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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-KSB
                                   (Mark One)

  |X| ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                                      1934

                    For the fiscal year ended March 31, 2008

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

               FOR THE TRANSITION PERIOD FROM ________ TO ________

                          COMMISSION FILE NO. 001-33088

                            IVIVI TECHNOLOGIES, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

          NEW JERSEY                                             22-2956711
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)

               135 CHESTNUT RIDGE ROAD, MONTVALE, NEW JERSEY 07645
                    (Address of principal executive offices)

                                 (201) 476-9600
                           (Issuer's telephone number)

         Securities registered under Section 12(b) of the Exchange Act:

     Title of each class               Name of each exchange on which registered
Common stock, without par value                  NASDAQ Capital Market

Securities registered under Section 12(g) of the Exchange Act: NONE

         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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. ( )

         Indicate by check mark whether registrant is a shell company (as
defined in Rule 12b-2 of the Act) ( ) Yes (X) No

Issuer's revenues for the year ended March 31, 2008: $1,606,441. The aggregate
market value of the common stock of the issuer held by non-affiliates of the
issuer as of June 17, 2008, calculated based on the closing sales price of the
issuer's common stock, without par value, on such date, as reported on the
NASDAQ Capital Market was $15,357,112.

At June 17, 2008, 10,715,130 shares of the issuer's common stock, without par
value, were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format: Yes [ ] No |X|


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                            IVIVI TECHNOLOGIES, INC.

                          ANNUAL REPORT ON FORM 10-KSB
                            YEAR ENDED MARCH 31, 2008

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------
PART I

Item 1.       Description of Business                                       3
Item 2.       Description of Property                                      38
Item 3.       Legal Proceedings                                            38
Item 4.       Submission of Matters to a Vote of Security Holders          39

PART II

Item 5.       Market for Common Equity and Related Stockholder Matters
              and Small Business Issuer Purchases of Equity Securities     40
Item 6.       Management's Discussion and Analysis and Results of
              Operations                                                   42
Item 7.       Financial Statements                                         52
Item 8.       Changes In and Disagreements With Accountants on
              Accounting and Financial Disclosure                          71
Item 8A.      Controls and Procedures                                      71
Item 8B.      Other Information                                            71

PART III

Item 9.       Directors, Executive Officers, Promoters, Control
              Persons and Corporate Governance; Compliance With Section
              16(a) of the Exchange Act                                    72
Item 10.      Executive Compensation                                       79
Item 11.      Security Ownership of Certain Beneficial Owners and
              Management and Related Stockholder Matters                   85
Item 12.      Certain Relationships and Related Transactions and
              Director Independence                                        87
Item 13.      Exhibits                                                     90
Item 14.      Principal Accountant Fees and Services                       92



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                                     PART I

In addition to historical information, this Annual Report on Form 10-KSB
contains "forward-looking statements" (within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that
involve risks and uncertainties. See "Item 1. Business - Risk Factors -
Cautionary Note Regarding Forward-Looking Statements" of this Annual Report on
Form 10-KSB.

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS OVERVIEW

We are an early-stage medical technology company focusing on designing,
developing and commercializing proprietary electrotherapeutic technologies.
Electrotherapeutic technologies use electric or electromagnetic signals to help
relieve pain, swelling and inflammation and promote healing processes and tissue
regeneration. We have focused our research and development activities on
targeted pulsed electromagnetic field, or tPEMF, technology. This technology
utilizes a magnetic field that is turned on and off rapidly to create a
therapeutic electrical current in injured tissue, which then stimulates
biochemical and physiological processes to reduce pain and help repair injured
soft tissue. We are currently marketing products utilizing our tPEMF technology
to the chronic wound and through our licensing partner, Allergan USA, Inc., to
the plastic and reconstructive surgery markets. We are developing proprietary
technology for other therapeutic medical markets.

Based on mathematical modeling with specific biochemical signaling pathways, we
develop and design proprietary tPEMF signals, which we refer to as
"electroceuticalsTM." These signals are intended to improve specific
physiological processes, including those that generate the body's natural
anti-inflammatory response. We are currently utilizing our tPEMF technology to
address a wide array of pathological conditions, including acute and chronic
disorders in soft tissue such as chronic wounds, pain and edema, acute injuries
and chronic inflammatory disorders. Chronic wounds include pressure ulcers,
diabetic wounds and arterial and venous insufficiency wounds (wounds resulting
from poor blood flow in the arteries or veins). We are also developing
applications for increasing angiogenesis (new blood vessel growth), a critical
component for tissue regeneration.

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February, 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products, the SofPulse M-10, Roma and Torino PEMF products. We have had
discussions with the FDA regarding our 510(k) application and we received
various requests from the FDA for additional information, which information has
been delivered to the FDA. Following the delivery of such information, we
received a letter from the FDA regarding our voluntarily submitted 510(k) for
our current products, the SofPulse M-10, Roma and Torino PEMF products. The
letter stated that the FDA determined that such products are not substantially
equivalent to other devices cleared for marketing through the 510(k) process or
otherwise legally marketed prior to May 28, 1976. We believe the FDA made an
incorrect assessment of the data and we have undertaken efforts to have the FDA
reconsider the information we have provided by informally appealing the FDA
determination while maintaining the ability to formally appeal pursuant to
established FDA regulations and guidance. We discussed our position with the FDA
in a meeting conducted in early June 2008 and sent the FDA further information
subsequent to the meeting as requested by the FDA. We are awaiting its response
to our meeting and subsequent submission. We believe based upon regulations and
guidance published by the FDA, as well discussions with our independent expert
consultants, including former FDA officials, that all of our current products
are covered by the FDA clearance provided in 1991. Based upon the safety and
efficacy of our products, we do not believe the FDA will require us to cease
marketing and/or recall current products which have been already sold, or
rented. However, if we are unsuccessful in our efforts to have the FDA
reconsider the data and it does not modify its determination, the FDA may
require us to do so until FDA marketing clearance is obtained. In addition, the
FDA could subject us to other sanctions set forth under "Government Regulation."

Our products consist of the following three components:

o     the electroceutical signals;

o     a signal generator; and

o     applicators.

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The signal generator produces a specific electroceutical signal that is pulsed
through a cable and into the applicator. The applicator transmits the
electroceutical signal into the desired area, penetrating medical dressings,
casts, coverings, clothing and virtually all other non-metallic materials. Our
products can be used immediately following acute injury, trauma and surgical
wounds, as well as in chronic conditions, and require no alteration of standard
clinical practices to accommodate the therapy provided by our SofPulse. We
continue to focus our research and development activities on optimizing the
signal parameters of our tPEMF technology in order to produce improved clinical
outcomes and smaller more efficient products utilizing less power.

Since the mid-1990s, our products have been used in over 600,000 treatments by
healthcare professionals on medical conditions, such as:

o     acute or chronic wounds, including post surgical wounds;

o     edema and pain following plastic and reconstructive surgery; and

o     pain associated with the inflammatory phase of chronic conditions.

For such purpose, we regard each 15-minute application on a target area of a
patient as one treatment.

We are currently a party to, and intend to continue to seek, agreements with
distributors to assist us in the marketing and distribution of our products. As
of the date of this report, we have engaged three domestic third-party
distributors to assist us in marketing our products in the United States chronic
wound care market and one distributor each in Canada and Ireland to assist us in
marketing our products in the chronic wound care market in these countries. We
are also actively pursuing exclusive arrangements with strategic partners we
believe have leading positions in our target markets, in order to establish
nationwide, and in some cases worldwide, marketing and distribution channels for
our products. Generally, under these arrangements, the strategic partners would
be responsible for marketing, distributing and selling our products while we
continue to provide the related technology, products and technical support.
Through this approach, we expect to achieve broader marketing and distribution
capabilities in multiple target markets.

MARKET OVERVIEW

Our products can be used for treating a broad spectrum of acute and chronic
disorders of soft tissue, including serious pressure skin ulcers (also known as
bedsores), failed surgical closures, diabetic ulcers, edema and pain following
plastic and reconstructive surgery procedures, as well as pain associated with
the inflammatory phase of chronic conditions. We are considering additional
applications of our products, as well as developing other products using our
tPEMF technology. For example, we are currently researching and clinically
testing potential applications of our tPEMF technology for therapeutic
angiogenesis (the regeneration of new blood vessels) and vascularization (the
creation of new blood vessels) for use in circulatory and cardiac impairment
conditions and for the proliferation of stem cells. We are also exploring the
possibility of utilizing our tPEMF technology in an application to compete as a
non-invasive, non-pharmacologic alternative to other treatments which are used
for pain and edema, such as acetaminophen, without any of the potential known
side-effects or complications that are associated with such products.

WOUND CARE. According to market analysis published by MX (a trade journal on
business strategies for medical technology) in February 2006, wound care costs
the U.S. healthcare system more than $20 billion each year, including more than
$4 billion spent on wound management products in 2006 and forecasts growth to
$5.6 billion by 2009. The MX publication further states that chronic and severe
wounds, which are the most difficult wounds to treat, have been the focus of
significant product innovation in recent years. According to the MX publication,
the market for active wound care products, or products that contribute to wound
repair by delivering bioactive compounds or utilizing materials that facilitate
the body's own ability to heal, is anticipated to grow at 23% per year through
2009, while the market for traditional products, or products that treat wounds
with dry bandages and dressings, is expected to decline by 2% per year over the
same period. Based on the MX publication, it is estimated that at currently
anticipated growth rates, active wound care will represent a more than $1
billion opportunity within the next five years in the United States.

We anticipate that use of our products may be beneficial in a substantial number
of general post-surgery recovery plans in general hospitals, as well as in
long-term care nursing facilities and long-term acute care hospitals, or LTACHs,
rehabilitation hospitals, acute care facilities, and in the home. U.S. Census
Bureau statistics indicate that, as of March 2004, the 65-and-over age group was
one of the fastest growing population segments and was expected to reach
approximately 40 million by the year 2010. Management of wounds and circulatory
problems is crucial for the elderly. These patients frequently suffer from
deteriorating physical conditions and their wound problems are often exacerbated
by other disorders.

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We expect this market to continue to grow as a result of several factors,
including the continued increase in the incidence of diabetes and the aging
population. Physicians and nurses look for therapies that can promote the
healing process and overcome the obstacles of the patients' compromised
conditions. They also prefer therapies that are non-invasive and are easy to
administer, especially in the home care setting, where full-time skilled care is
generally not available.

PLASTIC AND RECONSTRUCTIVE SURGERY. Almost 12 million cosmetic surgery
procedures for a total cost in excess of $12.4 billion were performed in 2007,
according to statistics released by the American Society of Plastic Surgeons, or
ASPS, up 59% from nearly 7.4 million procedures in 2000. In addition, 5.1
million reconstructive plastic surgery procedures were performed in 2007.
According to the ASPS, cosmetic procedures being conducted in an office-based
surgical facility were 46% in 2004, with only 25% of such procedures being
conducted in a hospital.

POTENTIAL ADDITIONAL MARKETS. We are pursuing development and commercialization
of new products as well as devoting resources to the testing, validation, and
compliance with FDA regulatory requirements of new applications of our existing
products and our tPEMF technology to address the needs of the following
potential markets:

o     ANGIOGENESIS AND VASCULARIZATION. DO WE WANT THIS DISCUSSION IN THE MARKET
      OVERVIEW? According to the American Heart Association in 2008, the cost of
      coronary heart disease is estimated to be approximately $156.4 billion. We
      believe this market continues to grow, despite effective procedures like
      coronary artery bypass grafting and angioplasty and stenting (invasive
      procedures performed to reduce or eliminate blockages in coronary
      arteries) and that these procedure volumes continue to increase in part
      because cardiovascular disease is progressive and in part because the
      effects of cardiovascular procedures are not permanent. We also believe
      that the biggest market for products stimulating angiogenesis will be for
      treatment of coronary artery disease and peripheral vascular disease.
      Based on studies at the Plastic and Reconstructive Surgery Department of
      Montefiore Medical Center in New York City, we believe that the
      non-invasive application of our tPEMF technology to permanently improve
      cardiac circulation by creating new blood vessels, known as "remodeling,"
      could reduce the need for invasive procedures such as angioplasty and
      bypass surgery and long-term medication for atherosclerosis (the hardening
      of the arteries). An Internal Review Board, or IRB, approved a
      double-blind, randomized, placebo-controlled clinical trial in patients
      who were not candidates for angioplasty or cardiac bypass surgery. This
      trial was conducted at The Cleveland Clinic Florida, a not-for-profit
      multispecialty medical group practice. The trial is looking at ("is
      looking at" makes it sound like it is still going.) the use of our tPEMF
      technology over a period of five months on patients with ischemic
      cardiomyopathy (a heart condition resulting from decreased blood flow to
      the heart), the primary endpoint of which was the improvement in regional
      myocardial perfusion (the flow of blood through the heart) and function
      and the secondary endpoint of which was improvement in patient angina and
      exercise tolerance. Full enrollment of patients in the clinical trial
      occurred during June 2007; the final patient completed the protocol in
      January 2008; and we announced data from the trial on June 30, 2008. See--
      "Research and Development."

o     PAIN MANAGEMENT. UPDATE INFORMATION According to Medtech Insights, the
      total U.S. market for pain management devices reached $1.2 billion in
      2005. Pain is generally divided into acute and chronic. Acute pain can be
      modulated and removed by treating its cause. Chronic pain is distinctly
      different and more complex. The source of the pain is often known but
      cannot be eliminated. The urge to do something to relieve the pain often
      makes some patients drug-dependent. Chronic pain may be one of the most
      common and costly health problems in the United States. According to the
      American Academy of Orthopedic Surgeons, back pain alone generated over 19
      million physician visits in 2005.

      According to the Centers for Disease Control, arthritic conditions, the
      leading cause of disability in the U.S., afflicts at least 46 million
      Americans, with a cost of $128 billion a year in direct medical costs and
      indirect costs, such as lost productivity and workers' compensation. We
      intend to market our future products against other pain treatments. Now
      that such commonplace medications have been required to carry warning
      labels due to potential dangerous side-effects (and some drugs have been
      withdrawn altogether), we believe that there is a significant opportunity
      for a non-invasive, non-pharmacologic alternative that has efficacy and no
      known side-effects. The February 2007 publication of treatment guidelines
      by the American Heart Association in the journal, CIRCULATION, advises
      that non-pharmacological alternatives to non-steroidal anti-inflammatory
      drugs, or NSAID's, should be used first in treating chronic pain in
      patients with risk factors for heart disease.

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o     NEUROLOGY.

In chronic neurological disorders, the Alzheimer's Association estimated the
costs of treating and caring for people with dementia to Medicare and Medicaid
to be approximately $148 billion dollars in 2008. American Parkinson's Disease
Association suggests that there are 1.5 million cases in the US and the
Alzheimer's Association estimates there are 5 million people in the US with that
degenerative neurological condition. We have provided ongoing support for
research in this area, and will continue to explore the potential for effects on
slowing neuronal inflammation and cell death that is associated with
neurodegenerative diseases. In acute neurological area, traumatic brain injury
(TBI) is a significant health issue, often associated with lifelong impairment,
estimated to cost approximately $30 billion annually, by the Brain Injury
Foundation. Swelling of the brain, after a traumatic injury, can cause pressure
that damages the brain. We intend to explore the effects of tPEMF to reduce or
retard swelling in TBI, as an adjunct to current care. Lastly, there is a
growing interest in the use of electromagnetic fields in the diagnosis and
treatment for a number of conditions related to brain function, including
psychiatric disorders. Treatment with direct electrical stimulation has been
cleared by the FDA for use in depression, anxiety and insomnia. We may look for
opportunities to incorporate our technology into a study or case series in this
or another area in psychiatry.

o     STEM CELL TECHNOLOGY AND TISSUE ENGINEERING.

According to a Visiongain report, the stem cell and tissue engineering market is
expected to reach $10.0 billion by 2013. Tissue engineering technology is
available with several types of replacement skin, cartilage, regeneration of
bone and other connective structural substitutes. The flexibility and plasticity
of stem cells has led many researchers to believe that stem cells have
tremendous promise in the treatment of diseases other than those currently
addressed by stem cell procedures. Theoretically, to put stem cells into a
damaged heart may be simple but to persuade it to transform into functioning
heart muscle is more difficult because it can transform itself into several
organs or types of tissue. Some researchers have reported progress in the
development of new therapies utilizing stem cells for the treatment of cancer,
neurological, immunological, genetic, cardiac, pancreatic, liver and
degenerative diseases. Tissue engineering and stem cell technology have had the
capability to reform the medical market and have been recognized for some time.
We plan to explore the opportunities for creating medical devices based on our
tPEMF technology to address the needs of these markets.

o     ORTHOPEDIC APPLICATIONS.

We plan to explore opportunities to market our products utilizing our tPEMF
technology for the pain and edema associated with acute and chronic orthopedic
conditions, including fractures and joint replacements. The U.S. fracture
market, specifically fractures due to osteoporosis was estimated by the American
Society and Mineral Research in 2005 to include over 2 million fractures at an
overall cost of $16.9 billion, which is estimated to grow by 50% in 20 years due
to the aging population. The U.S. joint repair and revision market included over
940,000 procedures. Costs in 2003 for all knee and joint replacement procedures
were estimated at $24.8 billion.

For a discussion of the status of our research and development activities of
these potential new markets and applications, as well as the challenges in
developing and commercializing products in these markets, see "Potential New
Markets and Applications."

OUR STRATEGY

Our goal is to become a leader in the development of products and technologies
in the field of non-invasive electrotherapeutic technologies. The key elements
of our strategy are the following:

              CONTINUE TO EXPAND OUR TECHNOLOGY AND PRODUCT LINES.

We believe that we have a management team with the experience necessary to
develop and create new applications of electrotherapeutic technology. We also
intend to leverage the extensive knowledge and experience of the members of our
Medical and Scientific Advisory Boards, as well as our relationship with
Montefiore Medical Center, The Cleveland Clinic Florida, The Henry Ford
Hospital, Indiana State University and DSI Renal Care facilities where certain
of our clinical trials are being conducted, to assist us in expanding our
research and development of new technologies and products. The development of
new technologies, applications and products is a function of understanding how
to design electromagnetic signals that produce the optimal effects on a
biological target. We believe that we, along with our advisors, have developed
the knowledge and expertise to:

o     create a proper tPEMF signal for a desired physiologic effect;

o     test those signals in multiple systems;

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o     engineer the devices necessary to implement our technology for various
      treatments; and

o     clinically validate the effects and produce the necessary devices at the
      FDA-registered manufacturing facilities of ADM Tronics Unlimited, Inc., or
      ADM, our largest shareholder.

   EXPAND THE USE OF OUR TPEMF TECHNOLOGY FOR ANGIOGENESIS AND VASCULARIZATION
                              AND OTHER PROCEDURES.

We intend to pursue FDA clearance of our tPEMF technology for angiogenesis and
vascularization, the creation and stimulation of growth of new blood vessels. We
have been, and intend to continue devoting significant resources for the
testing, validation, FDA clearance and commercialization of our tPEMF technology
for such application. We are currently researching and clinically testing the
vascularization and angiogenic effects of our tPEMF technology for proposed use
in certain circulatory and cardiac impairment conditions, as alternatives to the
following treatments:

o     pharmacological interventions for impaired cardiovascular function and
      coronary artery disease;

o     balloon and laser angioplasty (an invasive procedure performed to reduce
      or eliminate blockages in coronary arteries);

o     arthrectomy (the removal of arterial plaque) and cardiac stenting (the
      implantation of a small, metal scaffold after angioplasty to keep the
      artery open and prevent regrowth of arterial plaque); and

o     cardiac bypass surgery.

We believe that the effects of our tPEMF technology on increasing blood flow and
angiogenesis (the regeneration of new blood vessels) in chronically injured
tissues, along with our non-invasive and non-pharmacological features, could
provide potential as a therapeutic alternative for revascularization (the
creation of new blood vessels), especially in patients for whom standard
angioplasty or cardiac bypass surgery is not suitable treatment. See
"--Angiogenesis and Vascularization Market" and discussion in"--Research and
Development" on the preliminary results of the Cleveland Clinic trial.

       MARKET PRODUCTS UTILIZING OUR TPEMF TECHNOLOGY AS AN ALTERNATIVE TO
                PHARMACEUTICALS AND INVASIVE SURGICAL PROCEDURES.

We believe that there is a growing desire among consumers of healthcare products
and services to find alternatives to pharmaceutical and invasive surgical
approaches to healthcare. We believe that continuing announcements regarding the
health problems associated with certain drugs and annual records stating the
number of patients who die from medical error are motivating factors for people
to seek alternative healthcare treatments and procedures, including treatments
like those offered by our products. We intend to pursue opportunities to provide
an alternative to pharmaceuticals and invasive surgical procedures.

   LEVERAGE MARKET VALIDATION OF OUR PRODUCTS AND TECHNOLOGY TO COMMERCIALIZE
         ADDITIONAL PRODUCTS TO GROW OUR MARKET SHARE AND CUSTOMER BASE.

We believe that growth opportunities exist through our continuing research into
signal optimization to market additional products using our tPEMF technology and
expand our markets and customer base. Working with clinically validated
prototypes has enabled us to reduce:

o     the size of the applicator used in the first generation of our products
      from over twelve pounds to under one pound;

o     the power output from the first generation of our products; and

o     the costs associated with manufacturing the first generation of our
      products.

We have developed new products including two new products utilizing our tPEMF
technology, the Roma(3) and the Torino II, both of which are currently being
marketed. In addition, the ability to decrease power output has significantly
reduced the serious problems of interference with medical monitoring equipment,
which has in the past, restricted where this technology could be utilized,
including hospital intensive care units. In addition, we have developed a
working model of a new device to be used in the treatment of pain associated
with osteoarthritis which will be utilized in human clinical trials at the Henry
Ford Hospital during fiscal 2008-2009. We expect that our additional products
and advancements will allow us to increase our current markets, as well as
attract new markets.

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      CONTINUE TO SEEK COLLABORATIVE AND STRATEGIC AGREEMENTS TO ESTABLISH
          BROADER MARKETING AND DISTRIBUTION CHANNELS FOR OUR PRODUCTS.

We continue to seek collaborative and strategic agreements to assist us in the
marketing and distribution of our products. We are actively pursuing exclusive
arrangements with strategic partners, having leading positions in our target
markets, which includes our current markets, as well as potential new markets,
in order to establish nationwide, and in some cases worldwide, marketing and
distribution channels for our products. Generally, under these arrangements, the
strategic partners would be responsible for marketing, distributing and selling
our products while we continue to provide the related technology, products and
technical support. Through this approach, we expect to achieve broader marketing
and distribution capabilities in multiple target markets.

In order to attract the interest of qualified potential strategic partners, we
have initiated, and will continue to initiate, distribution and sales of our
products in target market areas. We expect to generate sales from such efforts
and demonstrate market acceptance of our products in order to attract strategic
partners to assume marketing, distribution and sales responsibilities for our
products.

As of the date of this report, we have engaged three domestic third-party
distributors to assist us in marketing our products in the United States chronic
wound care market and one distributor each in Canada and Ireland to assist us in
marketing our products in the chronic wound care market in these countries.
Pursuant to these written agreements, we have granted the distributors exclusive
rights to distribute our products to LTACH's (in the U.S. only), acute care
facilities, rehabilitation/wound centers, nursing homes and skilled nursing
facilities in select markets within specified geographic areas. Under these
agreements, distributors are entitled to purchase products at specified prices
and/or receive monthly commissions based on varying percentages of the amount of
the invoices we receive for products rented by such distributors or products
sold as a result of such distributors' efforts, during the preceding calendar
month. These agreements generally have multi-year terms with automatic one-year
renewals, subject to earlier termination in the event of a breach by either
party. We intend to continue to generate revenues through the use of
distributors with the expectation of attracting strategic partners.

On November 9, 2006, we entered into an exclusive worldwide distribution
agreement with a wholly-owned subsidiary of Allergan, Inc., a global healthcare
company that discovers, develops and commercializes pharmaceutical and medical
device products in specialty markets. Pursuant to the agreement, we granted
Allergan's subsidiary, Inamed Medical Products Corporation (currently Allergan
USA, Inc,, "Allergan") and its affiliates the exclusive worldwide right to
market, sell and distribute certain of our products, including all improvements,
line extensions and future generations thereof in conjunction with any aesthetic
or bariatric medical procedures in the defined marketing territory. Under the
agreement, we also granted Allergan the right to rebrand such product, with
Allergan owning all rights to such brands developed by it for such purpose.

OUR PRODUCTS

We are currently focusing on the commercialization of products utilizing our
tPEMF technology for the treatment of a wide array of acute and chronic
disorders. We are currently utilizing our tPEMF technology, through the
following products, for the treatment of edema (swelling) and pain in soft
tissue.

SOFPULSE M-10. The SofPulse M-10 utilizes a box-shaped signal generator that
weighs approximately seven pounds. The signal generator delivers proprietary
electroceutical signals through a lightweight and conformable applicator that
ranges in diameter. The SofPulse M-10 is marketed for sale as well as rented to
the chronic wound care markets, particularly for use in long-term acute care
hospitals, as well as in long-term care nursing facilities, rehabilitation
hospitals, acute care hospitals and facilities and home health care systems.

ROMA(3). The Roma(3) utilizes a disk-shaped signal generator that is
approximately nine inches in diameter and weighs approximately two pounds. The
signal generator delivers the proprietary electroceutical signals simultaneously
through up to three lightweight and conformable devices that range in diameter,
allowing multiple treatments on the same patient. The signal generator contains
a programmable microprocessor that can automatically activate and deactivate the
Roma(3) for ongoing, unattended treatment. The devices utilized by the Roma(3)
are intended for single-patient use and are disposable. The Roma(3) is primarily
marketed as a rental product to the chronic wound care markets, particularly for
use in long-term acute care hospitals, as well as in long-term care nursing
facilities, rehabilitation hospitals, acute care hospitals and facilities and
home health care systems.

TORINO II. The Torino II is a battery powered, disposable single unit consisting
of both the signal generator and applicator for ease of use. The devices that
are incorporated into the Torino II are also lightweight and conformable and
come in varying sizes, depending on the application. The signal generator used
in the Torino II is also pre-programmed to provide therapy at optimal intervals
throughout the course of therapy.

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We plan to continue marketing our products to the wound care market and through
Allergan, to the plastic surgery market, and we are expanding our marketing
efforts in these areas.

                                   WOUND CARE

In the acute care setting, serious trauma wounds, failed surgical closures,
amputations (especially those resulting from complications of diabetes), burns
covering a large portion of the body and serious pressure ulcers present special
challenges to the physician. These are often deep and/or large wounds that are
prone to serious infection and further complications due to the extent of tissue
damage or the compromised state of the patient's health. These wounds are often
difficult--or in the worst cases, impossible--to treat quickly and successfully
with more conventional products. Physicians and hospitals need a therapy that
addresses the special needs of these wounds with high levels of clinical and
cost effectiveness. Given the high cost and infection risk of treating these
patients in health care facilities, the ability to create healthy wound beds and
reduce bacterial levels in the wound is particularly important.

