (395,665
              )
              $
              (891,947
              )
              $
              (899,738
              )Net
                  loss per share (basic and diluted)
              
              $
              (0.01
              )
              $
              (0.02
              )
              $
              (0.03
              )
              $
              (0.05
              )Weighted
                  average commonshares
                  outstanding
              
              
              30,096,008
              
              
              20,772,846
              
              
              29,975,635
              
              
              19,527,544





See
      accompanying notes to condensed financial statements.




-2-
 *Index*





**QUICK-MEDTECHNOLOGIES,
      INC.**


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


**FOR
      THE THREE MONTHS ENDED DECEMBER 31, 2005**


**(UNAUDITED** **)**





**Additional****Common
                Stock**
            
            **Paid-In**
            
            **Accumulated**
            
            **Outstanding****Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Stock
                Options**
            
            **Total**Balance, September
                30, 2005
            
            
            30,095,193
            
            
            3,009
            
            $
            11,397,989
            
            $
            (13,025,222
            )
            $
            1,143,836
            
            $
            (480,388
            )Stock
                  options granted for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            100,383
            
            
            100,383Stock
                issued for services
            
            
            13,324
            
            
            2
            
            
            10,512
            
            
            -
            
            
            -
            
            
            10,514Net
                loss, December 31, 2005
            
            
            -
            
            
            -
            
            
            -
            
            
            (355,665
            )
            
            -
            
            
            (355,665
            )Balance,
                December 31, 2005
            
            
            30,108,517
            
            
            3,011
            
            $
            11,408,501
            
            $
            (13,380,887
            )
            $
            1,244,219
            
            $
            (725,156
            )





See
      accompanying notes to condensed financial statements.


-3-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE  SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004**


**(UNAUDITED)**








**2005**
            
            **2004**Cash
                flows from operating activities:Net
                loss
            
            $
            (891,947
            )
            $
            (899,738
            )Adjustments
                to reconcile net loss to netcash
                used by operating activities:Depreciation
                and amortization
            
            
            24,510
            
            
            22,300Stock
                granted for services
            
            
            119,514
            
            
            161,624Stock-based
                compensation
            
            
            336,182
            
            
            100,663(Increase)
                decrease in:Accounts
                receivable
            
            
            (98,659
            )
            
            (6,700
            )Prepaid
                expenses
            
            
            4,204
            
            
            4,659Increase
                (decrease) in:Accounts
                payable
            
            
            (9,097
            )
            
            (26,389
            )Accrued
                interest
            
            
            (18,560
            )Other current liabilities
            
            
            110,833
            
            
            60,735Net
                cash used by operating activities
            
            
            (423,020
            )
            
            (582,846
            )Cash
                flows from investing activities:Purchase
                of fixed assets
            
            
            (5,329
            )
            
            (3,595
            )Patents
            
            
            (2,512
            )
            
            -Net
                cash used by investing activities
            
            
            (7,841
            )
            
            (3,595
            )Cash
                flows from financing activities:Issuance
                of common stock for cash, net
            
            
            33,553
            
            
            1,810,000Proceeds
                from stock option exercise
            
            
            29,750
            
            
            -Increase
                in short-term notes payable - officer/director
            
            
            -
            
            
            10,417Repayments
                of short-term notes payable - officer/director
            
            
            -
            
            
            (30,000
            )Increase
                in notes payable - officer/director
            
            
            -
            
            
            450,000Net
                cash provided by financing activities
            
            
            63,303
            
            
            2,240,417Net
                increase (decrease) in cash and cash equivalents
            
            
            (367,558
            )
            
            1,653,976Cash
                and cash equivalents at beginning of period
            
            
            844,309
            
            
            19,805Cash
                and cash equivalents at end of period
            
            $
            476,751
            
            $
            1,673,781





See
      accompanying notes to condensed financial statements.




-4-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**CONDENSED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE SIX MONTHS ENDED DECMBER 31, 2005 AND 2004 (CONTINUED)**


**(UNAUDITED)**








**2005**
            
            **2004****Supplementary
                Information:**Cash
                paid for:Interest
            
            $
            56,932
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            -Non-cash
                disclosures of investing andfinancing
                activities:Stock
                options granted to consultant
            
            $
            215,222
            
            $
            74,889Conversion
                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 six months ended December 31, 2005
        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 December 31, 2005 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 when 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. 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.




