**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549







FORM
      10-QSB





xQUARTERLY
      REPORT
      UNDER SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934





**For
      the quarterly period ended March 31, 2007**





o   
      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF


THE
      EXCHANGE ACT





For
      the
      transition period from _________ to _________





**Commission
      File Number : 0-7475**










**NATURE
      VISION, INC.**


(Exact
      name of small business issuer as specified in its charter)




**Minnesota**
            **41-0831186**(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)






1480
      Northern Pacific Road




**Brainerd,
      MN 56401**


(Address
      of principal executive offices)




**(218)
      825-0733**


(Issuer’s
      telephone number)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such requirements for the past 90 days.


Yes x No
o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


Yes o No x




The
      number of shares of issuer’s common stock, par value $0.16 per share,
      outstanding as of May
      15,
      2007, was 2,312,593. The registrant has no other classes of securities
      outstanding.





Transitional
      Small Business Disclosure Format (Check one): Yes o  No x











**NATURE
      VISION, INC.**


**INDEX**














**PART
                I**
            
            
            Page
                Number**Item
                1**:
            Financial
                InformationConsolidated
                Balance Sheet - March 31, 2007 and December 31, 2006
            1Consolidated
                Statements of Operations - Three Months Ended March 31, 2007 and
                2006
            2Consolidated
                Statements of Cash Flows - Three Months Ended March 31, 2007 and
                2006
            3Notes
                to Consolidated Financial Statements
            4**Item
                2:**
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            13**Item
                3:**
            Controls
                and Procedures
            17








**PART
                II****Item
                6**:
            Exhibits
            18Signatures
            18















i




**Part
      I**


**Item
      1: Financial Information**


**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Balance Sheets**


**March
      31, 2007 and December 31, 2006**


**Unaudited****March
                31, 2007**
            
            **December
                31, 2006**ASSETSCURRENT
                ASSETSCash
                and cash equivalents
            
            $
            -
            
            $
            2,344Accounts
                receivable, net
            
            
            987,109
            
            
            2,664,246Current
                portion of note receivable
            
            
            100,000
            
            
            100,000Inventories,
                net
            
            
            3,838,716
            
            
            4,466,189Prepaid
                expenses
            
            
            373,968
            
            
            390,608Current
                assets sold relating to discontinued operations
            
            
            -
            
            
            84,855Current
                assets retained relating to discontinued operations
            
            
            1,747,507
            
            
            4,066,480Total
                Current Assets
            
            
            7,047,300
            
            
            11,774,722PROPERTY
                AND EQUIPMENT, NET
            
            
            1,675,037
            
            
            1,695,958NON-CURRENT
                ASSETSBuilding
                and land held for sale, net
            
            
            565,449
            
            
            565,449Other
                assets sold relating to discontinued operations
            
            
            -
            
            
            186,701Cash
                surrender value of life insurance
            
            
            148,310
            
            
            148,310Note
                receivable, net of current portion
            
            
            175,000
            
            
            200,000Prepaid
                expenses, net of current portion
            
            
            64,340
            
            
            61,040Deferred
                income taxes
            
            
            1,320,546
            
            
            1,022,546Intangibles
                - net
            
            
            84,178
            
            
            91,498Total
                Non-Current Assets
            
            
            2,357,823
            
            
            2,275,544TOTAL
                ASSETS
            
            $
            11,080,160
            
            $
            15,746,224LIABILITIES
                AND STOCKHOLDERS’ EQUITYCURRENT
                LIABILITIESChecks
                issued in excess of cash in bank
            
            $
            118,791
            
            $
            71,394Current
                portion of deferred retirement benefits
            
            
            72,795
            
            
            72,795Line
                of credit, bank
            
            
            1,745,000
            
            
            3,900,000Accounts
                payable
            
            
            239,434
            
            
            632,398Accrued
                payroll and payroll taxes
            
            
            111,618
            
            
            175,582Accrued
                expenses
            
            
            544,013
            
            
            840,005Income
                taxes payable
            
            
            -
            
            
            5,000Current
                liabilities sold relating to discontinued operations
            
            
            -
            
            
            46,678Current
                liabilities retained relating to discontinued operations
            
            
            588,719
            
            
            1,872,901Total
                Current Liabilities
            
            
            3,420,370
            
            
            7,616,753LONG-TERM
                LIABILITIESDeferred
                retirement benefits, net of current portion
            
            
            536,836
            
            
            557,871Total
                Non-Current Liabilities
            
            
            536,836
            
            
            557,871Total
                Liabilities
            
            
            3,957,206
            
            
            8,174,624STOCKHOLDERS’
                EQUITYCommon
                stock, $.16 par value per share 25,000,000 shares authorized common
                shares
                issued and outstanding at March 31, 2007 were 2,225,387 and December
                31,
                2006 were 2,225,387
            
            
            356,062
            
            
            356,062Additional
                paid-in capital
            
            
            6,789,287
            
            
            6,789,287Retained
                earnings (deficit)
            
            
            (22,395
            )
            
            426,251Total
                Stockholders’ Equity
            
            
            7,122,954
            
            
            7,571,600TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            11,080,160
            
            $
            15,746,224




*See
      accompanying notes to consolidated financial statements.*




1




**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Statements of Operations (Unaudited)**


**Three
      Months Ended March 31, 2007 and 2006**




**2007**
            
            **2006**SALES,
                NET
            
            $
            1,756,079
            
            $
            1,670,954COST
                OF GOOD SOLD
            
            
            1,447,114
            
            
            1,206,847GROSS
                PROFIT
            
            
            308,965
            
            
            464,107SELLING,
                GENERAL AND ADMINISTRATIVE EXPENSES
            
            
            965,717
            
            
            1,185,054LOSS
                FROM OPERATIONS
            
            
            (656,752
            )
            
            (720,947
            )OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            (60,891
            )
            
            (50,876
            )Interest
                income
            
            
            5,473
            
            
            -Other
                income (expense)
            
            
            -
            
            
            2,814Net
                Other Expenses
            
            
            (55,418
            )
            
            (48,062
            )LOSS
                FROM CONTINUING OPERATIONS BEFORE TAXES
            
            
            (712,170
            )
            
            (769,009
            )BENEFIT FROM
                INCOME TAXES
            
            
            (284,000
            )
            
            (307,000
            )LOSS
                FROM CONTINUING OPERATIONS
            
            
            (428,170
            )
            
            (462,009
            )GAIN
                (LOSS) FROM DISCONTINUED OPERATIONS, NET OF $14,000 TAX BENEFIT AND
                $13,000 TAX PROVISION
            
            
            (20,476
            )
            
            20,317NET
                LOSS
            
            $
            (448,646
            )
            $
            (441,692
            )Loss
                from continuing operations per common shareBasic
            
            $
            (0.19
            )
            $
            (0.21
            )Diluted
            
            $
            (0.19
            )
            $
            (0.21
            )Income
                (loss) from discontinued operations per common shareBasic
            