In the extended care and home care settings, different types of wounds with
different treatment implications, present the most significant challenges.
Although a substantial number of acute wounds require post-discharge treatment,
a majority of the challenging wounds in the home care setting are non-healing
chronic wounds. These wounds often involve physiologic and metabolic
complications such as reduced blood supply, compromised lymphatic system (the
circulatory vessels or ducts in which the fluid bathing the tissue cells is
collected and carried to join the bloodstream) or immune deficiencies that
interfere with the body's normal wound healing processes. Diabetic ulcers,
arterial and venous insufficiency wounds (wounds resulting from poor blood flow
in the arteries or veins) and pressure ulcers are often slow-to-heal wounds.
These wounds often develop due to a patient's impaired vascular and tissue
repair capabilities. These conditions can also inhibit the patient's healing
process, and wounds such as these often fail to heal for many months, and
sometimes for several years. Difficult-to-treat wounds do not always respond to
traditional therapies. Physicians and nurses look for therapies that can promote
the healing process and overcome the obstacles of the patients' compromised
conditions. They also prefer therapies that are easy to administer, especially
in the home care setting, where full-time skilled care is generally not
available. In addition, because many of these patients are not confined to bed,
they want therapies which are minimally disruptive to their lives. Our products
are designed to allow patients mobility to conduct normal lives while their
wounds heal.

The therapeutic value of our products utilizing our tPEMF technology has been
demonstrated in the wound care market. In addition to the over 600,000
treatments since the mid-1990s, clinical research supports the efficacy of our
tPEMF technology. Independent studies conducted by L.C. Kloth, et. al., in 1999
showed increased wound healing for pressure ulcers treated with one of the
SofPulse signals. In addition, studies conducted by Harvey N. Mayrovitz, PhD.,
et. al., in conjunction with Electropharmacology, Inc., or EPI, and published in
a peer-reviewed medical journal in 1995 determined, through measured blood flow,
that treatment with our technology improved blood flow in the extremities in
diabetic patients who were vascularly impaired with foot ulcers. This
physiological effect is important in the treatment of diabetic ulcers due to the
fact that such non-healing diabetic wounds are primarily the result of impaired
circulation in the area of the wounds. Most significantly, the CMS decision
creating a National Coverage Determination for the use of electromagnetic
therapy in chronic wound treatments found that electromagnetic therapy was
analogous to direct electrical stimulation delivered through methods that differ
from electromagnetic therapy. Although electrical stimulation, when properly
administered, has been shown to be effective in treating recalcitrant wounds, it
is much more labor intensive and difficult to apply effectively without direct
contact with the wound site, while our products are virtually labor free and
easy to operate without direct contact with the wound site as they are able to
treat the target area through wound dressings.

From 1991 to 1997, EPI marketed its products utilizing electrotherapeutic
technologies primarily for use in nursing homes for the Medicare reimbursable
treatment of chronic wounds, primarily pressure sores and diabetic leg ulcers,
through a rental program. During such time, the business grew at a rate of 12%
per month to a monthly rental-billing rate of almost $300,000. However, due to
changes in reimbursement policy made by CMS in 1997, which prohibited Medicare
coverage of the use of this technology in the treatment of non-healing wounds,
the nursing home revenue diminished significantly by 2001. As a result of the
reimbursement policy changes, we began to:

o market our products for use in nursing homes for the non-reimbursable
treatment of pain and edema associated with acute and/or chronic wounds and for
the non-reimbursable treatment of pain and edema following reconstructive or
plastic surgery, both of which markets we continue to pursue today; and

o consider other applications for use of our tPEMF technologies, such as for
therapeutic angiogenesis and vascularization for use in circulatory and cardiac
impairment conditions.

                                       9

<PAGE>

In December 2003, CMS reversed its policy and issued an NCD requiring
reimbursement by Medicare for electromagnetic therapies for non-healing wounds,
which became effective in July 2004. In response to this regulatory change, we
re-introduced our products into the chronic wound market, where we believe that
our products utilizing our tPEMF technology have retained their reputation for
therapeutic effect. In addition, we have received authority from the U.S.
Department of Veterans Affairs, or VA, to market and sell and/or rent to VA
facilities nationwide our SofPulse M-10 for the treatment of wounds.

We continue to market our products for placement within surgical centers for
post-operative immediate use to reduce edema at the target area and a patient's
pain, through a monthly and per-use rental program to physicians and patients.
We anticipate that use of our products may be beneficial in a substantial number
of general post-surgery recovery plans. We are seeking opportunities to place on
a metered, pay-per-use or rental basis, our products in long-term care nursing
facilities, long-term acute care hospitals, rehabilitation hospitals, acute care
facilities, and in the home, through individual facilities, corporate nursing
home and long-term acute care hospital chains and through regional and national
contract therapy service companies that provide therapies to the nursing home
industry, as well as through our own sales personnel and third-party sales
organizations and distributors.

                       PLASTIC AND RECONSTRUCTIVE SURGERY

We plan to increase marketing of our products utilizing our tPEMF technology to
the plastic and reconstructive surgery market through our licensing partner,
Allergan. See "--Sales and Marketing" for a discussion of the Allergan
agreement. Plastic surgery patients are concerned about the length of post
surgical recovery time and we believe that use of our products can reduce the
period of recovery in these procedures. Further, plastic surgery procedures are
primarily elective in nature and expensive and are not dependent to the same
extent on, nor as sensitive to, cost and reimbursement issues as in many other
fields of medicine.

A pilot clinical trial has also been conducted by the chairman of the Innovative
Procedure Committee of the American Society for Aesthetic Plastic Surgery, or
ASAPS. This randomized, prospective study examined the use of our products
post-surgically following laser facial resurfacing. This study, which was a
placebo-controlled clinical study, yielded the following conclusions:

o     EDEMA AND PAIN TREATMENT DESIRABLE. The labeled indication of our
      products, use in post-operative treatment of edema and pain, is suitable
      for the needs of the plastic surgery market.

o     ASAPS POSITION STATEMENT. The study provided the basis for an official
      Position Statement being issued by ASAPS recognizing the efficacy of our
      products utilizing our tPEMF technology at reducing edema and pain
      post-surgically.

We have received positive clinical observations by plastic surgeons, and
affirmative consumer acceptance by their patients who participated in our beta
test from 2001 to the present in the New York metro area and in Southern
California where patients rented our product for in-home use following plastic
surgery. Dr. Heden and Dr. Pilla, our Science Director and Chairman of our
Scientific Advisory Board, published in the peer reviewed journal, Aesthetic
Plastic Surgery, a randomized-controlled trial looking at pain during recovery
from primary breast augmentation in 42 patients. The results of the trial
demonstrated a 270% reduction in pain and a 250% reduction in the use of pain
medication in the active treatment group, as compared to the placebo control.

POTENTIAL NEW MARKETS AND APPLICATIONS

We are pursuing development and commercialization of new products as well as
devoting resources to the testing, validation, and compliance with FDA
regulatory requirements of new applications of our technology to address the
needs of the angiogenesis and vascularization, stem cell, pain relief, neurology
and osteoarthritis markets. We cannot assure you that we will be able to develop
new products or expand the use of our tPEMF technology for any of these
additional markets or applications. Our ability to successfully expand the use
of our tPEMF technology for each of these applications will depend on a number
of risks, including:

o     funding studies related to such applications through joint ventures or
      other strategic alliances or otherwise;

o     establishing the efficacy of such applications through our research and
      development efforts;

o     developing and commercializing new products utilizing our technology for
      such applications;

o     obtaining FDA clearance or approval for such technologies or applications;
      and

o     establishing market acceptance and reimbursement of our products for such
      uses.

                                       10

<PAGE>

                     ANGIOGENESIS AND VASCULARIZATION MARKET

We are devoting significant resources into the testing, validation, FDA
regulatory requirements and commercialization of the angiogenic and vascular
applications of our tPEMF technology. We believe that the non-invasive
application of a specific signal to improve cardiac circulation by creating new
blood vessels could reduce the need for invasive procedures such as angioplasty
and bypass surgery and long-term medication for atherosclerosis.

o     EVIDENCE. Our tPEMF technology has been shown, in published studies in
      peer-reviewed journals, to enhance blood flow and appears to confirm a
      significant portion of this effect as angiogenic, (i.e., the creation of
      new blood flow and vessels).

o     MAYROVITZ FINDINGS. In published studies by Harvey N. Mayrovitz, et. al.,
      in a peer reviewed journal in 1995, our tPEMF technology was shown to have
      an immediate impact in significantly increasing micro-vascular blood flow.

o     MONTEFIORE MEDICAL CENTER FINDINGS. Recent research conducted by the
      Montefiore Medical Center Department of Plastic and Reconstructive Surgery
      Department in New York City, demonstrated that our tPEMF technology
      created a significant angiogenesis effect. These findings were presented
      at an international symposium in late 2003 and have been published in
      Plastic and Reconstructive Surgery, a respected peer-reviewed medical
      journal.

o     PATENTS. We have a patent pending that explicitly secures the angiogenic
      effects of our tPEMF technology.

o     RESEARCH PROGRAM. We have developed a research program to more fully
      document the effects and produce the data required to further validate the
      current evidence that our tPEMF in target areas is able to promote
      angiogenesis within the body.

o     PRE-MARKET APPROVAL. We are seeking to pursue the best regulatory
      strategies for advancing our tPEMF technology including the possibility of
      commencing the filing of a pre-market approval application with the FDA.

o     OPPORTUNITY. We believe that the non-invasive application of our tPEMF
      technology to permanently improve cardiac circulation by creating new
      blood vessels, known as "remodeling", could reduce the need for invasive
      procedures such as angioplasty and bypass surgery and long-term medication
      for atherosclerosis.

Human clinical trials are a pre-requisite to the filing of applications to the
FDA to market tPEMF for the indications, however, there can be no assurance that
we will obtain the necessary studies and results, that we will receive the
requisite FDA clearance or approval for such indications. Full enrollment of
patients occurred in the clinical trial at the Cleveland Clinic Florida,
occurred during June 2007; the final patient completed to protocol in January
2008; and we announced data from the trial on June 30, 2008. See "--Research and
Development". If we do not receive the requisite FDA clearance or approval to
market products utilizing our tPEMF technology for such indications, we will not
be able to enter the angiogenesis and vascularization markets.

                                   STEM CELLS

Stem cell research has focused, at least in the public debate, on the "kinds" of
stem cells available for experimentation and eventual utilization. However, we
believe that the bulk of stem cell implantations are not effective due to the
lack of adequate blood supply. The body, especially in injured tissues resulting
from various heart conditions and neurological disorders, does not provide nor
produce sufficient new blood supply to support the introduction of new cells. We
are seeking to develop the specific signals to accelerate the angiogenic process
to enhance the body's ability to support the growth of these new cells. We
believe that this application could improve the stem cell technologies that
currently fail today. If we encounter delays in developing, or are unable to
develop, the specific signals to accelerate the angiogenic process to enhance
the body's ability to support the growth of these new cells, we may be delayed
in, or may be prevented from, entering the stem cell market.

                                   PAIN RELIEF

We have developed a small, compact prototype product utilizing our tPEMF
technology that effectively reduces pain. We are preparing to market this
product into the consumer market, both at the prescription level and
over-the-counter, or OTC. In both cases, we intend to market the product to
compete with other pain treatments. Now that commonplace medications have been
required to carry warning labels due to potential dangerous side-effects (i.e.,
NSAID's) and some have been withdrawn altogether, we believe that there is a
significant opportunity for a non-invasive, non-pharmacologic alternative that
has efficacy and no known side-effects. We have developed prototypes of this
product; however, we must obtain regulatory clearance before marketing this
product. We have filed our 510(k) clearance application with the FDA to market
this product for pain relief during April, 2008. The FDA has requested
additional information relating to our filing which we are assessing with our
FDA consultants. We cannot assure you that we will be successful in obtaining
such clearance and without such clearance we will be unable to enter the pain
relief market.

                                       11

<PAGE>

                                    NEUROLOGY

There is a general understanding that many acute and chronic neurological
conditions are at least associated with, if not directly the result of,
inflammation. Out technology's ability to treat inflammation may then have
applications in both the acute and chronic neurological markets. Dr. Casper at
Montefiore Medical Center (see "--Research and Development") has conducted
significant research in the area of neuroprotection, using our technologies to
successfully protect neurons and to improve survival, as well as reduce
inflammation in both acute and chronic animal models. In addition to the current
data, there is a growing interest in neuropsychiatry in the effects of
electromagnetic fields in the treatment of a wide array of disorders. We believe
that the mechanism of action targeted in our current technologies may be
therapeutic in application to a number of acute and chronic neurological
disorders. We will continue to support ongoing basic science research in
neurodegenerative disease models as well as evaluate opportunities to extend
that work into acute and neuropsychiatric areas of neurology.

RESEARCH AND DEVELOPMENT

Our research and development efforts continue on several fronts directly related
to our technology, including our expansion into the angiogenesis and
vascularization, neurology and osteoarthritis markets, as well as new
technologies and products. Although we do not have any specific plans to date,
we intend to selectively pursue joint ventures, license agreements or other
commercial relationships with third-parties to commercialize any new
technologies and products we develop in the future. Our research and development
expenditures were $2,115,049 and $2,201,575 (including $413,795 and $581,712 of
share-based compensation related to the grant of stock options) for the fiscal
years ended March 31, 2008 and 2007, respectively.

We are a party to a sponsored research agreement with Montefiore Medical Center
pursuant to which we funded research in the fields of pulse delectro-magnetic
field therapy frequencies at Montefiore Medical Center's Department of Plastic
Surgery that commenced on October 17, 2004 and has concluded. We expect to
receive the data from this study during the summer of 2008 after a payment is
made by us of up to $90,000, which has been accrued and recorded in the March
31, 2008 financial statements.

We fund research in the field of neurosurgery under the supervision of Dr.
Casper, of Montefiore Medical Center's Department of Neurosurgery. During the
fourth quarter of 2005, Dr. Casper of Montefiore Medical Center's Department of
Neurosurgery received a grant in the amount of $270,000 from the National
Institutes of Health, or NIH, to commence studies to examine the effects of
pulsed magnetic fields on neurons and vessels in cell culture and intact brain
and neural transplants, as well as to explore the potential of this modality to
lessen neurodegeneration (progressive damage or death of neurons leading to a
gradual deterioration of the bodily functions controlled by the affected part of
the nervous system) and increase vascular plasticity (the lifelong ability of
the brain to reorganize neural pathways based on new experiences). We believe
this modality could have applications in the treatment of chronic and acute
vascular and neurodegenerative diseases, including Parkinson's disease. Although
Dr. Casper is not required to do so pursuant to the NIH grant, she has advised
us in writing that she intends to use our tPEMF technology in connection with
these studies. The term of the NIH grant expired on May 31, 2008. Prior to
receiving the NIH grant, we provided funding for Dr. Casper's research in this
field, as well as during and following the expiration of the term of the NIH
grant, we have funded Dr. Casper's continued research in this field using our
products. We expensed $225,000 during our fiscal 2006 -2007 and $222,850 during
our fiscal year 2007-2008 to continue Dr. Casper's research. We expect to fund
additional research for Dr. Casper during our fiscal year 2008-2009 of
approximately $455,000. We accrued $130,125 at March 31, 2008 for our research
and development efforts performed at Montefiore.

In January 2006, we entered into a Master Clinical Trial Agreement with
Cleveland Clinic Florida, a not-for-profit multispecialty medical group
practice, to set forth the basic terms and conditions with respect to studies to
be conducted by Cleveland Clinic Florida there under from time to time during
the term of the agreement, which is from January 9, 2006 to January 9, 2009. The
estimated cost of the trial and additional costs and expenses relating to the
trial is approximately $290,000 of which approximately $129,000 was paid by us
through March 31, 2008. At March 31, 2008, we accrued $161,000 for work
performed by the Cleveland Clinic Florida under its agreement with us as well as
additional fees, costs and expenses to third parties for work to be handled by
such third parties during the term of the agreement. The IRB-approved,
double-blind randomized placebo-controlled clinical trial in patients who are
not candidates for angioplasty or cardiac bypass surgery has concluded at The
Cleveland Clinic Florida. The study, which is the first controlled human
clinical trial using our tPEMF technology for a cardiac indication, had the
following three objectives:

o     to establish the safety of our tPEMF technology in treatment of patients
      with ischemic cardiomyopathy;

                                       12

<PAGE>

o     to evaluate the efficacy of our tPEMF technology on myocardial perfusion
      (the flow of blood through the heart), ventricular function (the function
      performance of the ventricle of the heart), clinical symptoms of angina
      (severe chest pains from the heart) and exercise tolerance after one and
      three-month treatments in patients with ischemic cardiomyopathy; and

o     to assess the sustainability of our tPEMF technology on ischemic
      myocardium (the decrease in blood flow to the heart) two months after
      completion of the therapy.

The primary endpoint of the trial was improvement in regional myocardial
perfusion and function. The secondary endpoint of the trial was improvement in
patient angina and exercise tolerance. We believe that the effects of our tPEMF
technology on increasing blood flow and angiogenesis (the regeneration of new
blood vessels) in chronically injured tissues, along with our non-invasive and
non-pharmacological features, could provide potential as a therapeutic
alternative for revascularization (the creation of new blood vessels),
especially in patients for whom standard percutaneous or surgical
revascularization is not suitable treatment.

Human clinical trials are a pre-requisite to the filing of applications with the
FDA to market tPEMF for the indications set forth above; however, there can be
no assurance that the results of such trials will be positive or even if the
results are positive, that we will receive the requisite FDA clearance or
approval for such indications. Full enrollment of patients in our clinical trial
occurred during June 2007, the final patient completed the protocol in January
2008 and we announced data from the trial during June 2008. The objectives of
this trial with our tPEMF(TM) technology in this patient population were to
evaluate safety: measure tPEMF(TM) effects on myocardial perfusion, ventricular
function, clinical symptoms of angina, physical limitations; and lastly, the
sustainability of any effects 2 months after treatment was completed. The
patients administered treatment to themselves for 30 minutes, twice a day for 3
months. This consisted of placing a lightweight vest over the chest, which held
a circular applicator over the left breast. Patients were evaluated at baseline,
1, 3 and 5 month intervals, with patients receiving the active treatment showing
significant reductions in anginal pain and frequency. As the improvements at the
5 month point demonstrated the highest significance, these improvements
persisted even after the therapy had been stopped for 2 months. While there were
dramatic findings in cardiac perfusion for some patients, the short study
duration and limited number of subjects did not allow statistical significance
to be seen at this time. The device used in this trial was not the device
currently marketed by us for treatment of postoperative edema and pain. There
would be no expectation of getting similar results with the currently marketed
device. FDA approval for the device used in the Cleveland Clinic trial would be
necessary to secure an appropriate indication for us to market such device. If
we do not receive the requisite FDA clearance or approval to market products
utilizing our tPEMF technology for those indications, we will not be able to
enter the angiogenesis and vascularization market.

During our fiscal year 2008-2009, we will fund additional studies in
cardiovascular ischemia with established research facilities, to establish clear
dose and response curves as well as dosing regimens for the use of our tPEMF
device in cardiovascular ischemia, in standard cardiovascular models. We expect
to fund approximately $400,000 for such studies, however, such amounts may be
increased if we expand our current studies or if we pursue additional studies.

In June, 2007, we entered into a Research Agreement with Indiana State
University to conduct randomized, double-blind animal wound studies to assist us
in determining optimal signal configurations and dosing regimens. Indiana State
University reported at the Bioelectromagnetics Society (BEMS) 30th annual
meeting in June 2008 results of the first phase of this study in which a
carrageenan injection model in rats treated with our targeted tPEMF signals had
significantly less pain and edema than rats treated with inactive units. We
expensed approximately $90,000 during our fiscal year ended 2008 for this
research and expect to expense approximately $70,000 during our fiscal year
ending 2009 for this research.

In February, 2008, we entered into a collaboration agreement with DSI Renal,
Inc.("DSI"). The first phase involves DSI initiating a multi-site, double-blind
randomized placebo controlled clinical trial to provide additional data on the
effect of our tPEMF technology on the healing of skin ulcers thought to be
caused by either ischemic and/or diabetic vasculopathy, in patients with end
stage renal disease being treated by hemodialysis. A total of 150 patents are
anticipated to be enrolled in the trial. Those patients will be randomly
selected into active and control groups, with the active group receiving our
tPEMF signal. We will supply DSI with product for the clinical trial and DSI
will provide personnel, supplies and equipment necessary for the conduct of the
trial. Primary end points will include time to complete healing, degree of wound
healing expressed as a percentage of total volume area healed at a specific time
and percentage of non-healing wounds. DSI has indicated to us that they
anticipate receiving IRB approval for the trial during the summer of 2008, with
recruitment to be completed within 12 months of initiation of the trial.
Following the completion of the trial, as mutually determined by the parties,
and subject to certain other terms of the collaboration agreement, DSI Renal
would be granted an exclusive license for the distribution of certain of our
products in the U.S. for the chronic and end stage renal disease market. Under
the terms of the collaboration, DSI would purchase products from us and pay a
royalty on all sales or rentals of such products.

                                       13

<PAGE>

On May 1, 2008, we signed a research agreement with the Henry Ford Health
System. The principal investigator, Dr. Fred Nelson in the Department of
Orthopedics will study our prototype device using targeted tPEMF signal
configurations on human patients with established osteoarthritis of the knee
that are active at least part of the day. The trial is expected to recruit up to
100 patients receiving active or sham treatment for six weeks and then cross
over for an additional six weeks. We have approval of the IRB at The Henry Ford
Health System to begin the double blind randomized controlled study. We expect
enrollment to begin by July 2008 and enrollment to continue for up to 12 months.
We expect to expense approximately $110,000 during our fiscal year 2008-2009 for
this study, of which approximately $27,000 was paid during May 2008. There can
be no assurance that this trial will be completed within this time frame or
within this cost.

INTELLECTUAL PROPERTY

                                     PATENTS

We attempt to protect our technology and products through patents and patent
applications. We have built a portfolio of patents and applications covering our
technology and products, including its hardware design and methods. As of the
date of this report, we have two issued U.S. patents, one petition pending for
one issued U.S. patent and eleven non-provisional pending U.S. patent
applications covering various embodiments and end use indications for tPEMF and
related signals and configurations. The titles, patent numbers and normal
expiration dates (assuming all the U.S. Patent and Trademark Office fees are
paid) of our two issued U.S. patents are set forth in the chart below.

<TABLE>
<S>            <C>
                                                                    PATENT
   TITLE                                                            NUMBER    EXPIRATION DATE
   --------------------------------------------------------------  ---------  ---------------
   Apparatus and Method for Therapeutically Treating Human Body
   Tissue with Electromagnetic Radiation                            5723001    March 3, 2019
   Pulsed Radio Frequency Electrotherapeutic System                 5584863    December 17, 2013
</TABLE>

One of the pending non-provisional U.S. Patent applications covers basic signal
configurations. We believe this to be a "seminal patent" as it describes our
proprietary methodology for testing signal components, i.e. frequency, pulse
rate, amplitude, etc. to achieve optimum biological responses for specific
conditions. Our other patents pending cover a range of technologies, including
specific embodiments and applications for treatment of various medical
indications, improved application methods and adjunctive utilization with other
therapeutic modalities.

We have two issued international patents in Singapore and South Africa and
ninety-one pending patent applications in various foreign countries. Because of
the differences in patent laws and laws concerning proprietary rights, the
extent of protection provided by U.S. patents or proprietary rights owned by us
may differ from that of their foreign counterparts.

We acquired certain rights to three patents in August 1998, in connection with
the ADM Tronics, Inc.'s ("ADM") acquisition of certain assets then used by EPI
in connection with the tPEMF device business, which are listed in the patent
table above along with a petition pending for one issued U.S. patent.
Immediately after the acquisition, ADM transferred all of the assets acquired
from EPI to us. The assets included all of the rights, title and interest in the
tPEMF business as well as the rights related to such three patents.

                                   TRADEMARKS

As of the date of this report, we have four registered trademarks/servicemarks,
"SofPulse", " Ivivi", "The Technology of Life", and our stylized Ivivi logo. We
currently have pending with the U.S. Patent & Trademark Office, applications for
trademark/servicemark registration for our "Roma(3)," "Torino,"
"electroceutical," "electroceuticals," "Changing how you heal," and "Changing
the way you heal."

                           PROTECTION OF TRADE SECRETS

We attempt to protect our trade secrets, including the processes, concepts,
ideas and documentation associated with our technologies, through the use of
confidentiality agreements and non-competition agreements with our current
employees and with other parties to whom we have divulged such trade secrets. If
our employees or other parties breach our confidentiality agreements and
non-competition agreements or if these agreements are not sufficient to protect
our technology or are found to be unenforceable, our competitors could acquire
and use information that we consider to be our trade secrets and we may not be
able to compete effectively. Most of our competitors have substantially greater
financial, marketing, technical and manufacturing resources than we have and we
may not be profitable if our competitors are also able to take advantage of our
trade secrets.

                                       14

<PAGE>

SALES AND MARKETING

We are currently marketing and generating revenues in the wound care market and
through our licensing partner, Allergan, in the plastic surgery market. In order
to facilitate the marketing of our products, we have developed and intend to
further develop relationships with sales and distribution companies currently
operating in these markets. In the wound care market, we are focusing our
marketing efforts on the long-term acute care hospitals because of the high
concentration of wound care patients and fixed reimbursements from Medicare.
During fiscal 2007-2008, we began to rent our devices to facilities based upon a
solutions based approach whereby, we rent a finite number of our devices for a
fixed monthly cost, the number and monthly price varies by customer, to assure
the facility receives the outcome and cost savings they expect from our device.
We are using this approach with the Regency Hospital Company and currently we
are in nine of Regency's twenty three locations and we anticipate increasing
this number during our fiscal year 2008-2009. In the plastic surgery market, we
are currently focusing our efforts on supporting the efforts of our licensing
partner, Allergan. We also intend to pursue additional markets and applications,
assuming we obtain FDA clearance and/or approval, such as angiogenesis and
vascularization for the treatment of certain circulatory impairment conditions
and pain relief. As we develop additional products and technologies, we intend
to develop the distribution arrangements for this market in concert with overall
regulatory and marketing approaches.

We seek collaborative and strategic agreements to assist us in the marketing and
distribution of our products. We are actively pursuing exclusive arrangements
with strategic partners, having leading positions in our target markets, in
order to establish nationwide, and in some cases worldwide, marketing and
distribution channels for our products. Generally, under these arrangements, the
strategic partners would be responsible for marketing, distributing and selling
our products while we continue to provide the related technology, products and
technical support. Through this approach, we expect to achieve broader marketing
and distribution capabilities in multiple target markets.

In order to attract the interest of qualified potential strategic partners, we
have initiated, and will continue to initiate, distribution and sales of our
products in target market areas. We expect to generate sales from such efforts
and demonstrate market acceptance of our products in order to attract strategic
partners to assume marketing, distribution and sales responsibilities for our
products. As of the date of this report, we have engaged three domestic
third-party distributors to assist us in marketing our products in the United
States, one distributor in Canada and one distributor in Ireland to assist us in
marketing our products in international markets. These distributors have the
exclusive right to distribute our products in select markets to LTACH's, acute
care facilities, rehabilitation/wound centers, nursing homes and skilled nursing
facilities. We intend to continue to generate revenues through the use of these
distributors with the expectation of attracting strategic partners.

