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: September 30, 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 November 1, 2006,
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 September 30, 2006 (unaudited)                                                          |  | 
|                                                                                                                           |  | 
|Statement of Operations  For the Three Months Ended September 30, 2005                                                    |  | 
|and 2006 (unaudited)                                                                                                       |  | 
|                                                                                                                           |  | 
|Statement of Operations  For the Six Months Ended September 30, 2005 and 2006 and                                         |  | 
|Cumulative Amounts from Inception of the Development Stage (July 26, 1990) through          September 30, 2006 (unaudited) |  | 
|                                                                                                                           |  | 
|                                                                                                                           |  | 
|Statement of Stockholders' Equity - For the Six Months Ended                                                               |  | 
|September 30, 2006 (unaudited)                                                                                             |  | 
|                                                                                                                           |  | 
|Statement of Cash Flows - For the Six Months Ended September 30, 2005                                                      |  | 
|and 2006 and Cumulative Amounts from Inception of the Development                                                          |  | 
|Stage (July 26, 1990) through September 30, 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

COGENCO
INTERNATIONAL, INC.(A Development Stage Company)BALANCE SHEET March 31, 2006 and
September 30, 2006(Unaudited)

ASSETS

|                                                        | March | September     
|------------------------------------------------------- | ----- | --------------
|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 $755 (September)       |       | 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 2,578,756 (September) |       |               
|shares issued and outstanding                           |       | 25,788        
|Additional paid-in capital                              |       | 5,693,975     
|Accumulated deficit (including $4,298,216 deficit       |       |               
|accumulated during the development stage at             |       |               
|September 30, 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 OPERATIONSFor the
Three Months Ended September 30, 2005 and 2006 (Unaudited)

|                                                      | 2005 | 2006                 
|----------------------------------------------------- | ---- | ---------------------
|Revenues:                                             |      |                      
|Rental income                                         |      | $                   
|Interest income                                       |      | 69                   
|                                                      |      |                      
|Total Revenues                                        |      | 69                   
|                                                      |      |                      
|Costs and expenses:                                   |      |                      
|Research and development                              |      | 1,800,000            
|Salary - officer                                      |      |                     
|Legal fees - related party (Note 3)                   |      | 1,500                
|Legal fees                                            |      | 3,514                
|Consulting and travel expenses -                      |      |                      
|related party                                         |      | 9,903                
|General and administration                            |      | 5,518                
|Rent and storage expenses                             |      |                     
|Depreciation                                          |      |                     
|                                                      |      |                      
|                                                      |      |                      
|Total costs and expenses                              |      | 1,820,435            
|                                                      |      |                      
|                                                      |      |                      
|Net loss (Note 2)                                     |      | $      (1,820,366    
|                                                      |      |                      
|                                                      |      |                      
|Basic and diluted loss per common share               |      | $               (0.75
|                                                      |      |                      
|                                                      |      |                      
|Weighted average number of common  shares outstanding |      | 2,433,104            
|                                                      |      |                      
|                                                      |      |                      

3



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COGENCO
INTERNATIONAL, INC.(A Development Stage Company) STATEMENT OF OPERATIONS For the Six
Months Ended September 30, 2005 and 2006 and Cumulative Amounts from Inception of the
Development Stage (July 26, 1990) Through September 30, 2006 (Unaudited)

|                                                | 2005 | 2006              | Cumulativeamounts fromInception
|----------------------------------------------- | ---- | ----------------- | -------------------------------
|Revenues:                                       |      |                   |                                
|Rental Income                                   |      | $                |                                
|Interest income                                 |      | 126               |                                
|                                                |      |                   |                                
|                                                |      |                   |                                
|Total Revenues                                  |      | 126               |                                
|                                                |      |                   |                                
|Costs and expenses:                             |      |                   |                                
|Research and development                        |      | 1,800,000         |                                
|Salary - officer                                |      |                  |                                
|Legal fees - related party (Note 3)             |      | 3,000             |                                
|Legal fees                                      |      | 14,759            |                                
|Consulting and travel expenses -  related party |      | 9,903             |                                
|Dry hole costs                                  |      |                  |                                
|General and administration                      |      | 14,009            |                                
|Rent and storage expenses                       |      | 405               |                                
|Depreciation                                    |      |                  |                                
|                                                |      |                   |                                
|                                                |      |                   |                                
|Total costs and expenses                        |      | 1,842,076         |                                
|                                                |      |                   |                                
|Net loss (Note 2)                               |      | $  (1,841,950     | )                              
|                                                |      |                   |                                
|                                                |      |                   |                                
|Basic and diluted loss per common share         |      | $           (0.78 | )                              
|                                                |      |                   |                                
|                                                |      |                   |                                
|Weighted average number of common               |      |                   |                                
|shares outstanding                              |      | 2,374,002         |                                
|                                                |      |                   |                                
|                                                |      |                   |                                