***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 six months ended December 31,
        2005,
        the Company recorded costs related to this pronouncement, which include the
        effects of any grants made during the period, of approximately $456,000 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 six
        months
        ended December 31, 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.


-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 six months period ended December 31, 2004 was
        $262,287.
 
 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
        December 31, 2004 would have been as follows:


**December
                  31,
                  2004****Three
                  Months**
              
              
              **Six
                  Months**Net
                  lossAs
                  reported
              
              $
              (395,665
              )
              $
              (899,738
              )Pro
                  forma
              
              $
              (395,665
              )
              $
              (931,188
              )Loss
                  per shareAs
                  reported
              
              $
              (0.02
              )
              $
              (0.05
              )Pro
                  forma
              
              $
              (0.02
              )
              $
              (0.05
              )


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 will be 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 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.


-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 will be 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 previous
      fifteen (15) days of 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 at December 31, 2005 and 2004 is shown below:


**December
                31, 2005**
            
            **December
                31, 2004****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
            
            
            635,000
            
            
            0.17Exercised
            
            
            (175,000
            )
            
            0.17
            
            
            -
            
            
            -Forfeited
            
            
            (825,000
            )
            
            2.61
            
            
            (720,000)
            
            
            -Outstanding
                at end of period
            
            
            2,779,834
            
            $
            1.33
            
            
            2,898,500
            
            $
            1.84Exercisable
                at end of period
            
            
            2,306,501
            
            
            
            
            
            2,881,133Available
                for issuance at end of period
            
            
            1,045,166
            
            
            
            
            
            1,118,167








During
      the six months ended December 31, 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
      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
            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:





**December
                31, 2005**
            
            **December
                31, 2004****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
            
            
            90,000
            
            
            0.15Exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Forfeited
            
            
            -
            
            
            -
            
            
            -
            
            
            -Outstanding
                at end of period
            
            
            896,394
            
            $
            0.35
            
            
            657,500
            
            $
            0.20Exercisable
                at end of period
            
            
            644,727
            
            
            
            
            
            431,668





-9-
 *Index*





**QUICK-MED
      TECHNOLOGIES, INC.**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**NOTE
      3 - STOCKHOLDERS’ EQUITY (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 the 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.





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




For
      the
      six months ended December 31, 2005 and 2004, the Company received $0 and
      $450,000 respectively, from the Company’s Chairman. The funding received in 2004
      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 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. 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 December 31, 2005, the convertible
      note
      outstanding balance was $1,268,625, convertible into 3,338,487 shares of
      restricted common stock.


During
        the period ended December 31, 2005, 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 interest payment, 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 six months ended December 31, 2004, 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 $30,000 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, in 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 us 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 will terminate in their entirety
      thirty (30) days from Engelhard’s receipt of the termination notice provided
      that Engelhard does not cure its material breaches among others within that
      time
      period.





In
      accordance with the termination provision of the Agreements, Engelhard is
      required to deliver any and all materials containing our trade secrets or
      confidential information, and must cease and desist from using the Company’s
      trade secrets or confidential information along with any trademark or trade
      names associated with the intellectual property including “EquistatTM.” The
      Company is currently assessing its legal remedies and investigating its
      damages.





During
      October 2005, the Company and Engelhard entered into the tolling agreements,
      resulting in an extension of the termination period to January 31, 2006. During
      the six month period ended December 31, 2005, the revenues generated under
      the
      Agreements represented more than ninety-nine (99%) percent of the total
      revenues.




While
        the
        Company retains the right to terminate its  agreement with Engelhard
        at any time subsequent to January 31, 2006, the management of
 the Company is currently engaged in negotiations with Engelhard
        for an amendment to the terms of its existing agreement.  Although no
        agreement has been reached, Engelhard has notified us of its desire to
        successfully resolve this matter; 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.


