UNITED
STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.  20549

FORM
10-QSB

[   X   ]   
       QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES
EXCHANGE          
           ACT OF
1934

For the
quarterly period ended: December 31, 2006

OR

[         ]
         TRANSITION REPORT PURSUANT
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE              
        ACT
OF 1934

For the
transition period from _______________ to ________________

Commission
file number
2-87052-D

Cogenco International, Inc.(Exact name of
Registrant as specified in its charter)

|Colorado                        | 84-0914754
|------------------------------- | ----------
|(State or other jurisdiction of |           
|incorporation or organization)  |           
|                                |           

Suite
1840, 6400 South Fiddlers Green Circle, Greenwood Village, CO 80111(Address of principal executive offices and Zip Code)

(303)
758-1357(Registrants telephone number)

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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
[      ]

The number
of shares outstanding of the issuers classes of common stock, as of February 12,
2007, is 2,581,256 shares, $.01 par value.

Transitional Small Business Issuer Disclosure Format Yes
[      ] No
[   X   ]



---

COGENCO
INTERNATIONAL, INC.(A Development Stage  Company)

INDEX

Page
No.

|PART I.    FINANCIAL
      INFORMATION                                                                                                      |  | 
|------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Item
      1:   Financial Statements                                                                                                        |  | 
|                                                                                                                                            |  | 
|Balance Sheet
      March 31, 2006 and December 30, 2006 (unaudited)                                                                        |  | 
|                                                                                                                                            |  | 
|Statement of
      Operations - For the Three Months Ended December 31, 2005                                                                |  | 
|and 2006
      (unaudited)                                                                                                                  |  | 
|                                                                                                                                            |  | 
|Statement of
      Operations - For the Nine Months Ended December 31, 2005 and 2006
      and                                              |  | 
|Cumulative
      Amounts from Inception of the Development Stage (July 26, 1990) through
               December 31, 2006
      (unaudited) |  | 
|                                                                                                                                            |  | 
|                                                                                                                                            |  | 
|Statement of
      Stockholders' Equity - For the Nine Months Ended                                                                         |  | 
|December 31,
      2006 (unaudited)                                                                                                         |  | 
|                                                                                                                                            |  | 
|Statement of
      Cash Flows - For the Nine Months Ended December 31, 2005                                                                 |  | 
|and 2006 and
      Cumulative Amounts from Inception of the Development                                                                     |  | 
|Stage (July
      26, 1990) through December 31, 2006 (unaudited)                                                                           |  | 
|                                                                                                                                            |  | 
|Notes to
      Unaudited Financial Statements                                                                                               |  | 
|                                                                                                                                            |  | 
|Item 2:   Managements
      Discussion and Analysis or Plan of Operation                                                                   |  | 
|                                                                                                                                            |  | 
|Item 3:   Controls and
      Procedures                                                                                                     |  | 
|                                                                                                                                            |  | 
|PART II.   OTHER
      INFORMATION                                                                                                          |  | 
|                                                                                                                                            |  | 
|Item 1.   Legal
      Proceedings                                                                                                           |  | 
|                                                                                                                                            |  | 
|Item 2.   Unregistered
      Sales of Equity Securities and Use of Proceeds                                                                 |  | 
|                                                                                                                                            |  | 
|Item 3.   Defaults
      upon senior securities.                                                                                            |  | 
|                                                                                                                                            |  | 
|Item 4.   Submission
      of matters to a vote of security holders.                                                                        |  | 
|                                                                                                                                            |  | 
|Item 5.   Other
      information.                                                                                                          |  | 
|                                                                                                                                            |  | 
|Item
      6.   Exhibits                                                                                                                    |  | 
|                                                                                                                                            |  | 
|Signatures                                                                                                                                  |  | 
|                                                                                                                                            |  | 
|Certification pursuant to Securities
      Exchange Act of 1934 and                                                                         |  | 
|Sections 302 and 906 of the
      Sarbanes-Oxley Act of 2002                                                                                |  | 
|                                                                                                                                            |  | 
|                                                                                                                                            |  | 
|                                                                                                                                            |  | 