4



---

COGENCO
INTERNATIONAL, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS EQUITY
For the Six Months Ended September 30, 2006 (Unaudited)

|                              | Common stock | Additionalpaid-in | Accumulated | Totalstockholders' | 
|----------------------------- | ------------ | ----------------- | ----------- | ------------------ | 
|
|Balance at March 31, 2006     |              | 2,578,756         |             | $  25,788          | 
|Net loss for the six months   |              |                   |             |                    | 
|ended September 30, 2006      |              |                  |             |                   | 
|                              |              |                   |             |                    | 
|                              |              |                   |             |                    | 
|Balance at September 30, 2006 |              | 2,578,756         |             | $  25,788          | 
|                              |              |                   |             |                    | 
|                              |              |                   |             |                    | 
|                              |              |                   |             |                    | 

5



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COGENCO
INTERNATIONAL, INC. (A Development Stage Company) STATEMENT OF CASH FLOWS For the Six
Months Ended September 30, 2005 and 2006 and Cumulative Amounts from Inception of the
Development Stage (July 26, 1990) Through September 30, 2006(Unaudited)

|                                          | Six months Ended      September 30, | Cumulative      amounts from |  
|----------------------------------------- | ----------------------------------- | ---------------------------- | -
|
|Cash flows from operating activities:     |                                     |                              |  
|Net loss                                  |                                     | $(1,841,950                  | )
|Adjustment to reconcile net loss to net   |                                     |                              |  
|cash used in operating activities:        |                                     |                              |  
|Research and development expenses         |                                     |                             |  
|Depreciation expense                      |                                     |                             |  
|Consulting fees paid directly by          |                                     |                              |  
|common stock purchasers                   |                                     |                             |  
|Change in prepaid expense                 |                                     |                             |  
|Change in accounts payable and            |                                     |                              |  
|accrued expenses                          |                                     | 4,937                        |  
|                                          |                                     |                              |  
|Net cash used in operations               |                                     | (1,837,013                   | )
|                                          |                                     |                              |  
|Cash flows from investing activities:     |                                     |                              |  
|Contract payments                         |                                     | (1,350,000                   | )
|Purchase certificate of deposit           |                                     |                             |  
|Purchase of computer equipment            |                                     | (1,834                       | )
|                                          |                                     |                              |  
|Net cash used in investing activities     |                                     | (1,351,834                   | )
|                                          |                                     |                              |  
|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           |                                     | 233,628                      |  
|                                          |                                     |                              |  
|Cash and cash equivalents at              |                                     |                              |  
|beginning of year                         |                                     | 95,460                       |  
|                                          |                                     |                              |  
|                                          |                                     |                              |  
|Cash and cash equivalents at              |                                     |                              |  
|end of period                             |                                     | $      329,088               |  
|                                          |                                     |                              |  
|                                          |                                     |                              |  
|                                          |                                     |                              |  

6



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COGENCO
INTERNATIONAL, INC.(A Development Stage Company)NOTES TO UNAUDITED FINANCIAL
STATEMENTSSeptember 30, 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 September 30, 2006, and
the results of operations and cash  flows for the periods ended  September 30, 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 September 30, 2006 because,
in managements  opinion and based on  historical performance the effective tax rate
for the years will be zero.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of March 31,  2006 and September 30, 2006, total deferred tax assets and valuation
allowance are as  follows:
| | ----------------------------------------------------------------------------------------------------------------

|                                              | March 31,2006 | September 30,2006    
|--------------------------------------------- | ------------- | ---------------------
|Deferred tax assets resulting from:           |               |                      
|                                              |               |                      
|Loss carryforward                             |               | $           212,200  
|                                              |               |                      
|Future deduction for research and development |               | 1,138,600            
|                                              |               |                      
|Valuation allowance                           |               | (1,350,800           
|                                              |               |                      
|                                              |               |                      
|                                              |               | $                   
|                                              |               |                      
|                                              |               |                      