We also believe that aiming messages directly to the public has been effectively
used by the pharmaceutical industry, and we intend to pursue this approach as
one of our marketing strategies. Additionally, we intend to market our current
products and other products we develop through active solicitation of customers
by exhibiting at trade shows, advertising in trade magazines and contracting
with a network of sales/distributor organizations to solicit prospective
customers. As of the date of this report, we have eight full time employees
concentrating 100% of their efforts on sales, sales support and marketing of our
products. We also intend to utilize independent marketing organizations and
manufacturer's representatives to promote our products on a commission basis.

On November 9, 2006, we entered into an exclusive worldwide distribution
agreement with a wholly-owned subsidiary of Allergan, Inc., a global healthcare
company that discovers, develops and commercializes pharmaceutical and medical
device products in specialty markets. Pursuant to the Agreement, we granted
Allergan Inc.'s subsidiary, Inamed Medical Products Corporation (currently known
as, Allergan USA, Inc., "Allergan"), and its affiliates the exclusive worldwide
right to market, sell and distribute certain of our products, including all
improvements, line extensions and future generations thereof in conjunction with
any aesthetic or bariatric medical procedures in the Marketing Territory. In
November 2006, we received $500,000 under the terms of this Agreement which has
been recorded as deferred revenue in our financial statements and is being
amortized to revenue over eight years. The agreement calls for certain milestone
payments of up to $1,000,000 in the aggregate upon the first commercial sale (as
defined in the agreement) of the product in the United States and Europe. We
have not received nor have we earned the milestone payments up to $1,000,000 as
Allergan has not sold the number of units to the number of doctors defined under
the agreement as first commercial sale. We can not determine as of the date of
this report on Form 10KSB when Allergan will be able to sell the number of units
to the number of doctors defined in the agreement in order for us to receive our
milestone payments. In addition, Allergan will purchase the product from us at a
pre-determined price and must meet certain minimum order requirements. Allergan
has met the minimum order quantities through the date of this report on Form
10KSB. Finally, we will receive royalty payments, which began February 2008,
based on Allergan's net sales and number of units sold of the product for the
previous quarter, subject to certain annual minimum royalty payments to be
determined by the parties.

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The agreement has an eight year initial term beginning at the product's first
commercial sale. The initial term may be extended, at Allergan's option, for two
additional years without further payment. Allergan may also pay us a $2,000,000
extension fee and extend the term of the agreement for up to eight additional
years, for a total term of up to 18 years. Allergan has not exercised this
option as of the date of this report on Form 10KSB.

Allergan may only market, sell and distribute the product under the agreement in
the "Marketing Territory," which is generally defined in the agreement as the
United States and such other jurisdictions for which all requisite regulatory
approval has been obtained. If the marketing, sale or distribution of the
product in a jurisdiction would infringe third-party intellectual property
rights and likely result in a lawsuit against us or Inamed, Inamed could require
us to use reasonable commercial efforts to obtain a license for, or redesign,
the product to be sold in that jurisdiction.

In the event we fail to supply Allergan or its subsidiaries certain minimum
amounts of the product and fail to procure alternate suppliers for such products
within certain timeframes, Inamed will have the right to use certain of our
intellectual property and/or other proprietary information to manufacture the
product until such time as we demonstrate to Inamed's reasonable satisfaction
that we are fully able to resume our supply obligations. During such time as
Inamed controls product manufacturing, our royalty rate would be significantly
reduced.

In the event Allergan is required to discontinue the marketing, sale or
distribution of the product in the United States and/or any country in the
European Union because of problems with regulatory approvals and/or other
reasons related to the product, we will be required to repay Allergan portions
of the milestone payments up to $1,000,000.

Allergan may terminate the agreement by giving us 90 to 180 days' prior written
notice. We may terminate the agreement by giving 12 months' prior written notice
if Allergan fails to timely pay the minimum royalty amounts for any applicable
year or fails to meet the minimum sales requirements set forth in the agreement.
A non-breaching party may terminate the agreement following a material breach of
the agreement and the breaching party's failure to cure such breach during the
applicable cure period by giving the breaching party proper prior written
notice. If we are in material breach, and fail to cure, Inamed may have the
right to use certain of our intellectual property and/or other proprietary
information to manufacture the product. Our royalty rate would subsequently be
significantly reduced.

Neither party may assign or otherwise transfer its right and obligations under
the Agreement, including upon a change of control of such party (as defined in
the agreement), without the prior written consent of the other party, which
consent shall not be unreasonably withheld, except that Allergan may assign its
rights and obligations without our prior written consent to Allergan's
affiliates and upon a sale of all or substantially all of the assets or equity
of the business entity, division or unit, as applicable, that markets,
distributes or sells the product.

The agreement includes other terms and conditions, including provisions
regarding regulatory responsibilities, audit rights, insurance, indemnification
and confidentiality.

                           MANUFACTURER AND SUPPLIERS

                                  MANUFACTURER

We and ADM, our largest shareholder, are parties to a manufacturing agreement,
pursuant to which ADM serves as the exclusive manufacturer of all current and
future medical, non-medical electronic and other devices or products to be
produced by us. Pursuant to the terms of the manufacturing agreement, for each
product that ADM manufactures for us, we pay ADM an amount equal to 120% of the
sum of (i) the actual, invoiced cost for raw materials, parts, components or
other physical items that are used in the manufacture of the product and
actually purchased for us by ADM, if any, plus (ii) a labor charge based on
ADM's standard hourly manufacturing labor rate, which we believe is more
favorable then could be attained from unaffiliated third-parties. We generally
purchase and provide ADM with all of the raw materials, parts and components
necessary to manufacture our products and, as a result, the manufacturing fee
paid to ADM is generally 120% of the labor rate charged by ADM. On April 1,
2007, we instituted a procedure whereby ADM invoices us for finished goods at
ADM's cost plus 20 percent.

ADM warrants the products it manufactures for us against defects in material and
workmanship for a period of 90 days after the completion of manufacture. After
such 90-day period, ADM has agreed to provide repair services for the products
to us at its customary hourly repair rate plus the cost of any parts, components
or items necessary to repair the products unless we provide such parts,
components or items to ADM.

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Under our manufacturing agreement, all inventions, patentable or otherwise,
trade secrets, discoveries, ideas, writings, technology, know-how, improvements
or other advances or findings relating to our products and technologies shall be
and become the exclusive proprietary and confidential information of our company
or any person to whom we may have assigned rights therein. ADM has no rights in
any such proprietary or confidential information and is prohibited from using or
disclosing any of our proprietary or confidential information for its own
benefit or purposes, or for the benefit or purpose of any other person other
than us without our prior written consent. ADM has also agreed to cooperate with
us in securing for us any patents, copyrights, trademarks or the like which we
may seek to obtain in connection therewith. If ADM breaches any of the
confidentiality agreements contained in our manufacturing agreement, or if these
agreements are not sufficient to protect our technology or are found to be
unenforceable, our competitors could acquire and use information that we
consider to be our trade secrets and we may not be able to compete effectively.
We and ADM have agreed that all future technologies and products utilizing
non-invasive electrotherapeutic technologies will be developed and
commercialized by us and not ADM, unless we elect not to pursue such
technologies and products.

Since ADM is the exclusive manufacturer of all of our current and future
products, if the operations of ADM are interrupted or if our orders or orders of
other ADM customers exceed the manufacturing capabilities of ADM, ADM may not be
able to deliver our products to us on time and we may not be able to deliver our
products to our customers on time. Under the terms of the agreement, if ADM is
unable to perform its obligations under our manufacturing agreement or is
otherwise in breach of any provision of our manufacturing agreement, we have the
right, without penalty, to engage third parties to manufacture some or all of
our products. In addition, if we elect to utilize a third-party manufacturer to
supplement the manufacturing being completed by ADM, we have the right to
require ADM to accept delivery of our products from these third-party
manufacturers, finalize the manufacture of the products to the extent necessary
for us to comply with FDA regulations and ensure that the design, testing,
control, documentation and other quality assurance procedures during all aspects
of the manufacturing process have been met.

As the exclusive manufacturer of our products, ADM is required to comply with
Quality System Regulation, or QSR, requirements, which require manufacturers,
including third-party manufacturers, to follow stringent design, testing,
control, documentation and other quality assurance procedures during all aspects
of the manufacturing process. In addition, ADM's manufacturing facility is
required to be registered as a medical device manufacturing site with the FDA
and is subject to inspection by the FDA. ADM has been registered by the FDA as a
Registered Medical Device Establishment since 1988, allowing it to manufacture
medical devices in accordance with procedures outlined in FDA regulations, which
include quality control and related activities. Such registration is renewable
annually and although we do not believe that the registration will fail to be
renewed by the FDA, there can be no assurance of such renewal. The failure of
ADM to obtain any annual renewal would have a material adverse effect on us if
we were not able to secure another manufacturer of our product. If ADM fails to
comply with these requirements, we will need to find another company to
manufacture our products, which could delay the shipment of our product to our
customers.

We believe that it could take approximately 30-45 days to secure a third-party
manufacturer to supplement ADM's manufacturing capabilities and approximately
90-120 days to replace ADM as our sole manufacturer. However, although we
believe that there are a number of third-party manufacturers, other than ADM,
available to us, we cannot assure that we would be able to secure another
manufacturer on terms favorable to us or at all or how long it will take us to
secure such manufacturing.

The term of the manufacturing agreement expires on March 31, 2009, subject to
automatic renewals for additional one-year periods, unless either party provides
three months' prior written notice to the other prior to the end of the relevant
term of its desire to terminate the agreement. See "Item 12. Certain
Relationships and Related Transactions and Director Independence".

                                    SUPPLIERS

As of April 1, 2007, we purchase only finished products from ADM. Previously, we
purchased and provided ADM with the raw materials, parts, components and other
items that are required to manufacture our products. ADM relies on a single or
limited number of suppliers for such raw materials, parts, components and other
items. Although there are many suppliers for each of these raw materials, parts,
components and other items, ADM is dependent on a limited number of suppliers
for many of the significant raw materials and components. ADM does not have any
long-term or exclusive purchase commitments with any of its suppliers. ADM's
failure to maintain existing relationships with their suppliers or to establish
new relationships in the future could also negatively affect their ability to
obtain raw materials and components used in our products in a timely manner. If
ADM is unable to obtain ample supply of product from its existing suppliers or
alternative sources of supply, we may be unable to satisfy our customers' orders
which could reduce our revenues and adversely affect our relationship with our
customers.

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COMPETITION

The manufacture, distribution and sale of medical devices and equipment designed
to relieve swelling and pain or to treat chronic wounds is highly competitive
and many of our competitors possess significant product sales, and greater
experience, financial resources, operating history and marketing capabilities
than us. For example, Diapulse Corporation of America, Inc. manufactures and
markets devices that are deemed by the FDA to be substantially equivalent to
some of our products, Regenesis Biomedical manufactures and markets a device
that is similar to our first generation device; BioElectronics Corporation
developed and markets the ActiPatch(TM), a medical dermal patch that delivers
tPEMF therapy to soft tissue injuries; and Kinetics Concepts, Inc. manufactures
and markets negative pressure wound therapy devices in the wound care market. A
number of other manufacturers, both domestic and foreign, and distributors
market shortwave diathermy devices that produce deep tissue heat and that may be
used for the treatment of certain of the medical conditions that our products
are used for. Our products may also compete with pain relief drugs as well as
pain relief medical devices, as well as other forms of treatment, such as
hyperbaric oxygen chambers, thermal therapies and hydrotherapy. Other companies
with substantially larger expertise and resources than ours may develop or
market new products and technologies that directly compete with our current
products or other products or technologies developed by us and which may achieve
more rapid acceptance in the medical community. Several other companies
manufacture medical devices based on the principle of electrotherapeutic
technologies for applications in bone healing and spinal fusion, and may adapt
their technologies or products to compete directly with us. Also, universities
and research organizations may actively engage in research and development to
develop technologies or products that will compete with our technologies and
products. Barriers to entry in our industry include (i) a large investment in
research and development; (ii) numerous costly and time-consuming regulatory
hurdles to overcome before any products can be marketed and sold; (iii) high
costs for marketing and for building an effective distribution network; and (iv)
the ability to obtain financing during the entire start up period.

Our ability to commercially exploit our products must be considered in light of
the problems, expenses, difficulties, complications and delays frequently
encountered in connection with the development of new medical processes, devices
and products and their level of acceptance by the medical community. Our
competitors may succeed in developing competing products and technologies that
are more effective than our products and technologies, or that receive
government approvals more quickly than our new products and technologies, which
may render our existing and new products or technology uncompetitive,
uneconomical or obsolete.

We believe that in order to become, and continue to be, competitive, we will
need to develop and maintain competitive products and to take and hold
sufficient market share. Our methods of competition include (i) continuing our
efforts to develop and sell products, which, when compared to existing products,
perform more efficiently and are available at prices that are acceptable to the
market; (ii) displaying our products and providing associated literature at
major industry trade shows; (iii) initiating discussions with and educating the
medical community to develop interest in our products; and (iv) pursuing
alliance opportunities for the distribution of our products. We further believe
that our competitive advantages with respect to our products include:

o the clinical efficacy of our technology and products, as documented in
publications regarding the efficacy of the technology underlying our products
and the clinical research and studies performed with respect to our products,
and as reinforced by the FDA clearance of our products for the treatment of
edema and pain in soft tissue and Medicare's reimbursement for the use of
electromagnetic therapy for the treatment of chronic wounds;

o the benefits of treatments utilizing our products, which include treatments
that are non-invasive and painless, are free from known side-effects and are not
susceptible to overdose or abuse, do not require special training to implement,
may be applied to any part of the body and do not require prescriptions;

o our continued efforts to protect the technology relating to our products
through patents and trade secrets, including three existing patents, eight
non-provisional U.S. patent applications and one provisional U.S. patent
pending; and

o the relevant experience of the members of our advisory boards, the Medical
Advisory Board, which includes, among others, Dr. Berish Strauch, an
internationally recognized surgeon, and the Scientific Advisory Board, which is
led by Dr. Arthur Pilla, a principal innovator in tPEMF technology.

                               MANAGEMENT SERVICES

In order to keep our operating expenses manageable, we and ADM are parties to a
management and services agreement under which ADM provides us with services
relating to equipment manufactured by ADM and allocates portions of its real
property facilities for use by our five Research and Development employees who
maintain offices at the ADM facility. Our reliance on the management services
agreement with ADM has been reduced significantly as a result of us moving all
of our employees, except Research and Development into a new facility during
December, 2007.

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We use office, manufacturing and storage space in a building located in
Northvale, New Jersey, currently leased by ADM, pursuant to the terms of the
management services agreement. ADM determines the portion of space allocated to
us on a monthly basis, and we are required to reimburse ADM for our respective
portions of the lease costs, real property taxes and related costs. See "Item 2.
Properties" and "Item 12. Certain Relationships and Related Transactions and
Director Independence" of this Annual Report on Form 10-KSB.

In addition, on February 1, 2008, we entered into an information technology
("IT") service agreement with ADM. Pursuant to this agreement, we share certain
costs related to hardware, software and employees. We have not billed ADM nor
has ADM billed us for any charges under this agreement for the year end March
31, 2008.

GOVERNMENT REGULATION

Our product is a medical device subject to extensive and rigorous regulation by
the FDA, as well as other federal and state regulatory bodies. The FDA
regulations govern the following activities that we perform and will continue to
perform to help ensure that medical products distributed worldwide are safe and
effective for their intended uses among others:

o     product design and development;

o     product testing;

o     product manufacturing;

o     product safety and effectiveness;

o     product labeling;

o     product storage;

o     record keeping;

o     pre-market clearance or approval;

o     advertising and promotion;

o     production;

o     product sales and distribution; and

o     adverse event reporting.

In response to a 510(k) pre-market notification submitted by EPI, to the FDA in
late 1990, on January 17, 1991, EPI received from the FDA clearance to begin
marketing its magnetic resonance therapy device, which we currently refer to as
the SofPulse. The FDA cleared the use of the SofPulse, which utilizes our tPEMF
technology, for the adjunctive use in the palliative treatment of post-operative
pain and edema in superficial tissue. Since the date of the 510(k) clearance
with respect to the marketing of the SofPulse was granted in 1991, we have made
some modifications to the SofPulse, which resulted in the development of our
current products, including the SofPulse M-10, the Roma(3), the Torino I and the
Torino II. We believe based on guidance published by the FDA, that all of our
current products are covered by the FDA clearance provided in 1991.
Specifically, because we do not believe that any of the changes, or the sum of
the incremental changes made, to the SofPulse in our current products could
significantly affect the safety or effectiveness of the SofPulse, we believe
that the marketing of our current products is sufficiently covered by the FDA
clearance provided in 1991 and does not require a submission of another 510(k)
premarket notification. However, in February, 2007, in response to inquiries
from the FDA, we voluntarily submitted a 510(k) for our current products, the
SofPulse M-10, Roma and Torino PEMF products. We have had discussions with the
FDA regarding our application and we received various requests from the FDA for
additional information, which information has been delivered to the FDA.
Following the delivery of such information, we received a letter from the FDA
regarding our voluntarily submitted 510(k) for our current products, the
SofPulse M-10, Roma and Torino tPEMF products. The letter stated that the FDA
determined that such products are not substantially equivalent to devices
marketed in interstate commerce prior to May 28, 1976 or to any device which has
been classified into Class I (General Controls) or Class II (Special Controls)
or to another device found to be substantially equivalent through the 510(k)
process. We believe the FDA made an incorrect assessment of the data and we have
undertaken efforts to have the FDA reconsider the information we have provided
by informally appealing the FDA determination while maintaining the ability to
formally appeal pursuant to established FDA regulations and guidance. We
discussed our position with the FDA in a meeting conducted in early June 2008
and sent the FDA further information subsequent to the meeting as requested by
the FDA. We are awaiting its response to our meeting and subsequent submission.

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We believe based upon regulations and guidance published by the FDA, as well
discussions with our independent expert consultants, including former FDA
officials, that all of our current products are covered by the FDA clearance
provided in 1991. Based upon the safety and efficacy of our products, we do not
believe the FDA will require us to cease marketing and/or recall current
products which have been already sold, or rented. However, if we are
unsuccessful in our efforts to have the FDA reconsider the data and it does not
modify its determination, the FDA may require us to do so until FDA marketing
clearance is obtained.

If the FDA does not grant the 510(k) clearance for our current products, the FDA
may require us to cease marketing and/or recall current products already sold or
rented until FDA clearance or approval is obtained. In addition, the FDA could
subject us to the other sanctions described in our Form 10-KSB under "Pervasive
and Continuing Regulation." On April 3, 2008, we filed a Pre-Market Notification
on Form 510(k) with the US Food and Drug Administration ("FDA") for a small,
compact product utilizing our targeted pulsed electromagnetic field ("tPEMF")
therapy technology for the symptomatic relief and management of chronic,
intractable pain; relief of pain associated with arthritis and for the
adjunctive treatment for post-surgical and post-trauma acute pain. Although
clearance to market this product could be granted to us by the FDA as early as
90 days from the date of filing of the application, the FDA has requested
additional from us in a letter dated, April 25, 2008. We are consulting with our
FDA consultants in order to respond to the additional information requested from
the FDA. We cannot be assured that we will be successful in obtaining FDA
clearance and, without such clearance we will be unable to enter the muskular
skeletel pain relief market. There are numerous medications used in the
treatment of pain and if we receive clearance to market this product we intend
to offer it as an alternative to such medications. These commonplace medications
have been required to carry warning labels due to potential dangerous
side-effects (and some withdrawn altogether), as compared to our non-invasive,
non-pharmacologic alternative device with no known side-effects. We continue to
be engaged in research and development for additional medical applications of
our technology and we expect to file 510(k) applications for such additional
applications in the future.

              FDA'S PRE-MARKET CLEARANCE AND APPROVAL REQUIREMENTS

Unless an exemption applies, each medical device we wish to commercially
distribute in the United States will require either prior 510(k) clearance or
pre-market approval (PMA) from the FDA. The FDA classifies medical devices into
one of three classes. Devices deemed to pose lower risks are placed in either
class I or II, which in many cases requires the manufacturer to submit to the
FDA a pre-market notification requesting permission to commercially distribute
the device. This process is generally known as 510(k) submission and clearance.
Some low risk devices are exempt from this requirement. Devices deemed by the
FDA to pose the greatest risk, such as many life-sustaining, life-supporting or
implantable devices, or devices deemed not substantially equivalent to a
previously cleared 510(k) device, are placed in class III, requiring pre-market
approval.

510(K) CLEARANCE PATHWAY

When a 510(k) clearance is required, we must submit a pre-market notification
demonstrating that our proposed device is substantially equivalent to a
previously cleared 510(k) device or a device that was in commercial distribution
before May 28, 1976 for which the FDA has not yet called for the submission of
pre-market approval applications. By regulation, the FDA is required to review a
510(k) pre-market notification within 90 days of submission of the application.
As a practical matter, clearance often takes significantly longer. The FDA may
require further information, including clinical data, to make a determination
regarding substantial equivalence.

                           PRE-MARKET APPROVAL PATHWAY

A pre-market approval application must be submitted to the FDA if the device
cannot be cleared through the 510(k) process or granted "DO NOVO"
classification. The process of submitting a satisfactory pre-market approval
application is significantly more expensive, complex and time consuming than the
process of establishing "substantial equivalence" pursuant to a pre-market
notification and requires extensive research and clinical studies. A pre-market
approval application must be supported by extensive data, including, but not
limited to, technical, preclinical, clinical trials, manufacturing and labeling
to demonstrate to the FDA's satisfaction the safety and effectiveness of the
device. Upon completion of these tasks, an applicant is required to submit to
the FDA all relevant clinical, animal testing, manufacturing, laboratory
specifications and other information. If accepted for filing, the application is
further reviewed by the FDA and subsequently may be reviewed by an FDA
scientific advisory panel comprised of physicians, statisticians and other
qualified personnel. A public meeting may be held before the advisory panel in
which the pre-market approval application is reviewed and discussed. Upon
completion of such process, the advisory panel issues a favorable or unfavorable
recommendation to the FDA or recommends approval with conditions. The FDA is not
bound by the opinion of the advisory panel. The FDA may conduct an inspection to

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<PAGE>

determine whether the applicant conforms to QSR requirements. If the FDA's
evaluation is favorable, the FDA will subsequently publish a letter approving
the pre-market approval application for the device for a particular indication
for use. Interested parties can file comments on the order and seek further FDA
review. The pre-market approval process may take several years and no assurance
can be given concerning the ultimate outcome of pre-market approval applications
submitted by an applicant.

No device that we have developed has required pre-market approval. In January
1991, however, the FDA advised EPI of its determination to treat the MRT100, the
first product produced, as a class III device. The FDA retains the right to
require the manufacturers of certain Class III medical devices to submit a
pre-market approval application in order to sell such devices or to promote such
devices for specific indications. To date, we have not been asked by the FDA to
seek pre-market approval for our products; however, there can be no assurance
that we will not be required to do so in the future and that, if required, we
will be able to comply with such requirement.

                       PERVASIVE AND CONTINUING REGULATION

After a device is placed on the market, numerous regulatory requirements apply.
These include:

o     Quality System Regulations, or QSR, which require finished device
      manufacturers, including contract manufacturers, to follow stringent
      design, testing, control, documentation and other quality assurance
      procedures during all aspects of the manufacturing process;

o     labeling regulations and FDA prohibitions against the promotion of
      products for uncleared, unapproved or "off-label" uses;

o     medical device reporting regulations, which require that manufacturers
      report to the FDA if their device may have caused or contributed to a
      death or serious injury or malfunctioned in a way that would likely cause
      or contribute to a death or serious injury if the malfunction of that or a
      similar company device were to recur; and

o     post-market surveillance regulations, which apply when necessary to
      protect the public health or to provide additional safety and
      effectiveness data for the device.

The FDA has broad post-market and regulatory enforcement powers. We are subject
to unannounced inspections by the FDA to determine our compliance with the QSR
and other regulations, and these inspections include the manufacturing
facilities of ADM, the exclusive manufacturer of our products, or any other
manufacturing subcontractors that we may engage. ADM has been registered with
the FDA as a Medical Device Establishment. Such registration is renewable
annually and although we do not believe that the registration will fail to be
renewed by the FDA, there can be no assurance of such renewal. The failure of
ADM to obtain any annual renewal would have a material adverse effect on us if
we were not able to secure another manufacturer of our product. If ADM fails to
comply with these requirements, we will need to find another company to
manufacture our products which could delay the shipment of our product to our
customers.

Failure to comply with applicable regulatory requirements can result in
enforcement action by the FDA or the Department of Justice, which may include
any of the following sanctions, among others:

o     fines, injunctions and civil penalties;

o     mandatory recall or seizure of our products;

o     operating restrictions and partial suspension or total shutdown of
      production;

o     refusing our requests for 510(k) clearance or pre-market approval of new
      products or new intended uses;

o     withdrawing 510(k) clearance or pre-market approvals that are already
      granted; and

o     criminal prosecution.

The FDA also has the authority to require us to repair, replace or refund the
cost of any medical device that has been manufactured for us or distributed by
us. If any of these events were to occur, they could have a material adverse
effect on our business.

We also are subject to a wide range of federal, state and local laws and
regulations, including those related to the environment, health and safety, land
use and quality assurance. We believe that we and ADM are in substantial
compliance with these laws and regulations as currently in effect, and our
compliance with such laws will not have a material adverse effect on our capital
expenditures, earnings and competitive and financial position.

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                            INTERNATIONAL REGULATIONS

International sales of medical devices are subject to foreign governmental
regulations, which vary substantially from country to country. The time required
to obtain clearance or approval by a foreign country may be longer or shorter
than that required for FDA clearance or approval, and the requirements may be
different. There can be no assurance that we will be successful in obtaining or
maintaining necessary approvals to market our products in certain foreign
markets, or obtain such approvals for additional products that may be developed
or acquired by us.

The primary regulatory environment in Europe is that of the European Union,
which consists of 27 countries encompassing most of the major countries in
Europe. Three member states of the European Free Trade Association have
voluntarily adopted laws and regulations that mirror those of the European Union
with respect to medical devices. Other countries, such as Switzerland, have
entered into Mutual Recognition Agreements and allow the marketing of medical
devices that meet European Union requirements.