            $
            (0.01
            )
            $
            0.01Diluted
            
            $
            (0.01
            )
            $
            0.01Net
                loss per common shareBasic
            
            $
            (0.20
            )
            $
            (0.20
            )Diluted
            
            $
            (0.20
            )
            $
            (0.20
            )Weighted
                average common sharesBasic
            
            
            2,225,387
            
            
            2,202,348Diluted
            
            
            2,225,387
            
            
            2,202,348




*See
      accompanying notes to consolidated financial statements.*






2




**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Statements of Cash Flows (Unaudited)**


**Three
      Months Ended March 31, 2007 and 2006**




**2007**
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (448,646
            )
            $
            (441,692
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activitiesDepreciation
                and amortization
            
            
            117,465
            
            
            118,311Gain
                on disposal of property and equipment
            
            
            -
            
            
            (2,814
            )Gain
                on sale of discontinued operations
            
            
            (77,489
            )
            
            -Benefit
                from deferred income taxes
            
            
            (298,000
            )
            
            (294,000
            )Change
                in deferred retirement benefits
            
            
            -
            
            
            (336
            )Change
                in bad debt reserve
            
            
            -
            
            
            6,000Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            3,070,487
            
            
            1,502,353Inventories,
                net
            
            
            1,553,096
            
            
            (1,236,462
            )Prepaid
                expenses
            
            
            26,029
            
            
            17,195Other
                non current assets
            
            
            -
            
            
            1,618Accounts
                payable
            
            
            (1,385,649
            )
            
            (301,269
            )Income
                taxes payable
            
            
            (5,000
            )
            
            (2,000
            )Accrued
                payroll and payroll taxes
            
            
            (113,976
            )
            
            27,450Accrued
                expenses
            
            
            (229,056
            )
            
            (29,054
            )Payments
                on deferred retirement benefits
            
            
            (21,035
            )
            
            (30,459
            )Net
                Cash Flows from Operating Activities
            
            
            2,188,226
            
            
            (665,159
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchases
                of property and equipment
            
            
            (89,224
            )
            
            (425,996
            )Proceeds
                from sale of property and equipment
            
            
            -
            
            
            42,855Proceeds
                from sale of discontinued operations
            
            
            491,952
            
            
            -Payments
                received on note receivable
            
            
            25,000
            
            
            -Purchases
                of intangibles
            
            
            -
            
            
            (56,420
            )Net
                Cash Flows from Investing Activities
            
            
            427,728
            
            
            (439,561
            )CASH
                FLOWS FROM FINANCING ACTIVITIESIncrease
                in checks issued in excess of cash in bank
            
            
            47,397
            
            
            11,542Net
                advances from (payments on) line of credit, bank
            
            
            (2,155,000
            )
            
            1,330,000Principal
                payments on long-term debt
            
            
            -
            
            
            (42,722
            )Payments
                on contract payable
            
            
            (510,695
            )
            
            (462,420
            )Cash
                received on exercise of options
            
            
            -
            
            
            268,320Net
                Cash Flows from Financing Activities
            
            
            (2,618,298
            )
            
            1,104,720Net
                Change in Cash and Cash Equivalents
            
            
            (2,344
            )
            
            -CASH
                AND CASH EQUIVALENTS - January 1, 2007 and 2006
            
            
            2,344
            
            
            -CASH
                AND CASH EQUIVALENTS - March 31, 2007 and 2006
            
            $
            -
            
            $
            -Supplemental
                Cash Flow Disclosures:Cash
                paid for interest
            
            $
            77,887
            
            $
            51,600Cash
                paid for income taxes
            
            $
            5,000
            
            $
            2,000Noncash
                Investing and Financing Activities:Transaction
                costs related to sale of segment included in current liabilities
                retained
                related todiscontinued operations
            
            $
            202,274
            
            
            -




*See
      accompanying notes to consolidated financial statements.*






3




NATURE
      VISION, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


March
      31,
      2007 and 2006 (Unaudited)






NOTE
      1 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




NATURE
      OF
      OPERATIONS




On
      August
      31, 2004, the Company changed its name from Photo Control Corporation to Nature
      Vision, Inc. in connection with a reverse merger transaction with Nature Vision
      Operating, Inc. (f/k/a, Nature Vision, Inc.), a Minnesota corporation that
      was
      incorporated in 1998. As part of the merger transaction, Nature Vision
      Operating, Inc. became a wholly owned subsidiary of the Company. The merger
      transaction has been accounted for as a reverse merger.




Nature
      Vision, Inc. (the Company) is an outdoor recreation products Company. On October
      20, 2006, Nature Vision, Inc. sold the Norman product line (Norman) of its
      Photo
      Control division and renamed the division the Vaddio Division. On February
      5,
      2007, the Company sold certain assets and transferred certain liabilities
      related to its Vaddio division (Vaddio). The Norman and Vaddio divisions
      designed, manufactured and marketed professional cameras, electronic flash
      equipment, lens shades and related photographic accessories and sold products
      used in the video conferencing and presentation industry. The Company began
      discussions and efforts to sell Norman and Vaddio in the third and fourth
      quarter of 2006, respectively. See Note 8 for additional information
      related to the sale of the Norman and Vaddio operations, respectively. The
      assets and liabilities of Vaddio at December 31, 2006 met the requirements
      of
      Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for
      Impairment or Disposal of Long-Lived Assets" as being held for sale. Operations
      and cash flows will be eliminated as a result of the sale and the Company will
      not have any significant involvement in the operations after the sale. In
      accordance with appropriate accounting rules, the Company has reclassified
      the
      previously reported financial results to exclude the results of the Norman
      and
      Vaddio operations and have presented on a historical basis these operations
      as a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets under discontinued operations. All of the financial information
      in the consolidated financial statements and notes to the consolidated financial
      statements has been revised to reflect only the results of continuing operations
      of the Company’s outdoor recreation products. As a result of the sale of the
      Vaddio and Norman divisions, the Company has only one segment.




Nature
      Vision, Inc. (Nature Vision) designs and markets video viewing systems for
      the
      sport fishing market and other video based consumer and industrial products.
      The
      Company grants unsecured credit to its customers which are primarily dealers
      and
      consumers located throughout the United States and Canada. The Company contracts
      with outside organizations for the manufacture and sale of its products. The
      geographic market in which the Company competes consists of the entire United
      States and, to a lesser extent some foreign countries.




INTERIM
      FINANCIAL INFORMATION




The
      accompanying consolidated balance sheet at March 31, 2007 and the consolidated
      statements of operations and cash flows for the three months ended March 31,
      2007 and 2006 are unaudited. The unaudited interim consolidated balance sheet
      and consolidated statements of operations, and cash flows have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America and, in the opinion of management, reflect all adjustments, which
      include only normal recurring adjustments, necessary to present fairly the
      Company's financial position, results of operations and its cash flows for
      the
      three months ended March 31, 2007 and 2006. The financial data and other
      information disclosed in these notes to the consolidated financial statements
      related to these periods are unaudited. Operating results for the three months
      ended March 31, 2007 are not necessarily indicative of the results that may
      be
      expected for the year ending December 31, 2007. The consolidated financial
      statements should be read in conjunction with the audited financial statements
      for the year ended December 31, 2006 included in the Annual Report on Form
      10-KSB of the Company filed with the Securities and Exchange
      Commission.