7



---



COGENCO
INTERNATIONAL, INC.(A Development Stage Company)NOTES TO UNAUDITED FINANCIAL
STATEMENTSSeptember 30, 2006

3.     Related
party transactions

| | For
the period from inception of the development stage to September 30, 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
the six months ended September 30, 2005, and 2006, and from inception of the  development
stage,  the Company  incurred legal  costs of $3,000, $3,000, and $117,549,
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 entered into a Finders  Agreement  containing the
following  terms:  Cogenco  agreed to engage MJM on a  non-exclusive  basis;  Cogenco
agreed to 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  agreed to 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



---



COGENCO
INTERNATIONAL, INC.(A Development Stage Company)NOTES TO UNAUDITED FINANCIAL
STATEMENTSSeptember 30, 2006

3.     Related
party transactions (continued)

| | 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 $14,460 for the six months ended  September 30, 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 $79,506 has been  pledged
as  collateral  on a letter of credit in the amount of $70,000  securing  the  lease.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
board of directors by resolution dated April 3, 2006,  agreed to permit Mr. David Brenman
to pursue a business  opportunity in  the oil and gas industry  with  respect to WPE, in
which he wants to invest and  participate  as a manager.  WPE is in the process  (as of
May 31, 2006) of  attempting  to acquire  certain  producing  properties  located in
North  Dakota.  The Board of Directors  determined that the business  opportunity with
WPE is not a corporate  opportunity of Cogenco,  and that David Brenman is entitled  to
pursue such  opportunity  outside of his  employment  responsibilities  with  Cogenco,
provided  that such  activities  do not  unreasonably  interfere with his employment
activities with Cogenco or compromise any trade secrets or confidential or non-public
information relating to Cogenco.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



---



COGENCO
INTERNATIONAL, INC.(A Development Stage Company)NOTES TO UNAUDITED FINANCIAL
STATEMENTSSeptember 30, 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 $6,000,000 to DMI by October 31, 2006,
and an additional $1,000,000 by November 30, 2006, for a total of $7,000,000  in
additional payments. 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 and
will also likely not be able to meet its  November 30th obligation.  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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Of
the total payments of $3,250,000 made to DMI, we included $197,527 in research and
development expenses for the six months  ended September 30, 2006. This figure represents
the amount of funds received by DMI from Cogenco which had been expended by DMI  as of
September 30, 2006 on research and development expenses and related expenses.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



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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  September
30, 2006, we had working  capital of $49,341,  this  represents a decrease of  $56,020
from our working capital of $105,361  on June 30, 2006.  This  decrease is  attributable
primarily to a reduction in our cash  resources by $37,788,  and an  increase in our
accrued salaries payable of  approximately  $18,750.  Included in our  working  capital is a
certificate  of deposit in the amount of $79,506  which is not available to  us for the
payment of our current  liabilities.  Excluding the  certificate  of deposit,  our
current  assets  would be $30,165 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).

As  a result of
the New  Development  Agreement  and the New LOI,  Cogenco  assumed some  additional
payment  obligations  including an  obligation to pay $6,000,000 by October 31, 2006, and another  $1,000,000 by
November  30,  2006.  Cogenco  has not made any of these  payments to DMI  and will also
likely not be able to meet its  November  30th  obligation.  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).

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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 (without  interest) under his employment  agreement
until such time as the  Company has adequate cash flow 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  September  30, 2006,  we had an operating  loss of $56,216.  This
represents a $1,764,150  decrease from our  operating  loss of $1,820,366 on September
30, 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
$16,380,  and  miscellaneous  expenses of $8,517  (including  general and administrative
and traveling  expenses),  with minimal offsetting  interest income of $721 and rental
income of $5,460, and  our unsuccessful efforts to obtain necessary financing.
The loss recognized in the first quarter of fiscal 2005 was much greater because of
the $1,800,000 in research and development expenses incurred during that period.

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.

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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:

| | (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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b)
There was no placement  agent or  underwriter  for the  transaction.  We paid 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.

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:   November
10, 2006

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

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