The European Union has adopted numerous directives and European Standardization
Committees have promulgated voluntary standards regulating the design,
manufacture, clinical trials, labeling and adverse event reporting for medical
devices. Devices that comply with the requirements of a relevant directive will
be entitled to bear a CE conformity marking (which stands for Conformite
Europeenne), indicating that the device conforms with the essential requirements
of the applicable directives and, accordingly, can be commercially distributed
throughout the member states of the European Union, the member states of the
European Free Trade Association and countries which have entered into a Mutual
Recognition Agreement. The method of assessing conformity varies depending on
the type and class of the product, but normally involves a combination of
self-assessment by the manufacturer of the product and a third-party assessment
by a Notified Body, an independent and neutral institution appointed by a
country to conduct the conformity assessment. This third-party assessment may
consist of an audit of the manufacturer's quality system and specific testing of
the manufacturer's device. An assessment by a Notified Body in one member state
of the European Union, the European Free Trade Association or one country which
has entered into a Mutual Recognition Agreement is required in order for a
manufacturer to commercially distribute the product throughout these countries.
ISO 9001 and ISO 13845 certification are voluntary harmonized standards.
Compliance establishes the presumption of conformity with the essential
requirements for a CE Marking. In April 2007, we initiated our application for
CE Marking approval for our Roma and Torino products and in June 2007, we
received approval for CE Marking of such products. In addition, our Roma and
Torino products are ISO 13485 certified and have received ETL safety
certifications.

REIMBURSEMENT

Our products are rented principally to nursing homes and extended care
facilities that receive payment coverage for products and services they utilize
from various public and private third-party payors, including the Medicare
program and private insurance plans. As a result, the demand and payment for our
products are dependent, in part, on the reimbursement policies of these payors.
The manner in which reimbursement is sought and obtained for any of our products
varies based upon the type of payor involved and the setting to which the
product is furnished and in which it is utilized by patients.

We cannot determine the effect of changes in the healthcare system or method of
reimbursement in the United States for our products or any other products that
may be produced by us in the United States. For example, from 1991 to 1997,
products utilizing our technology were marketed primarily for use in nursing
homes for the Medicare reimbursable treatment of chronic wounds through a rental
program. Due to changes in reimbursement made by CMS, in 1997, which prohibited
Medicare coverage of the use of the technology used in our products in the
treatment of non-healing wounds, the nursing home revenue diminished
significantly by 2001 and we pursued alternative markets and applications for
use of our technology. In December 2003, CMS reversed its policy, clearing the
way for issuance of an NCD authorizing Medicare coverage of electromagnetic
therapy for wound treatment under the conditions described below. In response to
this significant regulatory change, we re-entered the wound care market.

CMS has not yet cleared separate reimbursement for the use of the technology
used in our products in the home health setting. Accordingly, in December 2005,
we retained a consulting company specializing in CMS reimbursement and coverage
matters to assist us in arranging and preparing for a meeting with CMS to
request such clearance. In May 2006, with the assistance of this consulting
company, we held a meeting with CMS and made a presentation in support of
separate reimbursement for the use of the technology used in our products in the
home health setting. In February 2008 we received a letter from CMS in response
to an informal review we requested in order to obtain reimbursement for our
devices from CMS. Our regulatory consultants specializing in this area have
reviewed CMS's request for further information and we have decided to clear our
regulatory issues with the FDA before we pursue a response to CMS. Even if we
were to obtain clearance from CMS for the separate reimbursement of the
technology used in our products in the home health setting, the regulatory
environment could again be changed to bar CMS coverage for treatment of chronic
wounds utilizing the technology used in our products, whether for home health
use or otherwise, which could limit the amount of coverage patients or providers
are entitled to receive for electromagnetic wound therapy.

                                       22

<PAGE>

We believe that government and private efforts to contain or reduce health care
costs are likely to continue. These trends may cause payors to deny or limit
reimbursement for our products, which could negatively impact the pricing and
profitability of, or demand for, our products.

                                    MEDICARE

Medicare is a federally funded program that provides health coverage primarily
to the elderly and disabled. Medicare is composed of four parts: Part A, Part B,
Part C and Part D. Medicare Part A (hospital insurance) covers, among other
things, inpatient hospital care, home health care and skilled nursing facility
services. Medicare Part B (supplementary medical insurance) covers various
services, including those services provided on an outpatient basis. Medicare
Part B also covers medically necessary durable medical equipment and medical
supplies. Medicare Part C, also known as "Medicare Advantage," offers
beneficiaries a choice of various types of health care plans, including several
managed care options. Medicare Part D is the new Voluntary Prescription Drug
Benefit Program, which became effective in 2006.

The Medicare program has established guidelines for the coverage and
reimbursement of certain equipment, supplies and support services. In general,
in order to be reimbursed by Medicare, a healthcare item or service furnished to
a Medicare beneficiary must be reasonable and necessary for the diagnosis or
treatment of an illness or injury or to improve the functioning of a malformed
body part and not otherwise excluded by statute.

CMS may adopt an NCD concerning items and services that will or will not be
covered. NCD's establish substantive legal standards for Medicare coverage of
specific items or services on a national basis to be followed by all Medicare
contracted intermediaries and carriers.

In 2004, CMS issued an NCD for Electrical Stimulation and Electromagnetic
Therapy for the Treatment of Wounds. Effective July 1, 2004, CMS covers
electromagnetic therapy for chronic stage III or stage IV pressure ulcers
(ulcers that have not healed within 30 days of occurrence), arterial ulcers,
diabetic ulcers, and venous stasis ulcers. Electromagnetic therapy services will
be covered only when performed by a physician, physical therapist, or incident
to a physician service. Unsupervised therapy for wound treatment will not be
covered, nor will the service be covered as an initial treatment modality.
Coverage begins only after appropriate standard would therapy has been tried for
at least 30 days and there are no measurable signs of improved healing. Medicare
does not cover the device used for electromagnetic treatment of wounds.

The NCD provides that electromagnetic therapy for wound treatment will be
covered only after appropriate standard wound treatment has been tried for at
least 30 days with no measurable signs of healing. Additionally, wounds
undergoing treatment by electromagnetic therapy must be evaluated at least
monthly by the treating physician. Medicare will not continue to cover the
treatment if the wound shows no measurable signs of improvement within any 30
day period of treatment or if certain other conditions exist following
treatment. Local Medicare contractors have some discretion to cover other uses
of electromagnetic therapy not specified in the NCD. Non-governmental payors
often adopt coverage conditions based on the NCD's issued for the applicable
therapy or service.

The methodology for determining the amount of Medicare reimbursement of our
products varies based upon, among other things, the setting in which a Medicare
beneficiary receives health care items and services. A discussion of Medicare
coverage for electromagnetic therapy for the treatment of wounds in various
settings is discussed below.

                                HOSPITAL SETTING

Since the establishment of the prospective payment system in 1983, acute care
hospitals are generally reimbursed for certain patients by Medicare for
inpatient operating costs based upon prospectively determined rates. Under the
prospective payment system, or PPS, acute care hospitals receive a predetermined
payment rate based upon the Diagnosis-Related Group, or DRG, which is assigned
to each Medicare beneficiary's stay, regardless of the actual cost of the
services provided. Certain additional or "outlier" payments may be made to a
hospital for cases involving unusually high costs or lengths of stay.
Accordingly, acute care hospitals generally do not receive direct Medicare
reimbursement under PPS for the distinct costs incurred in purchasing or renting
our products. Rather, reimbursement for these costs is included within the
DRG-based payments made to hospitals for the treatment of Medicare-eligible
inpatients who utilize the products. Long-term care and rehabilitation hospitals
also are now paid under a PPS rate that does not directly account for all actual
services rendered. Since PPS payments are based on predetermined rates, and may
be less than a hospital's actual costs in furnishing care, hospitals have
incentives to lower their inpatient operating costs by utilizing equipment and
supplies, such as our products, that are effective in treating patients more
quickly than traditional methods. The amount that the hospital receives under
PPS could limit the amount that we could charge a hospital for the use of our
products.

                                       23

<PAGE>

Certain specialty hospitals also use our products. Such specialty hospitals are
exempt from the PPS and, subject to certain cost ceilings, are reimbursed by
Medicare on a reasonable cost basis for inpatient operating and capital costs
incurred in treating Medicare beneficiaries. Such hospitals may have additional
Medicare reimbursement for reasonable costs incurred in the use of our products.

                        SKILLED NURSING FACILITY SETTING

On July 1, 1998, reimbursement for SNFs under Medicare Part A changed from a
cost-based system to a prospective payment system which is based on resource
utilization groups, or RUGs. Under the RUGs system, a Medicare patient in a SNF
is assigned to a RUGs category upon admission to the facility. The RUGs category
to which the patient is assigned depends upon the medical services and
functional support the patient is expected to require. The SNF receives a
prospectively determined daily payment based upon the RUGs category assigned to
each Medicare patient. These payments are intended generally to cover all
inpatient services for Medicare patients, including routine nursing care,
capital-related costs associated with the inpatient stay and ancillary services.
Effective July 2002, the daily payments were based on the national average cost.
Effective January 1, 2006, refinements to the RUG's decreased reimbursement for
therapy services. Because SNF's are paid on a fixed daily cost reimbursement,
SNFs have become less inclined to use products which had previously been
reimbursed as variable ancillary costs.

                               HOME HEALTH SETTING

The Balanced Budget Act of 1997 requires consolidated Medicare billing on a
prospective payment basis of all home health services provided to a beneficiary
under a home health plan of care authorized by a physician. Only the home health
agency overseeing the beneficiary's plan of care may bill Medicare for all such
covered items and services falling under that plan of care.

In 2004, CMS added electromagnetic therapy as a type of service payable in the
home health setting, but subject to Medicare's consolidated home health billing
provisions. Thus, Medicare will not pay separately for electromagnetic therapy
services. In December 2005, we retained a consulting company specializing in CMS
reimbursement and coverage matters to assist us in arranging and preparing for a
meeting with CMS to request that CMS cover electromagnetic therapy for wound
treatment separately in the home health setting. In May 2006, with the
assistance of this consulting company, we held a meeting with CMS and made a
presentation in support of reimbursement for the home health use of the
technology used in our products. In February 2008 we received a letter from CMS
in response to an informal review we requested in order to obtain reimbursement
for our devices from CMS. Our regulatory consultants specializing in this area
have reviewed CMS's request for further information and we have decided to clear
our regulatory issues with the FDA before we pursue a response to CMS.

                                 OTHER SETTINGS

Medicare will also reimburse electromagnetic therapy for wound treatment under
Medicare Parts A and B as appropriate by physicians and by therapists and at
federally qualified health centers, rural health clinics, and critical access
hospitals.

PRODUCT LIABILITY AND INSURANCE

We may be exposed to potential product liability claims by those who use our
products. Therefore, we maintain a general liability insurance policy, which
includes aggregate product liability coverage of $10,000,000 for products.

We believe that our present insurance coverage is adequate for the types of
products currently marketed. There can be no assurance, however, that such
insurance will be sufficient to cover potential claims or that the present level
of coverage, or increased coverage, will be available in the future at a
reasonable cost.

EMPLOYEES

At June 17, 2008, we had 25 full-time salaried employees, including 11 in
executive managerial and administrative positions and 8 in sales and marketing
positions and 6 in research and development positions. In addition, we have
three part time hourly employees.

We intend to add employees to our technical staff, sales and marketing staff and
administrative staff during the year ending March 31, 2009. We expect to add
additional employees for sales, laboratory and research/development positions.
We intend to utilize independent sales organizations and manufacturer's
representatives to promote our products on a commission basis and thereby avoid
the expense of creating an in-house sales capability.

None of our employees are represented by unions or collective bargaining
agreements. We believe that our relationships with our employees are good.

                                       24

<PAGE>

COMPANY HISTORY

We were incorporated under the laws of the State of New Jersey in March 1989
under the name AA Northvale Medical Associates, Inc. as a subsidiary of ADM (OTC
BB: ADMT.OB), our largest shareholder (which holds approximately 30.3% of the
outstanding shares of our common stock). From March 1989 until August 1998, we
had very limited operations, which included the operation of medical clinics for
conducting clinical studies on certain products of ADM. In August 1998, ADM
purchased certain assets from Electropharmacology, Inc. (formerly known as MRI,
Inc.), or EPI, that were then used by EPI in connection with its device
business, including the right to use the EPI patents, and immediately
transferred all of those assets to us. The assets included all of EPI's rights,
title and interest in its device business as well as certain rights related to
three patents related to the tPEMF technology that were issued in 1994, 1996 and
1998. In January 2000, we acquired all of the rights to the EPI patents. In
April 2003, we acquired the operations of five former subsidiaries of ADM, and
in August 2004, we changed our name to Ivivi Technologies, Inc. While we have
conducted development and sales and marketing activities, we have generated
limited revenues and have incurred significant losses to date.

AVAILABLE INFORMATION

We maintain a website at www.ivivitechnologies.com. We make available free of
charge on our website all electronic filings with the Securities and Exchange
Commission (including proxy statements and reports on Forms 10-KSB, 10-QSB and
8-K and any amendments to these reports) as soon as reasonably practicable after
such material is electronically filed with or furnished to the Securities and
Exchange Commission. The Securities and Exchange Commission maintains an
internet site (http://www.sec.gov) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the Securities and Exchange Commission.

We have also posted policies, codes and procedures that outline our corporate
governance principles, including the charters of the board's audit and
nominating and corporate governance committees, and our Code of Ethics covering
directors and all employees and the Code of Ethics for senior financial officers
on our website. These materials also are available free of charge in print to
stockholders who request them in writing. The information contained on our
website does not constitute a part of this report.

RISK FACTORS

AN INVESTMENT IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, TOGETHER WITH THE
OTHER INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 10-KSB, BEFORE BUYING
OUR COMMON STOCK. THESE RISKS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND THE VALUE OF OUR
COMMON STOCK.

                          RISKS AFFECTING OUR BUSINESS

WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR POTENTIAL FOR
FUTURE SUCCESS AND DETERMINE IF WE WILL BE ABLE TO EXECUTE OUR BUSINESS PLAN.
THIS MAKES IT DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS AND THE RISK OF SUCCESS
OR FAILURE OF OUR BUSINESS.

We were formed in 1989, but had very limited operations until 1998 when we
acquired the assets utilized by EPI in connection with its medical device
business and your evaluation of our business and prospects will be based partly
on our limited operating history. While we have conducted development and sales
and marketing activities, we have generated limited revenues to date.
Consequently, our historical results of operations may not give you an accurate
indication of our future results of operations or prospects. You must consider
our business and prospects in light of the risks and difficulties we will
encounter as an early-stage company in a new and rapidly evolving market. These
risks include:

o     our ability to effectively and efficiently market and distribute our
      products through our sales force and third-party distributors;

o     the ability of ADM or other manufacturers utilized by us to effectively
      and efficiently manufacture our products;

o     our ability to obtain market acceptance of our current products and future
      products that may be developed by us;

o     our ability to sell our products at competitive prices which exceed our
      per unit costs; and

o     our ability to obtain regulatory approval or clearance of our products.

We may not be able to address these risks and difficulties, which could
materially and adversely affect our revenues, operating results and our ability
to continue to operate our business.

                                       25

<PAGE>

WE HAVE A HISTORY OF SIGNIFICANT AND CONTINUED OPERATING LOSSES AND A
SUBSTANTIAL ACCUMULATED EARNINGS DEFICIT AND WE MAY CONTINUE TO INCUR
SIGNIFICANT LOSSES.

We have generated only limited revenues from product sales and have incurred net
losses of approximately $7.5 and $7.8 million for the fiscal years ended March
31, 2008 and 2007, respectively. At March 31, 2008, we had an accumulated
deficit of approximately $31.2 million. We expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our marketing efforts with respect to our
products and to continue our research and development of additional applications
for our products as well as new products utilizing our tPEMF technology and
other technologies that we may develop in the future. Our ability to increase
our revenues from sales of our current products and other products developed by
us will depend on:

o     increased market acceptance and sales of our current products;

o     commercialization and market acceptance of new technologies and products
      under development; and

o     medical community awareness.

WE WILL NEED ADDITIONAL CAPITAL TO MARKET OUR PRODUCTS AND TO DEVELOP AND
COMMERCIALIZE NEW TECHNOLOGIES AND PRODUCTS AND IT IS UNCERTAIN WHETHER SUCH
CAPITAL WILL BE AVAILABLE.

Our business is capital intensive and we will require additional financing in
order to:

o     fund research and development;

o     expand sales and marketing activities;

o     develop new or enhanced technologies or products;

o     maintain and establish regulatory compliance;

o     respond to competitive pressures; and

o     acquire complementary technologies or take advantage of unanticipated
      opportunities.

Our need for additional capital will depend on:

o     the costs and progress of our research and development efforts;

o     the preparation of pre-market application submissions to the FDA for our
      new products and technologies and costs associated therewith;

o     the number and types of product development programs undertaken;

o     the number of products we have manufactured for sale or rental;

o     the costs and timing of expansion of sales and marketing activities;

o     the amount of revenues from sales of our existing and potentially new
      products;

o     the cost of obtaining and maintaining, enforcing and defending patents and
      other intellectual property rights;

o     competing technological and market developments; and

o     developments related to regulatory and third-party coverage matters.

Although we expect that our available funds, together with funds from
operations, will be sufficient to meet our anticipated needs for the current
period through March 31, 2009, we will need to obtain additional capital to
continue to operate and grow our business. Our cash requirements may vary
materially from those currently anticipated due to changes in our operations,
including our marketing and distribution activities, product development,
research and development, regulatory requirements, and expansion of our
personnel and the timing of our receipt of revenues, including royalty payments.
Our ability to obtain additional financing in the future will depend in part
upon the prevailing capital market conditions, as well as our business
performance. There can be no assurance that we will be successful in our efforts
to arrange additional financing on terms satisfactory to us or at all. If
additional financing is raised by the issuance of common stock you may suffer
additional dilution and if additional financing is raised through debt
financing, it may involve significant restrictive covenants which could affect
our ability to operate our business. If adequate funds are not available, or are
not available on acceptable terms, we may not be able to continue our
operations, grow our business or take advantage of opportunities or otherwise
respond to competitive pressures and remain in business. In addition, we may
incur significant costs in connection with any potential financing, whether or
not we are successful in raising additional capital.

                                       26

<PAGE>

WE HAVE HAD DIFFICULTIES WITH OUR FINANCIAL ACCOUNTING CONTROLS IN THE PAST. IF
WE ARE UNABLE TO ESTABLISH APPROPRIATE INTERNAL FINANCIAL REPORTING CONTROLS AND
PROCEDURES, IT COULD CAUSE US TO FAIL TO MEET OUR REPORTING OBLIGATIONS, RESULT
IN THE RESTATEMENT OF OUR FINANCIAL STATEMENTS, HARM OUR OPERATING RESULTS,
SUBJECT US TO REGULATORY SCRUTINY AND SANCTION, CAUSE INVESTORS TO LOSE
CONFIDENCE IN OUR REPORTED FINANCIAL INFORMATION AND HAVE A NEGATIVE EFFECT ON
THE MARKET PRICE FOR SHARES OF OUR COMMON STOCK.

Effective internal controls are necessary for us to provide reliable financial
reports and effectively prevent fraud. We maintain a system of internal control
over financial reporting, which is defined as a process designed by, or under
the supervision of, our principal executive officer and principal financial
officer, or persons performing similar functions, and effected by our board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.

As noted below, we have had difficulties with our financial controls in the
past. As a public company, we have significant requirements for enhanced
financial reporting and internal controls. See discussion under "Item 8A.
Controls and Procedures" of this Annual Report on Form 10-KSB. We are required
to document and test our internal control procedures in order to satisfy the
requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires
annual management assessments of the effectiveness of our internal controls over
financial reporting. As of March 31, 2010 we will be required to include in our
annual report on Form 10-KSB a report by our independent registered public
accounting firm addressing these assessments. The process of designing and
implementing effective internal controls is a continuous effort that requires us
to anticipate and react to changes in our business and the economic and
regulatory environments and to expend significant resources to maintain a system
of internal controls that is adequate to satisfy our reporting obligations as a
public company.

On or about March 28, 2006, Stonefield Josephson, Inc., our former independent
auditors, advised us in writing and discussed with us orally its views regarding
certain areas requiring improvement in our internal control over financial
reporting. The areas requiring improvement were generally: (i) lack of staff
with technical accounting expertise to independently apply our accounting
policies in accordance with accounting principles generally accepted in the
United States, (ii) improper cut off procedures and (iii) lack of adequate
back-up and documentation procedures with respect to our inventory prior to
March 31, 2005 and with respect to stock options previously granted by us. Our
management has determined that, due to the reasons described above, we had not
consistently followed established internal control over financial reporting
procedures related to the analysis, documentation and review of selection of the
appropriate accounting treatment for certain transactions.

Although we have assigned the highest priority to the improvement in our
internal control over financial reporting and have taken, and will continue to
take, action in furtherance of such improvement, we cannot assure you that the
above-mentioned areas will be fully remedied, if ever. Moreover, we cannot
assure you that we will not, in the future, identify further areas requiring
improvement in our internal control over financial reporting. We cannot assure
you that the measures we have taken or will take to remediate any areas in need
of improvement or that we will implement and maintain adequate controls over our
financial processes and reporting in the future as we continue our rapid growth.
If we are unable to establish appropriate internal financial reporting controls
and procedures, it could cause us to fail to meet our reporting obligations,
result in the restatement of our financial statements, harm our operating
results, subject us to regulatory scrutiny and sanction, cause investors to lose
confidence in our reported financial information and have a negative effect on
the market price for shares of our common stock. See "Item 8A. Controls and
Procedures" of this Annual Report on Form 10-KSB.

WE HAVE RESTATED OUR FINANCIAL STATEMENTS IN THE PAST TO REFLECT VARIOUS
CORRECTIONS. NO ASSURANCES CAN BE GIVEN THAT SIMILAR RESTATEMENTS WILL NOT BE
REQUIRED IN THE FUTURE.

We restated our financial statements in the past to reflect various corrections
of certain errors. The impact of the restatement of such financial statements is
included in our financial statements as of and for the year ended March 31,
2006. In addition, we and our former auditors identified certain errors
requiring correction to our statement of operations for the year ended March 31,
2005. While we believe we have put processes in place to begin to remedy areas
in our internal controls, no assurances can be given that we will not be faced
with situations which may require us to restate our financial statements again.
Any such restatements could adversely affect the credibility of our reported
financial results and the price of our common stock.

                                       27

<PAGE>

WE ARE CURRENTLY DEPENDENT ON OUR PRODUCTS WHICH UTILIZE OUR tPEMF TECHNOLOGY,
AND AN INCREASE IN OUR REVENUES WILL DEPEND ON OUR ABILITY TO INCREASE MARKET
PENETRATION, AS WELL AS OUR ABILITY TO DEVELOP AND COMMERCIALIZE NEW PRODUCTS
AND TECHNOLOGIES.

Products based on non-invasive, electrotherapeutic technologies represent known
methods of treatment that we believe have been under-utilized clinically.
Physicians and other healthcare professionals may not use products and
technologies developed by us unless they determine that the clinical benefits to
the patient are greater than those available from competing products or
therapies or represent equal efficacy with lower cost. Even if the advantage of
our products and technologies is established as clinically and fiscally
significant, physicians and other healthcare professionals may not elect to use
such products and technologies. The rate of adoption and acceptance of our
products and technologies may also be affected adversely by unexpected side
effects or complications associated with our products, consumers' reluctance to
invest in new products and technologies, the level of third-party reimbursement
and widespread acceptance of other products and technologies. Consequently,
physicians and other healthcare professionals, healthcare payors and consumers
may not accept products or technologies developed by us. Broad market acceptance
of our current products and other products and technologies developed by us in
the future may require the education and training of numerous physicians and
other healthcare professionals, as well as conducting or sponsoring clinical and
fiscal studies to demonstrate the cost efficiency and other benefits of such
products and technologies. The amount of time required to complete such training
and studies could be costly and result in a delay or dampening of such market
acceptance. Moreover, healthcare payors' approval of use for our products and
technologies in development may be an important factor in establishing market
acceptance.

We may be required to undertake time-consuming and costly development activities
and seek regulatory clearance or approval for new products or technologies.
Although the FDA has cleared certain of our products for the treatment of edema
and pain in soft tissue, we may not be able to obtain regulatory clearance or
approval of new or existing products or technologies or new treatments through
existing products or maintain clearance of our existing products. In addition,
we have not demonstrated an ability to market and sell our products, much less
multiple products simultaneously. If we are unable to increase market acceptance
of our current products or develop and commercialize new products in the future,
we will not be able to increase our revenues. The completion of the development
of any new products or technologies or new uses of existing products will remain
subject to all the risks associated with the commercialization of new products
based on innovative technologies, including:

o     our ability to fund and establish research that supports the efficacy of
      new technologies and products;

o     our ability to obtain regulatory approval or clearance of such
      technologies and products, if needed;

o     our ability to obtain market acceptance of such new technologies and
      products;

o     our ability to effectively and efficiently market and distribute such new
      products;

o     the ability of ADM or other manufacturers utilized by us to effectively
      and efficiently manufacture such new products; and

o     our ability to sell such new products at competitive prices that exceed
      our per unit costs for such products.

IF OUR CUSTOMERS ARE UNABLE TO RECEIVE REIMBURSEMENT FROM THIRD-PARTIES,
INCLUDING REIMBURSEMENT FROM MEDICARE, OUR GROWTH AND REVENUES WILL BE
MATERIALLY AND ADVERSELY AFFECTED IN MARKETS WHERE OUR CUSTOMERS RELY ON
INSURANCE COVERAGE FOR PAYMENT.

Some healthcare providers such as hospitals and physicians that purchase, lease
or rent medical devices in the United States generally rely on third-party
payors, principally Medicare and private health insurance plans, including
health maintenance organizations, to reimburse all or part of the cost of the
treatment for which the medical device is being used. Commercialization of our
products and technologies in the United States will depend in part upon the
availability of reimbursement for the cost of the treatment from third-party
healthcare payors such as Medicare and private health insurance plans, including
health maintenance organizations, in non-capitated markets, where we rely on
insurance coverage for payment. Such third-party payors are increasingly
challenging the cost of medical products and services, which have and could
continue to have a significant effect on the ratification of such technologies
and services by many healthcare providers. Several proposals have been made by
federal and state government officials that may lead to healthcare reforms,
including a government directed national healthcare system and healthcare
cost-containment measures. The effect of changes in the healthcare system or
method of reimbursement for our current products and any other products or
technologies that we may market in the United States cannot be determined.

                                       28

<PAGE>

While commercial insurance companies make their own decisions regarding which
medical procedures, technologies and services to cover, commercial payors often
apply standards similar to those used adopted by the Centers for Medicare &
Medicaid Services, or CMS, in determining Medicare coverage. The Medicare
statute prohibits payment for any medical procedures, technologies or services
that are not reasonable and necessary for the diagnosis or treatment of illness
or injury. In 1997, CMS, which is responsible for administering the Medicare
program, had interpreted this provision to deny Medicare coverage of procedures
that, among other things, are not deemed safe and effective treatments for the
conditions for which they are being used, or which are still investigational.
However, in July 2004, CMS reinstated Medicare reimbursement for the use of the
technology used in our products in the treatment of non-healing wounds under
certain conditions.

CMS has established a variety of conditions for Medicare coverage of the
technology used in our products. These conditions depend, in part, on the
setting in which the service is provided. For example, in 2004, CMS added
electromagnetic therapy as a type of service payable in the home health setting,
but subject to Medicare's consolidated home health billing provisions. Thus,
Medicare will not pay separately for electromagnetic therapy services if the
service is billed under a home health plan of care provided by a home health
agency. Rather, the home health agency must pay for the electromagnetic therapy
as part of the consolidated payment made to the home health agency for the
entire range of home health services under the patient's care plan.

