---

---

# UNITED
STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

# FORM
10-QSB

# (X)  
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OFTHE SECURITIES
EXCHANGE ACT OF 1934For
the quarterly period ended December 31, 2005

# OR

# (   )  
TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE EXCHANGE ACT
For the transition period from _____________ to ___________

# Commission
File Number 0-11730

COGNIGEN
NETWORKS, INC.(Exact name
of small business issuer as specified in its charter)

|Colorado                        |  | 84-1089377          | 
|------------------------------- |  | ------------------- | 
|(State or other jurisdiction of |  | (I.R.S. Employer    | 
|incorporation or organization)  |  | Identification No.) | 

6405 218th
Street SW, Suite 305Mountlake Terrace, WA 98043(Address of principal executive
offices)(425) 329-2300(Issuers Telephone number)N/A(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 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 a court.  Yes  [   ]    No  [   ]

# APPLICABLE
ONLY TO CORPORATE ISSUERS

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

|Class                         | Outstanding atJanuary 31, 2006
|----------------------------- | ------------------------------
|Common Stock, $.001 par value |                               
|                              |                               

Transitional
Small Business Disclosure Format (Check one):  Yes  [   ]    No
[X]

---

# COGNIGEN
NETWORKS, INC.
Commission
File Number: 0-11730
Quarter
Ended December 31, 2005
FORM
10-QSB

|                                                                    | 
|------------------------------------------------------------------- | 
|Part I - FINANCIAL INFORMATION                                      | 
|Item 1. Consolidated Financial Statements                           | 
|Consolidated Balance Sheets                                         | 
|Unaudited Consolidated Statements of Operations                     | 
|Unaudited Consolidated Statements of Cash Flows                     | 
|Notes to Unaudited Consolidated Financial Statements                | 
|Item 2. Managements Discussion and Analysis or Plan of Operation   | 
|Item 3. Controls and Procedures                                     | 
|Part II - OTHER INFORMATION                                         | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 
|Item 4. Submission of Matters to a Vote of Security Holders         | 
|Item 6. Exhibits                                                    | 
|Signatures                                                          | 

1

---

COGNIGEN
NETWORKS, INC.
Part I  Financial Information

Item 1.
Financial Statements

# Consolidated
Balance Sheets

|                                                                              | December 31,2005 | June 30,2005  
|----------------------------------------------------------------------------- | ---------------- | --------------
|
|Assets                                                                        |                  |               
|Current assets                                                                |                 
|Cash                                                                          |                  | $      153,909
|Accounts receivable, net                                                      |                  | 449,212       
|Marketing commissions receivable                                              |                  | 963,683       
|Current portion of deferred tax asset                                         |                  | 18,514        
|Other current assets                                                          |                  | 25,249        
|                                                                              |                  |               
|Total current assets                                                          |                  | 1,610,567     
|                                                                              |                  |               
|Non-current assets                                                            |                 
|Property, plant and equipment, net                                            |                  | 9,874         
|Long term portion of deferred tax asset                                       |                  | 822,137       
|Deposits and other assets                                                     |                  | 120,565       
|                                                                              |                  |               
|Total non-current assets                                                      |                  | 952,576       
|                                                                              |                  |               
|Total assets                                                                  |                  | $   2,563,143 
|                                                                              |                  |               
|Liabilities and Stockholders Equity                                          |                 
|Current liabilities                                                           |                 
|Accounts payable                                                              |                  | $      573,178
|Accrued liabilities                                                           |                  | 238,666       
|Marketing commissions payable                                                 |                  | 821,008       
|Current portion of deferred commissions                                       |                  | --            
|Receivables financing arrangement                                             |                  | 442,500       
|Other current liabilities                                                     |                  | 47,825        
|                                                                              |                  |               
|Total current liabilities                                                     |                  | 2,123,177     
|Other long-term liabilities                                                   |                  | 14,963        
|                                                                              |                  |               
|Total liabilities                                                             |                  | 2,138,140     
|                                                                              |                  |               
|Stockholders equity                                                          |                 
|Preferred stock no par value, 20,000,000 shares authorized, 500,000 shares    |                 
|issued and outstanding, $1.00 per share liquidation preference                |                  | 450,000       
|Common stock $.001 par value, 300,000,000 shares authorized; 8,753,972 issued |                 
|and outstanding as of  December 31, 2005 and June 30, 2005                    |                  | 8,754         
|Additional paid-in capital                                                    |                  | 11,965,577    
|Accumulated deficit                                                           |                  | (11,999,328   
|                                                                              |                  |               
|Total stockholders equity                                                    |                  | 425,003       
|                                                                              |                  |               
|Total liabilities and stockholders equity                                    |                  | $   2,563,143 
|                                                                              |                  |               

2

---

COGNIGEN
NETWORKS, INC.Unaudited
Consolidated Statements of Operations

|                                         | Three Months EndedDecember 31, | Six Months EndedDecember 31, |   |                     
|---------------------------------------- | ------------------------------ | ---------------------------- | - | --------------------
|
|
|Revenue                                  |                                |                              |   |                     
|Marketing commissions                    |                                | $       1,502,703            |   | $      1,369,035    
|Telecommunications                       |                                | 981,477                      |   | 1,550,833           
|Other                                    |                                | 29,848                       |   | --                  
|                                         |                                |                              |   |                     
|Total revenue                            |                                | 2,514,028                    |   | 2,919,868           
|                                         |                                |                              |   |                     
|Operating expenses                       |                               
|Commissions:                             |                               
|Marketing                                |                                | 1,003,897                    |   | 707,834             
|Telecommunications                       |                                | 147,050                      |   | 230,333             
|Telecommunications                       |                                | 595,716                      |   | 830,744             
|Other                                    |                                | 20,364                       |   | --                  
|Selling, general and administrative      |                                | 847,058                      |   | 914,227             
|Depreciation and amortization            |                                | 3,270                        |   | 3,292               
|                                         |                                |                              |   |                     
|Total operating expenses                 |                                | 2,617,355                    |   | 2,686,430           
|                                         |                                |                              |   |                     
|Income (loss) from operations            |                                | (103,327                     | ) | 233,438             
|Interest expense                         |                                | (11,390                      | ) | (12,518             
|                                         |                                |                              |   |                     
|Income (loss) before income taxes        |                                | (114,717                     | ) | 220,920             
|Income taxes                             |                                | 24,022                       |   | --                  
|                                         |                                |                              |   |                     
|Net income (loss)                        |                                | (90,695                      | ) | 220,920             
|Preferred dividends                      |                                | (10,000                      | ) | (10,000             
|                                         |                                |                              |   |                     
|Net income (loss) attributable to        |                               
|common shareholders                      |                                | $        (100,695            | ) | $        210,920    
|                                         |                                |                              |   |                     
|Income (loss) per common share-          |                               
|basic and diluted                        |                                | $                 (.01       | ) | $                .02
|                                         |                                |                              |   |                     
|Weighted average number of common shares |                               
|outstanding:                             |                               
|Basic                                    |                                | 8,753,972                    |   | 8,753,972           
|                                         |                                |                              |   |                     
|Diluted                                  |                                | 8,809,821                    |   | 8,759,100           
|                                         |                                |                              |   |                     

