UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB
--------------------------------------------------------------------------------

(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the quarterly period ended December 31, 2006

[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the transition period from ______________ to _____________
--------------------------------------------------------------------------------

                        Commission File Number: 33-56574


                                 Diasense, Inc.
        (Exact name of small business issuer as specified in its charter)

     Pennsylvania                                              25-1605848
(State of incorporation)                                (IRS Employer ID Number)

                     211 West Wall Street, Midland, TX 79701
                    (Address of principal executive offices)

                                 (432) 682-1761
                           (Issuer's telephone number)
--------------------------------------------------------------------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]

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

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: January 16, 2007: 22,105,051

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
<PAGE>
                                 DIASENSE, INC.

               Form 10-QSB for the Quarter ended December 31, 2006

                                Table of Contents


                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

  Item 1 Financial Statements                                                 3

  Item 2 Management's Discussion and Analysis or Plan of Operation           15

  Item 3 Controls and Procedures                                             17

PART II - OTHER INFORMATION

  Item 1 Legal Proceedings                                                   17

  Item 2 Recent Sales of Unregistered Securities and Use of Proceeds         17

  Item 3 Defaults Upon Senior Securities                                     17

  Item 4 Submission of Matters to a Vote of Security Holders                 17

  Item 5 Other Information                                                   17

  Item 6 Exhibits                                                            17

SIGNATURES                                                                   18

                                       2
<PAGE>
                                     PART I
ITEM 1 - FINANCIAL STATEMENTS

                                 DIASENSE, INC.
                          (a development stage company)
                                  BALANCE SHEET
                                December 31, 2006

                                                                   December 31,
                                                                       2006
                                                                   ------------
                                     ASSETS
CURRENT ASSETS
   Cash on hand and in bank                                        $     12,071
                                                                   ------------

      TOTAL CURRENT ASSETS                                               12,071
                                                                   ------------

TOTAL ASSETS                                                       $     12,071
                                                                   ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES

CURRENT LIABILITIES
   Accounts payable - trade                                        $         --
   Accrued interest payable to current majority stockholder                 319
                                                                   ------------

      TOTAL CURRENT LIABILITIES                                             319
                                                                   ------------

LONG-TERM LIABILITIES
   Note payable to current majority stockholder                          20,000
                                                                   ------------

      TOTAL LIABILITIES                                                  20,319
                                                                   ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
   Preferred stock - no par value
     1,000,000 shares authorized
     None issued and outstanding - Common stock - $0.01 par value
     40,000,000 shares authorized
     22,105,051 shares issued and outstanding                           221,051
   Additional paid-in capital                                        47,851,633
   Common stock warrants                                                  5,000
   Deficit accumulated during the development stage                 (48,085,932)
                                                                   ------------

      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                               (8,248)
                                                                   ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $     12,071
                                                                   ============

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                            STATEMENTS OF OPERATIONS
                  Three months ended December 31, 2006 and 2005
   and Period from July 5, 1989 (date of inception) through December 31, 2006

<TABLE>
<CAPTION>
                                                                                                   Period from
                                                                                                  July 5, 1989
                                                     Three months           Three months       (date of inception)
                                                        ended                  ended                 through
                                                     December 31,           December 31,           December 31,
                                                         2006                   2005                   2006
                                                     ------------           ------------           ------------
<S>                                                  <C>                    <C>                    <C>
REVENUES                                             $         --           $         --           $         --
                                                     ------------           ------------           ------------
OPERATING EXPENSES
   General and administrative expenses                     13,037                 50,101             17,076,649
   Depreciation expense                                        --                     --                 91,495
   Research and development expense                            --                     --             10,556,405
   Technology and patent rights acquired                       --                     --              2,650,000
   Expense related to warrant extensions                       --                     --             17,890,676
   Amortization of goodwill                                    --                     --                535,057
                                                     ------------           ------------           ------------
      TOTAL OPERATING EXPENSES                             13,037                 50,101             48,800,282
                                                     ------------           ------------           ------------

LOSS FROM OPERATIONS                                      (13,037)               (50,101)           (48,800,282)

OTHER INCOME (EXPENSE)
   Interest expense                                          (312)               (44,265)              (336,924)
   Other income                                               124                     --              1,043,121
   Other expense                                               --                     --                (67,405)
   Equity in loss from unconsolidated subsidiaries             --                     --               (575,412)
   Impairment loss                                             --                     --               (690,124)
   Gain from sale of Diabecore stock                           --                     --                 57,242
   Gain from sale fo MicroIslet stock                          --                     --              1,283,852
                                                     ------------           ------------           ------------
      TOTAL OTHER INCOME (EXPENSE)                           (188)               (44,265)               714,350
                                                     ------------           ------------           ------------