In December 2005, we retained a consulting company specializing in CMS
reimbursement and coverage matters to assist us in arranging and preparing for a
meeting with CMS to request that CMS cover electromagnetic therapy for wound
treatment separately in the home health setting. In May 2006, with the
assistance of this consulting company, we held a meeting with CMS and made a
presentation in support of reimbursement for the home health use of the
technology used in our products. In February 2008 we received a letter from CMS
in response to an informal review we requested in order to obtain reimbursement
for our devices from CMS. Our regulatory consultants specializing in this area
have reviewed CMS's request for further information and we have decided to clear
our regulatory issues with the FDA before we pursue a response to CMS. Even if
CMS were to approve separate reimbursement of electromagnetic therapy in the
home health setting, the regulatory environment could change and CMS might deny
all coverage for electromagnetic therapy as treatment of chronic wounds, whether
for home health use or otherwise, which could limit the amount of coverage
patients or providers are entitled to receive. Either of these events would
materially and adversely affect our revenues and operating results. Medicare
does not cover the cost of the device used for the electromagnetic treatment of
wounds.

We cannot predict when, if ever, CMS will allow for reimbursement for the use of
the technology in our products in the home, or what additional legislation or
regulations, if any, may be enacted or adopted in the future relating to our
business or the healthcare industry, including third-party coverage and
reimbursement, or what effect any such legislation or regulations may have on
us. Furthermore, significant uncertainty exists as to the coverage status of
newly approved healthcare products, and there can be no assurance that adequate
third-party coverage will be available with respect to any of our future
products or new applications for our present products. In currently
non-capitated markets, failure by physicians, hospitals, nursing homes and other
users of our products to obtain sufficient reimbursement for treatments using
our technologies would materially and adversely affect our revenues and
operating results. Alternatively, as the U.S. medical system moves to more
fixed-cost models, such as payment based on diagnosis related groups,
prospective payment systems or expanded forms of capitation, the market
landscape may be altered, and the amount we can charge for our products may be
limited and cause our revenues and operating results to be materially and
adversely affected.

WE OUTSOURCE THE MANUFACTURING OF OUR PRODUCTS TO ADM, OUR LARGEST SHAREHOLDER
AND EXCLUSIVE MANUFACTURER, AND IF THE OPERATIONS OF ADM ARE INTERRUPTED OR IF
OUR ORDERS EXCEED THE MANUFACTURING CAPABILITIES OF ADM, WE MAY NOT BE ABLE TO
DELIVER OUR PRODUCTS TO CUSTOMERS ON TIME.

Pursuant to a manufacturing agreement between us and ADM, our largest
shareholder, ADM is the exclusive manufacturer of our products, and we may rely
on ADM to manufacture other products that we may develop in the future. ADM
operates a single facility and has limited capacity that may be inadequate if
our customers place orders for unexpectedly large quantities of our products, or
if ADM's other customers place large orders of products, which could limit ADM's
ability to produce our products. In addition, if the operations of ADM were
halted or restricted, even temporarily, or they are unable to fulfill large
orders, we could experience business interruption, increased costs, damage to
our reputation and loss of our customers. Moreover, under our agreement, ADM may
terminate the agreement under certain circumstances. Although we have the right
to utilize other manufacturers if ADM is unable to perform under our agreement,
manufacturers of our products need to be licensed with the FDA, and identifying
and qualifying a new manufacturer to replace ADM as the manufacturer of our
products could take several months during which time, we would likely lose
customers and our revenues could be materially delayed and/or reduced.

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BECAUSE OF OUR RELATIONSHIP WITH ADM, WE MAY BECOME SUBJECT TO CONFLICTS OF
INTERESTS THAT MAY ADVERSELY AFFECT OUR ABILITY TO OPERATE OUR BUSINESS.

Our Vice Chairman of the Board and Co-Chief Executive Officer, Andre' DiMino,
serves as the President and Chief Executive Officer of ADM; and our President
and Co-Chief Executive Officer, David Saloff, serves as a director of ADM. This
could create, or appear to create, potential conflicts of interest when members
of our senior management are faced with decisions that could have different
implications for us and for ADM. For example, conflicts of interest could arise
between us and ADM in various areas such as fundraising, competing for new
business opportunities, and other areas. In addition, ADM serves as the
exclusive manufacturer of our products and we utilize personnel at ADM to
provide administrative and other services to us. No assurance can be given as to
how potentially conflicted board members will evaluate their fiduciary duties to
us and ADM, respectively, or how such individuals will act under such
circumstances. Furthermore, the appearance of conflicts, even if such conflicts
do not materialize, might adversely affect the public's perception of us.

OUR ABILITY TO EXECUTE OUR BUSINESS PLAN DEPENDS ON THE SCOPE OF OUR
INTELLECTUAL PROPERTY RIGHTS AND NOT INFRINGING THE INTELLECTUAL PROPERTY RIGHTS
OF OTHERS. THE VALIDITY, ENFORCEABILITY AND COMMERCIAL VALUE OF THESE RIGHTS ARE
HIGHLY UNCERTAIN.

Our ability to compete effectively with other companies is materially dependent
upon the proprietary nature of our technologies. We rely primarily on patents
and trade secrets to protect our technologies.

We have:

o     one patent on our device, which expires in 2019, as well as one other
      patent for certain embodiments of tPEMF, expiring in 2013, a petition
      pending for one issued patent and two issued international patents;

o     eleven U.S. non-provisional patent applications pending and ninety one
      international pending patents;; .

Third parties may seek to challenge, invalidate, circumvent or render
unenforceable any patents or proprietary rights owned by us based on, among
other things:

o     subsequently discovered prior art;

o     lack of entitlement to the priority of an earlier, related application; or

o     failure to comply with the written description, best mode, enablement or
      other applicable requirements.

In general, the patent position of medical device companies, is highly
uncertain, still evolving and involves complex legal, scientific and factual
questions. We are at risk that:

o     other patents may be granted with respect to the patent applications filed
      by us; and

o     any patents issued to us may not provide commercial benefit to us or will
      be infringed, invalidated or circumvented by others.

The United States Patent and Trademark Office currently has a significant
backlog of patent applications, and the approval or rejection of patents may
take several years. Prior to actual issuance, the contents of United States
patent applications are generally published 18 months after filing. Once issued,
such a patent would constitute prior art from its filing date, which might
predate the date of a patent application on which we rely. Conceivably, the
issuance of such a prior art patent, or the discovery of "prior art" of which we
are currently unaware, could invalidate a patent of ours or prevent
commercialization of a product claimed thereby.

Although we generally conduct a cursory review of issued patents prior to
engaging in research or development activities, we may be required to obtain a
license from others to commercialize any of our new products under development.
If patents that cover our existing or new products are issued to other
companies, there can be no assurance that any necessary license could be
obtained on favorable terms or at all.

There can be no assurance that we will not be required to resort to litigation
to protect our patented technologies and other proprietary rights or that we
will not be the subject of additional patent litigation to defend our existing
and proposed products and processes against claims of patent infringement or any
other intellectual property claims. Such litigation could result in substantial
costs, diversion of management's attention, and diversion of our resources.

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<PAGE>

We also have applied for patent protection in several foreign countries. Because
of the differences in patent laws and laws concerning proprietary rights between
the United States and foreign countries, the extent of protection provided by
patents and proprietary rights granted to us by the United States may differ
from the protection provided by patents and proprietary rights granted to us by
foreign countries.

We attempt to protect our trade secrets, including the processes, concepts,
ideas and documentation associated with our technologies, through the use of
confidentiality agreements and non-competition agreements with our current
employees and with other parties to whom we have divulged such trade secrets. If
our employees or other parties breach our confidentiality agreements and
non-competition agreements or if these agreements are not sufficient to protect
our technology or are found to be unenforceable, our competitors could acquire
and use information that we consider to be our trade secrets and we may not be
able to compete effectively. Most of our competitors have substantially greater
financial, marketing, technical and manufacturing resources than we have and we
may not be profitable if our competitors are also able to take advantage of our
trade secrets.

We may decide for business reasons to retain certain knowledge that we consider
proprietary as confidential and elect to protect such information as a trade
secret, as business confidential information or as know-how. In that event, we
must rely upon trade secrets, know-how, confidentiality and non-disclosure
agreements and continuing technological innovation to maintain our competitive
position. There can be no assurance that others will not independently develop
substantially equivalent proprietary information or otherwise gain access to or
disclose such information.

THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL OR CONSULTANTS MAY
MATERIALLY AND ADVERSELY AFFECT OUR OPERATIONS AND OUR ABILITY TO EXECUTE OUR
GROWTH STRATEGY.

Our ability to execute our business plan depends upon the continued services of
Andre' DiMino, our Vice Chairman of the Board and Co-Chief Executive Officer and
David Saloff, our President and Co-Chief Executive Officer, as well as our key
technology, marketing, sales, support and consulting personnel, including Dr.
Arthur Pilla, one of our consultants, our Science Director and the Chairman of
our Scientific Advisory Board. Although we have entered into employment or
consulting agreements containing non-compete agreements with Messrs. DiMino and
Saloff and certain of our key personnel, including Dr. Pilla, we may not be able
to retain these individuals or enforce such non-compete agreements under
applicable law. Further, our employment agreement with Mr. DiMino requires him
to devote at least a majority of his work-time toward Ivivi; however, the
remaining amount of his work-time may be devoted elsewhere, including at ADM. As
a result, Mr. DiMino's attention to our business and operations may be diverted
by his obligations elsewhere, including at ADM, and we may not be able to have
access to Mr. DiMino as needed by us. If we lost the services of these executive
officers or our key personnel, our business may be materially and adversely
affected and our stock price may decline. In addition, our ability to execute
our business plan is dependent on our ability to attract and retain additional
highly skilled personnel. We have key person life insurance in the amount of $2
million for Mr. DiMino, but not for any of our other executive officers or key
employees.

WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS FOR OUR COMPONENTS AND RAW MATERIALS
AND ANY INTERRUPTION IN THE AVAILABILITY OF THESE COMPONENTS AND RAW MATERIALS
USED IN OUR PRODUCT COULD REDUCE OUR REVENUES AND MATERIALLY AND ADVERSELY
AFFECT OUR OPERATING RESULTS.

We rely on a limited number of suppliers for the components and raw materials
used in our products. Although there are many suppliers for each of our
component parts and raw materials, we are dependent on a single or limited
number of suppliers for many of the significant components and raw materials.
This reliance involves a number of significant risks, including:

o     unavailability of materials and interruptions in delivery of components
      and raw materials from our suppliers;

o     manufacturing delays caused by such unavailability or interruptions in
      delivery; and

o     fluctuations in the quality and the price of components and raw materials.

We do not have any long-term or exclusive purchase commitments with any of our
suppliers. Our failure to maintain existing relationships with our suppliers or
to establish new relationships in the future could also negatively affect our
ability to obtain our components and raw materials used in our products in a
timely manner. If we are unable to obtain ample supply of product from our
existing suppliers or alternative sources of supply, we may be unable to satisfy
our customers' orders which could reduce our revenues and adversely affect our
relationships with our customers and materially and adversely affect our
operating results.


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                          RISKS RELATED TO OUR INDUSTRY

THE MEDICAL PRODUCTS MARKET IS HIGHLY COMPETITIVE AND SUSCEPTIBLE TO RAPID
CHANGE AND SUCH CHANGES COULD RENDER OUR EXISTING PRODUCTS AND ANY NEW PRODUCTS
DEVELOPED BY US UNECONOMICAL OR OBSOLETE.

The medical products market is characterized by extensive research and
development activities and significant technological change. Our ability to
execute our business strategy depends in part upon our ability to develop and
commercialize efficient and effective products based on our technologies. We
compete against established companies as well as numerous independently owned
small businesses, including Diapulse Corporation of America, Inc., which
manufactures and markets devices that are substantially equivalent to some of
our products; Regenesis Biomedical, which manufactures and markets devices that
are similar to our first generation device; BioElectronics Corporation, which
develops and markets the ActiPatch(TM), a medical dermal patch that delivers
tPEMF therapy to soft tissue injuries; and KCI Concepts, Inc., which
manufactures and markets negative pressure wound therapy devices in the wound
care market. We also face competition from companies that have developed other
forms of treatment, such as hyperbaric oxygen chambers, thermal therapies and
hydrotherapy. In addition, companies are developing or may, in the future,
engage in the development of products and/or technologies competitive with our
products. We expect that technological developments will occur and that
competition is likely to intensify as new technologies are employed. Many of our
competitors are capable of developing products based on similar technology, have
developed and are capable of continuing to develop products based on other
technologies, which are or may be competitive with our products and
technologies. Many of these companies are well-established, and have
substantially greater financial and other resources, research and development
capabilities and more experience in obtaining regulatory approvals,
manufacturing and marketing than we do. Our ability to execute our business
strategy and commercially exploit our technology must be considered in light of
the problems, expenses, difficulties, complications and delays frequently
encountered in connection with the development of new medical processes, devices
and products and their level of acceptance by the medical community. Our
competitors may succeed in developing competing products and technologies that
are more effective than our products and technologies, or that receive
government approvals more quickly than our new products and technologies, which
may render our existing and new products or technology uncompetitive,
uneconomical or obsolete.

WE MAY BE EXPOSED TO PRODUCT LIABILITY CLAIMS FOR WHICH OUR PRODUCT LIABILITY
INSURANCE MAY BE INADEQUATE.

Our business exposes us to potential product liability risks, which are inherent
in the testing, manufacturing and marketing of medical devices. While we are not
aware of any side-effects resulting from the use of our products, there may be
unknown long-term effects that may result in product liability claims in the
future. Although we maintain $10.0 million of product liability insurance, we
cannot provide any assurance that:

o     our insurance will provide adequate coverage against potential liabilities
      if a product causes harm or fails to perform as promised;

o     adequate product liability insurance will continue to be available in the
      future; or

o     our insurance can be maintained on acceptable terms.

The obligation to pay any product liability claim in excess of whatever
insurance we are able to obtain would increase our expenses and could greatly
reduce our assets.

IF THE FDA OR OTHER STATE OR FOREIGN AGENCIES IMPOSE REGULATIONS THAT AFFECT OUR
PRODUCTS, OUR DEVELOPMENT, MANUFACTURING AND MARKETING COSTS WILL BE INCREASED.

The development, testing, production and marketing of our current products is,
and other products developed by us may be, subject to regulation by the FDA as
devices under the 1976 Medical Device Amendments to the Federal Food, Drug and
Cosmetic Act. Although the FDA has cleared our SofPulse product for the
adjunctive use in the palliative treatment of post-operative pain and edema in
superficial tissue, use of our current products and any new products developed
by us will be subject to FDA regulation as well. Before a new medical device, or
a new use of, or claim for, an existing product can be marketed in the United
States, it must first receive either 510(k) clearance or pre-market approval
from the FDA, unless an exemption applies. Either process can be expensive and
lengthy. The FDA's 510(k) clearance process usually takes from three to twelve
months, but it can take longer and is unpredictable. The process of obtaining
pre-market approval is much more costly and uncertain than the 510(k) clearance
process and it generally takes from one to three years, or even longer, from the
time the application is filed with the FDA.

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<PAGE>

In the United States, medical devices must be:

o     manufactured in establishments subject to FDA inspection to assess
      compliance with the FDA Quality Systems Regulation, or QSR; and

o     produced in accordance with the QSR for medical devices.

As a result, we, as well as ADM, the exclusive manufacturer of our products, are
required to comply with QSR requirements and if we fail to comply with these
requirements, we will need to find another company to manufacture our products
which could delay the shipment of our product to our customers. In addition,
ADM's manufacturing facility:

o     is required to be registered as a medical device manufacturing site with
      the FDA; and

o     is subject to inspection by the FDA.

The FDA requires producers of medical devices to obtain FDA clearance and, in
some cases, approval prior to commercialization in the United States. Testing,
preparation of necessary applications and the processing of those applications
by the FDA is expensive and time consuming. We do not know if the FDA will act
favorably or quickly in making such reviews, and significant difficulties or
costs may be encountered by us in our efforts to obtain FDA clearance and
approval. The FDA may also place conditions on clearance and approvals that
could restrict commercial applications of such products. Product approvals may
be withdrawn if compliance with regulatory standards is not maintained or if
problems occur following initial marketing. Delays imposed by the FDA clearance
and approval process may materially reduce the period during which we have the
exclusive right to commercialize patented products.

We have made modifications to our devices and may make additional modifications
in the future that we believe do not or will not require additional clearances
or approvals. Although we believe that our current products are covered by the
FDA clearance provided in 1991 with respect to the original SofPulse product, in
February, 2007, in response to inquiries from the FDA, we voluntarily submitted
a 510(k) for our current products, the SofPulse M-10, Roma and Torino PEMF
products. We have had discussions with the FDA regarding our 510(k) application
and we received various requests from the FDA for additional information, which
information has been delivered to the FDA. Following the delivery of such
information, we received a letter from the FDA regarding our voluntarily
submitted 510(k) for our current products, the SofPulse M-10, Roma and Torino
PEMF products. The letter stated that the FDA determined that such products are
not substantially equivalent to other devices cleared for marketing through the
510(k) process or otherwise legally marketed prior to May 28, 1976. We believe
the FDA made an incorrect assessment of the data and we have undertaken efforts
to have the FDA reconsider the information we have provided by informally
appealing the FDA determination while maintaining the ability to formally appeal
pursuant to established FDA regulations and guidance. We discussed our position
with the FDA in a meeting conducted in early June 2008 and sent the FDA further
information subsequent to the meeting as requested by the FDA. We are awaiting
its response to our meeting and subsequent submission. We believe based upon
regulations and guidance published by the FDA, as well discussions with our
independent expert consultants, including former FDA officials, that all of our
current products are covered by the FDA clearance provided in 1991. Based upon
the safety and efficacy of our products, we do not believe the FDA will require
us to cease marketing and/or recall current products which have been already
sold, or rented. However, if we are unsuccessful in our efforts to have the FDA
reconsider the data and it does not modify its determination, the FDA may
require us to do so until FDA marketing clearance is obtained. In addition, the
FDA could subject us to other sanctions discussed below.

Based upon the safety and efficacy of our products, we believe it is highly
unlikely that FDA will require us to cease marketing and / or recall products
which have been already sold or rented. However, if we are unsuccessful in our
efforts to have the FDA reevaluate the data and it does not modify its
determination, the FDA may require us to do so until FDA clearance or approval
is obtained. If the FDA does not grant the 510(k) clearance for our current
products, the FDA may require us to cease marketing and/or recall current
products already sold or rented until FDA clearance or approval is obtained. In
addition, the FDA could subject us to the other sanctions described in our Form
10-KSB under "Pervasive and Continuing Regulation."

We also are subject to Medical Device Reporting regulations, which require us to
report to the FDA if our products cause or contribute to a death or serious
injury, or malfunction in a way that would likely cause or contribute to a death
or serious injury. We are not aware of any death or serious injury caused by or
contributed to by our products, however, we cannot assure you that any such
problems will not occur in the future with our existing or future products.


                                       33

<PAGE>

Additionally, our existing and future products may be subject to regulation by
similar agencies in states and foreign countries. While we believe that we have
complied with all applicable laws and regulations, continued compliance with
such laws or regulations, including any new laws or regulations in connection
with our products or any new products developed by us, might impose additional
costs on us or marketing impediments on our products which could adversely
affect our revenues and increase our expenses. The FDA and state authorities
have broad enforcement powers. Our failure to comply with applicable regulatory
requirements could result in enforcement action by the FDA or state agencies,
which may include any of the following sanctions:

o     warning letters, fines, injunctions and civil penalties;

o     repair, replacement, refunds, recall or seizure of our products;

o     operating restrictions or partial suspension or total shutdown of
      production;

o     refusing our requests for 510(k) clearance or premarket approval of new
      products, new intended uses, or modifications to existing products;

o     withdrawing 510(k) clearance or premarket approvals that have already been
      granted; and

o     criminal prosecution.

If any of these events were to occur, it could harm our business and materially
and adversely affect our results of operations.

THE FDA CAN IMPOSE CIVIL AND CRIMINAL ENFORCEMENT ACTIONS AND OTHER PENALTIES ON
US IF WE OR OUR MANUFACTURER FAILS TO COMPLY WITH FDA REGULATIONS WHICH ARE
OFTEN DIFFICULT TO COMPLY WITH.

Medical device manufacturing facilities must maintain records, which are
available for FDA inspectors documenting that the appropriate manufacturing
procedures were followed. The FDA has authority to conduct inspections of our
facility, as well as the facility of our manufacturer. Labeling and promotional
activities are also subject to scrutiny by the FDA and, in certain instances, by
the Federal Trade Commission. If the FDA were to determine that the indication
for use of our products has a more narrow meaning than that which we have
historically deemed it to be, our ability to continue to market and sell our
products could be materially adversely affected. Any failure by us or the
manufacturer of our products to take satisfactory corrective action in response
to an adverse inspection or to comply with applicable FDA regulations could
result in enforcement action against us or our manufacturer, including a public
warning letter, a shutdown of manufacturing operations, a recall of our
products, civil or criminal penalties or other sanctions. From time to time, the
FDA may modify such requirements, imposing additional or different requirements
which may require us to alter our business methods which could result in
increased expenses and materially and adversely affect our results of
operations. In addition, if the Federal Trade Commission were to commence an
investigation concerning any of our claims about our products and conclude that
our claims were false, misleading or deceptive in violation of the Federal Trade
Commission Act, we could become subject to significant financial consequences
and compliance measures, including, the repayment of some or all of our gross
profits from such products and the compliance with various reporting
requirements imposed by the Federal Trade Commission.

                        RISKS RELATED TO OUR COMMON STOCK

EXECUTIVE OFFICERS, DIRECTORS AND ENTITIES AFFILIATED WITH THEM HAVE SUBSTANTIAL
CONTROL OVER US, WHICH COULD DELAY OR PREVENT A CHANGE IN OUR CORPORATE CONTROL
FAVORED BY OUR OTHER SHAREHOLDERS.

As of June 18, 2008, our directors, executive officers and ADM, together with
their affiliates, beneficially own, in the aggregate, approximately 52% of our
outstanding common stock, assuming the exercise of all outstanding options and
warrants held by such persons that are exercisable within 60 days of this
report. In particular, ADM, of which Andre' DiMino, our Vice Chairman of the
Board and Co-Chief Executive Officer, is President and Chief Executive Officer,
beneficially owns approximately 30.3% of our outstanding shares of common stock,
and Mr. DiMino, together with members of the DiMino family, beneficially own
approximately 39% of the outstanding shares of ADM.

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<PAGE>

Under the terms of a voting agreement among Mr. DiMino, David Saloff, our
President and Co-Chief Executive Officer, Edward Hammel, our Executive Vice
President, Sean Hagberg, Ph.D., our Chief Science Officer, Arthur Pilla, PhD.,
one of our consultants, our Science Director and the Chairman of our Scientific
Advisory Board, Berish Strauch, M.D., one of our consultants and a member of our
Medical Advisory Board, and Fifth Avenue Capital Partners, one of our
shareholders, Mr. DiMino shall have the right to vote up to 1,663,026 additional
shares of our common stock (including shares underlying options held by such
shareholders that are exercisable within 60 days of the date of this report),
representing approximately 15% of shares of our common stock outstanding as of
June 18, 2008. These figures do not reflect the increased percentages that the
officers and directors may have in the future in the event that they exercise
any additional options granted to them under the 2004 Amended and Restated Stock
Option Plan or if they otherwise acquire additional shares of common stock. The
interests of our current officer and director shareholders and our largest
shareholder may differ from the interests of other shareholders.

As a result, the current officer and director shareholders and ADM do and will
continue to have the ability to exercise substantial control over all corporate
actions requiring shareholder approval, irrespective of how our other
shareholders may vote, including the following actions:

o     the election of directors;

o     adoption of stock option plans;

o     the amendment of charter documents; or

o     the approval of certain mergers and other significant corporate
      transactions, including a sale of substantially all of our assets.

FUTURE SALES OF OUR COMMON STOCK, INCLUDING SALES OF OUR COMMON STOCK ACQUIRED
UPON THE EXERCISE OF OUTSTANDING OPTIONS OR WARRANTS, MAY CAUSE THE MARKET PRICE
OF OUR COMMON STOCK TO DECLINE.

We had 10,715,130 shares of common stock outstanding as of June 18, 2008. In
addition, as of June 18, 2008, options to purchase 3,393,475 shares of our
common stock were issued and outstanding, of which 1,749,241 were vested. All
remaining options will vest over various periods ranging up to a five-year
period measured from the date of grant. As of June 18, 2008, the
weighted-average exercise price of the vested stock options is $2.94, which is
higher than the June 18, 2008 market price of our common stock of $2.05. As of
June 18, 2008, warrants to purchase 2,634,241 shares of common stock were issued
and outstanding. We also may issue additional shares of stock in connection with
our business, including in connection with acquisitions, and may grant
additional stock options to our employees, officers, directors and consultants
under our stock option plans or warrants to third parties. If a significant
portion of these shares were sold in the public market, the market value of our
common stock could be adversely affected.

WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS WHICH COULD DISCOURAGE OR PREVENT A
TAKEOVER, EVEN IF SUCH TAKEOVER WOULD BE BENEFICIAL TO OUR SHAREHOLDERS.

Our amended and restated certificate of incorporation and by-laws include
provisions which could make it more difficult for a third-party to acquire us,
even if doing so would be beneficial to our shareholders. These provisions will
include:

o     authorizing the issuance of "blank check" preferred stock that could be
      issued by our board of directors to increase the number of outstanding
      shares or change the balance of voting control and resist a takeover
      attempt;

o     limiting the ability of shareholders to call special meetings of
      shareholders;

o     requiring all shareholder actions to be taken at a meeting of our
      shareholders or by the unanimous written consent of our shareholders; and

o     establishing advance notice requirements for nominations for election to
      the board of directors and for proposing matters that can be acted upon by
      shareholders at shareholder meetings.

In addition, provisions of the New Jersey Business Corporation Act, including
the New Jersey Shareholder Protection Act, and the terms of the employment
agreements with our executive officers may discourage, delay or prevent a change
in our control.


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<PAGE>

DUE TO PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BY-LAWS, A SHAREHOLDER
MAY BE PREVENTED FROM CALLING A SPECIAL MEETING FOR SHAREHOLDER CONSIDERATION OF
A PROPOSAL OVER THE OPPOSITION OF OUR BOARD OF DIRECTORS AND SHAREHOLDER
CONSIDERATION OF A PROPOSAL MAY BE DELAYED UNTIL OUR NEXT ANNUAL MEETING.

Our amended and restated certificate of incorporation and our by-laws provide
that any action required or permitted to be taken by our shareholders must be
effected at an annual or special meeting of shareholders or by the unanimous
written consent of our shareholders. Our amended and restated certificate of
incorporation provides that, subject to certain exceptions, only our board of
directors, the chairman or vice chairman of our board of directors, a chief
executive officer or a co-chief executive officer, as the case may be, or our
president or, at the direction of any of them, any vice president or secretary
may call special meetings of our shareholders. Our by-laws also contain advance
notice requirements for proposing matters that can be acted on by the
shareholders at a shareholder meeting. Accordingly, a shareholder may be
prevented from calling a special meeting for shareholder consideration of a
proposal over the opposition of our board of directors and shareholder
consideration of a proposal may be delayed until the next annual meeting. As
such, any time-sensitive proposals that a shareholder may have may not be
considered in a timely manner.