---

PART I.   
FINANCIAL INFORMATION

ITEM 1.   
FINANCIAL STATEMENTS

1



---

COGENCO
INTERNATIONAL, INC.  (A Development Stage Company)  BALANCE SHEET  March 31, 2006 and
December 31, 2006  (Unaudited)

|                                                       | March | December          
|------------------------------------------------------ | ----- | ------------------
|ASSETS                                                 |       |                   
|                                                       |       |                   
|Current assets:                                        |       |                   
|Cash, in interest bearing accounts                     |       | $          99,738 
|Certificate of deposit (Note 3)                        |       | 78,120            
|Prepaid expense                                        |       | 5,460             
|                                                       |       |                   
|                                                       |       |                   
|Total current assets                                   |       | 183,318           
|                                                       |       |                   
|Computer equipment, at cost, net of accumulated        |       |                   
|depreciation of $363 (March) and $951 (December)       |       | 3,137             
|Stand still fee and codevelopment payments             |       | 197,527           
|                                                       |       |                   
|                                                       |       |                   
|                                                       |       |                   
|Total assets                                           |       | $        383,982  
|                                                       |       |                   
|                                                       |       |                   
|LIABILITIES AND STOCKHOLDERS' EQUITY                   |       |                   
|                                                       |       |                   
|Current liabilities:                                   |       |                   
|Accounts payable                                       |       | $            3,677
|Accounts payable - related party                       |       |                  
|Accrued salary - officer                               |       |                  
|                                                       |       |                   
|                                                       |       |                   
|Total current liabilities                              |       | 3,677             
|                                                       |       |                   
|Stockholders' equity:                                  |       |                   
|Preferred stock, $.01 par value; 10,000,000 shares     |       |                   
|authorized, no shares issued and outstanding           |       |                  
|Common stock, $.01 par value; 50,000,000 shares        |       |                   
|authorized, 2,578,756 (March) and 2,581,256 (December) |       |                   
|shares issued and outstanding                          |       | 25,788            
|Additional paid-in capital                             |       | 5,693,975         
|Accumulated deficit (including $4,349,796 deficit      |       |                   
|accumulated during the development stage at            |       |                   
|December 31, 2006)                                     |       | (5,339,458        
|                                                       |       |                   
|                                                       |       |                   
|Total stockholders' equity                             |       | 380,305           
|                                                       |       |                   
|                                                       |       |                   
|Total liabilities and stockholders' equity             |       | $        383,982  
|                                                       |       |                   
|                                                       |       |                   
|                                                       |       |                   
|                                                       |       |                   
|                                                       |       |                   
|                                                       |       |                   

2



---

COGENCO
INTERNATIONAL, INC.  (A Development Stage Company)  STATEMENT OF OPERATIONS  For the
Three Months Ended December 31, 2005 and 2006  (Unaudited)

|                                        | 2005 | 2006                        
|--------------------------------------- | ---- | ----------------------------
|Revenues:                               |      |                             
|Rental income                           |      | $                          
|Interest income                         |      | 521                         
|                                        |      |                             
|                                        |      |                             
|Total Revenues                          |      | 521                         
|                                        |      |                             
|Costs and expenses:                     |      |                             
|Research and development                |      | 387,906                     
|Salary - officer                        |      | 37,500                      
|Legal fees - related party (Note 3)     |      | 1,500                       
|Legal fees                              |      | 3,902                       
|Consulting and travel expenses -        |      |                             
|related party                           |      | 106                         
|General and administration              |      | 9,815                       
|Rent and storage expenses               |      | 10,920                      
|Depreciation                            |      |                            
|                                        |      |                             
|                                        |      |                             
|Total costs and expenses                |      | 451,649                     
|                                        |      |                             
|                                        |      |                             
|Net loss (Note 2)                       |      | $               (451,128    
|                                        |      |                             
|                                        |      |                             
|Basic and diluted loss per common share |      | $                     (0.17 
|                                        |      |                             
|                                        |      |                             
|Weighted average number of common       |      |                             
|shares outstanding                      |      | 2,578,756                   
|                                        |      |                             
|                                        |      |                             