LOSS BEFORE PROVISION FOR INCOME TAXES                    (13,225)               (94,366)           (48,085,932)

PROVISION FOR INCOME TAXES                                     --                     --                     --
                                                     ------------           ------------           ------------

NET LOSS                                             $    (13,225)          $    (94,366)          $(48,085,932)
                                                     ============           ============           ============
Earnings per share of common stock
 outstanding computed on net loss -
 basic and fully diluted                                      nil                    nil
                                                     ============           ============
Weighted-average number of shares
 outstanding - basic and fully diluted                 22,105,051             22,980,051
                                                     ============           ============
</TABLE>

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
                  Three months ended December 31, 2006 and 2005
   and Period from July 5, 1989 (date of inception) through December 31, 2006

<TABLE>
<CAPTION>
                                                                                                       Period from
                                                                                                       July 5, 1989
                                                                Three months       Three months    (date of inception)
                                                                   ended              ended              through
                                                                December 31,       December 31,        December 31,
                                                                    2006               2005                2006
                                                                ------------       ------------        ------------
<S>                                                             <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss) for the period                             $    (13,225)      $    (94,366)       $(48,085,931)
   Adjustments to reconcile net loss to
    net cash provided by operating activities
     Depreciation and amortization                                        --                 --             626,552
     Gain on sale of Diabecore stock                                      --                 --             (57,242)
     Warrants issued for services                                         --              3,861             515,515
     Expense related to warrant extensions                                --                 --          17,890,676
     Common stock issued for services                                     --                 --             138,950
     Common stock issued for License and Marketing agreement              --                 --              80,000
     Impairment loss                                                      --                 --             704,491
     Inventory deposit - BICO                                             --                 --          (1,000,000)
     Gain on MicroIslet stock                                             --                 --          (1,283,852)
     Equity in loss of unconsolidated subsidiaries                        --                 --             575,412
     Accrued interest contributed to equity                               --                 --             324,879
     Increase (Decrease) in
       Accounts payable                                                   --             (5,966)                 --
       Other accrued liabilities                                          --                 --                  --
       Accrued interest payable                                          312             44,265                 319
                                                                ------------       ------------        ------------
          NET CASH USED IN OPERATING ACTIVITIES                      (12,913)           (52,206)        (29,570,231)
                                                                ------------       ------------        ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                     --                 --            (303,746)
   Proceeds from sale of property and equipment                           --                 --             175,000
   Cash paid for investment in MicroIslet                                 --                 --          (1,600,000)
   Proceeds from sale of MicroIslet stock                                 --                 --           2,070,726
   Cash paid for investment in Diabecore                                  --                 --            (987,468)
   Proceeds from sale of Diabecore stock                                  --             14,887              57,242
   Net activity on notes receivable from related parties                  --                 --            (138,538)
                                                                ------------       ------------        ------------
          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES             --             14,887            (726,784)
                                                                ------------       ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Cash received from notes payable to
    Former majority shareholder and others                                --                 --             396,200
       Current majority shareholder                                       --                 --              20,000
       Convertible notes                                                  --             50,000              95,000
   Cash paid on notes payable                                             --            (12,000)            (42,500)
   Cash received from sale of common stock                                --                 --          11,096,834
   Cash received on Regulation S sale of common stock                     --                 --             288,751
   Cash received on sale of common stock to BICO                          --                 --           4,200,000
   Cash received on warrant exercises                                     --                 --             118,066
   Net activity on cash advanced to/received from BICO                    --                 --          14,160,060
   Cash paid to acquire treasury stock                                    --                 --             (35,001)
   Cash contributed as capital to support operations                      --                 --              11,677
                                                                ------------       ------------        ------------
          NET CASH PROVIDED BY FINANCING ACTIVITIES                       --             38,000          30,309,086
                                                                ------------       ------------        ------------

INCREASE (DECREASE) IN CASH                                          (12,913)               681              12,071
Cash at beginning of period                                           24,984              1,545                  --
                                                                ------------       ------------        ------------
CASH AT END OF PERIOD                                           $     12,071       $      2,226        $     12,071
                                                                ============       ============        ============
</TABLE>

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                      STATEMENTS OF CASH FLOWS - CONTINUED
                  Three months ended December 31, 2006 and 2005
   and Period from July 5, 1989 (date of inception) through December 31, 2006