THE TRADING PRICE OF OUR COMMON STOCK IS HIGHLY VOLATILE, AND YOU MAY NOT BE
ABLE TO RESELL YOUR SHARES AT OR ABOVE THE PRICE AT WHICH YOU PURCHASED YOUR
SHARES, OR AT ALL.

The trading price of our common stock is highly volatile and subject to wide
fluctuations in price in response to various factors, some of which are beyond
our control. These factors include:

o     quarterly variations in our results of operations or those of our
      competitors;

o     announcements by us or our competitors of acquisitions, new products,
      significant contracts, commercial relationships or capital commitments;

o     disruption to our operations or those of ADM, our exclusive manufacturer,
      or our suppliers;

o     commencement of, or our involvement in, litigation;

o     any major change in our board or management;

o     changes in governmental regulations or in the status of our regulatory
      approvals; and

o     general market conditions and other factors, including factors unrelated
      to our own operating performance.

In addition, the stock market in general, and the market for medical device
technology companies in particular, have experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating
performance of those companies. These broad market and industry factors may
seriously harm the market price of our common stock, regardless of our actual
operating performance. In addition, in the past, following periods of volatility
in the overall market and the market price of a company's securities, securities
class action litigation has often been instituted against these companies. This
litigation, if instituted against us, could result in substantial costs and a
diversion of our management's attention and resources.

IF OUR COMMON STOCK IS DELISTED FROM THE NASDAQ CAPITAL MARKET, YOU MAY NOT BE
ABLE TO RESELL YOUR SHARES AT OR ABOVE THE PRICE AT WHICH YOU PURCHASED YOUR
SHARES, OR AT ALL.

In order for our common stock to continue to be listed on the NASDAQ Capital
Market, we must meet the current NASDAQ Capital Market listing requirements. One
of these requirements is the maintenance of a $1.00 bid price. If our bid price
were to go and remain below $1.00 for 30 consecutive days, NASDAQ could notify
us of our failure to meet the continued listing standards, after which we would
have 180 calendar days to correct such failure or be delisted from the NASDAQ
Capital Market. If we were unable to meet this or any of NASDAQ's other listing
requirements, our common stock could be delisted from the NASDAQ Capital Market.
If our common stock were to be delisted from the NASDAQ Capital Market, our
common stock could continue to trade on the NASD's over-the-counter bulletin
board following any delisting from the NASDAQ Capital Market, or on the Pink
Sheets, as the case may be. Any such delisting of our common stock could have an
adverse effect on the market price of, and the efficiency of the trading market
for, our common stock, not only in terms of the number of shares that can be
bought and sold at a given price, but also through delays in the timing of
transactions and less coverage of us by securities analysts, if any. Also, if in
the future we were to determine that we need to seek additional equity capital,
it could have an adverse effect on our ability to raise capital in the public or
private equity markets.

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<PAGE>

PENNY STOCK REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF OUR
SECURITIES.

If we fail to maintain listing for our securities on the NASDAQ Capital Market,
and no other exclusion from the definition of a "penny stock" under the Exchange
Act, is available, then our common stock would be subject to "penny stock"
regulations. The Securities and Exchange Commission has adopted regulations
which generally define a "penny stock" to be any equity security that is not
trading on the NASDAQ Capital Market or an exchange that has a market price (as
defined) of less than $5.00 per share or an exercise price of less than $5.00
per share, subject to certain exceptions. As a result, if our common stock
became subject to these regulations, it would be subject to rules that impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a risk disclosure document mandated by
the Securities and Exchange Commission relating to the penny stock market. The
broker-dealer must also disclose the commission payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell our common stock and may affect
the ability of investors to sell our common stock in the secondary market and
the price at which such purchasers can sell any such securities.

WE HAVE NOT PAID DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY DIVIDENDS IN THE
FUTURE, AND ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF YOUR STOCK.

We have never paid any cash dividends on our common stock and do not anticipate
paying any cash dividends on our common stock in the foreseeable future and any
return on investment may be limited to the value of your stock. We plan to
retain any future earnings to finance growth.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-KSB may contain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act.

Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, assumptions, estimates,
intentions, and future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control, and which may
cause our actual results, performance or achievements to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may," "will,"
"can," "anticipate," "assume," "should," "indicate," "would," "believe,"
"contemplate," "expect," "seek," "estimate," "continue," "plan," "point to,"
"project," "predict," "could," "intend," "target," "potential," and other
similar words and expressions of the future.

All forward-looking statements are expressly qualified in their entirety by this
cautionary notice. You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date of this Annual
Report on Form 10-KSB. We have no obligation, and expressly disclaim any
obligation, to update, revise or correct any of the forward-looking statements,
whether as a result of new information, future events or otherwise. We have
expressed our expectations, beliefs and projections in good faith and we believe
they have a reasonable basis. However, we cannot assure you that our
expectations, beliefs or projections will result or be achieved or accomplished.

                                       37

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

We are headquartered at 135 Chestnut Ridge Road, Montvale, New Jersey. We also
have office and laboratory space located at 224-S Pegasus Avenue, Northvale, New
Jersey . Our facilities located in Montvale, New Jersey consist of 7,494 square
feet of office space. The lease began in October 2007 and will expire on
November 30, 2014, subject to our option to renew the lease for an additional
five year period on terms and conditions set forth therein. Pursuant to the
lease, we will be required to pay rent in the amount of $14,051 per month during
the first two years of the term, with the exception of month 13 at no cost, and
$15,612 per month thereafter. Our office and laboratory facilities at 224-S
Pegasus Ave. are housed in part of 16,000 square feet of combined warehouse and
office space currently leased by ADM, pursuant to a lease that expires in June
2018. We and two subsidiaries of ADM utilize portions of the leased space.
Pursuant to a service and facilities agreement to which we, ADM and ADM's
subsidiaries are parties, ADM determines, on a monthly basis, the portion of
space utilized by us during such month, which may vary from month to month based
upon the amount of inventory being stored by us and areas used by us for
research and development, and we reimburse ADM for our portion of the lease
costs, real property taxes and related costs based upon the portion of space
utilized by us. We have incurred $42,360 and $43,795 for the use of such space
during the fiscal years ended March 31, 2008 and 2007, respectively.

During March 2008, we entered into lease agreements to rent two apartments
located in Park Ridge, NJ, for use by management. Monthly rent is $2,000 and
$1,500, respectively, and security deposits are $3,000 and $2,250, respectively.
Both leases expire on March 31, 2009.

We believe that our existing facilities are suitable as office, storage and
laboratory space, and are adequate to meet our current needs. We also believe
that our insurance coverage adequately covers our current interest in our leased
space. We do not own any real property for use in our operations or otherwise.

ITEM 3. LEGAL PROCEEDINGS

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004, pursuant to which: (i) we appointed NYHHC as exclusive
distributor of our products in a defined market place for so long as NYHHC
secured a minimum number of placements of our products and (ii) NYHHC agreed to
pay us $2,500 per month for each product shipped to NYHHC. By letter, dated
August 9, 2005, we terminated the agreement due to NYHHC's failure to make the
payments required under the agreement and failure to achieve the minimum number
of placements required under the agreement. We are seeking various forms of
relief, including: (i) money damages, including amounts due under unpaid
invoices in an aggregate amount of $236,560, (ii) an accounting and (iii) the
return of our products. The defendants filed a motion to dismiss alleging lack
of jurisdiction and failure to state a claim with regard to Harry Ruddy. We
opposed the defendant's motion to dismiss. On November 18, 2005, the Court
denied the defendant's motion to dismiss, without prejudice, based upon lack of
jurisdiction. The complaint was dismissed against Harry Ruddy, individually The
Court permitted a period of discovery to determine the jurisdiction issue, which
discovery is substantially complete. The defendants filed another motion to
dismiss based upon a claim of lack of jurisdiction, which was heard and denied
by the Court on June 9, 2006. On or about July 10, 2006, the defendants filed an
answer and NYHHC filed counterclaims against us for breach of contract, breach
of the implied covenant of good faith and fair dealing, restitution, unjust
enrichment and fraudulent inducement. An answer to the counterclaim was filed on
August 9, 2006. On April 30,2008 during a conference before the Hon. Brian R.
Martinotti J.S.C. all claims were settled and the terms of the settlement were
placed on the record. The settlement calls for the defendants to dismiss with
prejudice all counterclaims filed against us and to pay us the sum of
$120,000.00 in installments. The terms provide for an initial payment of
$15,000.00 and the balance to be paid in equal monthly installments of
$5,000.00. The amount of the settlement will be reduced to $100,000.00 if that
sum is paid on or before June 30, 2008. In the event of default defendants shall
be liable for an additional payment of $30,000.00, interest at the rate of 8%
per annum as well as costs and attorney's fees. The settlement was documented in
a written agreement executed by the parties and the initial payment of $15,000
was paid on June 18, 2008.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount which Ivivi has refuted. We responded to Stonefield Josephson's demand
for arbitration, which we believe was procedurally defective and premature due
to Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,


                                       38

<PAGE>

2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No.BER-l-872-08 on January 31, 2008. A commencement of arbitration notice
initiated by Stonefield Josephson was received by us on March 11, 2008. In March
and April motions were filed by us and Stonefield Josephson which sought various
forms of relief including the forum for resolution of the claims. On June 3,
2008 the Hon. Menelaos W. Toskos J.S.C. determined that the language in the
engagement agreement constituted a forum selection clause and the claims should
be decided in California. On June 19, 2008, we filed a complaint against
Stonefield Josephson in the Superior Court of California, Los Angeles County.

Other than the foregoing, we are not a party to, and none of our property is the
subject of, any pending legal proceedings other than routine litigation that is
incidental to our business.

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

No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of our fiscal year ended
March 31, 2008.


                                       39

<PAGE>



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

Our common stock has been quoted on NASDAQ since January 2, 2008 under the
ticker symbol "IVVI" and on The American Stock Exchange from the IPO on October
19, 2006 through January 1, 2008 under the ticker symbol "II." On June 13, 2008,
the last quoted per share sales price of our common stock on NASDAQ was $2.50.
The following table sets forth, for the periods indicated, the range of high and
low sales prices for our common stock as reported by NASDAQ and The American
Stock Exchange.

<TABLE>
<S>            <C>
Fiscal year ended March 31, 2008:
Quarter ended:                                         HIGH            LOW          CLOSE
                                                    ------------   ------------  -------------
      June 30, 2007                                      $ 6.05         $ 4.05         $ 4.31
      September 30, 2007                                 $ 5.40         $ 3.00         $ 5.15
      December 31, 2007                                  $ 6.64         $ 3.50         $ 4.13
      March 31, 2008                                     $ 5.75         $ 3.15         $ 3.40

Fiscal year ended March 31, 2007:
Quarter ended:                                         HIGH            LOW          CLOSE
                                                    ------------   ------------  -------------
      12/31/2006 (Beginning October 19, 2006)            $ 6.55         $ 5.20         $ 5.99
      March 31, 2007                                     $ 6.15         $ 3.61         $ 4.15
</TABLE>


HOLDERS

As of June 17, 2008, there were approximately 38 registered holders of record of
our common stock.

DIVIDENDS

To date, we have not paid any dividends on our common stock and we do not intend
to pay dividends for the foreseeable future, but intend instead to retain
earnings, if any, for use in our business operations. The payment of dividends
in the future, if any, will be at the sole discretion of our board of directors
and will depend upon our debt and equity structure, earnings and financial
condition, need for capital in connection with possible future acquisitions and
other factors, including economic conditions, regulatory restrictions and tax
considerations. We cannot guarantee that we will pay dividends or, if we pay
dividends, the amount or frequency of these dividends.

EQUITY COMPENSATION PLAN INFORMATION

SEE "ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS."

USE OF PROCEEDS

The Registration Statement on Form SB-2 (File No. 333-122768) (the "Registration
Statement") relating to our IPO was declared effective by the Securities and
Exchange Commission on October 18, 2006. On October 24, 2006, we completed the
IPO, pursuant to which we sold 2.5 million shares of our common stock at $6.00
per share and raised gross proceeds of $15.0 million. Net proceeds to us were
approximately $12.2 million from the IPO after the payment of underwriting
discounts and commissions and expenses related to the IPO. We granted the
underwriters of the IPO an option for a period of 45 days following the
consummation of the IPO to purchase from us up to an aggregate of 375,000
additional shares of our common stock to cover over-allotments, if any. On
November 22, 2006, the underwriters partially exercised their over-allotment
option for 250,000 shares of our common stock for additional gross proceeds of
$1.5 million. Net proceeds to us from the partial exercise of the over-allotment
option were $1.4 million after the payment of underwriting commissions and
expenses. Maxim Group LLC acted as representative of the underwriters of the IPO
and Murray, Carret & Co., LLC acted as co-manager of the IPO. The offering of
the securities in our IPO did not terminate prior to the sale of all of the
registered securities, other than that portion of the over-allotment option that
was not exercised.

                                       40

<PAGE>

The aggregate amount of the gross proceeds raised in the IPO, including the
underwriters' partial exercise of the over-allotment option, was $16.5 million.
We paid the underwriters of the IPO $1,485,000 in underwriting discounts and
commissions and $360,000 for non-accountable expenses. We incurred additional
expenses related to the IPO, including the exercise of the over-allotment
option, of approximately $1,015,000, and the net proceeds to us from the IPO
were approximately $13,640,000.

<TABLE>
<S>                 <C>
Use of the net proceeds from the IPO through March 31, 2008 was as follows:

       Repayment of indebtedness due to ADM (1)                                                        $ 2,607,266

       Repayment of loan plus interest due to AJAX Capital LLC (2)                                         257,123

       Repayment of interest on convertible loan due to AJAX Capital LLC                                    76,712

       Repayment of interest on convertible loan due to Kenneth S. Abramowitz & Co, Inc. (3)                18,740

       Repayment of interest on all remaining convertible loans issued in our private placement            148,913

       Research and development                                                                          1,278,690

       Sales and marketing                                                                               1,111,473

       Patent filings and other regulatory                                                                 431,379

       Insurance                                                                                           347,361

       Professional fees                                                                                   950,890

       General corporate purposes, including working capital                                             6,115,317

       Termination of revenue sharing agreement with AJAX Capital LLC                                      296,136
                                                                                                    ---------------

       Total                                                                                           $13,640,000
                                                                                                    ===============
_____________
</TABLE>

(1)   As of the date of this report, ADM is the beneficial owner of
      approximately 30.3% of our outstanding common stock.

(2)   Ajax Capital LLC is an investment fund wholly-owned by Steven Gluckstern,
      our Chairman of the Board.

(3)   Kenneth S. Abramowitz & Co, Inc. is an investment fund wholly-owned by
      Kenneth Abramowitz, one of our directors.

SHARE REPURCHASES.

We did not repurchase any issued and outstanding shares of our common stock
during the fiscal year ended March 31, 2008.

                                       41

<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS AND INVOLVES
NUMEROUS RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, THOSE DESCRIBED
UNDER "ITEM 1. BUSINESS-RISK FACTORS" OF THIS ANNUAL REPORT ON FORM 10-KSB.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING
STATEMENTS. THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTE THERETO INCLUDED ELSEWHERE IN THIS ANNUAL REPORT
ON FORM 10-KSB.

OVERVIEW

We are an early-stage medical technology company focusing on designing,
developing and commercializing proprietary electrotherapeutic technologies.
Electrotherapeutic technologies use electric or electromagnetic signals to help
relieve pain, swelling and inflammation and promote healing processes and tissue
regeneration. We have focused our research and development activities on
targeted pulsed electromagnetic field, or tPEMF technology. This technology
utilizes a magnetic field that is turned on and off rapidly to create a
therapeutic electrical current in injured tissue, which then stimulates
biochemical and physiological processes to help repair injured soft tissue and
reduce related pain. We are currently marketing products utilizing our tPEMF
technology to the chronic wound and plastic and reconstructive surgery markets.
We are developing proprietary technology for other therapeutic medical markets.

While we have conducted research and development and performed sales and
marketing activities, we have generated limited revenues to date and have
incurred significant losses since our inception. At March 31, 2008, we had an
accumulated deficit of approximately $31.2 million. We expect to incur
additional operating losses, as well as negative cash flow from operations for
the foreseeable future as we continue to expand our marketing efforts with
respect to our products and to continue our research and development of
additional applications for our products, as well as new products utilizing our
tPEMF technology. We are focusing our research and development activities on
optimizing the signal parameters of our tPEMF technology, enabling us to produce
improved clinical outcomes and produce a smaller more efficient product
utilizing less power.

Our revenues to date have been primarily generated through monthly or daily
rental programs, through the direct sale of our products and through licensing
sales and fees. We expect future revenues to be generated through monthly or
daily rental programs with, and the sale of our products and related disposable
products to long-term care nursing facilities, long-term acute care hospitals,
rehabilitation hospitals, acute care facilities, home health users and
individual patients. In addition, we expect revenues also to be generated
through the sale of certain of our products through Allergan to plastic surgery
patients and physicians.

Our ability to increase our revenues from rental and sales of our current
products and other products developed by us will depend on a number of factors,
including our ability to increase market penetration of our current products,
our ability to enter into marketing and distribution agreements in our target
markets with companies such as Allergan as well as our ability to develop and
commercialize new products and technologies. Physicians and other healthcare
professionals may not use our products or other potential products and
technologies developed by us unless they determine that the clinical benefits to
the patient are greater than those available from competing products or
therapies or represent equal efficacy with lower cost.

Even if the advantage of our products and technologies is established as
clinically and fiscally significant, physicians and other healthcare
professionals may not elect to use our products and technologies developed by us
for any number of reasons. The rate of adoption and acceptance of our products
and technologies may be affected adversely by perceived issues relating to
quality and safety, consumers' reluctance to invest in new products and
technologies, the level of third-party reimbursement and widespread acceptance
of other products and technologies. Broad market acceptance of our current
products and other products and technologies developed by us in the future may
require the education and training of numerous physicians and other healthcare
professionals, as well as conducting or sponsoring clinical and cost-benefit
studies to demonstrate the effectiveness and efficiency of such products and
technologies. The amount of time required to complete such training and studies
could be costly and result in a delay or dampening of such market acceptance.
Moreover, healthcare payors' approval of use for our products and technologies
in development may be an important factor in establishing market acceptance.


                                       42

<PAGE>

While commercial insurance companies make their own decisions regarding which
medical procedures, technologies and services to cover, commercial payors often
apply standards similar to those adopted by the Centers for Medicare and
Medicaid Services, or CMS in determining Medicare coverage. The Medicare statute
prohibits payment for any medical procedures, technologies or services that are
not reasonable and necessary for the diagnosis or treatment of illness or
injury. In 1997, CMS, which is responsible for administering the Medicare
program, had interpreted this provision to deny Medicare coverage of procedures
that, among other things, are not deemed safe and effective treatments for the
conditions for which they are being used, or which are still investigational.
However, in July 2004, CMS reinstated Medicare reimbursement for the use of the
technology used in our products in the treatment of non-healing wounds under
certain conditions.

CMS has established a variety of conditions for Medicare coverage of the
technology used in our products. These conditions depend, in part, on the
setting in which the service is provided. For example, in 2004, CMS added
electromagnetic therapy as a type of service payable in the home health setting,
but subject to Medicare's consolidated home health billing provisions. Thus,
Medicare will not pay separately for electromagnetic therapy services if the
service is billed under a home health plan of care provided by a home health
agency. Rather, the home health agency must pay for the electromagnetic therapy
as part of the consolidated payment made to the home health agency for the
entire range of home health services under the patient's care plan.

In December 2005, we retained a consulting company specializing in CMS
reimbursement and coverage matters to assist us in arranging and preparing for a
meeting with CMS to request that CMS cover electromagnetic therapy for wound
treatment separately in the home health setting. In May 2006, with the
assistance of this consulting company, we held a meeting with CMS and made a
presentation in support of reimbursement for the home health use of the
technology used in our products. In February 2008, we received a letter from CMS
in response to an informal review we requested in order to obtain reimbursement
for our device from CMS. Our regulatory consultants specializing in this area
have reviewed CMS's request for further information and we have decided to clear
our regulatory issues with the FDA before we pursue a response to CMS. Even if
CMS were to approve separate reimbursement of electromagnetic therapy in the
home health setting, the regulatory environment could change and CMS might deny
all coverage for electromagnetic therapy as treatment of chronic wounds, whether
for home health use or otherwise, which could limit the amount of coverage
patients or providers are entitled to receive. Either of these events would
materially and adversely affect our revenues and operating results.

We cannot predict when, if ever, CMS will allow for reimbursement for the use of
the technology in our products in the home, or what additional legislation or
regulations, if any, may be enacted or adopted in the future relating to our
business or the healthcare industry, including third-party coverage and
reimbursement, or what effect any such legislation or regulations may have on
us. Furthermore, significant uncertainty exists as to the coverage status of
newly approved healthcare products, and there can be no assurance that adequate
third-party coverage will be available with respect to any of our future
products or new applications for our present products. In currently
non-capitated markets, failure by physicians, hospitals, nursing homes and other
users of our products to obtain sufficient reimbursement for treatments using
our technologies would materially and adversely affect our revenues and
operating results. Alternatively, as the U.S. medical system moves to more
fixed-cost models, such as payment based on diagnosis related groups,
prospective payment systems or expanded forms of capitation, the market
landscape may be altered, and the amount we can charge for our products may be
limited and cause our revenues and operating results to be materially and
adversely affected.

We may be required to undertake time-consuming and costly development activities
and seek regulatory clearance or approval for existing or new products or
technologies. Although the FDA has cleared the use of certain of our products
for the treatment of edema and pain in soft tissue, we may not be able to obtain
regulatory clearance or approval of existing or new products or technologies or
new treatments through existing products. In addition, we have not demonstrated
ability to market and sell our products. The completion of the development of
any new products or technologies or new uses of existing products will remain
subject to all the risks associated with the commercialization of new products
based on innovative technologies, including:

o     our ability to fund and establish research that supports the efficacy of
      new technologies and products;

o     our ability to obtain regulatory approval or clearance of such
      technologies and products, if needed;

o     our ability to obtain market acceptance of such new technologies and
      products;


                                       43

<PAGE>

o     our ability to effectively and efficiently market and distribute such new
      products;

o     the ability of ADM or other manufacturers utilized by us to effectively
      and efficiently manufacture such new products; and

o     our ability to sell such new products at competitive prices that exceed
      our per unit costs for such products.

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February, 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products, the SofPulse M-10, Roma and Torino PEMF products. We have had
discussions with the FDA regarding our 510(k) application and we received
various requests from the FDA for additional information, which information has
been delivered to the FDA. Following the delivery of such information, we
received a letter from the FDA regarding our voluntarily submitted 510(k) for
our current products, the SofPulse M-10, Roma and Torino PEMF products. The
letter stated that the FDA determined that such products are not substantially
equivalent to other devices cleared for marketing through the 510(k) process or
otherwise legally marketed prior to May 28, 1976. We believe the FDA made an
incorrect assessment of the data and we have undertaken efforts to have the FDA
reconsider the information we have provided by informally appealing the FDA
determination while maintaining the ability to formally appeal pursuant to
established FDA regulations and guidance. We discussed our position with the FDA
in a meeting conducted in early June 2008 and sent the FDA further information
subsequent to the meeting as requested by the FDA. We are awaiting its response
to our meeting and subsequent submission. We believe based upon regulations and
guidance published by the FDA, as well discussions with our independent expert
consultants, including former FDA officials, that all of our current products
are covered by the FDA clearance provided in 1991. Based upon the safety and
efficacy of our products, we do not believe the FDA will require us to cease
marketing and/or recall current products which have been already sold, or
rented. However, if we are unsuccessful in our efforts to have the FDA
reconsider the data and it does not modify its determination, the FDA may
require us to do so until FDA marketing clearance is obtained. In addition, the
FDA could subject us to other sanctions set forth under "Government Regulation."

Based upon the safety and efficacy of our products, we believe it is highly
unlikely that FDA will require us to cease marketing and / or recall products
which have been already sold or rented. However, if we are unsuccessful in our
efforts to have the FDA reevaluate the data and it does not modify its
determination, the FDA may require us to do so until FDA clearance or approval
is obtained. If the FDA does not grant the 510(k) clearance for our current
products, the FDA may require us to cease marketing and/or recall current
products already sold or rented until FDA clearance or approval is obtained. In
addition, the FDA could subject us to the other sanctions described in our Form
10-KSB under "Pervasive and Continuing Regulation."

On April 3, 2008, we filed a Pre-Market Notification on Form 510(k) with the US
Food and Drug Administration ("FDA") for a small, compact product utilizing our
targeted pulsed electromagnetic field ("tPEMF") therapy technology for the
symptomatic relief and management of chronic, intractable pain; relief of pain
associated with arthritis and for the adjunctive treatment for post-surgical and
post-trauma acute pain. Although clearance to market this product could be
granted to us by the FDA as early as 90 days from the date of filing of the
application, the FDA has requested additional from us in a letter dated, April
25, 2008 to us. We are consulting with our FDA advisors in order to respond to
the additional information requested from the FDA. We cannot be assured that we
will be successful in obtaining FDA clearance and without such clearance, we
will be unable to enter the pain relief market. There are numerous medications
used in the treatment of pain and if we receive clearance to market this product
we intend to offer it as an alternative to such medications. These commonplace
medications have been required to carry warning labels due to potential
dangerous side-effects (and some withdrawn altogether), as compared to our
non-invasive, non-pharmacologic alternative device with no known side-effects.
We continue to be engaged in research and development for additional medical
applications of our technology and we expect to file 510(k) applications for
such additional applications in the future.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Estimates are used for, but not
limited to, the accounting for the allowance for doubtful accounts, inventories,
income taxes and loss contingencies. Management bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances. Actual results could differ from these
estimates under different assumptions or conditions.


                                       44

<PAGE>

We believe the following critical accounting policies, among others, may be
impacted significantly by judgment, assumptions and estimates used in the
preparation of our financial statements:

o We recognize revenue from the rental, from direct sale of our products and
from licensing sales and fees.

Rental revenue is recognized as earned on either a monthly or pay-per-use basis
in accordance with individual customer agreements. In most cases, we allow the
rental end user to evaluate our equipment on a trial basis, during which time we
provide any demonstration or education necessary for the use of our equipment.
Rental revenue recognition commences after the end of the trial period. All of
our rentals are terminable by either party at any time. When we use a third
party to bill insurance companies, we still recognize revenue as our products
are used. When certain of our distributors bill end users, we recognize rental
revenue when we are paid by the distributor.

Direct sale revenue is recognized when our products are shipped to end users
including medical facilities and distributors. Our products are principally
shipped on a "freight collect" basis. Shipping and handling charges and costs
are immaterial. We have no post shipment obligations and sales returns have been
immaterial.