3



---

COGENCO
INTERNATIONAL, INC.  (A Development Stage Company)  STATEMENT OF OPERATIONS  For the Nine
Months Ended December 31, 2005 and 2006 and Cumulative Amounts  from Inception of the
Development Stage (July 26, 1990) Through December 31, 2006  (Unaudited)

|                                        | 2005 | 2006                  | Cumulativeamounts fromInception
|--------------------------------------- | ---- | --------------------- | -------------------------------
|Revenues:                               |      |                       |                                
|Rental Income                           |      | $                    |                                
|Interest income                         |      | 647                   |                                
|                                        |      |                       |                                
|                                        |      |                       |                                
|Total Revenues                          |      | 647                   |                                
|                                        |      |                       |                                
|Costs and expenses:                     |      |                       |                                
|Research and development                |      | 2,187,906             |                                
|Salary - officer                        |      | 37,500                |                                
|Legal fees - related party (Note 3)     |      | 4,500                 |                                
|Legal fees                              |      | 18,661                |                                
|Consulting and travel expenses -        |      |                       |                                
|related party                           |      | 10,009                |                                
|Dry hole costs                          |      |                      |                                
|General and administration              |      | 23,824                |                                
|Rent and storage expenses               |      | 11,325                |                                
|Depreciation                            |      |                      |                                
|                                        |      |                       |                                
|                                        |      |                       |                                
|Total costs and expenses                |      | 2,293,725             |                                
|                                        |      |                       |                                
|                                        |      |                       |                                
|Net loss (Note 2)                       |      | $      (2,293,078     | )                              
|                                        |      |                       |                                
|                                        |      |                       |                                
|Basic and diluted loss per common share |      | $               (0.94 | )                              
|                                        |      |                       |                                
|                                        |      |                       |                                
|Weighted average number of common       |      |                       |                                
|shares outstanding                      |      | 2,442,501             |                                
|                                        |      |                       |                                
|                                        |      |                       |                                

4



---

COGENCO
INTERNATIONAL, INC.  (A Development Stage Company)  STATEMENT OF STOCKHOLDERS EQUITY
For the Nine Months Ended December 31, 2006(Unaudited)

|                             | Common stock | Additionalpaid-in | Accumulated | Totalstockholders' | 
|---------------------------- | ------------ | ----------------- | ----------- | ------------------ | 
|
|Balance at March 31, 2006    |              | 2,578,756         |             | $25,788            | 
|Sale of common stock in      |              |                   |             |                    | 
|private placement (Note 5)   |              | 2,500             |             | 25                 | 
|Net loss for the nine months |              |                   |             |                    | 
|ended December 31, 2006      |              |                  |             |                   | 
|                             |              |                   |             |                    | 
|                             |              |                   |             |                    | 
|Balance at December 31, 2006 |              | 2,581,256         |             | $25,813            | 
|                             |              |                   |             |                    | 
|                             |              |                   |             |                    | 

5



---

COGENCO
INTERNATIONAL, INC.  (A Development Stage Company)  STATEMENT OF CASH FLOWS  For the Nine
Months Ended December 31, 2005 and 2006 and Cumulative Amounts  from Inception of the
Development Stage (July 26, 1990) Through December 31, 2006  (Unaudited)