3

---

COGNIGEN
NETWORKS, INC.Unaudited
Consolidated Statements of Cash Flows

|                                                                | Six Months Ended   December 31, |          
|--------------------------------------------------------------- | ------------------------------- | ---------
|
|
|Cash flows from operating activities                            |                                 |          
|Net income (loss)                                               |                                 | $(44,578 
|                                                                |                                 |          
|Adjustments to reconcile net income (loss) to net cash provided |                                
|by operating activities:                                        |                                
|Depreciation and amortization                                   |                                 | 6,948    
|Bad debt expense                                                |                                 | 33,508   
|Issuance of stock options and warrants                          |                                 | 21,199   
|Changes in assets and liabilities:                              |                                
|Accounts receivable                                             |                                 | (24,991  
|Commissions receivable, net                                     |                                 | 234,847  
|Deposits and other assets                                       |                                 | 48,311   
|Accounts payable                                                |                                 | 6,542    
|Commissions payable                                             |                                 | (213,241 
|Accrued liabilities                                             |                                 | (22,146  
|Other current liabilities                                       |                                 | 17,522   
|Other                                                           |                                 | 14,847   
|                                                                |                                 |          
|                                                                |                                 | 123,346  
|                                                                |                                 |          
|Net cash provided by operations                                 |                                 | 78,768   
|                                                                |                                 |          
|Cash flows from investing activities                            |                                
|Capital expenditures                                            |                                 | (915     
|Increase other assets                                           |                                 | (88,600  
|                                                                |                                 |          
|Net cash used in investing activities                           |                                 | (89,515  
|                                                                |                                 |          
|Cash flows from financing activities                            |                                
|Payments on deferred commissions                                |                                 | (226,068 
|Decrease in receivables financing arrangement                   |                                 | --       
|Increase in receivables financing arrangement                   |                                 | 247,500  
|                                                                |                                 |          
|Net cash provided by (used in) financing activities             |                                 | 21,432   
|                                                                |                                 |          
|Net increase (decrease) in cash and cash equivalents            |                                 | 10,685   
|Cash and cash equivalents-beginning of period                   |                                 | 143,224  
|                                                                |                                 |          
|Cash and cash equivalents-end of period                         |                                 | $ 153,909
|                                                                |                                 |          

Supplemental
Disclosures of Cash Flow Information and Non-Cash Transactions

Cash
payments  for  interest  expense  during the six months  ended  December 31, 2005 and
2004 were $20,255 and $25,786,  respectively.

4

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
1  Description of Business

Cognigen
Networks, Inc. (the Company) was incorporated in May 1983 in the State of
Colorado to engage in the cellular radio and broadcasting business and to engage
in any other lawful activity permitted under Colorado law. In June 1988, the
Company changed its name to Silverthorne Production Company (Silverthorne) and
commenced operations in the oil and gas industry. These operations were
discontinued in 1989. Between 1989 and 1999, Silverthorne attempted to locate
acquisition prospects and negotiate an acquisition. Silverthornes pursuit
of an acquisition did not materialize until August 20, 1999, with the
acquisition of the assets of Inter-American Telecommunications Holding
Corporation (ITHC), which was accounted for as a reverse acquisition. The
surviving entity changed its name to Cognigen Networks, Inc. on July 12, 2000.

The
Company is an Internet and relationship enabled marketer. The Companys
core products are long distance telephone and personal communications services.
Revenue is generated in two ways. First, marketing commissions revenue is
generated from a number of vendors who are represented on the Companys
agent web sites and for whom the Company sells their products and services via
contractual agreements. Second, telecommunications revenue is generated through
sales of the Companys proprietary products and services through the
Companys agent web sites.

The Company
formed a subsidiary, LowestCostMall,  Inc. (LCM), in May 2005 to begin offering
customers, through its sales agent  force, an online retail store. These operations have
been consolidated as part  of the consolidated operations beginning in July 2005. LCM
provides innovative  online shopping of thousands of discounted products such as office
products,  toys, flowers, jewelry, electronic and household items. Revenue is generated
by  LCM through the sales of discounted products and sales of memberships. The
memberships enable the members to receive even lower prices on the same  discounted
products.

Note
2  Summary of Significant Accounting Policies

The
accompanying consolidated financial statements include the accounts of Cognigen
Networks, Inc. and its subsidiaries, Intandem Communications Corp. (Intandem)
since February 1, 2004 and LCM. All intercompany accounts and transactions have
been eliminated in consolidation.

In the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, have been made to (a) the unaudited consolidated statements of
operations for the three and six months ended December 31, 2005 and 2004,
respectively, (b) the unaudited consolidated balance sheet as of December 31,
2005 and (c) the unaudited consolidated statements of cash flows for the six
months ended December 31, 2005 and 2004, respectively, in order to make the
financial statements not misleading.

The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all the information and footnotes
required by generally accepted accounting principles for financial statements.
For further information, refer to the audited consolidated financial statements
and notes thereto for the year ended June 30, 2005, included in the Companys Annual Report on
Form 10-KSB filed with the Securities and Exchange Commission.

5

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
2  Summary of Significant Accounting Policies (continued)

The
preparation of the consolidated financial statements 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.

The
results for the six months ended December 31, 2005 may not necessarily be
indicative of the results for the fiscal year ending June 30, 2006.