-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 our equity financings in November
        30 and
        December 31, 2004, and revenues; however, there are no assurances that these
        equity financings and revenues 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, debt obligations that are secured
        by our assets and revenues and are senior obligations we owe to our Chairman
        of
        the Board; and (k) 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
        2005, 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®, 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 $565,890 in the six months ended December 31, 2005
        from
        $30,986 in the six months ended December 31, 2004.
  Our
        agreement with Engelhard calls for financial milestones within specified
        dates,
        which had not been met as of December 31, 2005. We subsequently 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 this matter and we are currently in negotiation to reach
        a
        satisfactory agreement. 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 2005, we have spent approximately $370,000 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 Six Months Ended December 31, 2005 and 2004***




Revenues. During
        the six months ended December 31, 2005 we had $632,557 of revenues, compared
        to
        $35,653 of revenues for the six months ended December 31, 2004, representing
        a
        1,674% increase in our revenues. Our revenues during the six months ended
        December 31, 2005 consisted of: (a) $630,057, which represented our royalties
        from the product sales and the license fee for exclusivity 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; and (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. Our revenues during the six
        months ended December 31, 2004 consisted of: (a) $30,986, which represented
        our
        royalties from the product sales by a cosmetic and personal care division
        of
        Engelhard Corporation; and (b) $4,667, 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 will terminate in their entirety thirty (30) days from
        Engelhard’s receipt of the termination notice, if Engelhard fails to cure its
        material breaches. The termination procedures provided for in the Agreements
        further provide that within thirty (30) days Engelhard must deliver to us
        all
        materials containing our trade secrets or confidential information, and must
        cease and desist from using our trade secrets or confidential information
        along
        with any trademark or trade names associated with our intellectual property,
        including without limitation “Equistat.” We are currently assessing our legal
        remedies and investigating our damages.
 
 In
        October 2005, Engelhard and we entered into tolling agreements resulting
        in an
        extension of the termination period to January 31, 2006 to negotiate with
        Engelhard regarding the above matters.
 
 While
        we
        retain the right to terminate our agreement with Engelhard at any time
        subsequent to January 31, 2006, we are currently engaged in negotiations
        with
        Engelhard for an amendment to the terms of the existing agreement.
 Although no agreement has been reached, Engelhard has notified us of its
        desire to successfully resolve this matter; 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.
 
 Operating
        Losses. Operating losses for the six months ended December 31, 2005 decreased by
        1% or
        $4,688 to ($861,169) for the six months ended December 31, 2005 from ($856,481)
        for the six months ended December 31, 2004. The decrease in operating loss
        was
        primarily due to an increase in revenues of $596,904 offsetting an increase
        in
        expenses of $601,592 for the six months ended December 31, 2005. The increase
        in
        expenses was primarily due to the following: (a) an increase of $258,289
        or 162%
        increase in research and development expenses; (b) an increase of $193,409
        or
        74% in non-cash stock-based compensation; (c) an increase of $106,980 or
        1,726%
        in cost of revenues; and (d) an increase of $40,705 or 9% 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 $193,409 or 74%
        to
        $455,696 for the six months ended December 31, 2005, from $262,287 for the
        six
        months ended December 31, 2004. 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 2005, 710,000 stock
        options in 2005 compared to approximately 585,000 stock options issued in
        2004.
        Second, the fair market value of the stock options issued in 2005 with an
        exercise price of $0.80 per share was higher than the fair market value of
        those
        issued in 2004 with an exercise price $0.17, resulting in the recognition
        of
        a higher compensation expense in 2005. 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 2005 when compared with the prior period. Fourth,
        in
        both 2005 and 2004 we paid our directors for their services with our restricted
        common stock. Although the number of shares granted in 2005 was fewer than
        2004,
        the value of the shares granted was approximately $23,000 higher in 2005
        than
        2004.








-14-
 *Index*




Research
        and Development Expense. Research
        and development expense increased by $258,289 or 162% to $418,001 for the
        six
        months ended December 31, 2005, from $159,712 for the six months ended December
        31, 2004, 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 $40,705 or 9% to $482,342 for the
        six
        months period ended December 31, 2005, from $441,637 for the six months period
        ended December 31, 2004. This increase in our general and administrative
        expenses is primarily attributed to legal fees for patent related work, ,
        our
        corporate governance expenses, our patent maintenance fees, additional
        consulting expenses incurred in 2005, 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 six months ended December 31, 2004, 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 six
        months ended December 31, 2005.
 
 Interest
        Income. During
        the six months ended December 31, 2005, we had $7,594 in interest
        income , which
        represented interest earned on our certificate of deposits and money market
        account funded by the equity financings during the period. There was no interest
        income in the comparable 2004 period.
 