|                                        | Nine months Ended December 31, | Cumulativeamounts from |  
|--------------------------------------- | ------------------------------ | ---------------------- | -
|
|Cash flows from operating activities:   |                                |                        |  
|Net loss                                |                                | $      (2,293,078      | )
|Adjustment to reconcile net loss to net |                                |                        |  
|cash used in operating activities:      |                                |                        |  
|Research and development expenses       |                                | 387,906                |  
|Depreciation expense                    |                                |                       |  
|Consulting fees paid directly by        |                                |                        |  
|common stock purchasers                 |                                |                       |  
|Change in prepaid expense               |                                | (1,200                 | )
|Change in accounts payable and          |                                |                        |  
|accrued expenses                        |                                | 3,052                  |  
|                                        |                                |                        |  
|                                        |                                |                        |  
|Net cash used in operations             |                                | (1,903,320             | )
|                                        |                                |                        |  
|Cash flows from investing activities:   |                                |                        |  
|Contract payments                       |                                | (1,350,000             | )
|Purchase certificate of deposit         |                                | (77,450                | )
|Purchase of computer equipment          |                                | (1,834                 | )
|                                        |                                |                        |  
|                                        |                                |                        |  
|Net cash used in investing activities   |                                | (1,429,284             | )
|                                        |                                |                        |  
|Cash flows from financing activities:   |                                |                        |  
|Proceeds from sale of common stock      |                                | 3,422,475              |  
|Short-term borrowings                   |                                |                       |  
|Repayments of short-term borrowings     |                                |                       |  
|                                        |                                |                        |  
|                                        |                                |                        |  
|Net cash provided by financing          |                                |                        |  
|activities                              |                                | 3,422,475              |  
|                                        |                                |                        |  
|                                        |                                |                        |  
|Net increase (decrease) in cash         |                                | 89,871                 |  
|                                        |                                |                        |  
|Cash and cash equivalents at            |                                |                        |  
|beginning of year                       |                                | 95,460                 |  
|                                        |                                |                        |  
|                                        |                                |                        |  
|Cash and cash equivalents at            |                                |                        |  
|end of period                           |                                | $          185,331     |  
|                                        |                                |                        |  
|                                        |                                |                        |  
|                                        |                                |                        |  

6



---

COGENCO
INTERNATIONAL, INC. (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTSDecember 31, 2006

1.    Basis of
presentation

| | The
accompanying financial statements have been prepared by the Company, without  audit. In
the opinion of management, the accompanying unaudited financial  statements contain all
adjustments (consisting of only normal recurring  accruals) necessary for a fair
presentation of the financial position as of  March 31, 2006 and December 31, 2006, and
the results of operations and cash  flows for the periods ended December 31, 2005 and
2006. The financial statements  have been prepared on a going concern basis which
contemplates the realization  of assets and liquidation of liabilities in the ordinary
course of business. As  shown in the accompanying financial statements, the Company has
incurred  significant losses from inception to date and does not have sufficient funds on
hand to continue to fund operations. As a development stage company, the Company
continues to rely on infusions of equity capital to fund operations. As a  result,
substantial doubt exists about the Companys ability to continue to  fund future
operations using its existing resources. The Company continues to  seek equity
investments of which there can be no assurance.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.    Income
taxes

| | No
provision for income taxes is required at March 31, 2006 and December 31, 2006
because, in managements opinion and based on historical performance the
effective tax rate for the year will be zero.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of March 31, 2006 and December 31, 2006, total deferred tax assets and valuation
allowance are as follows:
| | -------------------------------------------------------------------------------------------------------------

|                                              | March 31,2006 | December 31,2006   
|--------------------------------------------- | ------------- | -------------------
|Deferred tax assets resulting from:           |               |                    
|Loss carryforward                             |               | $        212,200   
|Future deduction for research and development |               | 1,138,600          
|Valuation allowance                           |               | (1,350,800         
|                                              |               |                    
|                                              |               | $                 
|                                              |               |                    
|                                              |               |                    

3.    Related
party transactions

| | For
the period from inception of the development stage to December 31, 2006, the
Company incurred legal costs of $88,221, from a law firm which was formerly a
principal stockholder. A former principal of that law firm is a relative of an
officer and director of the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