PRINCIPLES
      OF CONSOLIDATION




The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiary. All significant inter-company transactions and balances
      have been eliminated in consolidation.









4






INVENTORIES




Inventories
      consist of raw materials, work in process and finished goods and are valued
      at
      lower of cost using the first-in, first-out (FIFO) method or market. Market
      represents estimated realizable value in the case of finished goods and
      replacement or reproduction cost in the case of other inventories. Because
      of
      changing technology and market demand, inventory is subject to obsolescence.
      An
      annual review is made of all inventories to determine if any obsolete,
      discontinued or slow moving items are in inventory. Based on this review,
      inventory is disposed of or an allowance for obsolescence established to cover
      any future disposals. Such estimates are difficult to make under current
      volatile economic conditions and it is possible significant changes in required
      inventory reserves may occur in the future.





DISCONTINUED
      OPERATIONS





The
      sale
      of the Company’s Norman photography product line to Promark International, Inc.
      was completed on October 20, 2006 pursuant to the terms of an Asset Purchase
      Agreement. The transaction involved the sale of inventory, equipment and certain
      other assets relating to the Norman photography product line. The Company
      negotiated the sale of these assets during the quarter ended September 30,
      2006.





On
      February 5, 2007, the Company sold certain assets and transferred certain
      liabilities related to its Vaddio division. The Company negotiated the sale
      of
      these assets and assumption of certain liabilities during the quarter ended
      December 31, 2006.





These
      assets met the requirements of SFAS No. 144, "Accounting for Impairment or
      Disposal of Long-Lived Assets" as being held for sale. Operations and cash
      flows
      will be eliminated as a result of the sales and the Company will not have any
      significant involvement in the operations after the sales. In accordance with
      appropriate accounting rules, the Company has reclassified the previously
      reported financial results to exclude the results of the Norman and Vaddio
      product lines and these results are presented on a historical basis as a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets entitled "Assets/Liabilities sold relating to discontinued
      operations" and “Assets/Liabilities retained relating to discontinued
      operations”. In accordance with EITF 87-24, “Allocation of Interest to
      Discontinued Operations”, the Company elected to not allocate consolidated
      interest expense to the discontinued operations where the debt is not directly
      attributed to or related to the discontinued operations.  All of the
      financial information in the consolidated financial statements and notes to
      the
      consolidated financial statements has been revised to reflect only the results
      of continuing operations (see Note 8).




BUILDING
      AND LAND HELD FOR SALE




In
      November 2006, management signed an agreement and began marketing for sale
      the
      building and land located in Minneapolis, Minnesota. Accordingly, we have
      reflected the carrying value of the building as held for sale as of March 31,
      2007 and December 31, 2006. As a result, we discontinued recording depreciation
      on the building in the fourth quarter of the year ended December 31, 2006 and
      management believes that the current market value of the building and land
      is in
      excess of its carrying value.




REVENUE
      RECOGNITION




The
      Company recognizes revenue on the date products are shipped to the customer
      and
      returns are permitted for defective equipment. The Company does not sell
      products with the guaranteed right of return. Estimated reserves for returns
      are
      established by management based on historical experience and are subject to
      ongoing review and adjustment by the Company. Sales and cost of goods sold
      are
      reported net of the provision for actual and estimated future returns in the
      accompanying consolidated statements of operations. Revenues are reported net
      of
      discounts and allowances. The Company’s revenue is recognized in accordance with
      generally accepted accounting principles as outlined in the SEC’s Staff
      Accounting Bulletin No. 104 “Revenue Recognition,” which requires that four
      basic criteria be met before revenue can be recognized: (i) persuasive evidence
      of an arrangement exists; (ii) the price is fixed or determinable; (iii)
      reasonably assured it is collectible; and (iv) product delivery has occurred.
      The Company recognizes revenue as products are shipped based on FOB shipping
      point terms when title passes to customers.







5






ALLOWANCE
      ACCOUNTS




The
      Company has established allowance reserves for sales returns and warranty cost.
      Reserves are estimated based on historical experience, current product lines
      being sold, and management's estimates. The Company provides a standard one
      one-year warranty program for the majority of its products. The allowance
      reserve for sales returns and warranty cost relating to continuing operations
      was $175,000 at both March 31, 2007 and December 31, 2006. The following table
      provides the expense recorded and charges against the reserve relating to
      continuing operations for the quarters ended March 31, 2007 and
      2006.





**2007**
            
            **2006**Accrued
                balance - beginning
            
            $
            175,000
            
            $
            175,000Provision
            
            
            38,146
            
            
            6,386Claims
                incurred
            
            
            (38,146
            )
            
            (96,386
            )Accrued
                balance - ending
            
            $
            175,000
            
            $
            85,000




RESEARCH
      AND DEVELOPMENT




The
      Company expenses all costs related to product research and development as
      incurred.




STOCK-BASED
      COMPENSATION




Prior
      to
      January 1, 2006, the Company accounted for its employee stock awards under
      the
      recognition and measurement provisions of APB Opinion No. 25, Accounting for
      Stock Issued to Employees, and related Interpretations, as permitted by SFAS
      No.
      123, Accounting for Stock-Based Compensation. Generally, no stock option-based
      employee compensation cost was recognized in the Company’s Consolidated
      Statements of Operations prior to January 1, 2006, as stock options granted
      under those plans had an exercise price equal to the market value of the
      underlying common stock on the date of grant.




Effective
      January 1, 2006, the Company adopted the fair value recognition and measurements
      provisions of SFAS No. 123(R), using the modified-prospective-transition method.
      Under that transition method, compensation cost for stock options recognized
      during the three months ended March 31, 2007 and 2006 includes compensation
      cost
      for all options granted prior to, but not vested as of January 1, 2006, based
      on
      the grant date fair value estimated in accordance with the provisions of SFAS
      No. 123. Compensation cost will be recorded for all options granted, if any,
      subsequent to January 1, 2006, based on the grant-date fair value estimated
      in
      accordance with the provisions of SFAS No. 123(R).




In
      accordance with SFAS No. 123(R), cash flows from income tax benefits resulting
      from tax deductions in excess of the compensation cost recognized for
      stock-based awards have been classified as financing cash flows prospectively
      from January 1, 2006. Prior to adoption of SFAS No. 123(R), such excess income
      tax benefits were presented as operating cash flows. There were no cash flows
      from income tax benefits for the three months ended March 31, 2007 and 2006.





As
      a
      result of adopting SFAS 123(R) on January 1, 2006, the Company’s net loss for
      the quarters ended March 31, 2007 and 2006 was not impacted since there were
      no
      options that were granted and / or vested during the respective periods. Basic
      and diluted loss per common share would not have changed for the quarters ended
      March 31, 2007 and 2006 if the Company had not adopted SFAS No. 123(R).