 Interest
        Expense. Interest
        expense for the six months period ended December 31, 2005 decreased $22,363
        or
        37% to $38,372 compared to $60,735 the six months period ended December 31,
        2004. 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 2004 period.
  Net
        Loss. Net loss
        for the six months period ended December 31, 2005 was ($891,947) or ($0.03)
        per
        share compared to ($899,738) or ($0.05) per share for the six months period
        ended December 31, 2004. 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 December 31, 2005 and 2004***
  Revenues. During
          the three months ended December 31, 2005 we had $274,708 of revenues, compared
          to $14,639 of revenues for the three months ended December 31, 2004,
          representing a 1,777% increase in our revenues. Our revenues during the
          three
          months ended December 31, 2005 consisted of $274,708, which represented
          our
          royalties from the product sales and the license fee for exclusivity 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. Our revenues for the three months ended December 31, 2004,
          consisted of: (a) $9,972, which represented our royalties from the product
          sales
          by a cosmetic and personal care division of Engelhard; and (b) $4,667,
          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 December 31, 2005 decreased
          by 11%
          or $40,624
          to ($341,218) for the three months ended December 31, 2005 from ($381,842)
          for
          the three months ended December 31, 2004. The decrease in operating loss
          was
          primarily due to an increase in revenues of $260,069 offsetting an increase
          in
          expenses of $219,445 for the three months ended December 31, 2005. The
          increase
          in expenses was primarily due to: (a) an increase of $76,416 or 222% in
          non-cash
          stock-based compensation; (b) an increase of $110,843 or 125% increase
          in
          research and development expenses; (c) an increase of $40,113 or 2011%
          in cost
          of revenues; and (d) offset by a reduction of $9,459 or 4% in general and
          administrative expenses for those comparable prior periods.
 
 Non-Cash
          Stock-Based Compensation. Non-Cash
          Stock-Based Compensation increased $76,416 or 222%
          to
          $110,897 for the three months ended December 31, 2005, from $34,481 for
          the
          three months ended December 31, 2004. 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 2005, 710,000 stock
          options in 2005 compared to approximately 585,000 stock options issued
          in 2004.
          Second, the fair market value of the stock options issued in 2005 with
          an
          exercise price of $0.80 per share was higher than the fair market value of
          those issued in 2004 with an exercise price $0.17, resulting in the recognition
          of a higher compensation expense in 2005. 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 $68,000 in 2005 when compared with the prior period.





-16-




Research
        and Development Expense. Research
        and development expense increased by $110,843 or 125% to $199,770 for the
        three
        months ended December 31, 2005, from $88,927 for the three months ended December
        31, 2004, 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 decreased by $9,459 or 4% to $250,407 for the
        three
        months period ended December 31, 2005, from $259,866 for the three months
        period
        ended December 31, 2004. This decrease in our general and administrative
        expenses is primarily attributed to the absence of the legal fees related
        to
        equity financings in 2005 offsetting by the increase in legal fees for patent
        related work, , our corporate governance expenses, our patent maintenance
        fees,
        additional consulting expenses incurred in 2005, 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 three months ended December 31, 2004, 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 three
        months ended December 31, 2005.
 
 Interest
        Income. During
        the three months ended December 31, 2005, we had $4,739 in interest
        income , which
        represented interest earned on our certificate of deposits and money market
        account funded by the equity financings during the period. There was no interest
        income in the comparable 2004 period.
 
 Interest
        Expense. Interest
        expense for the three months period ended December 31, 2005 decreased $12,115
        or
        39% to $19,186, compared to $31,301 the three months period ended December
        31,
        2004. This decrease was due to a decline of approximately $1,300,000 in the
        average outstanding loan balance due to our Chairman during the three months
        ended December 31, 2005, compared to approximately $2,100,000 average
        outstanding balance for the comparable 2004 period.
  Net
        Loss. Net loss
        for the three months period ended December 31, 2005 was ($355,665) or ($0.01)
        per share compared to ($395,665) or ($0.02) per share for the three months
        period ended December 31, 2004. This decrease is primarily attributable to
        increases in revenues, offset by increases in non-cash stock-based compensation,
        research and development expenses, and general and administrative
        expense.