---

COGENCO
INTERNATIONAL, INC. (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTSDecember 31, 2006

| | For
the nine months ended December 31, 2005, and 2006, and from inception of the
development stage, the Company incurred legal costs of $4,500, $4,500, and
$119,049, respectively, from two law firms in which a principal of each law firm
is a relative of an officer and director of the Company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2004 we entered into an employment contract with David Brenman which
became effective on or about September 30, 2005, when we paid DMI $3,250,000 for
participation in the co-development agreement. The employment agreement was
approved by our board of directors, including David Brenmans father and
brother-in-law. The material terms of David Brenmans employment agreement
are described in an annual report on Form 10-KSB for the year ended March 31,
2006. We paid Mr. Brenman his salary as due under the employment agreement
through August 15, 2006, but we have been unable to make payments to him as
required under his employment agreement beginning August 31, 2006. Mr. Brenman
has orally agreed to defer (without interest) collection of any amounts due
under his employment agreement until such time as Cogenco is adequately
financed.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
and subsequent to the fiscal years 2005 and 2006, Cogenco has raised $3,900,000
from offshore private placements using a Liechtenstein-based fund manager, MJM
as a finder. MJM and Cogenco have entered into a Finders Agreement
containing the following terms: Cogenco agrees to engage MJM on a non-exclusive
basis; Cogenco shall pay MJM a finders fee of 7 1⁄2% of the funds
raised from MJMs European clients; each party shall be entitled to
indemnification under certain circumstances; and Cogenco shall reimburse MJM for
related expenses. As a result, Cogenco has paid MJM a finders fee of
$292,500. The fund manager paid one-third of the finders fee to David W.
Brenman president of Cogenco, in accordance with an oral agreement between them.
Pursuant to that oral agreement, Mr. Brenman will be entitled to receive
one-quarter of the fund managers profits from making the investment in
Cogenco. MJM is owned and operated by Herald Janssen, who, through MJM and
Genesis Investment Funds Limited is a principal shareholder of Cogenco and has
had prior personal relationships with Mr. Brenman.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
October 2005, Cogenco entered into an office lease with an unaffiliated party  for
approximately 3,210 square feet at the rate of $5,350 per month over its  term of 38
months. Commencing April 1, 2006, Cogenco has subleased a portion of  the space
(approximately 1,605 square feet) to another company (Micro-Imaging  Solutions, Inc. or
MIS) for $2,675 per month (Cogencos cost).  The income from this
sublease was $25,380 for the nine months ended December 31,  2006. MIS will also be
responsible for it pro-rata share of other expenses  incurred under the lease. The
sublease is on a month-to-month basis, and Cogenco  expects that MIS use of the
office space will continue during the  remaining term of Cogencos lease, depending
on MISs financial  capabilities. An affiliate of David Brenman has a significant
equity interest in  MIS. The lease and sublease was approved by the remaining members of
the  Cogenco  board of directors, including Mr. David Brenmans father and his
brother-in-law. A certificate of deposit of $80,304 has been pledged as  collateral on a
letter of credit in the amount of $70,000 securing the lease.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



---

COGENCO
INTERNATIONAL, INC. (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTSDecember 31, 2006

| | 
| | 

4.    Contract
payment

| | In
August 2004, Cogenco entered into a letter agreement with DMI BioSciences, Inc.
(DMI) for an agreement by which Cogenco would participate in the
development of a drug for the treatment of asthma in humans. The parties
modified this agreement in November 2004 and, pursuant to the modification,
Cogenco paid DMI $100,000 and entered into a co-development agreement with DMI
for the development of a drug for the treatment of asthma in humans (the
Old Development Agreement). Under the terms of the agreements, as
amended, Cogenco paid DMI $3,250,000 by September 30, 2005. Once Cogenco paid
DMI the full $3,250,000 it had the right to participate in revenues from sales
of the asthma products.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2006, Cogenco and DMI negotiated a restated letter of intent (the
New LOI) which contemplated additional payments of $7,000,000 to DMI
by November 30, 2006. In addition, the parties negotiated a new co-development
agreement (the New Development Agreement) for the development of a
drug for the treatment of multiple sclerosis. Upon signing the New Development
Agreement, the Old Development Agreement was terminated (although the payments
that Cogenco has made will be credited to the New Development Agreement).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cogenco
has not made any of the required payments to DMI. Cogenco does not have the
funds necessary to make these payments. DMI, however, has not yet given Cogenco
notification of default (although it is entitled to under the New Development
Agreement).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