On
November 21, 2001, the Company entered into a Stock Redemption Agreement with
the Anderson Family Trust (AFT), a substantial stockholder of the Company, and
Cantara Communications Corporation (Cantara) whereby AFT sold 2,712,501 shares
of the Companys common stock to the Company in exchange for the transfer
by the Company to Cantara of the original Cognigen Agency and all of its
downline agents. As a result of this transaction, Cantara received the
contingent right to receive all of its direct sales commissions and generational
downline commission overrides. During the first twelve months of the ownership
by Cantara of the former Cognigen Agency, now renamed Cantara, Cantara agreed to
a capping of the commissions payable to it, thereafter commencing January 2003,
Cantara has received the full direct and generational override commissions it is
entitled to earn pursuant to the existing and current Company commission
structure applicable for all agents. Payment of commissions to Cantara is
totally contingent upon the generation of sales by it and its downline agents
and payment for the products and services sold by the Companys customers
and vendors. The sales are generated either directly by employees of Cantara
and/or its downline sub-agents. Cantara has contracted with Kevin E. Anderson
Consulting, Inc. (KEAC), a corporation owned by Kevin E, Anderson, founder of
Cognigen Communications Corporation and a beneficiary of the AFT, to manage
Cantara for a set monthly fee. AFT owns approximately 13% of the Companys
common stock. Currently, the monthly commission payment to Cantara is
approximately 11% of the total commissions paid monthly to all of the
Companys agents.

On
December 9, 2005, the Company entered into an agreement with AFT and Cantara
(the Cantara Purchase Agreement). Under the Cantara Purchase Agreement, the
Company has paid the AFT a total of $50,000. The Stock Redemption Agreement will
terminate if the Company pays AFT a total of $1,500,000 by March 15, 2010
(unless one or more of the payments automatically are deferred by 60 days upon
the payment by us of $50,000 to the AFT) pursuant to a schedule set forth in the
Cantara Purchase Agreement. The first payment is due March 15, 2006. Under the
Cantara Purchase Agreement, the AFT continues to receive 100% of the amount due
under the Stock Redemption Agreement until the Company makes the first payment
of $450,000. Thereafter, the percentage that the AFT receives reduces as the
Company makes additional payments. The Company has the right to prepay the
$1,500,000 at anytime and stop all payments to the AFT under the Stock
Redemption Agreement.

At the
time the Company makes the first payment of $450,000, the Company will also be
required to enter into a two year consulting agreement with KEAC whereby the
Company and the AFT would pay KEAC
$8,000 per month. The amount that the Company would be required to pay would be
based on the payments that the Company makes to the AFT pursuant to the schedule
set forth in the Cantara Purchase Agreement. The Company has the right to extend
the consulting agreement with KEAC for an additional two years. All of this is
contingent on the Company being able to negotiate an agreement acceptable to
KEAC.

6

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
2  Summary of Significant Accounting Policies (continued)

Once
the Company has paid the $1,500,000 to the AFT or if the Company defaults in any
payments required by the Cantara Purchase Agreement, the Stock Redemption
Agreement will terminate. If the Company defaults in making the required
payments, the AFT will receive the percentage of the payments under the Stock
Redemption Agreement in effect on the last day of the payments actually made by
us to the AFT.

The
following presents statement of operations data and proforma data. The proforma
data reflect certain statement of operations accounts for the three and six
months ended December 31, 2005 that reflect the increase in commissions expense
had the payments to the stockholder, paid under the Stock Redemption Agreement,
during these periods been accounted for as commissions expense rather than a
reduction to deferred commissions payable as it was through September 30, 2005.
Thereafter, commission expense to Cantara was reflected in the statement of
operations.

|                                             | Pro FormaThree MonthsEndedDecember 31,2005 | Actual threeMonthsEndedDecember 31,2005 | Pro FormaSix MonthsEndedDecember 31,2005 | ActualSix MonthsEndedDecember 31,2005
|-------------------------------------------- | ------------------------------------------ | --------------------------------------- | ---------------------------------------- | -------------------------------------
|Total revenue                                |                                            | $ 2,514,028                             |                                          | $ 2,514,028                          
|                                             |                                            |                                         |                                          |                                      
|Operating expenses:                          |                                           
|Marketing commissions                        |                                            | 1,150,947                               |                                          | 1,150,947                            
|Telecommunications                           |                                            | 595,716                                 |                                          | 595,716                              
|Other                                        |                                            | 20,364                                  |                                          | 20,364                               
|Selling, general and administrative          |                                            | 847,058                                 |                                          | 847,058                              
|Depreciation and amortization                |                                            | 3,270                                   |                                          | 3,270                                
|                                             |                                            |                                         |                                          |                                      
|Total operating expenses                     |                                            | 2,617,355                               |                                          | 2,617,355                            
|                                             |                                            |                                         |                                          |                                      
|Loss from operations                         |                                            | $  (103,327                             | )                                        | $  (103,327                          
|                                             |                                            |                                         |                                          |                                      
|Net loss attributable to common shareholders |                                           
|                                             |                                            | $  (100,695                             | )                                        | $  (100,695                          
|                                             |                                            |                                         |                                          |                                      

7

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
3 Receivables Financing Arrangement

The
balance of receivables financing arrangement as of December 31, 2005 is
$442,500. This represents the amount of marketing commissions receivables that
have been pledged under an Accounts Receivable Purchase Agreement (Receivables
Purchase Agreement) with Silicon Valley Bank. The Receivables Purchase Agreement
provides for up to $1,250,000 in marketing commissions receivable to be used as
collateral for advances under the Receivables Purchase Agreement of which 75% of
the marketing commissions receivable balances are available in cash advances to
the Company. Interest charges are 1.3% per month on the marketing commissions
receivable balances used as collateral. The bank was given a Security Agreement
in the assets of the Company including any of the Companys copyrights,
trademarks, patents and mask works, as a condition to the Receivables Purchase
Agreement. The Receivables Purchase Agreement is renewable from year to year
unless terminated in writing by either party.

Note
4 Stockholders Deficit

As of
December 31, 2005, the Company has authorized 20,000,000 shares of preferred
stock. The Company has designated 500,000 shares as 8% Convertible Series A.