<TABLE>
<CAPTION>
                                                                                                       Period from
                                                                                                       July 5, 1989
                                                                Three months       Three months    (date of inception)
                                                                   ended              ended              through
                                                                December 31,       December 31,        December 31,
                                                                    2006               2005                2006
                                                                ------------       ------------        ------------
<S>                                                             <C>                <C>                 <C>
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
   Interest paid for the year                                    $        --        $        --         $    11,725
                                                                 ===========        ===========         ===========
   Income taxes paid for the year                                $        --        $        --         $        --
                                                                 ===========        ===========         ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES
   Issuance of 371,000 shares of common stock
    to satisfy $303,000 note payable                             $        --        $        --         $   303,000
                                                                 ===========        ===========         ===========
   Issuance of 3,000,000 shares of common stock
    to BICO in payment of intercompany debt                      $        --        $        --         $10,500,000
                                                                 ===========        ===========         ===========
</TABLE>

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Diasense, Inc. (Company) was incorporated on July 5, 1989 in accordance with the
Laws of the  Commonwealth of Pennsylvania as a wholly-owned  subsidiary of BICO,
Inc. (BICO) (formerly Biocontrol Technology, Inc.).

The  Company was  approximately  52% owned by BICO until July 23, 2004 when BICO
sold its entire ownership interest to Dominion Assets, LLC (Dominion). On August
29, 2006, the Company entered into a Voluntary Surrender Agreement with Dominion
whereby  all of the  Company's  assets,  which had  previously  been  pledged as
collateral to secure loan agreements by and between the Company and Dominion and
under which the Company was then in default, were repossessed.  Dominion was, at
that time,  the majority  shareholder  of the  Company.  Keith R. Keeling owns a
majority  interest in  Dominion  and was also a former  member of the  Company's
Board of Directors and the Company's former Chief Executive Officer (CEO) of the
Company through his resignation from both positions on August 4, 2006.

Thorough the date of the Voluntary Surrender  Agreement,  the Company's business
efforts were focused on developing a noninvasive  glucose sensor  (Sensor).  The
Sensor  was  proposed  to  use   electromagnetic   technology   to  measure  the
concentration  of glucose in human tissue  without  requiring the user to take a
blood sample.

The Company's current principal  business activity is to seek a suitable reverse
acquisition  candidate  through  acquisition,  merger or other suitable business
combination method.

The Company has never fully  implemented any business plan(s) and,  accordingly,
is considered to be in the development stage.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting  principles  generally  accepted in the United  States of America and
originally  had a year-end of December 31. During 1992,  the Company's  Board of
Directors elected to change the Company's year-end from December 31 to September
30. All accompanying  financial  information presented for periods subsequent to
December 31, 1992 reflect the effect of this action.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented.

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange Commission on its Annual Report on Form 10-KSB containing the Company's
financial  statements  for the year ended  September 30, 2006.  The  information
presented  within  these  interim  financial  statements  may  not  include  all
disclosures  required by generally accepted accounting  principles and the users
of financial information provided for interim periods should refer to the annual
financial information and footnotes when reviewing the interim financial results
presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending September 30, 2007.

                                       7
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE C - GOING CONCERN UNCERTAINTY

Diasense, Inc. (Company) was incorporated on July 5, 1989 in accordance with the
Laws  of the  Commonwealth  of  Pennsylvania  as a  wholly-owned  subsidiary  of
Biocontrol Technology,  Inc., which later changed its name to BICO, Inc. (BICO).
On August 29, 2006,  the Company  entered into a Voluntary  Surrender  Agreement
(Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all
of the  Company's  assets,  which had  previously  been pledged as collateral to
secure  loan  agreements  under  which the  Company  was then in  default,  were
repossessed.  Dominion  was,  at that  time,  the  majority  shareholder  of the
Company.  Through the date of the Voluntary Surrender  Agreement,  the Company's
business  efforts  were  focused on  developing  a  noninvasive  glucose  sensor
(Sensor).  The Sensor was proposed to use electromagnetic  technology to measure
the  concentration of glucose in human tissue without requiring the user to take
a blood sample.

The Company's current principal  business activity is to seek a suitable reverse
acquisition  candidate  through  acquisition,  merger or other suitable business
combination method.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The Company  anticipates  future sales of equity securities to facilitate either
the  consummation  of a business  combination  transaction  or to raise  working
capital to support and preserve the integrity of the corporate entity.  However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional  equity  securities  or, that such  funding,  if
available, will be obtained on terms favorable to or affordable by the Company.

If no additional  operating  capital is received  during the next twelve months,
the  Company  will be  forced  to rely on  existing  cash in the  bank  and upon
additional  funds  loaned  by  management  and/or  significant  stockholders  to
preserve the integrity of the corporate  entity at this time. In the event,  the
Company  is  unable to  acquire  advances  from  management  and/or  significant
stockholders, the Company's ongoing operations would be negatively impacted.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Cash and cash equivalents

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  certificates  of  deposit  and  other  highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

2. Property and Equipment

     Property and equipment were recorded at historical  cost.  These costs were
     depreciated over the estimated useful lives of the individual  assets using
     the straight-line method, generally seven to thirty-nine years.