---

COGENCO
INTERNATIONAL, INC. (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTSDecember 31, 2006

| | The
New LOI also amended the suggestion in the August 2004 letter agreement that the
parties will attempt to negotiate a business combination between DMI and Cogenco
(provided that Cogenco becomes adequately funded with at least $25,000,000).
Since the business combination did not occur by October 30, 2006, upon notice
from DMI to Cogenco, the $3,250,000 investment will be automatically converted
into 1,000,000 shares of DMI common stock and Cogenco will become a minority
shareholder of DMI.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Of
the total payments of $3,250,000 made to DMI, we included $197,527 in research
and development expenses for the nine months ended December 31, 2006. This
figure represents the amount of funds received by DMI from Cogenco which had
been expended by DMI as of December 31, 2006 on research and development
expenses and related expenses.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.   
Stockholders equity

| | For
the nine months ended December 31, 2006, Cogenco issued 2,500 shares of its
common stock to one offshore European accredited investor in exchange for an
investment of $25,000.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



---

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

The
statements contained in this Report on Form 10-QSB that are not purely
historical are forward looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding our expectations, hopes, intentions or
strategies regarding the future. Forward looking statements include: statements
regarding future products or product development; statements regarding future
selling, general and administrative costs and research and development spending,
and our product development and marketing strategies; statements regarding
future capital expenditures and financing requirements; and similar forward
looking statements. All forward-looking statements included in this document are
based on information available to us on the date hereof, and we undertake no
obligation to update any such forward-looking statements. It is important to
note that our actual results could differ materially from those in such
forward-looking statements.

Material
Changes in Financial Condition

Since
the time Cogenco ceased active business operations in 1988, we have been
actively seeking potential business opportunities. Except for a series of equity
financings in 2005 and 2006, and the activities described below relating to DMI
BioSciences, Inc. (DMI), Cogenco has not engaged in any business
operations for more than the past five years and has not received any income
from operations in more than the past ten years.

On
December 31, 2006, we had working capital of $21,082, this represents a decrease
of $28,259 from our working capital of $49,341 on September 30, 2006. This
decrease is attributable primarily to an increase in our accrued salaries
payable of approximately $37,500. Included in our working capital is a
certificate of deposit in the amount of $80,304 which is not available to us for
the payment of our current liabilities except for rent as it comes due.
Excluding the certificate of deposit, our current assets would be $59,222 less
than our current liabilities. We have had significant cash flow difficulties
and, as discussed below, we have not been able to pay our obligations to DMI
Biosciences, Inc. and our president has deferred (without interest) collection
of his salary since August 15, 2006 until Cogenco is adequately financed. We
alleviated a portion of our working capital deficit when we received a $25,000
investment from certain offshore accredited investors in October 2006 ($23,125
net to us after fees); this amount allowed us to resolve certain payables but
was insufficient to cure our default to DMI or make salary payments to our
president. We will not be able to meet our current obligations or pursue any
business opportunity without a substantial amount of additional funding, and we
cannot provide any assurance that we will be able to obtain that financing on
reasonable terms, if at all.

As
described in our most recent 10-KSB, beginning in 2004, Cogenco entered into a
letter agreement with DMI and a subsequent co-development agreement, by which
Cogenco would participate in the development of a drug for the treatment of
asthma in humans (the Old Agreements). Under the terms of the Old
Agreements, as amended, Cogenco paid DMI $3,250,000 by September 30, 2005. In
February 2006, Cogenco and DMI negotiated a new letter of intent and
co-development agreement (the New LOI and the New Development
Agreement) for the development of a drug for the treatment of multiple
sclerosis. Upon signing the New Development Agreement, the Old Agreements were
terminated (although the payments that Cogenco has made will be credited to the
New Development Agreement).