Licensing sales are sales to companies that are licensed to distribute our
products in specific markets. Licensing sales revenue is recognized when our
products are received and accepted by the distributor. Further, and to a lesser
extent, we recognize revenue from the amortization of licensing fees under the
aforementioned exclusive worldwide distribution agreement.

We provide an allowance for doubtful accounts determined primarily through
specific identification.

o     Our products held for sale are included in the balance sheet under
      "Inventory." At March 31, 2008, we also had equipment in use or under
      rental agreements, which are our products that are rented to third
      parties, used internally or loaned out for marketing and testing. The
      units are depreciated over three years commencing on the date placed in
      service.

o     We apply Statement of Financial Accounting Standards No. 128, "Earnings
      Per Share" (FAS 128). Net loss per share is computed by dividing net loss
      by the weighted average number of common shares outstanding plus common
      stock equivalents representing shares issuable upon the assumed exercise
      of stock options and warrants. Common stock equivalents were not included
      for the reporting periods, as their effect would be anti-dilutive.

o     We follow the provisions of SFAS No. 123(R), Accounting for Stock-based
      Compensation, to account for compensation costs under our stock option
      plans.

o     We use the fair value method for equity instruments granted to
      non-employees and use the Black Scholes option value model for measuring
      the fair value of warrants and options. The stock based fair value
      compensation is determined as of the date of the grant or the date at
      which the performance of the services is completed (measurement date) and
      is recognized over the periods in which the related services are rendered.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS (SFAS
No. 157), which establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. Where applicable, this accounting
standard, which simplifies and codifies related guidance within GAAP, is
effective for us beginning April 1, 2008. We have not yet determined the effect,
if any the adoption of SFAS No. 157 may have on our financial statements.

In February 2007, the FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (SFAS No. 159). This statement
permits entities to choose to measure financial assets and liabilities, with
certain exceptions, at fair value at specified election dates. A business entity
shall report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. This
statement is effective for us beginning April 1, 2008. We have not determined
the effect, if any, the adoption of SFAS No. 159 may have on our financial
statements.

We believe the effects of any other recently issued, but not yet effective
accounting pronouncements, would not have a material effect on our financial
statements.


                                       45

<PAGE>

RESULTS OF OPERATIONS

YEAR ENDED MARCH 31, 2008 (FISCAL 2008) COMPARED TO YEAR ENDED MARCH 31, 2007
(FISCAL 2007)

NET LOSS - Net loss decreased $275,520 to $7,503,091, or $0.74 per share, for
fiscal 2008 compared to $7,778,611, or $1.13 per share, for fiscal 2007. The
decrease in net loss primarily resulted from (i) increases in revenues of
$424,101, or 36%, (ii) decreases in cost of rental revenue of $45,318, or 48%,
(iii) decreases in research and development expenses of $86,526, or 4%, (iv)
decreases in net interest expense of $1,665,761, or 100% (v) increase in net
interest income of $299,242, or 100% (vi) a decrease in the change in the fair
value of warrant and registration rights liabilities of $25,827, or 100%, offset
by increases in cost of licensing sales of $495,008, or 100%, increases in cost
of direct sales of $21,801, or 25%, increases in sales and marketing expenses of
$705,900, or 54%, and increases in general and administrative expenses of
$1,048,546, or 29%.

REVENUE - Total revenue increased $424,101, or 36%, to $1,606,441 for fiscal
2008 as compared to $1,182,340 for fiscal 2007. The increase in revenue was
primarily the result of our licensing sales and fees from our Allergan agreement
and, to a lesser extent increased unit sales resulting from increased marketing
efforts. Licensing sales and fees increased $401,881 or 1,543% and direct sales
increased by $24,554 or 5.9% offset by a decrease in rentals of $2,334 or 0.3%.
Licensing sales and fees are made up of sales of our units to Allergan of
$364,383, amortization of our upfront $500,000 licensing fee received from
Allergan upon signing our agreement of $62,500 and royalties received from
Allergan on sales of our units by Allergan of $1,040. Royalties received from
Allergan sales are from a limited launch of our product to select doctors in
select geographic markets. Our cost of licensing sales of $495,008 on licensing
sales of our units to Allergan of $364,383 is a loss on gross margin of $130,625
or 36%. The negative gross margin is the result of limited production runs of
our product upon receiving an initial order for 20,000 units from Allergan. The
units were all shipped by April 2008. As production volume increases, we expect
more economies of scale, although we can not predict when we will be at break
even levels predicted under the Allergan agreement. Royalties from Allergan are
received by us from Allergan in the quarter following Allergan's sale of product
to their customers. We expect, once Allergan completes its product launch, our
royalties received from Allergan on these sales will far exceed our production
losses.

COST OF RENTALS - Cost of rental revenue decreased $45,318, or 48%, to $48,725
for fiscal 2008 from $94,043 for fiscal 2007 due to a decrease in the
inter-company allocation from ADM. During fiscal 2007 cost of rentals consisted
primarily of the cost of electronics and other components plus the inter-company
charges from ADM for the manufacture of our products and depreciation. Effective
April 1, 2007, ADM began invoicing us for finished goods at ADM's cost of raw
materials and manufacturing, plus 20 percent. Our cost of rentals for fiscal
2008 and fiscal 2007 included depreciation of $21,477 and $5,463 and
inter-company allocations of $4,982 and $75,584, respectively.

COST OF LICENSING SALES - Cost of licensing sales increased $495,008, or 100%,
to $495,008 for fiscal 2008 from $0 for fiscal 2007 due to the start of unit
sales under the terms of our agreement with Allergan.

COST OF DIRECT SALES - Cost of direct sales increased $21,801, or 25%, to
$108,841 for fiscal 2008 from $87,040 for fiscal 2007 primarily due to the
increase in unit sales.

RESEARCH AND DEVELOPMENT COSTS - Research and development costs decreased
$86,526, or 4%, to $2,115,049 for fiscal 2008 from $2,201,575 for fiscal 2007.
The decrease was due to decreased share based compensation costs related to
stock option grants awarded to research and development consultants of $167,917
offset by additional other expenses of $81,391 in fiscal 2008.

SELLING AND MARKETING EXPENSES - Selling and marketing expenses increased
$705,900, or 54%, to $2,012,969 for fiscal 2008 as compared to $1,307,069 for
fiscal 2007. The increase resulted primarily from (i) increases in employee
compensation expenses of $510,134, as we increased staffing for sales and
marketing from 4 employees at March 31, 2007 to 11 employees at March 31, 2008;
(ii) increases in recruitment fees expenses of $79,214,to retain the additional
employees within sales and marketing; (iii) increases in advertising costs of
$106,559 as we continue to promote our products; and (iv) increases in marketing
expenses of $173,196, to fulfill sample requests for our Torino units to
Allergan and other customers as well as the cost of our Roma units on
evaluations, offset by decreases in consulting fees expenses of $48,054 and
commission expenses of $120,822.


                                       46

<PAGE>

GENERAL AND ADMINISTRATIVE EXPENSES - General and administrative expenses
increased $1,048,546, or 29%, to $4,628,182 for fiscal 2008 as compared to
$3,579,636 for fiscal 2007. The increase resulted primarily from (i) increases
in employee compensation expenses of $352,563, primarily the result of adding
two staffing positions to the accounting department. These two roles were
previously handled by ADM under our Management Agreement with ADM. We are no
longer billed by ADM for these shared employees in ADM's accounting department
as of January, 2008, the date we moved into our new facility; (ii) increases in
payroll tax expenses of $51,530, (iii) increases in rent expenses of $84,764,
(iv) increases in employee benefits expenses of $130,449, (v) increases in
business insurance expenses of $87,484, (vi) increases in travel expenses of
$162,209, (vii) increases in investor relations expenses of $148,319, (viii)
increases in public relations expenses of $62,543, (ix) increases in
professional fees expenses of $35,638, and, (x) increases in other office
expenses of $86,268, partially offset by decreases in share based compensation
of $181,387. General and administrative expenses for fiscal 2008 and fiscal 2007
reflect inter-company allocations of $198,247 and $242,595, respectively.
Inter-company allocations for fiscal 2008 and fiscal 2007 consisted of amounts
payable to ADM under our management services agreement.

WARRANTS AND REGISTRATION RIGHTS - The change in the fair value of warrant and
registration rights liabilities decreased $25,827, or 100%, to $0 for fiscal
2008 as compared to $25,827 for fiscal 2007. The decrease resulted from the
reclassification of the warrant and registration rights liabilities to equity
when the registration statement related to our IPO became effective in October
2006.

INTEREST INCOME (EXPENSE), NET - Net interest and financing costs decreased
$1,965,003, or 118%, to net interest income of $299,242 for fiscal 2008 from net
interest expense of $1,665,761 for fiscal 2007. This is due to the elimination
of interest and financing costs incurred in fiscal 2007 when proceeds from our
IPO were used to retire the convertible debentures and the investment of excess
cash in money market funds.

LIQUIDITY AND CAPITAL RESOURCES

We have had significant operating losses for the fiscal years ended March 31,
2008 and 2007. As of March 31, 2008, we had an accumulated deficit of
approximately $31.2 million. Our continuing operating losses have been funded
principally through the proceeds of our private placement financings and our
IPO. We have only generated limited revenues of $1,606,441 and $1,182,340 for
the fiscal years ended March 31, 2008 and 2007, respectively, primarily from the
rental and sale of our products, and we expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our marketing efforts with respect to our
products and continue our research and development of additional applications
for our technology and other technologies that we may develop in the future. We
do not expect to be able to generate sufficient cash flow from our operations
during the next twelve-month period; however, we believe that the proceeds from
our private placement financings, combined with our expected revenues, will be
sufficient to fund our operations through March 31, 2009.

As of March 31, 2008, we had cash and cash equivalents of approximately $6.6
million as compared to cash and cash equivalents of approximately $8.3 million
at March 31, 2007. The decrease in cash and cash equivalents during the fiscal
year ended March 31, 2008 was due to funds used in operations of approximately
$6.0 million, cash used in investing activities of approximately $1.0 million
offset by cash flow provided from financing activities of approximately $5.3
million, which includes amounts raised in our private placement financings.

Net cash used in operating activities was approximately $6.0 million during the
fiscal year ended March 31, 2008 compared to approximately $3.5 million during
the fiscal year ended March 31, 2007. Net cash used in operating activities for
the fiscal year ended March 31, 2008 resulted primarily from our net loss of
approximately $7.5 million during the period, partially offset by non-cash
charges of approximately $1.9 million, and, increases in accounts receivables of
approximately $120,000 and increases in deposits with ADM of approximately
$278,000 during fiscal 2008.

Net cash used by investing activities was approximately $1.0 million during the
fiscal year ended March 31, 2008 compared to approximately $309,000 during the
fiscal year ended March 31, 2007. Net cash used by investing activities for the
fiscal year ended March 31, 2008 resulted from purchases of property, plant and
equipment of approximately $441,000, payments for patents and trademarks of
approximately $ 371,000, increases in equipment in use and under rental
agreements of approximately $112,000 and an increase in restricted cash of
approximately $48,000.


                                       47

<PAGE>

Net cash provided by financing activities was approximately $5.3 million during
the fiscal year ended March 31, 2008 compared to net cash provided by financing
activities of approximately $11.4 million during the fiscal year ended March 31,
2007. Cash provided by financing activities for the fiscal year ended March 31,
2008 resulted from the issuance of shares under the terms of a securities
purchase agreement in October 2007 for net proceeds of $4,865,000 and from the
exercise of stock options and warrants during fiscal 2008 in the amount of
approximately $396,000.

In November 2006, we received $500,000 in milestone payments under the term of
our agreement with Allergan. We received our first order from Allergan during
September, 2007 for 20,000 units. We have provided multiple shipments of these
units to Allergan through April, 2008. We have also received orders from
Allergan for sample units as required under our agreement. Allergan can receive
samples free of charge in accordance with the agreement each year up to an
approved allotment and any samples in addition to the approved allotment as
defined by the parties is sold to Allergan at prices negotiated between the
parties. Our licensing sales and fees from Allergan for the fiscal year ended
March 31, 2008 were as follows: sales of our units to Allergan of $364,383,
amortization of our upfront $500,000 licensing fee received from Allergan upon
signing our agreement of $62,500 and royalties received from Allergan on sales
of our units by Allergan of $1,040. Royalties received from Allergan sales are
from a limited launch of our product to select doctors in select geographic
markets. Our cost of licensing sales of $495,008 on licensing sales of our units
to Allergan of $364,383 is a loss on gross margin of $130,625 or 36%. The
negative gross margin is the result of limited production runs of our product
upon receiving an initial order for 20,000 units from Allergan. The units were
all shipped by April 2008. As production volume increases, we expect more
economies of scale, although we can not predict when we will be at break even
levels predicted under the Allergan agreement. Royalties from Allergan are
received by us from Allergan in the quarter following Allergan's sale of product
to their customers. We expect, once Allergan completes its product launch, our
royalties received from Allergan on these sales will far exceed our production
losses. Our research and development efforts continue on several fronts directly
related to our technology, including our expansion into the angiogenesis and
vascularization market, as well as new technologies and products. Although we do
not have any specific plans to date, we intend to pursue entering into joint
ventures, license agreements or other relationships with third-parties to
commercialize any new technologies and products we develop in the future. Our
research and development expenditures were $2,115,049 and $2,201,575 (including
$413,795 and $581,712 of share-based compensation related to the grant of stock
options) for the fiscal years ended March 31, 2008 and 2007, respectively.

We are a party to a sponsored research agreement with Montefiore Medical Center
pursuant to which we funded research in the fields of pulsed electro-magnetic
frequencies at Montefiore Medical Center's Department of Plastic Surgery that
commenced on October 17, 2004 and expires on December 31, 2009. We were notified
prior to our fiscal year ended March 31, 2007, that the research being conducted
by Montefiore Medical Center's Department of Plastic Surgery has concluded prior
to our fiscal year end and this agreement will not be renewed. We expect to
receive the data from this study during the summer of 2008 after a payment is
made by us of up to $90,000, which was accrued by us and recorded in the March
31, 2008 financial statements.

We fund research in the field of neurosurgery under the supervision of Dr.
Casper, of Montefiore Medical Center's Department of Neurosurgery. Dr. Casper is
to examining the effects of pulsed magnetic fields on neurons and vessels in
cell culture and intact brain and neural transplants, as well as to explore the
potential of this modality to lessen neurodegeneration (progressive damage or
death of neurons leading to a gradual deterioration of the bodily functions
controlled by the affected part of the nervous system) and increase vascular
plasticity (the lifelong ability of the brain to reorganize neural pathways
based on new experiences). We believe this modality could have applications in
the treatment of chronic and acute vascular and neurodegenerative diseases,
including Parkinson's disease. We provided funding for Dr. Casper's research in
this field using our products. We expensed $225,000 during our fiscal year
2006-2007 and $222,850 during our fiscal year 2007-2008 to continue Dr. Casper's
research. We expect to fund additional research for Dr. Casper during fiscal
2008-2009 of approximately $455,000. We accrued $130,125 at March 31, 2008 for
our research and development efforts at Montefiore Medical Center through March
31, 2008.

In January 2006, we entered into a Master Clinical Trial Agreement with
Cleveland Clinic Florida, a not-for-profit multispecialty medical group
practice, to set forth the basic terms and conditions with respect to studies to
be conducted by Cleveland Clinic Florida there under from time to time during
the term of the agreement, which is from January 9, 2006 to January 9, 2009. The
estimated cost of the trial and additional costs and expenses relating to the
trial is approximately $290,000 of which approximately $129,000 was paid by us
through March 31, 2008. At March 31, 2008, we accrued $161,000 for work
performed through March 31, 2008 by the Cleveland Clinic Florida under its
agreement with us as well as additional fees, costs and expenses to third
parties for work to be handled by such third parties during the term of the
agreement. The IRB-approved, double-blind randomized placebo-controlled clinical
trial in patients who are not candidates for angioplasty or cardiac bypass
surgery has concluded at The Cleveland Clinic.

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<PAGE>

During our fiscal year 2008-2009, we will fund additional studies in
cardiovascular ischemia, up to $385,000, with established research facilities,
to establish clear dose and response curves as well as dosing regimens for the
use of our tPEMF device in cardiovascular ischemia, in standard cardiovascular
models.

In June, 2007, we entered into a Research Agreement with Indiana State
University to conduct randomized, double-blind animal wound studies to assist us
in determining optimal signal configurations and dosing regimens. Indiana State
University reported at the Bioelectromagnetics Society (BEMS) 30th annual
meeting in June 2008 results of the first phase of this study in which a
carrageenan injection model in rats treated with our targeted tPEMF signals had
significantly less pain and edema than rats treated with inactive units. We
expensed approximately $90,000 during our fiscal year 2007-2008 for this
research and expect to expense approximately $70,000 during our fiscal year
2008-2009 for this research.

In February, 2008, we entered into a collaboration agreement with DSI Renal,
Inc. ("DSI"). The first phase involves DSI initiating a multi-site, double-blind
randomized placebo controlled clinical trial to provide additional data on the
effect of our tPEMF technology on the healing of skin ulcers thought to be
caused by either ischemic and/or diabetic vasculopathy, in patients with end
stage renal disease being treated by hemodialysis. A total of 150 patents are
anticipated to be enrolled in the trial. Those patients will be randomly
selected into active and control groups, with the active group receiving our
tPEMF signal. We will supply DSI with product for the clinical trial. DSI will
provide personnel, supplies and equipment necessary for the conduct of the
trial. Primary end points will include time to complete healing, degree of wound
healing expressed as a percentage of total volume area healed at a specific time
and percentage of non-healing wounds. DSI has indicated to us that they
anticipate receiving IRB approval for the trial during the summer of 2008, with
recruitment to be completed within 12 months of initiation of the trial.
Following the completion of the trial, as mutually determined by the parties,
and subject to certain other terms of the collaboration agreement, DSI Renal
would be granted an exclusive license for the distribution of certain of our
products in the U.S. for the chronic and end stage renal disease market. Under
the terms of the collaboration, DSI would purchase devices from us and pay a
royalty on all sales or rentals of such devices.

On May 1, 2008 we signed a research agreement with the Henry Ford Health System.
The principal investigator, Dr. Fred Nelson in the Department of Orthopedics
will study our prototype device using targeted tPEMF signal configurations on
human patients with established osteoarthritis of the knee that are active at
least part of the day. The trial is expected to recruit up to 100 patients
receiving active or sham treatment for six weeks and then cross over for an
additional six weeks. We are awaiting approval of the IRB at The Henry Ford
Health System to begin the double blind randomized controlled study. We expect
enrollment to begin by July 2008 and enrollment to continue for up to 12 months.
We expect to expense approximately $110,000 during our fiscal year 2008-2009 for
this study, of which approximately $27,000 was paid during May 2008. There can
be no assurance that this trial will be completed within this time frame or
within this cost.

Our business is capital intensive and we will require additional financing in
order to:

o     fund research and development;

o     expand sales and marketing activities;

o     develop new or enhanced technologies or products;

o     maintain and establish regulatory compliance;

o     respond to competitive pressures; and

o     acquire complementary technologies or take advantage of unanticipated
      opportunities.

Our need for additional capital will depend on:

o     the costs and progress of our research and development efforts;

o     the preparation of pre-market application submissions to the FDA for our
      new products and technologies;

o     the number and types of product development programs undertaken;

o     the number of products to be manufactured for sale or rental;

o     the costs and timing of expansion of sales and marketing activities;

o     the amount of revenues from sales of our existing products and potentially
      new products;

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<PAGE>

o     the cost of obtaining, maintaining, enforcing and defending patents and
      other intellectual property rights;

o     competing technology and market developments; and

o     developments relating to FDA and other regulatory and third-party coverage
      matters.

In order to keep our operating expenses manageable, we and ADM are parties to a
management services agreement under which ADM provides us with services relating
to equipment manufactured by ADM and allocates portions of its real property
facilities for use by our five Research and Development employees who maintain
offices at the ADM facility. Our reliance on the facilities and services
agreement with ADM has been reduced significantly as a result of us moving all
of our employees, except Research and Development into a new facility during
December, 2007.

We use office, manufacturing and storage space in a building located in
Northvale, New Jersey, currently leased by ADM, pursuant to the terms of the
management services agreement. ADM determines the portion of space allocated to
us on a monthly basis, and we are required to reimburse ADM for our respective
portions of the lease costs, real property taxes and related costs. See "Item 2.
Properties" and "Item 12. Certain Relationships and Related Transactions and
Director Independence" of this Annual Report on Form 10-KSB.

In addition, on February 1, 2008, we entered into an information technology
("IT") service agreement with ADM. Pursuant to this agreement, we share certain
costs related to hardware, software and employees. We have not billed ADM nor
has ADM billed us for any charges under this agreement for the year end March
31, 2008

We have incurred $4,982 and $75,584 for ADM's manufacture of our products during
the fiscal years ended March 31, 2008 and March 31, 2007, respectively.

The amount included in general and administrative expense representing ADM's
allocations for the fiscal year ended March 31, 2008 and 2007, was $198,247 and
$242,595, respectively, consisting of amounts payable under our facilities and
services agreement with ADM.

We purchased $901,845 and $59,789 of finished goods from ADM at contracted rates
during the fiscal years ended March 31, 2008 and 2007, respectively.

FINANCINGS

During October 2006, we completed our IPO, selling 2.5 million shares of our
common stock at $6.00 per share raising gross proceeds of $15.0 million. Net
proceeds to us were approximately $12.2 million from the IPO after the payment
of underwriting discounts and commissions and expenses related to the IPO.
During November 2006, we received additional net proceeds of approximately $1.4
million, after the payment of underwriting commissions and expenses, from the
partial exercise of the underwriters' over-allotment option to purchase 250,000
of the 375,000 available shares of our common stock at $6.00 per share.

Upon the consummation of the IPO, we paid approximately $2.6 million to ADM
representing the balance in inter-company accounts at October 24, 2006 due to
ADM from us, for product manufacturing and services provided by ADM to us under
our management services agreement for the period from March 1989 to October
2006. Further, at the closing of our IPO, we repaid in full our notes payable to
Ajax on October 24, 2006 with a payment of $257,123, which represented the
outstanding principal and interest under the unsecured subordinated loan.

Upon the consummation of the IPO, unsecured convertible notes in the aggregate
principal amount of $6.1 million issued in our December 2004 and February 2005
joint private placement with ADM automatically converted into an aggregate of
1,630,232 shares of our common stock. The notes bore interest at an annual rate
of 6%, which interest was payable at the direction of the holder in cash, shares
of ADM common stock or shares of our common stock. We issued 21,378 shares and
18,016 shares of common stock on December 27, 2006 and January 17, 2007,
respectively, in lieu of cash for interest payments on the notes, which
concluded our obligation to such holders.

On the effective date of the Registration Statement, unsecured convertible notes
in the aggregate principal amount of $2,000,000 issued in connection with our
November 2005 and March 2006 private placements to four institutional investors
automatically converted into an aggregate of 392,157 shares of our common stock.
The notes bore interest at an annual rate of 8%, payable in cash. Two of the
institutional investors who purchased notes, Ajax Capital LLC and Kenneth S.
Abramowitz & Co., Inc., are investment funds wholly-owned by Steven Gluckstern
and Kenneth Abramowitz, respectively, each of whom began to serve as a director
of our company in connection with our IPO, waived their right to receive
interest payments on a quarterly basis through the consummation of the IPO
(approximately $25,000 per quarter). We used approximately $77,000 and $19,000
of the net proceeds from our IPO to pay Ajax Capital LLC and Kenneth S.
Abramowitz, Co. Inc., respectively, and approximately $149,000 of the net
proceeds from the IPO to pay to the remaining such holders' any and all interest
with respect to such notes then due and payable.

                                       50

<PAGE>

As a result of the foregoing, we do not have any loans outstanding as of the
date of this report On October 18, 2007, we entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement") dated as of October 15, 2007,
between us and the purchaser named therein (the "Purchaser"). The Securities
Purchase Agreement provided for the sale by us to the Purchaser of a total of
1,000,000 shares of common stock, no par value (the "Shares"), at a price of
$5.00 per share for gross proceeds of $5,000,000.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.

Although we expect that our available funds, together with funds from
operations, will be sufficient to meet our anticipated needs for the current
period through March 31, 2009, we will need to obtain additional capital to
continue to operate and grow our business. Our cash requirements may vary
materially from those currently anticipated due to changes in our operations,
including our marketing and distribution activities, product development,
research and development, regulatory requirements, and expansion of our
personnel and the timing of our receipt of revenues, including royalty payments.
Our ability to obtain additional financing in the future will depend in part
upon the prevailing capital market conditions, as well as our business
performance. There can be no assurance that we will be successful in our efforts
to arrange additional financing on terms satisfactory to us or at all. If
additional financing is raised by the issuance of common stock you may suffer
additional dilution and if additional financing is raised through debt
financing, it may involve significant restrictive covenants which could affect
our ability to operate our business. If adequate funds are not available, or are
not available on acceptable terms, we may not be able to continue our
operations, grow our business or take advantage of opportunities or otherwise
respond to competitive pressures and remain in business. In addition, we may
incur significant costs in connection with any potential financing, whether or
not we are successful in raising additional capital.


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<PAGE>


ITEM 7. FINANCIAL STATEMENTS

                                                                            Page

Report of Independent Registered Public Accounting Firm                       53

Balance Sheet as of March 31, 2008                                            54

Statements of Operations for the years ended March 31, 2008 and 2007          55

Statements of Stockholders' Equity for the years ended
  March 31, 2008 and 2007                                                     56

Statements of Cash Flows for the years ended March 31, 2008 and 2007          57

Notes to the Financial Statements                                             58


                                       52


<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Ivivi Technologies, Inc.

We have audited the accompanying balance sheet of Ivivi Technologies, Inc. as of
March 31, 2008, and the related statements of operations, stockholders' equity,
and cash flows for each of the two years then ended. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ivivi Technologies, Inc. as of
March 31, 2008, and the results of its operations, changes in stockholders'
equity and its cash flows for each of the two years then ended in conformity
with accounting principles generally accepted in the United States of America.

                                             /s/ Raich Ende Malter & Co. LLP
                                             East Meadow, New York
                                             June 30, 2008

                                       53


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                                  BALANCE SHEET
                              AS OF MARCH 31, 2008

                                     ASSETS


Current assets:
       Cash and cash equivalents                                   $  6,600,154
       Accounts receivable, net of allowance for
         doubtful accounts of $34,750                                   319,007
       Inventory                                                        111,951
       Deposits with affiliate - net                                    241,828
       Prepaid expenses and other current assets                        141,148
                                                                   ------------

                                                                      7,414,088

Property and equipment, net                                             405,793
Inventory long-term                                                     115,885
Equipment in use and under rental agreements, net                       155,834
Intangible assets, net of accumulated
       amortization of $44,674                                          615,064

Restricted cash                                                          48,167
                                                                   ------------

                                                                   $  8,754,831
                                                                   ============


                  LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
       Accounts payable and accrued expenses                       $  1,029,143
                                                                   ------------

Deferred revenue                                                        411,458
                                                                   ------------

Stockholders' equity:
       Preferred stock, no par value, 5,000,000 shares
       authorized, no shares issued and outstanding                          --
       Common stock, no par value; 70,000,000 shares
         authorized, 10,715,130 shares issued
         and outstanding                                             26,183,516
       Additional paid-in capital                                    12,346,187
       Accumulated deficit                                          (31,215,473)
                                                                   ------------

                                                                      7,314,230
                                                                   ------------

                                                                   $  8,754,831
                                                                   ============


The accompanying notes are an integral part of these financial statements.