There
      were no stock options granted during the quarters ended March 31, 2007 and
      2006.





Stock
      options issued to non-employees (which no options were issued to non-employees),
      are accounted for in accordance with Emerging Issues Task Force (EITF) 96-18,
      Accounting for Equity Instruments That Are Issued to Other Than Employees for
      Acquiring, or in Conjunction with Selling, Goods or Services.






6








NET
      INCOME (LOSS) PER COMMON SHARE




Net
      loss
      per common share was based on the weighted average number of common shares
      outstanding during the periods when computing the basic net loss per share.
      When
      dilutive, stock options and warrants are included as equivalents using the
      treasury stock market method when computing the diluted net loss per share.
      There were no dilutive common stock equivalents, options and warrants, for
      the
      three months ended March 31, 2007 and 2006, respectively. Anti-dilutive options
      were 190,458 and 197,958 at March 31, 2007 and March 31, 2006, respectively.




INCOME
      TAXES




The
      Company accounts for income taxes using the asset and liability approach, which
      requires the recognition of deferred tax assets and liabilities for tax
      consequences of temporary differences between the financial statement and income
      tax reporting bases of assets and liabilities based on currently enacted rates
      and laws. These temporary differences principally include depreciation,
      amortization, net operating losses, deferred retirement benefits, paid time
      off
      and performance benefits, contract payable, allowance for doubtful accounts,
      inventory obsolescence allowance, and warranty reserves. Deferred taxes are
      reduced by a valuation allowance to the extent that realization of the related
      deferred tax assets is not assured.




ESTIMATES




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those estimates.
      For the Company, significant estimates include the allowance for doubtful
      accounts receivable, reserves for inventory valuation, reserves for sales
      returns, reserves for warranty services, and the valuation allowance for
      deferred tax assets.




RECENT
      ACCOUNTING PRONOUNCEMENTS




In
      July
      2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty
      in
      Income Taxes - an Interpretation of FASB Statement 109 (FIN 48), which clarifies
      the accounting for uncertainty in tax positions. FIN 48 provides that the tax
      effects from an uncertain tax position can be recognized in the Company’s
      financial statements only if the position is more likely than not of being
      sustained on audit, based on the technical merits of the position. To the extent
      interest and penalties would be assessed by taxing authorities on any
      underpayment of income taxes, such amounts would be accrued and classified
      as a
      component of income tax expenses on the consolidated statement of operations.
      The Company has no accrued liabilities for interest or penalties recorded
      related to unrecognized tax benefits. The provisions of FIN 48 are effective
      as
      of January 1, 2007, with the cumulative effect of the change in accounting
      principle recorded as an adjustment to retained earnings. The adoption of FIN
      48
      was not material to the financial statements.





RECLASSIFICATIONS





Certain
      accounts in the prior periods' consolidated financial statements have been
      reclassified for comparative purposes to conform with the presentation in the
      current period consolidated financial statements. These reclassifications had
      no
      effect on net income or stockholders' equity.




NOTE
      2 -
      INVENTORIES




Inventories
      consisted of the following at:


**March
                31,**
              **2007**
            
            **December
                31,**
              **2006**Raw
                Materials
            
            $
            2,806,019
            
            $
            2,611,257Finished
                Goods
            
            
            1,092,697
            
            
            2,009,932Total
            
            
            3,898,716
            
            
            4,621,189Less:
                Valuation Allowance
            
            
            (60,000
            )
            
            (155,000
            )Inventories,
                net
            
            $
            3,838,716
            
            $
            4,466,189








7






NOTE
      3 -
      PROPERTY AND EQUIPMENT




Property
      and equipment consisted of the following at:


**March
                31,**
              **2007**
            
            **December
                31,**
              **2006**Tooling
            
            
            1,669,071
            
            
            1,669,071Office
                furniture and equipment
            
            
            592,784
            
            
            592,784Warehouse
                equipment
            
            
            293,834
            
            
            293,834Vehicles
            
            
            20,279
            
            
            20,279Leasehold
                improvements
            
            
            199,257
            
            
            199,257Construction
                in progress
            
            
            133,844
            
            
            44,620Total
            
            
            2,909,069
            
            
            2,819,845Less:
                Accumulated depreciation
            
            
            (1,234,032
            )
            
            (1,123,887
            )Net
            
            $
            1,675,037
            
            $
            1,695,958




NOTE
      4 -
      LINE OF CREDIT, BANK




The
      Company has a line of credit financing agreement with First National Bank of
      Deerwood up to a maximum amount of $3,000,000 which expires April 1, 2008.
      Interest is payable monthly at prime plus 1.00% (9.25% at March 31, 2007) with
      a
      minimum interest rate of 5%. The line of credit is collateralized by accounts
      receivable, inventories, property and equipment. The agreement requires the
      following affirmative covenants measured based upon December 31 financial
      results, minimum net worth of $7,000,000, debt to equity ratio of less than
      1.0
      to 1.0 and debt service ratio not to exceed 1.2 to 1.0. The Company was out
      of
      compliance with debt to equity ratio being 1.11 to 1.0 and a negative debt
      service ratio at December 31, 2006. The Company received a waiver letter from
      its credit provider.  The
      Company had a line of credit financing agreement with First National Bank of
      Deerwood up to a maximum amount of $5,600,000 which expired April 1, 2007.
      Interest was payable monthly at prime plus .75%, (9.00% at December 31, 2006),
      with a minimum interest rate of 5%. The weighted average interest rate on the
      line of credit for the three months ended March 31, 2007 and 2006 was 9.00%
      and
      8.17%, respectively. The balance outstanding on the line of credit was
      $1,745,000 and $3,900,000 at March 31, 2007 and December 31, 2006, respectively.




NOTE
      5 -
      INCOME TAXES




The
      provision for income taxes for continuing operations consists of the following
      components for the three months ended March 31:


**2007**
            
            **2006**Current
            
            $
            -
            
            $
            -Deferred
            
            
            (284,000
            )
            
            (307,000
            )Total
                Benefit from Income Taxes
            
            $
            (284,000
            )
            $
            (307,000
            )







8








The
      provision for taxes differs from the expected provision that would result from
      the application of federal tax rates to pre-tax income. A comparison of the
      provision for income tax expense at the federal statutory rate of 34% for the
      three months ended March 31 to the Company’s effective rate is as
      follows:


**2007**
            
            **2006**Federal
                statutory rate
            
            
            (34.0)
            %
            
            (34.0
            )%State
                tax, net of federal benefit
            
            
            (2.8)
            
            
            (2.8
            )Permanent
                differences and other including surtax exemption
            
            
            (3.1)
            
            
            (2.6
            )Research
                and development credit
            
            
            (0.0)
            
            
            (0.5
            )Effective
                Tax Rate
            
            
            (39.9)
            %
            
            (39.9
            )%




The
      Company adopted FIN 48 effective January 1, 2007. Upon adoption, there was
      approximately $400,000 of unrecognized income tax benefits. The adoption of
      FIN
      48 had no effect on stockholders’ equity. As of March 31, 2007 and December 31,
      2006, there was approximately $400,000 of unrecognized income tax benefits
      related to temporary differences included as a deferred tax liability. The
      Company’s federal and state tax returns are potentially open to examinations for
      fiscal years 2003-2006.