11



---

As a
result of the New Development Agreement and the New LOI, Cogenco assumed some
additional payment obligations including an obligation to pay $7,000,000 by
November 30, 2006. Cogenco has not made any of these payments to DMI. Cogenco
does not have the funds necessary to make these payments. DMI, however, has not
yet given Cogenco notification of default (although it is entitled to under the
New Development Agreement).

The
New LOI also amended the suggestion in the August 2004 letter agreement that the
parties will attempt to negotiate a business combination between DMI and Cogenco
(provided that Cogenco becomes adequately funded with at least $25,000,000).
Since the business combination did not occur by October 30, 2006, upon notice
from DMI to Cogenco, the $3,250,000 investment will be automatically converted
into 1,000,000 shares of DMI common stock and Cogenco will become a minority
shareholder of DMI.

At the
present time we do not intend to obtain the funding necessary to meet our
obligations to DMI under the New Development Agreement. Under the terms of the
New Development Agreement, DMI may declare a default and cause our $3,250,000
investment to be automatically converted into 1,000,000 shares of DMI common
stock. Cogenco is giving consideration to affirmatively taking that step itself.
In either event, Cogenco will become a minority shareholder of DMI.

As
described in our most recent 10-KSB, in November 2004, we entered into an
employment contract with David Brenman which became effective on or about
September 30, 2005. Under the terms of this employment agreement, Mr. Brenman is
entitled to receive (among other things) an annual salary of $150,000. We paid
Mr. Brenman his salary as due under this employment agreement through August 15,
2006, but we have since been unable to make any subsequent payments to him as
required under his employment agreement. In addition, we anticipate that we will
continue to be unable to make any payments under this employment agreement for
the foreseeable future. Mr. Brenman has agreed to defer the compensation due to
him under his employment agreement (without interest) until such time as the
Company has adequate resources to be able to make such payments.

Material
Changes in Results of Operations

We are
not operating in any business at this time, although we are continuing to seek
out business opportunities. Business opportunities require working capital to
investigate and complete, and at the present time we do not have the necessary
working capital and we can offer no assurance that, if the need arises, we will
be able to obtain financing on reasonable terms, if at all. We have not received
any revenues from operations for more than the past ten years and, therefore, we
anticipate that we will continue to incur losses.

During
the quarter ended December 31, 2006, we had an operating loss of $51,580. This
represents a $399,548 decrease from our operating loss of $451,128 on December
31, 2005. The operating loss for the current quarter was caused principally by
costs and expenses consisting of officers salary of $37,500, rent and
storage of $16,395, and miscellaneous expenses of $9,406 (including general and
administrative and traveling expenses), with minimal offsetting interest income
of $801 and rental income of $10,920. The loss recognized in the third quarter
of fiscal 2005 was much greater because of the $387,906 in research and
development expenses incurred during that period.

For
the quarter ended December 31, 2006, total stockholders equity decreased
to $23,631. This represents a $28,455 decrease in shareholders equity from
September 30, 2006, and a decrease of $354,799 from March 31, 2006. The decrease
in stockholders equity is the result of the continued net operating losses
experienced by the Company and the corresponding rise in our accumulated
deficit.

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Plan of
Operations

As
discussed above, we are not engaged in any business operations at the present
time. We are unable to pursue the business arrangement with DMI at the present
time because of insufficient available capital. Because of our working capital
shortages, we are also unable to spend any significant effort in reviewing
business opportunities received from third parties. We have not actively pursued
any such business opportunity in more than the past two years except for the
business transaction with DMI which is described above. We will not be able to
pursue any business opportunity without a substantial amount of funding provided
from third parties. Consequently, we cannot offer any assurance that we will be
able to complete our obligations with respect to DMI or obtain the funds
necessary to invest in other business opportunities.

Off Balance
Sheet Arrangements

We
have no off balance sheet arrangements and thus no disclosure is required.
Cogenco has an obligation to pay rent to an unaffiliated party under an office
lease through December 2008 at the rate of $5,350 per month. This obligation is
not reflected on Cogencos balance sheet, although our rent expense is
recognized on our Statement of Operations.