     Gains and losses from  disposition of property and equipment are recognized
     as incurred and are included in operations.

                                       8
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

2. Property and Equipment

     In accordance  with  Statement of Financial  Accounting  Standards No. 144,
     "Accounting  for the  Impairment  or Disposal of  Long-Lived  Assets",  the
     Company  follows the policy of evaluating  all property and equipment as of
     the end of  each  reporting  quarter.  At  December  31,  2006,  management
     determined that no such impairments were necessary.

3. Income Taxes

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At December 31, 2006 and 2005, respectively,  the deferred tax asset
     and deferred  tax  liability  accounts,  as recorded  when  material to the
     financial  statements,  are entirely  the result of temporary  differences.
     Temporary  differences  represent  differences in the recognition of assets
     and  liabilities  for  tax  and  financial  reporting  purposes,  generally
     consisting of  accumulated  depreciation  and  amortization,  allowance for
     doubtful accounts and vacation accruals.

     As of December 31, 2006 and 2005,  the  deferred  tax asset  related to the
     Company's net operating loss  carryforward  is fully  reserved.  Due to the
     provisions  of Internal  Revenue  Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax  return  taxable  income in future  periods  as a result of a change in
     control   involving  50  percentage  points  or  more  of  the  issued  and
     outstanding securities of the Company.

4. Earnings (loss) per share

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) available to common stockholders by the  weighted-average  number of
     common shares  outstanding  during the respective  period  presented in our
     accompanying financial statements.

     Fully diluted earnings (loss) per share is computed similar to basic income
     (loss) per share  except that the  denominator  is increased to include the
     number of common  stock  equivalents  (primarily  outstanding  options  and
     warrants).

     Common  stock  equivalents  represent  the  dilutive  effect of the assumed
     exercise of the outstanding stock options and warrants,  using the treasury
     stock method, at either the beginning of the respective period presented or
     the date of  issuance,  whichever  is later,  and only if the common  stock
     equivalents  are  considered  dilutive  based upon the Company's net income
     (loss) position at the calculation date.

     At  December  31,  2006,  and  subsequent  thereto,   the  Company  had  no
     outstanding common stock equivalents.  All issued and outstanding  warrants
     as of December 31, 2005 were considered  anti-dilutive due to the Company's
     net operating loss position.

5. Treasury Stock

     The Company records treasury stock transactions using the par value method.

6. Research and development costs

     Research and  development  expenses were charged to operations as incurred.
     Patents,  Licenses and  Marketing  Agreements  acquired from BICO were also
     charged to operations as acquired.

                                       9
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE F - CALCULATION OF COMPREHENSIVE INCOME (LOSS)

<TABLE>
<CAPTION>
                                                                                       Period from
                                                                                       July 5, 1989
                                          Three months           Three months       (date of inception)
                                             ended                  ended                 through
                                          December 31,           December 31,           December 31,,
                                              2006                   2005                   2006
                                          ------------           ------------           ------------
<S>                                       <C>                    <C>                    <C>
Net Loss                                  $    (13,225)          $    (94,366)          $(48,085,932)
                                          ============           ============           ============

Comprehensive Income items: None                    --                     --                     --
                                          ------------           ------------           ------------

Comprehensive Loss                        $    (13,225)          $    (94,366)          $(48,085,932)
                                          ============           ============           ============
</TABLE>

NOTE G - INCOME TAXES

The  components  of income tax  (benefit)  expense  for each of the three  month
periods  ended  December  31, 2006 and 2005 and for the period from July 5, 1989
(date of inception) through December 31, 2006, are as follows:

                                                                Period from
                                                               July 5, 1989
                       Three months         Three months     (date of inception)
                           ended               ended              through
                        December 31,        December 31,        December 31,
                           2006                2005                2006
                         -------             -------             -------
Federal:
  Current                $    --             $    --             $    --
  Deferred                    --                  --                  --
                         -------             -------             -------
                              --                  --                  --
                         -------             -------             -------
State:
  Current                     --                  --                  --
  Deferred                    --                  --                  --
                         -------             -------             -------
                              --                  --                  --
                         -------             -------             -------

  Total                  $    --             $    --             $    --
                         =======             =======             =======

                                       10
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE G - INCOME TAXES - CONTINUED

Concurrent  with a September  2006 change in control,  the Company has a nominal
net operating loss  carryforward  for future  periods.  The ultimate  amount and
availability  of any future net operating loss  carryforwards  may be subject to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of the carryforwards.