NOTE
      6 -
      CONTRACT PAYABLE - VADDIO




The
      Company had employment agreements with 3 employees. The agreements, which
      expired on December 31, 2006, provided for an annual base salary and bonus
      payments under each employment agreement, equal to 3.4% to each employee of
      annual sales of Vaddio products (net of allowances for returns and billing
      errors) in excess of $1,600,000 and $2,000,000 in 2005 and 2006, respectively.
      The employee has agreed, during his employment and for a period of three years
      thereafter, not to compete with the Company in any business that the Company
      is
      conducting on the date of termination, nor will he solicit employees, customers
      and suppliers of the Company or accept employment or provide services to the
      Company’s customers during this three-year time period. Contract payments of
      $510,695 and $462,420 were paid during the three months ended March 31, 2007
      and
      2006, respectively. The amount owed related to the contract payable was $251,536
      and $762,231 at March 31, 2007 and 2006, respectively, and is included in
      current liabilities retained relating to discontinued operations.




NOTE
      7 -
      CONCENTRATIONS




Major
      Customers




The
      Company derived more than 10% of its revenues from the following unaffiliated
      customers in the following amounts for the three months ended March 31:





**2007**
            
            **2006**Customer
                A
            
            $
            268,807
            
            $
            341,336Customer
                B
            
            
            447,806
            
            
            349,689





The
      Company had receivable balances greater than 10% of its accounts receivable
      from
      the following unaffiliated customers:


**March
                31, 2007**
            
            **December
                31, 2006**Customer
                A
            
            $
            105,638
            
            $
            445,923Customer
                B
            
            
            335,969
            
            
            429,095Customer
                C
            
            
            *
            
            
            461,742




*Did
      not
      represent more than 10% of the Company’s accounts receivable for the period
      indicated.







9





Foreign
      Sales





Included
      in the consolidated statements of operations are foreign sales related to
      continuing operations of $143,030 and $171,327 for the three months ended March
      31, 2007 and 2006, respectively.




Foreign
      Inventory





Included
      in the consolidated balance sheets are international inventories related to
      continuing operations of $189,035 and $204,098 at March 31, 2007 and December
      31, 2006, respectively. Foreign inventories consist of raw material goods held
      in Asia and used in the production of Nature Vision products.





NOTE
      8 -
      DISCONTINUED OPERATIONS





**Norman
      photography product line sale**





The
      sale
      of Nature Vision’s Norman photography product line to Promark International,
      Inc. was completed on October 20, 2006 pursuant to the terms of an Asset
      Purchase Agreement. The transaction involved the sale of inventory, equipment
      and certain other assets relating to Nature Vision’s Norman photography product
      line for a total purchase price of approximately $2,400,000, of which $300,000
      is payable pursuant to the terms of a three-year note. The note bears interest
      at prime plus 1% and is unsecured. The note requires quarterly principal
      payments of $25,000 plus interest through September 30, 2009. The remaining
      balance on the note is $275,000 at March 31, 2007. This product line has been
      classified as discontinued operations.





**Vaddio
      product line sale**




The
      sale
      of Nature Vision’s Vaddio product line to New Vad, LLC (New Vad) closed on
      February 5, 2007 pursuant to the terms of the Asset Purchase Agreement. The
      transaction involved the sale of fixed assets, equipment, licenses, intellectual
      property and certain other assets relating to Nature Vision’s Vaddio product
      line. The original purchase price paid by the Buyer was $757,372 which consisted
      of $710,694 in cash at closing and $46,678 in assumed paid time off. In
      addition, Nature Vision will receive 2% of receipts from the gross sales of
      all
      Vaddio products sold by New Vad after March 1, 2007, paid on a monthly basis
      with a six-month deferral, until a total payment of $750,000 is received.




As
      part
      of the transaction, the parties also entered into a Consignment Sale Agreement,
      providing for the sale of Nature Vision’s inventory to New Vad over the next 12
      months at a book value estimated to be $2,031,359. Under the terms of the
      Consignment Sale Agreement, New Vad will purchase, at the Company’s cost, the
      consigned inventory from Nature Vision as needed before purchasing a similar
      type of item from a third party until the inventory is sold in its entirety,
      or
      January 31, 2008, at which time the remaining inventory will be purchased.
      The
      Company has sold $695,742 of inventory to New Vad through March 31, 2007. There
      is $165,487 included in accounts receivable relating to discontinued operations
      that is due from New Vad as part of inventory sold during the three months
      ended
      March 31, 2007. The remaining inventory to be purchased by New Vad was
      $1,335,617 at March 31, 2007.




In
      addition, the parties entered into a Collection Agreement, under which New
      Vad
      will collect and transmit to Nature Vision payments made by customers on Nature
      Vision’s accounts receivable for products or services sold or provided before
      the closing date.




The
      gain
      on the sale was calculated as follows:




Cash
                received
            
            
            $
            710,694Assumption
                of accrued paid time off
            
            
            
            46,678Subtotal
            
            
            
            757,372Less:
                Estimated transaction costs
            
            
            
            (421,016
            )Net
                proceeds on sale
            
            
            
            336,356Less:
                Prepaid expenses
            
            
            
            (72,166
            )Less:
                Property and equipment carrying amount
            
            
            
            (186,701
            )Gain
                on disposition of assets
            
            
            $
            77,489






10




The
      potential deferral proceeds of up to $750,000 will be recorded when earned
      and
      collection is deemed probable. No deferred sale proceeds were recorded during
      the three months ending March 31, 2007.




This
      product line has been classified as discontinued operations.





The
      following are condensed statements of the discontinued operations (Vaddio and
      Norman) for the three months ended March 31:





2007
            
            
            2006Sales,
                Net
            
            
            
            
            $
            736,802
            
            $
            2,995,637Cost of good sold
            
            
            
            
            
            574,763
            
            
            1,900,856Gross profit
            
            
            
            
            
            162,039
            
            
            1,094,781Selling,
                general, and administrative
            
            
            
            
            
            274,004
            
            
            1,065,937Income (loss) from operations
            
            
            
            
            
            (111,965
            )
            
            28,844Other
                income
            
            
            
            
            
            -
            
            
            4,473Gain
                on sale of Vaddio product line
            
            
            
            
            
            77,489
            
            
            -Income
                and gain from discontinued operations
            
            
            
            
            
            (34,476
            )
            
            33,317Benefit
                from (provision for) income taxes
            
            
            
            
            
            14,000
            
            
            (13,000
            )Gain
                (loss) from discontinued operations
            
            
            
            
            $
            (20,476
            )
            $
            $20,317




Assets
      and liabilities as a result of discontinued operations consisted of the
      following at March 31, 2007 and December 31, 2006:





2007
            
            2006Current
                assets sold relating to discontinued operations:Prepaid expenses
            
            $
            -
            
            $
            84,855Other
                assets sold relating to discontinued operations:Fixed assets, net
            
            
            -
            
            
            156,199Intangibles, net
            
            
            -
            
            
            30,502Total
            
            $
            -
            
            $
            186,701Current
                liabilities assumed relating to discontinued operations:Accrued
                vacation
            
            $
            -
            
            $
            46,678








11





Assets
      and liabilities retained relating to the discontinued operations consisted
      of
      the following at March 31, 2007 and December 31, 2006:





2007
            
            2006Current
                assets retained relating to discontinued operations:Accounts
                receivable
            
            $
            411,890
            
            $
            1,805,240Inventory
            
            
            1,335,617
            
            
            2,261,240Total
            
            $
            1,747,507
            
            $
            4,066,480Current
                liabilities retained relating to discontinued operations:Accounts payable
            
            $
            -
            
            $
            992,685Accrued payroll and related expenses
            
            
            30,000
            
            
            80,012Contract payable
            
            
            251,536
            
            
            762,231Accrued transaction costs
            
            
            202,274
            
            
            -Other current liabilities
            
            
            104,909
            
            
            37,973Total
            
            $
            588,719
            
            $
            1,872,901







12







**Item
      2: Management’s Discussion and Analysis of Financial Condition and Results of
      Operations**




The
      following discussion and analysis of financial condition, results of operations,
      liquidity and capital resources should be read in conjunction with our audited
      consolidated financial statements and notes thereto appearing elsewhere in
      this
      report. This discussion contains forward-looking statements that involve risks
      and uncertainties, including information with respect to our plans, intentions
      and strategies for our businesses. Our actual results may differ materially
      from
      those estimated or projected in any of these forward-looking statements.




**Company
      History and Overview**




Nature
      Vision, Inc., (f/k/a Photo Control Corporation) (the “Company” or “we”) was
      incorporated as a Minnesota corporation in 1959. On August 31, 2004, the Company
      changed its name to Nature Vision, Inc. in connection with a merger transaction
      with Nature Vision Operating Inc. (f/k/a Nature Vision, Inc.) a Minnesota
      corporation that was incorporated in 1998. As a part of the merger, Nature
      Vision Operating Inc. became a wholly-owned subsidiary of the Company. The
      shares of the combined company trade on the Nasdaq SmallCap Market under the
      symbol, “NRVN.”




The
      Company’s continuing operations are composed of one operating division, the
      Nature Vision Division for outdoor recreation products, located in Brainerd,
      Minnesota. On October 20, 2006, Nature Vision, Inc. sold the Norman product
      line
      of its Photo Control division (Norman) and renamed the division the Vaddio
      Division. On February 5, 2007, the Company sold certain assets and transferred
      certain liabilities related to its Vaddio division (Vaddio). The Norman and
      Vaddio divisions designed, manufactured and marketed professional cameras,
      electronic flash equipment, lens shades and related photographic accessories
      and
      sold audio visual peripheral products used in the video conferencing and
      presentation industry. The Company began discussions and efforts to sell Norman
      and Vaddio in the third and fourth quarter of 2006, respectively. The assets
      and
      liabilities of Vaddio at December 31, 2006 met the requirements of Statement
      of
      Financial Accounting Standards (SFAS) No. 144, "Accounting for Impairment or
      Disposal of Long-Lived Assets" as being held for sale. Operations and cash
      flows
      will be eliminated as a result of the sale and the Company will not have any
      significant involvement in the operations after the sale. In accordance with
      appropriate accounting rules, the Company has reclassified the previously
      reported financial results to exclude the results of the Norman and Vaddio
      operations and have presented on a historical basis these operations as a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets under discontinued operations. All of the financial information
      in the consolidated financial statements and notes to the consolidated financial
      statements has been revised to reflect only the results of continuing operations
      of the Company’s outdoor recreation products.




The
      long-term growth plans for the Company will be in the outdoor recreation
      markets. This growth will be generated organically and through strategic
      acquisitions.




**Revenue**




Revenue
      consists of sales of our products net of returns and allowances. Direct revenue
      includes sales from orders to distributors, dealers and direct consumers and
      includes customer service and shipping charges. New product innovation through
      the use of technology will continue to be the basis of our organic growth.
      We
      will look to strategic acquisitions to provide penetration into new product
      categories and channels.




**Cost
      of Goods Sold**




Cost
      of
      goods sold for our products consists of the cost of direct materials, labor
      to
      produce the products, freight in, depreciation, amortization, warehousing,
      associated management, occupancy costs, customer service and warranty, shipping
      and receiving costs, quality assurance and other indirect miscellaneous
      manufacturing costs. Cost of goods sold can fluctuate based on the product
      mix
      sold for a given period. The increased cost of oil continues to drive up the
      cost of components and the freight to receive and ship products. We continue
      to
      evaluate make versus outsource opportunities to reduce these costs. We look
      to
      increase our distribution abilities and capacities.




**Gross
      Profit**




We
      define
      gross profit as the difference between revenue and cost of goods sold. We
      believe our gross profit is our best metric to manage the business on a
      divisional and product line basis.






13





**Selling,
      General and Administrative Expenses**




Selling,
      general and administrative expenses include directly identifiable operating
      costs and other expenses. The majority of these costs are fairly consistent
      from
      month to month. Selling costs consist of payroll, commissions, product
      management, marketing, advertising and servicing accounts costs. General and
      administrative costs include payroll, product design, product development,
      engineering, order processing costs, management information systems, accounting
      and administrative. General and administrative expenses include costs associated
      with general corporate management and shared departmental services such as
      legal, external accounting, management information systems, finance, insurance
      and human resources. Other costs consist primarily of interest on the existing
      line of credit. The interest rate on the credit facility floats with prime,
      at
      prime plus 1.00%. As rates have increased over the prior year, these costs
      have
      continued to rise.




**Income
      from Operations**




Income
      from Operations is defined as revenue less cost of goods sold and selling,
      general and administrative expenses.




**Gain
      (Loss) from Discontinued Operations**




On
      October 20, 2006, Nature Vision, Inc. sold the Norman product line of its Photo
      Control division (Norman) and renamed the division the Vaddio Division. On
      February 5, 2007, the Company sold certain assets and transferred certain
      liabilities related to its Vaddio division (Vaddio). In accordance with
      Statement of Financial Accounting Standards No. 144 , “Accounting for the
      Impairment or Disposal of Long-Lived Assets,” this operating segment was
      classified as discontinued operations and the financial results are reported
      separately as discontinued operations for all periods presented.