ITEM 3.   
CONTROLS AND PROCEDURES

As
required by Rule 13a-15 under the Securities Exchange Act of 1934, within the 90
days prior to the filling date of this report, we carried out an evaluation of
the effectiveness of the design and operation of the Companys disclosure
controls and procedures. This evaluation was carried out under the supervision
and with the participation of our Chief Executive Officer who is also our
Principal Financial and Accounting Officer. Following this inspection, this
officer concluded that the Companys disclosure controls and procedures are
effective.

There
have been no significant changes in the Companys internal controls or in
other factors, which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation. Disclosure controls and
procedures are controls and other procedures that are designed to ensure that
information required to be disclosed in the Company reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commissions
rules and forms. Disclosures controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in the Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Companys Chief
Executive Officer and the Companys Principal Financial Officer as
appropriate, to allow timely decisions regarding required disclosure.

PART II
 OTHER INFORMATION

ITEM 1.    LEGAL
PROCEEDINGS.

Not applicable.

ITEM 2.   
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On
October 27, 2006, we received subscriptions from an offshore, European
accredited investor in exchange for a total investment of $25,000. The following
sets forth the information required by Item 701 in connection with that
transaction:

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(a)
The transaction was completed effective October 27, 2006. We issued 2,500 shares
of our common stock to Genesis Investment Funds Limited, an accredited investor.
Genesis Investment Funds Limited is controlled by Genesis Capital Management
Limited, a company controlled by Herald A.M.A. Janssen and Peter H. Jacobs. Mr.
Janssen and Mr. Jacobs co-founded Genesis Investment Funds Limited and Genesis
Capital Management Limited, and appointed Genesis Capital Management as the
investment advisor for Genesis Investment Funds Limited. Pursuant to a
discretionary investment management agreement, Genesis Capital Management has
discretionary investment and voting control over the assets of Genesis Capital
Management Limited, including the shares of Cogenco common stock that Genesis
Investment Funds Limited owns.

(b)
There was no placement agent or underwriter for the transaction. We accrued a
finders fee of 71⁄2% of the total amount raised (a total of $1,875)
to a Lichtenstein-based fund manager, MJM. The fund manager paid or will pay
one-third of the finders fee to David W. Brenman, president of Cogenco, in
accordance with an oral agreement between them. Pursuant to that oral agreement,
Mr. Brenman will be entitled to receive one-quarter of the fund managers
profits (if any) from making the investment in Cogenco.

(c)
The total offering price was $25,000. No underwriting discounts or commissions
were paid. We paid a finders fee as described above.

(d)
We relied on the exemption from registration provided by Sections 4(2) and 4(6)
under the Securities Act of 1933 for this transaction, as well as Regulation D
and Regulation S. We did not engage in any public advertising or general
solicitation in connection with this transaction. We provided the accredited
investor with disclosure of all aspects of our business, including providing the
accredited investor with our reports filed with the Securities and Exchange
Commission, our press releases, access to our auditors, and other financial,
business, and corporate information. Based on our investigation, we believe that
the accredited investor obtained all information regarding Cogenco it requested,
received answers to all questions it posed, and otherwise understood the risks
of accepting our securities for investment purposes.

(e)
The common stock issued is not exercisable, exchangeable, or convertible. We
have no registration obligation relating to the shares of common stock.

(f)
We used all of the proceeds received to meet our minimal operating expenses.

ITEM 3.   
DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

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

Not applicable.

ITEM 5.   
OTHER INFORMATION.

As
discussed above in Managements Discussion and Analysis, Mr. David Brenman
has deferred (without interest) collection of his salary since August 15, 2006,
until Cogenco is adequately financed.

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ITEM 6.   
EXHIBITS

A.    Exhibits

31.   
Certification pursuant to Rule 13a-14(a).

32.   
Certification  pursuant to 18 U.S.C. §1350.

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SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

Date:    February
9, 2007

| | /s/   
David W. Brenman David W. Brenman, Preesident Principal Executive Officer, Principal
Accounting Officer, Principal Financial Officer and Director
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

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