The Company's  income tax expense  (benefit) for each of the three month periods
ended  December  31, 2006 and 2005 and for the period from July 5, 1989 (date of
inception) through December 31, 2006, respectively,  differed from the statutory
federal rate of 34 percent as follows:

<TABLE>
<CAPTION>
                                                                                             Period from
                                                                                             July 5, 1989
                                                       Three months      Three months    (date of inception)
                                                          ended             ended              through
                                                       December 31,      December 31,        December 31,
                                                           2006              2005                2006
                                                       ------------      ------------        ------------
<S>                                                    <C>               <C>                 <C>
Statutory rate applied to income before income taxes   $     (4,500)     $    (32,000)       $(16,349,500)
Increase (decrease) in income taxes resulting from:
  State income taxes                                             --                --                  --
  Other, including reserve for deferred tax asset
   and application of net operating loss carryforward         4,500            32,000          16,349,500
                                                       ------------      ------------        ------------

      Income tax expense                               $         --      $         --        $         --
                                                       ============      ============        ============
</TABLE>

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs,  statutory differences in the  depreciable/amortizable
lives for  property and  equipment  and patents and the  recognition  of expense
charges  related to the issuance of warrants,  between the  financial  statement
carrying  amounts and tax bases of assets and liabilities  give rise to deferred
tax assets and/or liabilities.  As of December 31, 2006 and 2005,  respectively,
after taking the September 2006 change in control into consideration:

                                                December 31,        December 31,
                                                    2006                2005
                                                  -------             -------
Deferred tax assets
  Net operating loss carryforwards                $ 4,500             $    --
  Less valuation allowance                         (4,500)                 --
                                                  -------             -------

  Net Deferred Tax Asset                          $    --             $    --
                                                  =======             =======

NOTE H - COMMON STOCK TRANSACTIONS

On September 18, 2006, the Company entered into a unit purchase  agreement (Unit
Purchase Agreement) to sell 1,000 Units to Glenn A. Little (Little) for $125,000
cash.  Each Unit consisted of 11,100 shares of common stock and 500 common stock
purchase  warrants or an  aggregate  of  11,100,000  shares of common  stock and
500,000   common  stock  purchase   warrants.   There  were  no  commissions  or
underwriting discounts paid in conjunction with this transaction and the Company
believes  that the shares and  warrants  were  exempt  from  registration  under
Section 4(2) of the Securities Act of 1933 as amended.

                                       11
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE H - COMMON STOCK TRANSACTIONS - CONTINUED

The common  stock  purchase  warrants  can be  exercised  at any time from their
issuance on September 18, 2006 through  September 18, 2011 at an exercise  price
of $0.10 per share.  The  Company  assigned a value of $5,000 to these  warrants
from the $125,000 aggregate purchase price, which is equivalent to the par value
of the underlying common stock supporting the warrants.

On September 18, 2006,  connected with yet separate from the aforementioned Unit
Purchase  Agreement,  the Company  entered into a Share Purchase  Agreement with
Dominion, the Company's then-majority shareholder, whereby the Company purchased
from  Dominion  11,975,000  shares of common stock of the Company for a purchase
price of $1.00.  The shares  were  cancelled  upon  receipt by the  Company  and
returned to unissued status.

NOTE I - STOCK WARRANTS

During August 2006, the Company reached termination  agreements with all holders
of the Company's Common Stock Warrants and terminated all issued and outstanding
warrants.  As of December 31, 2006, the only outstanding  warrants relate to the
aforementioned September 18, 2006 transaction with Glenn A. Little.

                                             Number of          Weighted
                                              Warrant           Average
                                              Shares             Price
                                              ------             -----
     Balance at October 1, 2004              2,643,000
       Issued                                  200,000
       Exercised                                    --
       Expired                              (2,143,000)
                                            ----------

     Balance at September 30, 2005             700,000
       Issued                                  500,000           $0.10
       Exercised                                    --
       Expired                                (700,000)
                                            ----------

     Balance at September 30, 2006             500,000
       Issued                                       --
       Exercised                                    --
       Expired                                      --
                                            ----------

     Balance at December 31, 2006              500,000           $0.10
                                            ==========

NOTE J - ASSET SURRENDER

On August 29, 2006,  the Company  entered into a Voluntary  Surrender  Agreement
(Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all
of the Company's  assets,  pledged as collateral to secure loan agreements under
which the Company is in default, were repossessed.