**Trends
      and Opportunities**




*Retail
      Expansion by Larger Customers.* Our
      large
      customers, such as Cabela’s, Bass Pro Shops and Gander Mountain continue to
      represent a large concentration of our revenue. Our smaller customers continue
      to reduce in quantity and quality. These new large retail store expansion plans
      will provide significant opportunities for growth at the expense of the smaller
      owner operator establishments. We anticipate the number of customers within
      the
      Outdoor recreation products market to continue to reduce as the average size
      of
      our customer continues to increase. This consolidation puts significant pressure
      on the business with its increased reliance on fewer customers. Failure to
      continue business with an existing customer or even maintain an existing sales
      level with a customer could have a significant impact on earnings.




*Inventories* .
      At the
      end of 2006, we increased our required levels to insure a high rate of order
      fulfillment. Lower than anticipated sales in 2006 were a cause for the increase
      in  inventories.
      We currently have stock in place to fulfill orders and management feels that
      the
      inventory is saleable. We anticipate the ability to reduce the required levels
      in future quarters. Should sales of existing products not achieve forecasted
      levels, a change in product components or customer requirements occur, such
      reductions may not be obtainable.




*Increased
      oil prices.* Increased
      oil prices may affect us more negatively than our competition. If gasoline
      prices should continue to increase, consumers may opt to reduce the amount
      of
      discretionary spending on entertainment items and take fewer vacations.
      Increased oil prices continue to impact the costs of material components. We
      rely on outsourced production and the costs for the associated shipping could
      materially impact the cost of product and gross profit margins.




*Increased
      interest costs.* Given
      the
      cyclical nature of our business we are reliant on a credit facility. As growth
      rates dictate additional borrowing, interest rates have consistently increased
      impacting the costs of financing. If we are unable to maintain favorable
      financing arrangements it will impact the overall profitability of the Company.




*Acquisition
      opportunities* .
      We
      continue to evaluate opportunities for strategic acquisitions. These
      acquisitions are expected to be accretive to earnings. These potential
      acquisitions will require financing which we anticipate we will be able to
      obtain.




*Investment
      in infrastructure.* We
      anticipate that we will continue investing in our infrastructure to support
      our
      new distribution facility. We will also continue to invest in qualified
      employees to support our organic growth with new product
      innovation.


14


**Results
      of Operations**




The
      following table provides the percentage change in our net sales, gross profit,
      income from operations, and net income for the three months ended March
      31:


**(in
                thousands)**
            **2007**
            
            **2006**
            
            **Increase/
                (Decrease)**NET
                SALES
            
            
            $
            1,756
            
            $
            1,671
            
            
            5.1.
            %GROSS
                PROFIT
            
            
            
            309
            
            
            464
            
            
            (33.4
            %)LOSS
                FROM OPERATIONS
            
            
            
            (657
            )
            
            (721
            )
            
            8.9
            %NET
                LOSS
            
            
            $
            (449
            )
            $
            (442
            )
            
            (1.6
            %)





The
      following table presents our gross profit, income from operations and net income
      as a percentage of net sales for the three months ended March 31:


**2007**
            
            **2006**GROSS
                PROFIT
            
            
            
            17.6
            %
            
            27.8
            %LOSS
                FROM OPERATIONS
            
            
            
            (37.4
            %)
            
            (43.1
            %)NET
                LOSS
            
            
            
            (25.6
            %)
            
            (26.5
            %)





Increased
      sales were due to an increase in hunting product sales as a result of new
      hunting blinds. In addition, there was an increase in sales in the Vector
      product as a result of this product line being introduced by the Company towards
      the end of the three months ended March 31, 2006. The increase in sales was
      partially offset by higher than expected returns during the three months ended
      March 31, 2007. The increased returns during the three months ended March 31,
      2007 had a negative impact on the Company’s gross profit. Gross profits were
      also impacted by rising fuel costs passed along through increased freight costs,
      both incoming and outgoing. Outgoing freight was additionally impacted by the
      sale of lower cost items in similar or larger configurations and quantities,
      thereby increasing the cost per unit shipped. The final major impact on gross
      profit was the move to our new leased facility from our previously owned
      facility. This change results in a lease expense in 2007 that reduces gross
      profit while the owned facility in 2006 generated interest expense, which did
      not reduce gross profit.





**Selling,
      General and Administrative Expenses**





Selling,
      general and administrative costs have decreased due to lower accounting and
      legal expenses relative the comparative period in fiscal 2006. In addition,
      the
      Company has reduced its engineering costs as a result of lower headcount.
      Research and development expenses decreased from $30,503 for the three months
      ended March 31, 2006 to $13,676 for the three months ended March 31, 2007.




**Liquidity
      and Capital Resources**




The
      Company had a cash balance of $0 at March 31, 2007 compared to $2,344 at
      December 31, 2006. The change is a combination of many factors. Cash provided
      from operations was $2,188,226 for the three months ended March 31, 2007. The
      components of cash provided from operations are the following: (i) depreciation
      and amortization of $117,465 and (ii) changes in various operating assets and
      liabilities of $2,894,896. These amounts were offset by a net loss of $448,646,
      benefit from deferred income taxes of $298,000, and gain on sale of discontinued
      operations of $77,489. The most significant components relating to the change
      in
      various operating assets and liabilities relate to the change in accounts
      receivable of $3,070,487 and inventory of $1,553,096, offset by a change in
      accounts payable of $1,385,649. The majority of the change in the accounts
      receivable, inventory, and accounts payable is related to the discontinued
      operations and the seasonality of the continuing operations.






15




Cash
      provided from investing activities was approximately $427,728 for the three
      months ended March 31, 2007.




The
      Company sold its Vaddio product line to New Vad, LLC (New Vad) on February
      5,
      2007 pursuant to the terms of the Asset Purchase Agreement. The transaction
      involved the sale of fixed assets, equipment, licenses, intellectual property
      and certain other assets relating to Nature Vision’s Vaddio product line. The
      original purchase price paid by the Buyer was $757,372 which consisted of
      $710,694 in cash at closing and $46,678 in assumed vacation pay. The gain on
      the
      sale of the product line is based on prepaid expenses of $72,166 and equipment
      and intangibles of $186,701. Estimated transaction costs of (legal and broker
      fee) are projected to be $421,016, of which $202,274 are accrued for at March
      31, 2007. The estimated pretax gain on the sale of the business unit is
      calculated at $77,489. The Company utilized the net proceeds to pay down the
      contract payable liability that was retained by the Company in the sale and
      to
      reduce the line of credit. In connection with the asset purchase agreement,
      Nature Vision will receive 2% of receipts from the gross sales of all Vaddio
      products sold by New Vad after March 1, 2007, paid on a monthly basis with
      a
      six-month deferral, until a total payment of $750,000 is received. The proceeds
      from these deferred payments are not included in the above mentioned pretax
      gain. As part of the transaction, the parties also entered into a Consignment
      Sale Agreement, providing for the sale of Nature Vision’s inventory to New Vad
      over the next 12 months. Under the terms of the Consignment Sale Agreement,
      New
      Vad will purchase the consigned inventory from Nature Vision, Inc. as
      needed before purchasing a similar type of item from a third party until the
      inventory is sold in its entirety, or January 31, 2008, at which time the
      remaining inventory will be purchased. The
      Company has sold $695,742 of inventory to New Vad through March 31, 2007. The
      remaining inventory to be purchased by New Vad was $1,335,617 at March 31,
      2007.
      In addition, the parties entered into a Collection Agreement, under which New
      Vad will collect and transmit to Nature Vision, Inc. payments made by customers
      on Nature Vision’s accounts receivable for products or services sold or provided
      before the closing date. Any remaining balances due on June 5, 2007 will be
      remitted by New Vad to Nature Vision, Inc.