On
October 17, 2002 the Company issued 500,000 shares of 8% Convertible Series A
Preferred Stock (Preferred Stock) to Stanford Venture Capital Holdings, Inc. for
$500,000. Each share of the 8% Convertible Series A Preferred Stock is
convertible, at the option of the holder, into one share of the Companys
common stock for a period of five years. After five years the Preferred Stock is
automatically converted to common stock. The Preferred Stock does not have
voting rights and has a liquidation preference of $1.00 per share. In
conjunction with the issuance of the Preferred Stock, the Company paid $30,000
in cash and issued 64,516 shares of the Companys common stock valued at
$20,000 to unaffiliated third-parties as a finders fee.

Dividends
on the Preferred Stock are cumulative at the rate of 8% per annum of the
liquidation value, $1.00 per share, are payable in cash, when and if declared by
the Board of Directors, and are preferential to any other junior securities, as
defined. The Board has not declared any such dividends. Because of the
cumulative nature of these dividends, if all dividends were to be declared the
balance owing would be $168,225 as of December 31, 2005.

Note
5  Stock Options and Warrants

BayHill
Agreement

On
November 22, 2005, the Company and the BayHill Group LC (BayHill) entered into
an agreement whereby BayHill has agreed to provide services to assist the
Company in developing business strategies and other corporate matters, including
assisting the Company in its strategic planning activities, raising capital,
finding companies for the Company to acquire, assisting the Company in its
investor relations activities and serving in various interim management
capacities as requested. The term of the agreement is for six months but may be
extended for three month periods unless cancelled by either party on thirty days
notice.

8

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

For
providing services pursuant to the agreement, the Company pays BayHill $10,000
per month for six months commencing November 22, 2005, and then $15,000 per
month thereafter during any extension period. Of the $10,000 and the $15,000
payments, one half is accrued until the Company has received cumulative equity
funding in amounts greater than $1,000,000 or has acquired another business or
businesses which have at least $1,000,000 in cash.

The
Company also has agreed to grant BayHill warrants to purchase 437,500 shares of
common stock at an exercise price of $.23 per share. The warrants will vest
according to a schedule if the Company is able to meet certain parameters. The
Company has agreed to grant BayHill certain piggyback and demand registration
rights. If the agreement is terminated by the Company, warrants not vested after
one year from the date of termination will be cancelled. As of December 31,
2005, the Company has accrued $9,953 in other current liabilities for these
warrants based on a calculation using the Black Scholes Model.

Stock
Option Plan

The
Company has established the 2001 Incentive and Non-statutory Stock Option Plan
(the Plan), which authorizes the issuance of up to 625,000 shares of the
Companys common stock. The Plan will remain in effect until 2011 unless
terminated earlier by an action of the Board. All employees, board members and
consultants of the Company are eligible to receive options under the Plan at the
discretion of the Board. Options issued under the Plan vest according to the
individual option agreement for each grantee.

During
the six months ended December 31, 2005, the Company granted 80,000 options to
non-employee Directors to purchase shares of common stock of the Company. The
options granted vest immediately and are exercisable at $.71 for 30,000 shares
and $.21 for 50,000 shares and expire five years from the date of grant. For the
six months ended December 31, 2005, the Company had included $11,246 in general
administrative expenses for the issuance of these options based on a calculation
using the Black Scholes Model.

As of
December 31, 2005, the number of stock options outstanding under the Plan was
555,000.

As of
December 31, 2005, the number of stock options outstanding not under any plan
was 25,000.

As of
December 31, 2005, there were 987,500 warrants outstanding that were exercisable
into shares of common stock of the Company, including 437,500 warrants that were
issued to BayHill. 500,000 warrants expired unexercised in November 2005.

9

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
6  Commitments and Contingencies

LowestCostMall

On
April 19, 2005, the Company entered into a Services Agreement with Vcommerce
Corporation pursuant to which Vcommerce has agreed to provide the Company with
the back office for an online retail store, which the Company began offering to
customers in July 2005 through its sales agent force and subsidiary,
LowestCostMall, Inc., dba, LowestCostMall.com. Pursuant to the Services
Agreement, Cognigen paid Vcommerce $20,000 upon the signing and will pay $5,000
per month over the first 12 months of the Services Agreement. In addition, the
Company is to pay Vcommerce a fee of $4,000 per month for monthly hosting
services and other fees as agreed upon by the Company.

The Services
Agreement  has been transferred to LowestCostMall, Inc. with a guarantee of such
provisions  in the agreement by Cognigen Networks, Inc. The Services Agreement is in
effect  for 36 months with automatic renewals unless terminated by either party. The
Company has the right to terminate the Services Agreement after the first 12  months of
the term by paying Vcommerce $24,000 and giving Vcommerce six months  notice of
termination during which period Vcommerce would provide no services to  the Company.

Other
Contingencies

On
April 7, 2005, David L. Jackson, one of the Companys directors and a
member of the Companys Compensation Committee, filed a complaint with the
California Department of Fair Employment and Housing (No. E200405M1559-oo-ap)
alleging that he was improperly terminated as an employee by the Companys Board of
Directors. Because of the costs involved in litigating this complaint, the
Company settled with Mr. Jackson by paying Mr. Jackson $32,000 in one lump sum.
Mr. Jackson did not specify in his complaint the amount of his alleged losses.

The
Company has granted a security interest to Global Crossing Bandwidth, Inc.
(Global Crossing) in the assets of the Company to the extent the assets relate
to services provided by Global Crossing and to the extent any amounts remain
outstanding to Global Crossing. This security interest is second to an existing
security interest by Silicon Valley Bank described in Note 3.

10

---

# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

Note
7  Related Party Information

Stock
Redemption Agreement between the Company, the Anderson Family Trust, Cantara
Communications Corporation, and Kevin E. Anderson Consulting, Inc.

On
December 7, 2001, the Company closed a transaction in which it purchased, or
redeemed, 2,712,500 shares of the Companys common stock from the AFT. AFT
delivered shares from those owned by Cognigen Corporation, a company 98.9 %
owned by AFT, to satisfy its obligation pursuant to the transaction. Kevin E.
Anderson and members of his family are the beneficiaries of AFT. Kevin E.
Anderson may be deemed to beneficially own the shares of our common stock owned
by AFT.