-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 December 31, 2005 was $476,751, as compared with a September
        30,
        2005 balance of $592,283.
  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 80,000 shares of restricted common stock for an
        aggregate purchase price of $80,000 in cash.
   Based
        on
        our cash position at December 30, 2005, 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 $476,751 as of December 31, 2005, coupled with
        collection on accounts receivable of $147,767 and the $80,000 cash received
        from
        the issuance of common stock will satisfy our cash requirements for only
        approximately five (5) 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
        December 31, 2005, 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 2006, we paid the quarterly interest payment of $19,186 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 to our operations, however, 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
        December 31, 2005, we had a working capital of $390,314, that primarily consists
        of: (a) cash of $476,751; (b) accounts receivable of $147,767; (c) accrued
        interest on the stockholder loan totaling $19,186 (d) accounts payable of
        $97,343, and (e) the short-term other current liabilities of $110,833. At
        December 31, 2005, we had a stockholders’ deficit of $701,823, 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 $423,020 for the six months ended December 31,
        2005.
        Net cash used in investing activities was $7,841. Net cash provided by financing
        activities was $63,303 of which $33,553 was from the sale of our restricted
        common stocks and $29,750 from the exercise of 175,000 stock
        options.
   To
        date,
        we have funded our activities principally from the issuance of shares of
        restricted common stock to; (a) an institutional investor for net proceeds
        of
        $1,810,000 and accredited investors for net proceeds of $87,000; (b) our
        Chairman of the Board totaling $850,000; (c) from stockholder loans totaling
        $2,673,105, including related accrued interest, and (d) 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  December 31, 2005, 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 December 31, 2005, 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
      November 30, 2005, we issued 1,990 shares of our common stock to Ms. Sally
      MacKay in exchange for approximately $1,592, which we owed to Ms. MacKay for
      services rendered to us. The shares granted to Ms. MacKay were valued at price
      of $0.80 per share, for an aggregate price of approximately $1,592. 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
      December 31, 2005, we issued 2,188 shares of our common stock to Ms. Sally
      MacKay in exchange for approximately $1,422, which we owed to Ms. MacKay for
      services rendered to us. The shares granted to Ms. MacKay were valued at price
      of $0.65 per share, for an aggregate price of approximately $1,422. 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
      December 31, 2005, we issued a warrant to GSP Consulting, Inc. (“GSP”) entitling
      GSP to acquire up to 3,769 shares of common stock at an exercise price ranging
      from $0.65 to $1.02 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 September to December 2005. 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
      December 31, 2005, we issued 9,146 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 $0.82 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.




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.






-22-
 *Index*




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





None.





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




In
        lieu
        of the Annual Meeting of Stockholders, shareholders of record at the close
        of
        business on December 5, 2005 holding 72.6% of the outstanding Common Stock
        (“Majority Shareholders”) executed the Written Consent with an effective date of
        January 19, 2006, effecting the following actions: (1) re-electing all current
        directors of the Company and electing Ms. Turnbull to the Board and (2)
        ratifying the reappointment of DaszkalBolton, LLP as the Company's independent
        auditors for fiscal year 2006. No other action has been authorized by the
        Written Consent. For her services as a director, the Company intends to grant
        Ms. Turnbull option and stock compensation in amounts to be determined at
        a
        later date.
 
 Pursuant
        to the terms of a stockholders agreement dated November 30, 2004, between
        Phronesis Partners, LP (“Phronesis”), Quick-Med, Michael R. Granito, our
        Chairman of the Board, and David S. Lerner, our President and director,
        Phronesis has the right to designate a qualified individual to Quick-Med’s Board
        of Directors. In addition, Phronesis, Michael R. Granito and David S. Lerner
        shall vote their respective shares of capital stock of Quick-Med to elect
        such
        designee. Currently, their combined total number voting shares constitute
        a
        majority of shares of Quick-Med. On December 5, 2005, Phronesis designated
        Cheryl L. Turnbull, Special Limited Partner at Phronesis Partners LP, to
        be a
        director to our Board of Directors. Quick-Med deemed Ms. Turnbull to be a
        qualified person and the Majority Shareholders elected her as the director
        of
        our Board.


**Item
      5. Other Information.**


None





**Item
      6. Exhibits and Reports on Form 8-K**





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





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




-
      24
      -