The
      Company purchased $89,224 of property and equipment during the three months
      ended March 31, 2007. In addition, the Company received $25,000 of principal
      payments on the $300,000 note receivable that was part of the Norman photography
      product line sale that was completed on October 20, 2006.





Cash
      used
      in financing activities was $2,618,298 for the three months ended March 31,
      2007. This is made up of payments on the Company’s line of credit of $2,155,000
      and $510,695 of payments on the contract payable; offset by an increase of
      checks issued in excess of cash in bank of $47,397.




As
      of
      March 31, 2007 working capital decreased to $3,626,930 from $4,157,969 at
      December 31, 2006.




Nature
      Vision Inc. has a secured line of credit for $3,000,000 at prime plus 1.00%.
      The
      prime rate at March 31, 2007 was 8.25%. As of March 31, 2007, the Company had
      the ability to borrow against the entire line of credit. Management anticipates
      continued advances against the line of credit to fund anticipated sales growth
      in future quarters. The agreement requires the following affirmative covenants
      measured based on December 31 audited results, minimum net worth of $7,000,000,
      debt to equity ratio of less than 1.0 to 1.0 and debt service ratio of not
      to
      exceed 1.2 to 1.0. ****** Management believes short-term liquidity needs of the Company will be provided
      through working capital and the line of credit, and will be sufficient to
      finance operations for a period of at least the next 12 months. ******





The
      Company signed an agreement in November 2006 to market and sell its Minneapolis,
      MN facility and land. This property relates to the discontinued operations
      of
      the Company. Management anticipates the sale of the property to exceed the
      carrying value as presented on the balance sheet. The Company anticipates
      utilizing the proceeds to reduce any existing debt or assist in funding a future
      acquisition. There is no assurance the Company will be able to sell the
      building.




It
      is
      management’s belief that it will fund any potential acquisitions through
      additional financing and the potential issuance of common stock. Management
      believes that any additional long-term debt requirements and additional lines
      of
      credit will be available. There is no assurance the Company will be able to
      obtain the necessary financing if needed.




It
      is
      management’s belief that long-term liquidity needs for the foreseeable future
      will be provided by working capital, and the expectation that the current line
      of credit will be renewed and any additional long-term debt requirements will
      be
      available.




The
      Company believes that the effect of inflation has not been material during
      the
      quarter ended March 31, 2007.







16








**Off-Balance
      Sheet Financing Arrangements**




As
      of
      March 31, 2007, there were no off-balance sheet arrangements, unconsolidated
      subsidiaries and commitments or guaranties of other parties.




**Critical
      Accounting Policies**




Management’s
      estimate of the warranty reserve is based on historical company data and
      management’s best estimate. We evaluated the key factors and assumptions used to
      develop the warranty reserve in determining that it is reasonable in relation
      to
      the consolidated financial statements taken as a whole.




The
      Company recognizes revenue when products are shipped and the customer takes
      ownership and assumes risk of loss, collection of the relevant receivable is
      probable, persuasive evidence of an arrangement exists and the sales price
      is
      fixed or determinable.  The Company’s revenue recognition policy is in
      accordance with SEC Staff Accounting Bulletin, No. 104.




Management
      records a reserve on accounts receivable which is an estimate of the amount
      of
      accounts receivable that are uncollectible. The reserve is based on a
      combination of specific customer knowledge, general economic conditions and
      historical trends. Management believes the results could be materially different
      if economic conditions change for our customers.




The
      carrying value of long-lived assets is periodically assessed to insure their
      carrying value does not exceed their estimated net realizable future value.
      This
      assessment includes certain assumptions related to future needs for the asset
      to
      help generate future cash flow. Changes in those assessments, future economic
      conditions or technological changes could have a material adverse impact of
      the
      carrying value of these assets.




The
      inventory reserve is an estimate of the future net realizable value of our
      inventory. It is based on historical trends, product life cycles, forecast
      of
      future inventory needs and on-hand inventory levels. Management believes reserve
      levels could be materially affected by changes in technology, our customer
      base,
      customer needs, general economic conditions and the success of certain Company
      sales programs.




Realization
      of deferred tax assets is dependent upon the generation of future taxable income
      during the periods in which those temporary differences become deductible.
      Management considers the scheduled reversal of deferred tax liabilities and
      projected future taxable income in making this assessment. Actual future
      operating results, as well as changes in future performance, could have a
      material adverse impact on the valuation reserves.




**Item
      3: Controls and Procedures**




(a)  As
      of
      March 31, 2007 an evaluation was performed by the registrant’s President and
      Chief Financial Officer of the effectiveness of the registrant’s disclosure
      controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
      the
      Securities Exchange Act of 1934). Based upon, and as of the date of that
      evaluation, the President and Chief Financial Officer concluded that the
      registrant’s disclosure controls and procedures were effective.




(b)  Changes
      in internal controls .
      There
      were no changes in the registrant’s internal controls over financial reporting
      identified in connection with the evaluation required by Rules 13a-15(d) or
      15d-15 under the Securities Exchange Act of 1934 during the registrant’s last
      fiscal quarter that has materially affected, or is reasonably likely to material
      affect the registrant’s internal control over financial reporting.







17




**Part
      II**




**Item
      1. Legal Proceedings.** Not
      applicable.




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.** Not
      applicable.




**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.** Not
      applicable.




**Item
      6. Exhibits.**




Listing
      of Exhibits:




10.1
            Asset
                Purchase Agreement, dated February 5, 2007, by and between New Vad,
                LLC
                and Nature Vision, Inc. (previously filed as Exhibit 10.1 to the
                Registrant's Report on Form 8-K dated February 5,
                2007).





10.2
            Consignment
                Sale Agreement, dated February 5, 2007, by and between New Vad, LLC
                and
                Nature Vision, Inc. (previously filed as Exhibit 10.2 to the Registrant's
                Report on Form 8-K dated February 5,
                2007).





10.3
            Collection
                Agreement, dated February 5, 2007, by and between New Vad, LLC and
                Nature
                Vision, Inc. (previously filed as Exhibit 10.3 to the Registrant's
                Report
                on Form 8-K dated February 5,
                2007).





31.1
            Certification
                of Chief Executive Officer.





31.2
            Certification
                of Chief Financial Officer.





32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.





**Signatures**








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





NATURE
                VISION, INC.Date:
                May 15, 2007
            By:/s/
                Jeffrey P. ZernovIts:
                Chief Executive Officer and PresidentDate:
                May 15, 2007
            By:/s/
                Michael R. DayIts:
                Chief Financial Officer





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