As
consideration for the return of the 2,712,500 shares to us, among other
consideration, the Company transferred to Cantara, an affiliate of Kevin E.
Anderson, the rights to become the up-line for the Companys current accounts and thereby
be entitled to commissions, fees and bonuses on the Companys current customer accounts,
with a commission not to exceed 12%, which commissions were agreed to be capped
by Cantara through December 31, 2002. The amount of commissions, fees and
bonuses that Cantara is entitled to is totally contingent upon the generation of
sales by it and its down line agents and payment for the products and services
sold by the Companys customers and vendors. The sales are generated either directly by
Cantara and/or its down-line sub-agents. For the six months ended December 31,
2005 and 2004, the Company paid Cantara $265,760 and $248,148 in commissions,
respectively. In addition, as a part of the transaction, the Companys
agreement with Kevin E. Anderson Consulting, Inc., pursuant to which the Company
paid Kevin E. Anderson Consulting, Inc. consulting fees of $14,583 per month,
was cancelled and Kevin E. Anderson was retained through March 31, 2003 at the
rate of $1,000 per month to provide up to 20 hours telecommuting consulting
services to the Company per month.

In
March 2003 the Company entered into a separate consulting agreement with Kevin
E. Anderson Consulting, Inc to provide expanded consulting and
technical/administrative services. For the six months ended December 31, 2005
and 2004, the Company paid Kevin E. Anderson Consulting, Inc. $27,000 and
$24,000, respectively, pursuant to the consulting agreement.

For the six
months  ended December 31, 2005 and 2004, Cognigen also paid members of Kevin E.  Andersons
family approximately $29,555 and $26,026 in agent commissions,  respectively.

On
December 9, 2005, the Company entered into an agreement with AFT and Cantara
Purchase Agreement. Under the Cantara Purchase Agreement, the Company has paid
the AFT a total of $50,000. The Stock Redemption Agreement will terminate if the
Company pays AFT a total of $1,500,000 by March 15, 2010 (unless one or more of
the payments automatically are deferred by 60 days upon the payment by us of
$50,000 to the AFT) pursuant to a schedule set forth in the Cantara Purchase
Agreement. The first payment is due March 15, 2006. Under the Cantara Purchase
Agreement, the AFT continues to receive 100% of the amount due under the Stock
Redemption Agreement until the Company makes the first payment of $450,000.
Thereafter, the percentage that the AFT receives reduces as the Company makes
additional payments. The Company has the right to prepay the $1,500,000 at
anytime and stop all payments to the AFT under the Stock Redemption Agreement.

11

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# COGNIGEN
NETWORKS, INC.
Notes to Unaudited Consolidated Financial Statements
December 31, 2005

At the
time the Company makes the first payment of $450,000, the Company will also be
required to enter into a two year consulting agreement with KEAC whereby the
Company and the AFT would pay KEAC $8,000 per month. The amount that the Company
would be required to pay would be based on the payments that the Company makes
to the AFT pursuant to the schedule set forth in the Cantara Purchase Agreement.
The Company has the right to extend the consulting agreement with KEAC for an
additional two years. All of this is contingent on the Company being able to
negoitate an agreement acceptable to KEAC.

Once
the Company has paid the $1,500,000 to the AFT or if the Company defaults in any
payments required by the Cantara Purchase Agreement, the Stock Redemption
Agreement will terminate. If the Company defaults in making the required
payments, the AFT will receive the percentage of the payments under the Stock
Redemption Agreement in effect on the last day of the payments actually made by
us to the AFT.

Note
7  Related Party Information (continued)

Agreement
with a Former Director

In
February 2005, the Company entered into an agreement with SEGAL & Co.
Incorporated, which is controlled by Robert B. Segal, a director at the time the
Company entered into the agreement who resigned as a director in May 2005. Under
the agreement, SEGAL & Co. Incorporated is to act as a non-exclusive
financial advisor to the Company. If it is successful in raising funds on terms
acceptable to the Company, the Company will pay SEGAL & Co. Incorporated a
financing fee of 4% of the first $5,000,000, 2% of the subsequent $10,000,000
and 1% thereafter. If SEGAL & Co. Incorporated is able to find a merger or
acquisition acceptable to the Company, it will receive 2.5% of the value of the
transaction. The agreement is for 12 months unless extended on a month to month
basis thereafter. The agreement also provides for reimbursement of approved
expenses up to $2,000 per month. This agreement expires in February 2006.

Payments
to Former Chief Executive Officer

Thomas S. Smith
resigned as the Companys  Chief  Executive  Officer in September  2005.  After Mr.
Smith  resigned,  the  Company had an oral agreement  with Thomas S. Smith pursuant to
which the Company  retained Mr. Smith or any law firm with  which he became  associated
with to provide  certain legal  services to the Company on a monthly  retainer of $12,500
per  month.  The  agreement  was  terminable  upon 60 days by  written  notice by either
party  which  notice was given by the  Company to Mr. Smith on December 22, 2005.

State Tax Audit

The State of
Washington is currently  performing an audit of the Companys  Washington  State
Business and Occupation Tax  Return.  The audit is in its  preliminary  stages.  To date,
the State of Washington has initially  calculated  $95,883 in  taxes  due by the  Company
from  prior  year tax  returns.  This  calculated  amount  was  derived  using  estimates
and  allocations  that the Company does not agree with.  As of December 31,  2005,  the
company has accrued  $30,000 in current  liabilities  as a potential  exposure  from this
audit but has not  completed  all of the  necessary  research and work to  arrive at a
final assessment.

12

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Item 2.    MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

We
are an Internet and relationship enabled marketer. The Companys core
products are long distance telephone and personal communications services. We
have generated revenue in two ways. First, marketing commissions revenue has
been generated from a number of vendors who are represented on our agent web
sites and for whom we sell their telecommunications and other products and
services via contractual agreements. Second, we have generated
telecommunications revenue through sales of our proprietary products and
services through our agent web sites. Our founder, Kevin E. Anderson, pioneered
our Internet based long distance telecommunication marketing opportunity in the
1990s. We have invested millions of dollars in developing business systems
for our independent agent network around the world. To date, over 820,000
customers have purchased telecommunication and personal technology services and
products from our websites. Each of the individuals, who are currently
registered as our agents, has a website that is replicated from the main
www.ld.net site.