At the time of the  repossession,  Dominion was the majority  shareholder of the
Company. Keith R. Keeling owns a majority 75% interest in Dominion, was a former
member the Company's  Board of Directors and the former CEO of the Company until
resigning from both such positions with the Company on August 4, 2006.

The  foreclosed  and  surrendered  assets  included the  Company's  intellectual
property  related to it non invasive glucose monitor and equipment and equipment
acquired during Fiscal 2006.

                                       12
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE J - ASSET SURRENDER - CONTINUED

In consideration of its surrender of all of its assets to Dominion,  the Company
received  releases from  approximately  $2,415,263 of its debt obligations which
had  been  secured  by  such  assets  under  certain  agreements,  as  described
immediately below. The Company's assets had been pledged as collateral to secure
(i) that certain Demand Note in a principal amount of $1,954,936, dated July 23,
2004,  issued  by the  Company  to BICO and  assigned  by BICO to  Dominion,  as
amended,  effective  September 28, 2004,  which accrued interest at a rate of 8%
per annum (Demand Note), (ii) the additional loans totaling $50,700 in principal
amount and accruing  interest at a rate of 8% per annum which had been  extended
by Dominion to the Company under that certain Note and Security Agreement, dated
October 29, 2004, by and between the Company and Dominion,  as amended (Note and
Security  Agreement) and (iii) six secured convertible notes (Convertible Notes)
in an aggregate  principal amount of $95,000,  accruing interest at a rate of 6%
per annum,  that the Company  issued to various  creditors on various dates from
November 15, 2005 through July 1, 2006.  The sum of the  principal  and interest
due under the Demand Note, the Note and Security  Agreement and the  Convertible
Notes as of August 15,  2006 was  approximately  $2,415,263.  The Company was in
default under the Demand Note and under the Note and Security  Agreement and had
no  ability  to repay  the loans  underlying  such  obligations.  As a result of
Dominion's  demand  for  payment  under the  Demand  Note and under the Note and
Security  Agreement  and in order to avoid legal action by Dominion to repossess
the assets, which would have likely resulted in continuing financial obligations
to Dominion,  the Company  entered  into the  Voluntary  Surrender  Agreement to
convey the Company's  assets to Dominion in exchange for Dominion's  agreeing to
(I) release the Company of its  obligations  under the Demand Note and under the
Note and Security Agreement,  and (ii) assume the Company's  obligation to repay
the Convertible Notes.

At the date of  repossession,  the  Company's  equipment had a net book value of
approximately  $$22,885  and the  Company's  intellectual  property  had no book
value.  Due to the  uncertainty of whether a marketable  product could have ever
been developed from the Company's  intellectual  property  without a significant
additional  investment  by the  Company,  if ever,  the  immediate  sale of such
intellectual  property would have been difficult or impossible,  and, therefore,
at the time of its repossession, it had little or no market value.

The Company  recognized  contributed  capital of  approximately  $2,595,000 as a
result of this net debt forgiveness from a related party.

NOTE K - COMMITMENTS AND CONTINGENCIES

INDEPENDENT CONSULTANT AGREEMENTS

On August 31, 2006, the Company and Michael Pitsakis  (Pitsakis) mutually agreed
to terminate  the  Independent  Consultant  Agreement,  dated May 19,  2005,  as
amended  November  11,  2005,  by and  between the  Company  and  Pitsakis  (the
"Pitsakis Consulting Agreement"). In connection with its entry into the Pitsakis
Consulting Agreement,  the Company had issued a warrant certificate to Pitsakis,
granting Pitsakis warrants to purchase  4,000,000 shares of the Company's common
stock. As of the termination of the Pitsakis Consulting Agreement,  only 100,000
of such warrants had vested.  Pitsakis has agreed to waive his right to exercise
the vested warrants.  In consideration  for such waiver of exercise rights,  the
Company  waived  any  restrictions  imposed  upon  Pitsakis  under the  Pitsakis
Consulting  Agreement  preventing  Pitsakis  from being engaged in a competitive
capacity with any entity  engaged in the research and  development of technology
similar to the Company's  technology.  The Company and Pitsakis  terminated  the
Pitsakis  Consulting  Agreement  due to the fact that the  Company  is no longer
developing its technology.

On August 31, 2006, the Company and Jeremy Grata (Grata) mutually  terminated an
Independent  Consultant  Agreement,  dated May 19, 2005, as amended November 11,
2005,  by and between the Company and Grata  (Grata  Consulting  Agreement).  In
connection with its entry into the Grata Consulting  Agreement,  the Company had
issued a warrant  certificate  to Grata,  granting  Grata  warrants  to purchase
4,000,000  shares of the Company's  common stock.  As of the  termination of the
Grata Consulting Agreement,  only 100,000 of such warrants had vested. Grata has
agreed to waive his right to exercise the vested warrants.  In consideration for
such waiver of exercise rights, the Company waived any restrictions imposed upon
Grata under the Grata Consulting  Agreement  preventing Grata from being engaged
in  a  competitive  capacity  with  any  entity  engaged  in  the  research  and
development of technology similar to the Company's  technology.  The Company and
Grata terminated the Grata Consulting Agreement due to the fact that the Company
is no longer developing its technology.