We
formed a subsidiary, LowestCostMall, Inc. (LCM), in May 2005 to begin offering
customers, through our sales agent force, an online retail store. These
operations have been consolidated as part of our consolidated operations
beginning in July 2005. LCM provides innovative online shopping of thousands of
discounted products such as office products, toys, flowers, jewelry, electronic
and household items. Revenue is generated by LCM through the sales of discounted
products and sales of memberships. The membership enables the member to receive
even lower prices on the same discounted products.

In
prior years, we made a major strategic transition in our business profile and
delivery of telecommunications products and services. In addition to being
historically successful at representing and selling the telecommunications
services and products of outside vendors, we began selling multiple branded
products and services whereby the customer and account are owned by us. We refer
to these products and services as our proprietary products and services. The
most significant impact of this strategic transition is that by billing our
owned customer accounts, we generate approximately five to seven times as much
revenue compared to commission revenue we receive from vendors.

Through
the acquisition of multiple state licenses, billing capability, and new
distribution channels, we can grow revenue, maintain closer contact to our
customers, and control bottom line retention and contribution to a greater
degree. We are currently licensed to provide proprietary telecommunications
products in 47 states.

See
additional discussion of liquidity and capital resources below.

13

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Three Months
Ended December 31, 2005 Compared to Three Months Ended December 31, 2004

Total
revenue for the three months ended December 31, 2005 was $2,514,028 compared to
$2,919,868 for 2004. Marketing commissions revenue was $1,502,703 for 2005
compared to $1,369,035 for the prior year. Telecommunications revenue was
$981,477 for 2005 as compared to $1,550,833 for the prior year.

Marketing
commissions revenue for 2005 increased $133,668 from that of 2004, or 9%. This
increase reflects increases in sales of cellular products.

Telecommunications
revenue decreased $569,356 for 2005 compared to 2004, or 37%. This decrease
results from lower sales of our proprietary products and services, as well as,
lower selling prices of those products and services due to declining long
distance rates.

Marketing
commissions  expense increased from $707,834 for 2004 to $1,003,897 for 2005, an increase
of $296,063,  or 42%.  This  increase  correlates  to an increase  in  marketing
commissions  revenue  explained  above.  The higher  percentage  increase in  marketing
commissions  expense  compared to the  increase in marketing  commissions  revenue
results from a  difference  in product  mix between the periods  and the  payment of
higher  commission  expense to certain  master  sales  agents who have been added to our
sales agent force to increase  volume and sell certain  products  and  services  such as
cellular  products.  In addition,  marketing  commission expense increased in October
2005 when we began accruing payments  to Cantara as  marketing  commissions  expense.
During  the  quarter  ended  December  31,  2005,  the  Company  expensed  approximately
$120,000 related to payments made to Cantara as marketing  commissions.  In prior
quarters,  these payments  were reflected as a reduction of the amounts owed to Cantara
as a result of the Stock  Redemption  Agreement  entered into  in November  2001 (see
Note 2 to the  Consolidated  Financial  Statements).  Accordingly,  we have reported a
net loss for  the six months  ended  December  31, 2005 of $44,578.  If we had been able
to account for  payments to Cantara in a manner  similar to prior quarters,  we would
have reported  approximately  $75,000 of net income before income taxes.  This change  in
accounting  had no effect on our cash flows since we have been  paying  approximately
$120,000  to  $150,000 of  marketing  commissions each quarter to Cantara related to this
obligation.

Telecommunications
commissions expense decreased from $230,333 for 2004 to $147,050 for 2005, a
decrease of $83,283, or 36%. This decrease is consistent with the decrease
described above in telecommunications revenue.

Telecommunications
expense, or carrier costs, decreased from $830,744 for 2004 to $595,716 for
2005, or a decrease of $235,028, or 28%. This decrease correlates to the
decrease in telecommunications revenue described above. The margins on our
telecommunications revenue decreased compared to the prior period reflective of
higher carrier costs and a highly competitive market for long distance customers
being driven by declining long distance rates.

Selling,
general and administrative expenses decreased $67,169 or 7% for 2005 compared to
2004. This decrease is largely attributable to lower bad debt expense on the
sales of our proprietary products.

Interest
expense for 2005 of $11,390 is consistent with that for 2004 of $12,518.

Six Months
Ended December 31, 2005 Compared to Six Months Ended December 31, 2004

Total
revenue for the six months ended December 31, 2005 was $5,335,900 compared to
$5,664,712 for 2004. Marketing commissions revenue was $3,244,675 for 2005
compared to $2,615,256 for the prior year. Telecommunications revenue was
$2,055,094 for 2005 as compared to $3,049,456 for the prior year.

14

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Marketing
commissions revenue for 2005 increased $629,419 from that of 2004, or 24%. This
increase reflects increases in sales of cellular products.

Telecommunications
revenue decreased $994,362 for 2005 compared to 2004, or 33%. This decrease
results from lower sales of our proprietary products and services, as well as,
lower selling prices of those products and services due to declining long
distance rates.

Marketing
commissions  expense increased from $1,338,248 for 2004 to $2,097,581 for 2005, an
increase of $759,333,  or  57%.  This  increase  correlates  to  an  increase  in
marketing  commissions  revenue  explained  above.  The  higher  percentage  increase in
marketing  commissions  expense  compared to the  increase in  marketing  commissions
revenue  results from a difference  in product mix between the periods and the payment of
higher  commission  expense to certain  master  sales  agents who have been added to our
sales agent force to increase  volume and sell  certain  products  and  services  such as
cellular  products.  In  addition,  marketing  commission  expense  increased in October
2005 when we  began accruing payments to Cantara as marketing  commissions  expense.
During the quarter ended December 31, 2005, the  Company  expensed  approximately
$120,000  related to  payments  made to Cantara as  marketing  commissions.  In prior
quarters,  these  payments  were  reflected  as a  reduction  of the  amounts  owed to
Cantara as a result of the Stock  Redemption  Agreement  entered  into  in  November
2001  (see  Note  2  to  the  Consolidated  Financial  Statements).  Accordingly,  we
have  reported a net loss for the six months ended  December 31, 2005 of $44,578.  If we
had been able  to account  for  payments  to  Cantara in a manner  similar to prior
quarters,  we would have  reported  approximately  $75,000 of net income  before income
taxes.  This change in  accounting  had no effect on our cash flows since we have been paying
approximately $120,000 to $150,000 of marketing commissions each quarter to Cantara
related to this obligation.

Telecommunications
commissions expense decreased from $453,975 for 2004 to $302,890 for 2005, a
decrease of $151,085, or 33%. This decrease is consistent with the decrease
described above in telecommunications revenue.

Telecommunications
expense, or carrier costs, decreased from $1,691,379 for 2004 to $1,285,620 for
2005, or a decrease of $405,759, or 24%. This decrease correlates to the
decrease in telecommunications revenue described above. The margins on our
telecommunications revenue decreased compared to the prior period reflective of
higher carrier costs and a highly competitive market for long distance customers
being driven by declining long distance rates.

Selling,
general and administrative expenses decreased $40,578 or 2% for 2005 compared to
2004. This decrease is largely attributable to lower bad debt expense on the
sales of our proprietary products.

Interest
expense for 2005 of $20,255 is consistent with that for 2004 of $25,786.

Liquidity
and Capital Resources

We
have historically funded our operations primarily from sales of securities and
operations. As of December 31, 2005 we had cash and cash equivalents of $153,909
and negative working capital of $512,610. Cash provided by operations during the
six months ended December 31, 2005 was $78,768. Cash provided from financing
activities of $21,432 included the payment of deferred commissions of $226,068
and an increase in the receivables financing arrangement of $247,500.

We
have a balance outstanding under a receivables financing arrangement with
Silicon Valley Bank as of December 31, 2005 of $442,500. This represents the
amount of marketing commissions receivables that have been pledged under an
Accounts Receivable Purchase Agreement (Receivables Purchase Agreement) with a
bank. The Receivables Purchase Agreement provides for up to $1,250,000 in
marketing commissions receivable to be used as collateral for advances under the
Receivables Purchase Agreement of which 75% of the marketing commissions
receivable balances are available in cash advances to us. Interest charges are
1.3% per month on the marketing commissions receivable balances used as
collateral. After one year, the Receivables Purchase Agreement is from year to
year unless terminated in writing by either party. We are in compliance with the
terms and conditions of the Receivables Purchase Agreement.

15

---

Cash
flows generated from operations and from our receivables financing arrangement
were sufficient to meet our working capital requirements for the six months
ended December 31, 2005, but may not be sufficient to meet our working capital
requirements for the foreseeable future or provide for expansion opportunities.
We are looking at various financing and equity opportunities to provide
additional working capital or for expansion opportunities and continue to
identify costs and expenses that can be reduced or eliminated. There can be no
assurance we will be able to secure additional debt or equity financing, that we
will be able to reduce or eliminate more costs and expenses or that cash flows
from operations will produce adequate cash flow to enable us to meet all of our
future obligations or to be able to expand. However, we believe that we will be
successful in producing sufficient cash flows from all collective sources to
continue for at least the next twelve months.

Forward
Looking Statements

Certain
of the information discussed herein, and in particular in this section entitled
Managements Discussion and Analysis or Plan of Operation,
contains forward looking statements that involve risks and uncertainties that
might adversely affect our operating results in the future in a material way.
Such risks and uncertainties include, without limitation, our possible inability
to become certified as a reseller in all jurisdictions in which we apply, the
possibility that our proprietary customer base will not grow as we expect, our
possible inability to obtain additional financing, the possible lack of
producing agent growth, our possible lack of revenue growth, our possible
inability to add new products and services that generate increased sales, our
possible lack of cash flows, our possible loss of key personnel, the possibility
of telecommunication rate changes and technological changes and the possibility
of increased competition. Many of these risks are beyond our control. We are not
entitled to rely on the safe harbor provisions of Section 27A of the Securities
Act of 1933, as amended, or Section 21E of the Securities Exchange Act of 1934
as amended, when making forward-looking statements.

Item 3.    Controls
and Procedures

(a)  
Evaluation of disclosure controls and procedures.

Under
the supervision and with the participation of our management, including our
Acting Chief Executive Officer and our Chief Financial Officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures ( as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934) at the end of the period covered by this report. Based
upon that evaluation, our Acting Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective.

In
preparing prior audits, our auditors identified potential deficiencies within
our internal control framework which have the potential to result in a material
control weakness. These potential control deficiencies relate to the manner in
which we process transactions to record telecommunications revenue and related
accounts receivable as our current processes and procedures require substantive
manual intervention, estimation and reliance on several sources of information
that are not integrated with our accounting system.

16

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In
addition, our Chief Financial Officer oversees our accounting and general
internal control process. As we have a very limited staff, we can not afford the
luxury of having other financial accounting minded management members at his
level that would help either crosscheck or advise in the accounting or financial
reporting process. Although, our Chief Financial Officer is constantly involved
in consultation with peers in the field of accounting and reporting, this
situation could potentially result in a material control weakness.

Our
certifying officer does not believe that the potential control deficiencies
constitute material weaknesses because of the number of compensating internal
controls already in place. However, we are a small company and due to the fact
that we have a limited number of employees, we are not able to have proper
segregation of duties. We are aware that the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission is going to issue its report on
internal controls structures for small companies. It is possible that after
reviewing this report and after our independent auditors perform a Section 404
test, we will conclude that due to the fact that we do not have proper
segregation of duties, some of the issues that we believe are compensating
internal controls are not sufficient to mitigate the lack of segregation of
duties. Thus, we might be deemed to have material weaknesses in our internal
control structure.

(b)  
Changes in internal controls.

There
were no changes made in our internal controls over financial reporting during
the period covered by this report or, to our knowledge, in other factors that
could affect these controls subsequent to the date of their evaluation.

# Part
II  Other Information

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

On
November 22, 2005, the Company and the BayHill Group LC (BayHill) entered into
an agreement whereby BayHill has agreed to provide services to assist the
Company in developing business strategies and other corporate matters, including
assisting the Company in its strategic planning activities, raising capital,
finding companies for the Company to acquire, assisting the Company in its
investor relations activities and serving in various interim management
capacities as requested. The term of the agreement is for six months but may be
extended for three month periods unless cancelled by either party on thirty days
notice.

For
providing services pursuant to the agreement, the Company pays BayHill $10,000
per month for six months commencing November 22, 2005, and then $15,000 per
month thereafter during any extension period. Of the $10,000 and the $15,000
payments, one half is accrued until the Company has received cumulative equity
funding in amounts greater than $1,000,000 or has acquired another business or
businesses which have at least $1,000,000 in cash.