                                       13
<PAGE>
                                 DIASENSE, INC.
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2006 and 2005

NOTE K - COMMITMENTS AND CONTINGENCIES - CONTINUED

INDEPENDENT CONSULTANT AGREEMENTS - continued

On August 31, 2006, the Company and Stuart Fine, MD (Fine)  mutually  terminated
an Independent Consultant Agreement, dated November 14, 2005, by and between the
Company and Fine (Fine Consulting Agreement).  In connection with its entry into
the Fine Consulting  Agreement,  the Company had issued a warrant certificate to
Fine,  granting Fine warrants to purchase 150,000 shares of the Company's common
stock. As of the termination of the Fine  Consulting  Agreement,  only 35,000 of
such  warrants  had vested.  Fine has agreed to waive his right to exercise  the
vested  warrants.  In  consideration  for such  waiver of exercise  rights,  the
Company  waived any  restrictions  imposed  upon Fine under the Fine  Consulting
Agreement  preventing Fine from being engaged in a competitive capacity with any
entity  engaged in the research and  development  of  technology  similar to the
Company's  technology.  The  Company  and Fine  terminated  the Fine  Consulting
Agreement  due  to the  fact  that  the  Company  is no  longer  developing  its
technology.

NOTE L - SUBSEQUENT EVENT

On November 14, 2006, the Company filed a Definitive  Schedule 14C - Information
Statement Pursuant to Section 14C of the Securities  Exchange Act of 1934 noting
actions to be taken without a meeting upon the written consent of the holders of
a majority of the outstanding shares of the voting capital stock of the Company.

The contemplated actions include:

     1.   Toreverse  split the  currently  issued and  outstanding  common stock
          (Reverse  Split) of the Company on a 100,000  shares for one (1) share
          basis,  with no stockholder being reversed to less than a round lot of
          100 shares; and
     2.   To change the Company's state of  incorporation  from  Pennsylvania to
          Nevada.

In conjunction with the proposed Reverse Stock split, no stockholder  shall have
less than one round lot of 100 shares after the reverse  split  calculation  and
all fractional shares will be rounded to the next higher whole share:

            Shares prior to              Shares after
             reverse split               reverse split
             -------------               -------------
                      50                     100
                     100                     100
                   1,000                     100
                  10,000                     100
                 100,000                     100
               1,000,000                     100
              10,000,000                     100
              10,000,001                     101

Only  stockholders  of  record  as of the  date of the  Reverse  Split  shall be
afforded  this special  treatment.  The expected  date of the Reverse  Split was
originally  anticipated  to be  complete  by January 10,  2007.  Management  now
estimates that these actions will be complete and effective by January 31, 2007.
The  possibility  exists that the reduction in the number of outstanding  shares
will  adversely  affect the market for our Common Stock by reducing the relative
level of  liquidity.  Consequently,  there can be no assurance  that the reverse
split will result in a proportionate increase in the value of the shares.

Following the reverse split, we will have issued and  outstanding  approximately
75,900 shares of common stock,  which  includes the treatment to preserve  round
lots. Management estimates that there will be 741 stockholders.


                (Remainder of this page left blank intentionally)

                                       14
<PAGE>
PART I - ITEM 2

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2) RESULTS OF OPERATIONS

The Company had no revenue for either of the three month periods ended  December
31, 2006 and 2005, respectively.

General  and  administrative  expenses  for each of the  respective  three month
periods  ended  December  31,  2006 and 2005 were  nominal,  principally  office
overhead  (2005)  and  professional  fees  (2006  and  2005)  incurred  with the
maintenance of the Company's filing  requirements under the Securities  Exchange
Act of 1934. It is anticipated that future  expenditure  levels will increase as
the Company intends to fully comply with it's periodic reporting requirements.

Earnings per share for the  respective  three month periods  ended  December 31,
2006 and 2005 were $0.00 and $0.00 based on the  weighted-average  shares issued
and outstanding at the end of each respective period.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under the  Securities  Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.

At December 31, 2006, the Company had working capital of approximately $11,750.