The
Company also has agreed to grant BayHill warrants to purchase 437,500 shares of
common stock at an exercise price of $.23 per share. The warrants will vest
according to a schedule if the Company is able to meet certain parameters. The
Company has agreed to grant BayHill certain piggyback and demand registration
rights. If the agreement is terminated by the Company, warrants not vested after
one year from the date of termination will be cancelled.

17

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We did
not engage the services of any underwriter in connection with our agreement to
issue the warrants.

In
agreeing to issue the warrants to BayHill, we relied on the exemption from
registration contained in Section 4(2) of the Securities Act of 1933, as
amended. BayHill had full information concerning us and will take the warrants
and underlying shares for purposes of other than distribution unless the
underlying shares are registered under the Securities Act of 1933, as amended.
The warrants and the underlying shares will contain a legend restricting their
transfer unless registered under the Securities Act of 1933, as amended, or
unless there is an exemption available for their transfer.

On
November 16, 2005, we issued to our non-employee directors options to purchase
up to 80,000 shares of our common stock. We do not consider these issuances to
be sales of securities.

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

At our
annual meeting of shareholders held on November 16, 2005, for which did not
solicit proxies from shareholders, the following items were approved, as
indicated by the vote stated following each item:

That
the number of directors to be voted on be reduced to four.

| | For
- 4,529,150 (all present at the meeting).                      Against - None
| | ---------------------------------------------------------------------------------

| | The
following persons were elected directors to serve until the next Annual Meeting of
Shareholders or until  their successors are elected and qualify:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

|                        | For | Withheld 
|----------------------- | --- | ---------
|Gary L. Cook            |     | 4,529,150
|David L. Jackson        |     | 4,029,150
|Christopher R. Seelbach |     | 4,529,150
|James H. Shapiro        |     | 4,529,150

18

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Item 6.   
Exhibits

EXHIBIT
NO.                    DESCRIPTION AND METHOD OF FILING

|3.1 |  | Articles of Incorporation filed on May 6, 1983 (incorporated by reference to
Exhibit 3.1 to our Annual Report on Form 10-KSB for the year ended June 30,
2000).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Articles of Amendment to our Articles of Incorporation filed on June 23, 1988
(incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-KSB
for the year ended June 30, 2000).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 |  | Articles of Amendment to our Articles of Incorporation filed on July 12, 2000
(incorporated by reference to Exhibit 3.3 to our Annual Report on Form 10-KSB
for the year ended June 30, 2000).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 |  | Articles of Amendment to our Articles of Incorporation filed on March 16, 2001
(incorporated by reference to our Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2001).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.5 |  | Articles of Amendment to our Articles of Incorporation filed on October 16, 2002
(incorporated herein by reference to Exhibit 3.1 to our Current Report on Form
8-K filed on November 4, 2002).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.6 |  | Bylaws as amended through May 17, 2005 (incorporated by reference to Exhibit
3.(ii) to our Current Report on Form 8-K filed on May 19, 2005).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|10.1 |  | Agreement dated November 22, 2005 between the BayHill Group LLC and us
(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K
filed on November 25, 2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Agreement dated December 9, 2005, among us, the Andersen Family Trust No. 1 and
Cantara Communications corporation ( incorporated by Reference to Exhibit 10.1
to our Current Report on Form 8-K filed on December 15, 2005).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.1 |  | Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1
to our Annual Report on Form 10-KSB for the year ended June 30, 2004).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|21 |  | Subsidiaries (incorporated by reference to Exhibit 21 to our Annual Report on
Form 10-KSB for the year ended June 30, 2005).
|-- |  | ----------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification of Acting Chief Executive Officer and Chief Financial Officer
required by Rule 13a-14(a)
|---- |  | ------------------------------------------------------------------------------------------------------

|32.1 |  | Certification of Acting Chief Executive Officer and Chief Financial Officer
required by Section 906 of the Sarbanes-Oxley Act of 2002
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------

19

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# 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.

COGNIGEN
NETWORKS, INC.

|                                                           | 
|---------------------------------------------------------- | 
|By:  /s/ Gary L. Cook                                      | 
|Gary L. Cook                                               | 
|Acting Chief Executive Officer and Chief Financial Officer | 

20

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# EXHIBIT
INDEX

EXHIBIT
NO.            DESCRIPTION AND METHOD OF FILING

|3.1 |  | Articles of Incorporation filed on May 6, 1983 (incorporated by reference to
Exhibit 3.1 to our Annual Report on Form 10-KSB for the year ended June 30,
2000).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Articles of Amendment to our Articles of Incorporation filed on June 23, 1988
(incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-KSB
for the year ended June 30, 2000).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 |  | Articles of Amendment to our Articles of Incorporation filed on July 12, 2000
(incorporated by reference to Exhibit 3.3 to our Annual Report on Form 10-KSB
for the year ended June 30, 2000).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 |  | Articles of Amendment to our Articles of Incorporation filed on March 16, 2001
(incorporated by reference to our Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2001).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.5 |  | Articles of Amendment to our Articles of Incorporation filed on October 16, 2002
(incorporated herein by reference to Exhibit 3.1 to our Current Report on Form
8-K filed on November 4, 2002).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.6 |  | Bylaws as amended through May 17, 2005 (incorporated by reference to Exhibit
3.(ii) to our Current Report on Form 8-K filed on May 19, 2005).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|10.1 |  | Agreement dated November 22, 2005 between the BayHill Group LLC and us
(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K
filed on November 25, 2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Agreement dated December 9, 2005, among us, the Andersen Family Trust No. 1 and
Cantara Communications corporation ( incorporated by Reference to Exhibit 10.1
to our Current Report on Form 8-K filed on December 15, 2005).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.1 |  | Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1
to our Annual Report on Form 10-KSB for the year ended June 30, 2004).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|21 |  | Subsidiaries (incorporated by reference to Exhibit 21 to our Annual Report on
Form 10-KSB for the year ended June 30, 2005).
|-- |  | ----------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification of Acting Chief Executive Officer and Chief Financial Officer
required by Rule 13a-14(a)
|---- |  | ------------------------------------------------------------------------------------------------------

|32.1 |  | Certification of Acting Chief Executive Officer and Chief Financial Officer
required by Section 906 of the Sarbanes-Oxley Act of 2002
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------

21

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