It is the belief of management  and  significant  stockholders  that  sufficient
working capital necessary to support and preserve the integrity of the corporate
entity  will be  present.  However,  there is no  legal  obligation  for  either
management or significant  stockholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The Company's need for working  capital may change  dramatically  as a result of
any business acquisition or combination  transaction.  There can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

PLAN OF BUSINESS

GENERAL

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  which may be deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common

                                       15
<PAGE>
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

COMBINATION SUITABILITY STANDARDS

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond the  preliminary  negotiation  stage with any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is  unable to  obtain  the  advice or  reports  from  experts,  the risks of any
combined enterprise's being unsuccessful will be enhanced.  Furthermore,  to the
knowledge of the Company's officers and directors, neither the candidate nor any
of  its  directors,   executive  officers,  principal  stockholders  or  general
partners:

     (1)  will not have been  convicted of  securities  fraud,  mail fraud,  tax
          fraud, embezzlement,  bribery, or a similar criminal offense involving
          misappropriation  or theft of funds,  or be the  subject  of a pending
          investigation or indictment involving any of those offenses;
     (2)  will not have been subject to a temporary or permanent  injunction  or
          restraining  order arising from unlawful  transactions  in securities,
          whether as issuer, underwriter, broker, dealer, or investment advisor,
          may be the subject of any pending  investigation  or a defendant  in a
          pending  lawsuit  arising from or based upon  allegations  of unlawful
          transactions in securities; or
     (3)  will not have been a defendant in a civil  action which  resulted in a
          final judgement against it or him awarding damages or rescission based
          upon unlawful practices or sales of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.

(4) LIQUIDITY AND CAPITAL RESOURCES

It is the belief of management  and  significant  stockholders  that  sufficient
working capital necessary to support and preserve the integrity of the corporate
entity  will be  present.  However,  there is no  legal  obligation  for  either
management or significant  stockholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The Company has no current plans, proposals, arrangements or understandings with
respect to the sale or issuance of additional  securities  prior to the location
of a merger or  acquisition  candidate.  Accordingly,  there can be no assurance
that sufficient  funds will be available to the Company to allow it to cover the
expenses related to such activities.

                                       16
<PAGE>
The Company does not currently contemplate making a Regulation S offering.

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

ITEM 3 - CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures

     The Company maintains  disclosure controls and procedures that are designed
     to ensure that  information  required to be  disclosed  in its Exchange Act
     reports is recorded,  processed,  summarized  and reported  within the time
     periods specified in the U. S. Securities and Exchange  Commission's  rules
     and forms, and that such information is accumulated and communicated to the
     Company's  management,  including the Company's Chief Executive Officer and
     Chief  Financial  Officer,  as  appropriate,   to  allow  timely  decisions
     regarding required disclosure.  Management necessarily applied its judgment
     in assessing the costs and benefits of such controls and procedures, which,
     by  their  nature,   can  provide  only  reasonable   assurance   regarding
     management's control objectives.

     The Company  carried out an evaluation,  under the supervision and with the
     participation of its management,  including its Chief Executive Officer and
     Chief Financial  Officer,  on the effectiveness of the design and operation
     of its disclosure  controls and  procedures  pursuant to Exchange Act Rules
     13a-15 and 15d-15 as of the end of the period covered by this report. Based
     upon that  evaluation,  the  Company's  Chief  Executive  Officer and Chief
     Financial  Officer  concluded  that the Company's  disclosure  controls and
     procedures are effective in timely alerting them to information relating to
     the Company required to be included in the Company's Exchange Act reports.

     While the  Company  believes  that its  existing  disclosure  controls  and
     procedures have been effective to accomplish their objectives,  the Company
     intends to continue to examine, refine and document its disclosure controls
     and procedures and to monitor ongoing developments in this area.

(b)  Changes in Internal Controls

     During  the  quarter  ended  December  31,  2006,  there  were  no  changes
     (including  corrective  actions with regard to significant  deficiencies or
     material  weaknesses)  in the  Company's  internal  control over  financial
     reporting  that  have  materially  affected,  or are  reasonably  likely to
     materially affect, the Company's internal control over financial reporting.

                          PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS

None

ITEM 3 - DEFAULTS ON SENIOR SECURITIES

None.

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

The  Company  has held no  regularly  scheduled,  called or special  meetings of
stockholders during the reporting period.

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS

31.1  Certification  pursuant  to  Section  302 of  Sarbanes-Oxley  Act of 2002
32.1  Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

                                       17
<PAGE>
                                   SIGNATURES

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


Dated: January 16, 2007                 By: /s/ Glenn A. Little
       ----------------                    -------------------------------------
                                                                 Glenn A. Little
                                              Chairman, Chief Executive Officer,
                                            Chief Financial Officer and Director

                                       18