                                       54

<PAGE>
<TABLE>
<S>                 <C>
                             IVIVI TECHNOLOGIES, INC.
                             STATEMENTS OF OPERATIONS
                           FOR THE YEARS ENDED MARCH 31


                                                        2008             2007
                                                    ------------    ------------
Revenue:
     Rentals                                        $    737,672    $    740,006
     Licensing sales and fees                            427,923          26,042
     Direct sales                                        440,846         416,292
                                                    ------------    ------------

                                                       1,606,441       1,182,340
                                                    ------------    ------------

Costs and expenses:
     Cost of rentals                                      48,725          94,043
     Cost of licensing sales                             495,008              --
     Cost of direct sales                                108,841          87,040
     Research and development                          2,115,049       2,201,575
     Sales and marketing                               2,012,969       1,307,069
     General and administrative                        4,628,182       3,579,636
                                                    ------------    ------------

                                                       9,408,774       7,269,363
                                                    ------------    ------------

                                                      (7,802,333)     (6,087,023)
Interest income (expense), net                           299,242      (1,665,761)
Change in fair value of warrants and registration
     rights liabilities                                       --         (25,827)
                                                    ------------    ------------

Loss before provision
     for income taxes                                 (7,503,091)     (7,778,611)
Provision for income taxes                                    --              --
                                                    ------------    ------------

Net loss                                            $ (7,503,091)   $ (7,778,611)
                                                    ============    ============

Net loss per share, basic and diluted               $      (0.74)   $      (1.13)
                                                    ============    ============

Weighted average shares outstanding                   10,073,373       6,875,028
                                                    ============    ============



The accompanying notes are an integral part of these financial statements.

                                       55


<PAGE>


                                                IVIVI TECHNOLOGIES, INC.

                                           STATEMENTS OF STOCKHOLDERS' EQUITY
                                      FOR THE YEARS ENDED MARCH 31, 2008 AND 2007


                                                    Common Stock           Additional                         Total
                                            ---------------------------      Paid-In      Accumulated     Stockholders'
                                              Shares          Amount         Capital        Deficit          Equity
                                            ------------   ------------    ------------   ------------    ------------

Balance - April 1, 2006                        4,745,000   $     74,600    $  1,286,914   $(15,933,771)   $(14,572,257)

Issuance of common stock in connection
  with initial public offering, net            2,750,000     13,640,241              --             --      13,640,241

Convertible debt converted                     1,584,009      8,087,500              --             --       8,087,500

Unamortized value of convertible debt
  discount at time of conversion                      --       (523,484)             --             --        (523,484)

Issuance cost related to convertible
  debt conversion                                     --       (568,864)             --             --        (568,864)

Value of share based registration rights
 liability at time of conversion                 438,380             --       3,450,050             --       3,450,050

Value of warrants and beneficial
 conversion feature at time of conversion             --             --       3,697,699             --       3,697,699

Accrued interest paid in stock                    39,394        212,161              --             --         212,161

Share based compensation                              --             --       2,142,448             --       2,142,448

Net loss                                              --             --              --     (7,778,611)     (7,778,611)
                                            ------------   ------------    ------------   ------------    ------------

Balance - March 31, 2007                       9,556,783   $ 20,922,154    $ 10,577,111   $(23,712,382)   $  7,786,883


Issuance of shares under private
  placement, net of issuance costs
  of $135,000                                  1,000,000      4,865,000              --             --       4,865,000

Exercise of stock options                         52,125         35,549              --             --          35,549

Exercise of warrants                             106,222        360,813              --             --         360,813

Share based compensation                              --             --       1,769,076             --       1,769,076

Net loss                                              --             --              --     (7,503,091)     (7,503,091)
                                                                                                          ------------

Balance - March 31, 2008                      10,715,130   $ 26,183,516    $ 12,346,187   $(31,215,473)   $  7,314,230
                                            ============   ============    ============   ============    ============


The accompanying notes are an integral part of these financial statements.


                                                                   56

<PAGE>
                                IVIVI TECHNOLOGIES, INC.

                                STATEMENTS OF CASH FLOWS
                              FOR THE YEARS ENDED MARCH 31,

                                                           2008             2007
                                                       ------------    ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                               $ (7,503,091)   $ (7,778,611)
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                           164,953          25,099
    Change in fair value of warrant and
      registration rights liabilities                            --          25,827
    Share based financing penalties                              --       1,350,278
    Amortization of loan costs and discount                      --         173,008
    Share based compensation                              1,769,076       2,142,448
    Provision for doubtful accounts                          25,495          30,608
    Amortization of deferred revenue                        (62,500)        (26,042)
    Gain on sale of equipment                                  (531)             --
Changes in operating assets and liabilities:
  (Increase) decrease in:
    Accounts receivable                                    (120,153)        (32,826)
    Inventory                                               (34,144)         54,761
    Prepaid expenses and other current assets                13,582        (144,144)
    Deposits with affiliates                               (278,485)             --
  Increase in:
    Accounts payable and accrued expenses                    23,168         158,834
    Deferred revenue                                             --         500,000
                                                       ------------    ------------
                                                         (6,002,630)     (3,520,760)
                                                       ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                    (441,020)        (34,344)
    Proceeds from sale of equipment                          17,554              --
    Equipment in use and under rental agreements           (112,300)             --
    Restricted cash                                         (48,167)             --
    Deferred licensing costs                                (14,694)        (75,534)
    Payments for patents and trademarks                    (370,648)       (198,873)
                                                       ------------    ------------
                                                           (969,275)       (308,751)
                                                       ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock in connection with
  initial public offering                                        --      13,963,898
Proceeds from issuance of shares, net of
  issuance costs of $135,000                              4,865,000              --
Exercise of stock options and warrants                      396,362              --
Affiliate advances                                               --      (2,566,038)
Proceeds of notes                                                --         250,000
Repayment of notes                                               --        (250,000)
                                                       ------------    ------------
                                                          5,261,362      11,397,860
                                                       ------------    ------------

Net increase (decrease) in cash and cash equivalents     (1,710,543)      7,568,349
Cash and cash equivalents, beginning of period            8,310,697         742,348
                                                       ------------    ------------

Cash and cash equivalents, end of period               $  6,600,154    $  8,310,697
                                                       ============    ============


                                       57

<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS
                          FOR THE YEARS ENDED MARCH 31,

                                                            2008         2007
                                                         ----------   ----------

Supplemental disclosures of cash flow information:
Cash paid for:
  Interest                                               $       --   $  417,662
  Income taxes                                           $       --   $       --

Non Cash Financing and Investing Activities:
  Debt converted to equity                               $       --   $7,564,016
  Warrant and registration rights liabilities
      converted to equity                                $       --   $7,147,749
  Shares issued for accrued interest                     $       --   $  212,161


The accompanying notes are an integral part of these financial statements.


</TABLE>

                                       58

<PAGE>


                            IVIVI TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008

1. ORGANIZATIONAL MATTERS

                                  ORGANIZATION

Ivivi Technologies, Inc. ("we", "us", "the company" or "Ivivi"), formerly AA
Northvale Medical Associates, Inc., was incorporated under the laws of the state
of New Jersey on March 9, 1989. We are authorized under our Certificate of
Incorporation to issue 70,000,000 common shares, no par value and 5,000,000
preferred shares, no par value.

                               NATURE OF BUSINESS

We sell and rent non-invasive electro-therapeutic medical devices. These
products are sold or rented to our licensees, distributors and customers
principally located in the United States with additional markets in Canada and
Ireland.

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February, 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products, the SofPulse M-10, Roma and Torino PEMF products. We have had
discussions with the FDA regarding our 510(k) application and we received
various requests from the FDA for additional information, which information has
been delivered to the FDA. Following the delivery of such information, we
received a letter from the FDA regarding our voluntarily submitted 510(k) for
our current products, the SofPulse M-10, Roma and Torino PEMF products. The
letter stated that the FDA determined that such products are not substantially
equivalent to other devices cleared for marketing through the 510(k) process or
otherwise legally marketed prior to May 28, 1976. We believe the FDA made an
incorrect assessment of the data and we have undertaken efforts to have the FDA
reconsider the information we have provided by informally appealing the FDA
determination while maintaining the ability to formally appeal pursuant to
established FDA regulations and guidance. We discussed our position with the FDA
in a meeting conducted in early June 2008 and sent the FDA further information
subsequent to the meeting as requested by the FDA. We are awaiting its response
to our meeting and subsequent submission. We believe based upon regulations and
guidance published by the FDA, as well discussions with our independent expert
consultants, including former FDA officials, that all of our current products
are covered by the FDA clearance provided in 1991. Based upon the safety and
efficacy of our products, we do not believe the FDA will require us to cease
marketing and/or recall current products which have been already sold, or
rented. However, if we are unsuccessful in our efforts to have the FDA
reconsider the data and it does not modify its determination, the FDA may
require us to do so until FDA marketing clearance is obtained. In addition, the
FDA could subject us to other sanctions set forth under "Government Regulation."

Based upon the safety and efficacy of our products, we believe it is highly
unlikely that the FDA will require us to cease marketing and/or recall products
which have been already sold or rented. However, if we are unsuccessful in our
efforts to have the FDA re-evaluate the data and it does not modify its
determination, the FDA may require us to do so until FDA clearance or approval
is obtained. If the FDA does not grant the 510(k) clearance for our current
products, the FDA may require us to cease marketing and/or recall current
products already sold or rented until FDA clearance or approval is obtained. In
addition, the FDA could subject us to the other sanctions described in our Form
10-KSB under "Pervasive and Continuing Regulation."

2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES-- These financial statements have been prepared in accordance
with accounting principles generally accepted in the United States which require
management to make estimates and assumptions that affect the reported amounts of
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.

FAIR VALUE OF FINANCIAL INSTRUMENTS-- For certain of our financial instruments,
including accounts receivable, accounts payable and accrued expenses and
advances payable-affiliates, the carrying amounts approximate fair value due to
their relatively short maturities.

CASH AND CASH EQUIVALENTS-- We consider all highly liquid investments with
maturities of three months or less at the time of purchase to be cash
equivalents. Cash equivalents consist primarily of money market funds that are
carried at cost, which approximate fair value.

                                       59

<PAGE>

REVENUE RECOGNITION-- We recognize revenue from the sales and rental of our
products. In addition, we recognize revenue from companies that are licensed to
distribute our products in specific markets. Further, and to a lesser extent, we
recognize revenue from the amortization of licensing fees under our Revenue
Sharing Agreement (See Note 8).

Sales to medical facilities and distributors are recognized when our products
are shipped. Licensing sales are recognized when our products are received and
accepted by the distributor.

Rental revenue is recognized as earned on either a monthly or pay-per-use basis
in accordance with individual customer agreements. In most cases, we allow the
rental end user to evaluate our equipment on a trial basis, during which time we
provide any demonstration or education necessary for the use of our equipment.
Rental revenue recognition commences after the end of the trial period. All of
our rentals are terminable by either party at any time. When we use a third
party to bill insurance companies, we still recognize revenue as our products
are used. When certain of our distributors bill end users, we recognize rental
revenue when we are paid by the distributor.

We estimate allowance for doubtful accounts determined primarily through
specific identification.

INVENTORY-- Inventory consists of our electroceutical units and is stated at the
lower of cost or market.

PROPERTY & EQUIPMENT-- We record our equipment at historical cost. We expense
maintenance and repairs as incurred. Depreciation is provided for by the
straight-line method over three to seven years, the estimated useful lives of
the property and equipment.

EQUIPMENT IN USE OR UNDER RENTAL AGREEMENTS-- Equipment in use or under rental
agreements consists of our electroceutical units and accessories rented to third
parties, used internally and loaned out for marketing and testing. Such
equipment is depreciated on a straight-line basis over three years, the
estimated useful lives of the units, commencing on the date placed in service.

INTANGIBLE ASSETS-- Intangible assets consist of patents and trademarks of
$539,726, net of accumulated amortization of $29,784 and deferred licensing
costs of $75,338, net of accumulated amortization of $14,890. Amortization
expense totaled $41,104 and $3,570 for the fiscal years ended March 31, 2008 and
2007, respectively. Patents and trademarks and deferred licensing costs are
amortized over their legal life or the life of the related Revenue Sharing
agreement (See Note 8), whichever is less. Amortization expense for the next
five years is estimated as follows:

         March 31, 2009      $  93,677
                   2010         93,677
                   2011         93,677
                   2012         93,677
                   2013         93,677
         2014 and after        146,679
                        --------------
                             $ 615,064
                        ==============


LONG-LIVED ASSETS-- We follow Statement of Financial Accounting Standards
(SFAS), No. 144, "ACCOUNTING FOR IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS,"
which established a "primary asset" approach to determine the cash flow
estimation period for a group of assets and liabilities that represents the unit
of accounting for a long lived asset to be held and used. Long-lived assets to
be held and used are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The carrying amount of a long-lived asset is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to sell. During
the years ended March 31, 2008 and 2007, no impairment loss was recognized.

ADVERTISING COSTS-- Advertising costs are expensed as incurred and amounted to
$188,391 and $81,832 for the fiscal years ended March 31, 2008 and 2007,
respectively.

RESEARCH AND DEVELOPMENT COSTS-- Our research and development costs consist
mainly of payments for third party research and development arrangements,
consulting payments and employee salaries. Research and development totaled
$1,701,254 and $1,619,863, before related charges of $413,795 and $581,712 for
share-based compensation, for the fiscal years ended March 31, 2008 and 2007,
respectively.

                                       60

<PAGE>

SHARE-BASED COMPENSATION--We follow the provisions of SFAS 123(R) "SHARE-BASED
PAYMENT," using the modified prospective method. Under this method, we
recognized compensation cost based on the grant date fair value, using the Black
Scholes option value model, for all share-based payments granted on or after
April 1, 2006 plus any awards granted to employees prior to April 1, 2006 that
remained unvested at that time.

We use the fair value method for equity instruments granted to non-employees and
use the Black Scholes option value model for measuring the fair value of
warrants and options. The share-based fair value compensation is determined as
of the date of the grant or the date at which the performance of the services is
completed (measurement date) and is recognized over the periods in which the
related services are rendered.

Fair value is computed using the Black Scholes method at the date of grant of
the options based on the following assumption ranges: (1) risk free interest
rate of 3.01% to 5.03%; (2) dividend yield of 0%; (3) volatility factor of the
expected market price of our common stock of 44% to 67.5%; and (4) an expected
life of the options of 1 to 6.5 years. The foregoing option valuation model
requires input of highly subjective assumptions. Because common share purchase
options granted to employees and directors have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value of estimates, the
existing model does not in the opinion of our management necessarily provide a
reliable single measure of the fair value of common share purchase options we
have granted to our employees and directors.

INCOME TAXES-- We reported the results of our operations for the period April 1,
2006 through October 18, 2006, the IPO date (see Note 3) as part of a
consolidated tax return with ADM Tronics Unlimited, Inc., formerly a majority
shareholder. We have entered into a tax sharing arrangement where members
compensate each other to the extent that their respective taxes are affected as
a result of this arrangement. We commenced filing separate corporate income tax
returns for the period October 19, 2006 through March 31, 2008 and will continue
to do so. Deferred income taxes result primarily from temporary differences
between financial and tax reporting. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax basis
of assets and liabilities using enacted tax rates. A valuation allowance is
recorded to reduce a deferred tax asset to that portion that is expected to more
likely than not be realized.

On April 1, 2007, the Company adopted FASB issued Interpretation No. 48,
ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES--AN INTERPRETATION OF FASB STATEMENT
NO. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements in accordance with FASB
Statement No. 109, ACCOUNTING FOR INCOME TAXES (FASB No. 109). The
interpretation prescribes a recognition threshold and also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. Previously, the Company had accounted for
tax contingencies in accordance with Statement of Financial Accounting Standards
("SFAS") No. 5, "Accounting for Contingencies." Under FIN 48, the Company
recognizes the financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain
the position following an audit. For tax positions meeting the
more-likely-than-not threshold, the amount recognized in the financial
statements is the largest benefit that has a greater than 50 percent likelihood
of being realized upon ultimate settlement with the relevant tax authority. As
of the adoption date, the Company applied FIN 48 to all tax positions for which
the statute of limitations remained open, and determined there was no material
impact on the financial statements on the date of adoption and on March 31,
2008.

NET LOSS PER SHARE-- We use SFAS No. 128, "Earnings Per Share" for calculating
the basic and diluted loss per share. We compute basic loss per share by
dividing net loss and net loss attributable to common shareholders by the
weighted average number of common shares outstanding. Diluted loss per share is
computed similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential shares had been issued and if the additional shares
were dilutive. Common equivalent shares are excluded from the computation of net
loss per share since their effect is antidilutive.

Per share basic and diluted net loss amounted to $0.74 for the fiscal year ended
March 31, 2008 and $1.13 for the fiscal year ended March 31, 2007. There were
5,329,216 potential shares and 5,270,291 potential shares that were excluded
from the shares used to calculate diluted earnings per share, as their inclusion
would reduce net loss per share, for the years ended March 31, 2008 and 2007,
respectively.

RECLASSIFICATIONS--Certain reclassifications have been made to the financial
statements for the prior period in order to have them conform to the current
period's classifications. These reclassifications have no effect on previously
reported net loss.

                                       61

<PAGE>

                          NEW ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS (SFAS
No. 157), which establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. Where applicable, this accounting
standard, which simplifies and codifies related guidance within GAAP, is
effective for us beginning April 1, 2008. We have not yet determined the effect,
if any the adoption of SFAS No. 157 may have on our financial statements.

In February 2007, the FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (SFAS No. 159). This statement
permits entities to choose to measure financial assets and liabilities, with
certain exceptions, at fair value at specified election dates. A business entity
shall report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. This
statement is effective for us beginning April 1, 2008. We have not determined
the effect, if any, the adoption of SFAS No. 159 may have on our financial
statements.

We believe the effects of any other recently issued, but not yet effective,
accounting pronouncements would not have a material effect on our financial
statements.

3. INITIAL PUBLIC OFFERING

During October 2006, we completed our initial public offering, the IPO, selling
2.5 million shares of our common stock at $6.00 per share, raising gross
proceeds of $15.0 million. The underwriters of the offering were granted an
option for a period of 45 days to purchase up to an aggregate of 375,000
additional shares of common stock from us to cover over-allotments, if any. Net
proceeds to us from the IPO were approximately $12.2 million after the payment
of underwriting discounts and commissions and expenses related to the offering.
On November 22, 2006, we received additional net proceeds of approximately $1.4
million, after the payment of underwriting commissions and expenses, from the
underwriters who partially exercised their option to purchase 250,000 of the
available 375,000 shares of our common stock to cover over-allotments at $6.00
per share.

Upon the consummation of the IPO, unsecured convertible notes in the aggregate
principal amount of $6,087,500, issued in our December 2004 and February 2005
joint private placements with ADM Unlimited, Inc., or ADM, the owner of 30.3% of
our outstanding common stock, automatically converted into an aggregate of
1,630,232 shares of our common stock. The notes bore interest at an annual rate
of 6%, which interest was payable at the discretion of the holder in cash,
shares of ADM common stock or shares of our common stock.

Also, upon consummation of the IPO, unsecured convertible notes in the aggregate
principal amount of $2,000,000 issued in connection with our November 2005 and
March 2006 private placements to four institutional investors automatically
converted into an aggregate of 392,157 shares of our common stock. The notes
bore interest at an annual rate of 8%, payable in cash. Two of the institutional
investors who purchased notes, Ajax Capital LLC ("AJAX") and Kenneth S.
Abramowitz & Co., Inc., are investment funds wholly-owned by Steven Gluckstern
and Kenneth Abramowitz, respectively, each of whom began to serve as a director
of our company upon the effective date of the Registration Statement and waived
their right to receive interest payments on a quarterly basis through the
consummation of the IPO (approximately $25,000 per quarter). We used
approximately $77,000 and $19,000 of the net proceeds to pay Ajax and Kenneth S.
Abramowitz Co., Inc., respectively, and an additional $149,000 of the proceeds
from the IPO to pay the other holders, any and all interest with respect to such
notes then due and payable.

As a result of the foregoing, we do not have any loans outstanding as of the
date of this filing.

4. PRIVATE PLACEMENT TRANSACTION

On October 18, 2007, we issued one million shares of our common stock at a price
of $5.00 per share in a private transaction with an institutional investor
raising approximately $4.9 million, net of expenses. We filed a registration
statement covering the resale of the shares of common stock issued in the
private placement, which went effective in December 2007.


                                       62

<PAGE>

5. PROPERTY AND EQUIPMENT, NET

Our property and equipment as of March 31, 2008 is as follows:


      Machinery and equipment                           $     451,665
      Computer equipment                                      149,845
      Furniture and fixtures                                   74,263
      Leasehold improvements                                    3,401
                                                        -------------

                                                              679,174
      Accumulated depreciation and amortization              (273,381)
                                                        -------------

                                                        $     405,793
                                                        =============


Depreciation and amortization expense related to property and equipment amounted
to $64,244 and $16,066 during the years ended March 31, 2008 and 2007,
respectively.

6. EQUIPMENT IN USE OR UNDER RENTAL AGREEMENTS

Equipment in use or under rental agreements (includes all our devices currently
marketed except our Torino units which are single patient units are included in
our Inventory and are not depreciated), consists of the following at March 31,
2008:

      Electroceutical units                 $    220,903
      Accumulated depreciation                   (65,069)
                                            ------------

                                            $    155,834
                                            ============

The following table summarizes where our depreciation expense related to
equipment in use or under rental agreements, which has been recorded during the
fiscal years ended March 31, 2008 and 2007:

                                                 2008             2007
                                             -----------      -----------
      Cost of rentals                        $    21,477      $     5,463
      Research and development                    14,348                -
      Sales and marketing                         23,781                -
                                             -----------      -----------
                                             $    59,606      $     5,463
                                             ===========      ===========


7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

At March 31, 2008, accounts payable and accrued expenses consisted of the
following:


      Research and development                        $    424,305

      Professional fees                                    262,762

      Compensation and employee benefits                   126,849

      Intellectual property                                 61,006

      Other                                                154,221
                                                      ------------

                                                      $  1,029,143
                                                      ============

                                       63


<PAGE>

8. DEFERRED REVENUE

In August, 2006, we sold to Ajax 15 units of the Roma3 and 5 units of the
SofPulse M-10 at a purchase price of $14,500 per unit, the then published
wholesale unit price for the Roma3 and the SofPulse M-10, for an aggregate
purchase price of $290,000. In connection therewith, we entered into a Revenue
Sharing Agreement (the "Revenue Sharing Agreement") with Ajax, pursuant to which
we agreed to use our commercially reasonable efforts to rent to third parties
all of the units of the Roma3 and the SofPulse M-10 purchased by Ajax.

On December 22, 2006, our Audit Committee approved the termination of the
Revenue Sharing Agreement with Ajax. In connection with the termination, Ajax
transferred to us all of its rights, title and interest in and to the units of
the Roma3 and the SofPulse M-10 purchased by Ajax on the date of the Revenue
Sharing Agreement, and we paid Ajax $296,136. As a result of the termination, we
are entitled to all revenues generated by the rental and sales of such units and
the related devices from and after the termination date.

On November 9, 2006, we entered into an exclusive worldwide distribution
agreement (the "Agreement") with Allergan Sales LLC (Allergan Sales), a
wholly-owned subsidiary of Allergan, Inc. ("Allergan"), a global healthcare
company that discovers, develops and commercializes pharmaceutical and medical
device products in specialty markets. Pursuant to the Agreement, we granted
Allergan Sales and its affiliates the exclusive worldwide right to market, sell
and distribute certain of our products, including all improvements, line
extensions and future generations thereof (collectively, the "Product") in
conjunction with any aesthetic or bariatric medical procedures (the "Field") in
the defined Marketing Territory.

Under the Agreement, we also granted Allergan Sales the right to rebrand the
Product, with Allergan Sales owning all rights to such brands developed by
Allergan Sales for such purpose. Under the Agreement, we received an initial
payment of $500,000 and will receive certain milestone payments of up to
$1,000,000 in the aggregate upon the Product's First Commercial Sale (as defined
in the Agreement) in the United States and Europe. In addition, Allergan Sales
will purchase the Product from us at a predetermined price and must meet certain
minimum order requirements. Finally, we will receive royalty payments based on
Allergan Sales' net sales and number of units sold of the Product, subject to
certain annual minimum royalty payments to be determined by the parties.

The Agreement has an eight year initial term beginning at the Product's First
Commercial Sale. The initial term may be extended for two additional years
without further payment at Allergan Sales' option. Allergan Sales may also pay
us a $2,000,000 extension fee and extend the term of the Agreement for up to
eight additional years, for a total term of up to 18 years.

Allergan Sales may market, sell and distribute the Product under the Agreement
only in the "Marketing Territory," which is generally defined in the Agreement
as the United States and such other jurisdictions for which all requisite
regulatory approval has been obtained. If the marketing, sale or distribution of
the Product in a jurisdiction would infringe third-party intellectual property
rights and likely result in a lawsuit against us or Allergan Sales, Allergan
Sales could require us to use reasonable commercial efforts to obtain a license
for, or redesign, the Product to be sold in that jurisdiction.

In the event we fail to supply Allergan Sales or its affiliates certain minimum
amounts of the Product and fail to procure alternate suppliers for such Products
within certain timeframes, Allergan Sales will have the right to use certain of
our intellectual property and/or other proprietary information to manufacture
the Product until such time as we demonstrate to Allergan Sales' reasonable
satisfaction that we are fully able to resume our supply obligations. During
such time as Allergan Sales controls Product manufacturing, our royalty rate
would be significantly reduced.

In the event Allergan Sales is required to discontinue the marketing, sale or
distribution of the Product in the United States and/or any country in the
European Union because of problems with regulatory approvals and/or other
reasons related to the Product, we will be required to repay Allergan Sales
portions of the milestone payments up to $1,000,000.

Allergan Sales may terminate the Agreement by giving 90 to 180 days' prior
written notice to us. We may terminate the Agreement by giving 12 months' prior
written notice if Allergan Sales fails to timely pay us minimum royalty amounts
for any applicable year or fails to meet the minimum sales requirements set
forth in the Agreement. A nonbreaching party may terminate the Agreement
following a material breach of the Agreement and the breaching party's failure
to cure such breach during the applicable cure period by giving the breaching
party proper prior written notice. If we are in material breach, and fail to
cure, Allergan Sales may have the right to use certain of our intellectual
property and/or other proprietary information to manufacture the Product. Our
royalty rate would subsequently be significantly reduced.

                                       64

<PAGE>

Neither party may assign or otherwise transfer its right and obligations under
the Agreement, including upon a change of control of such party (as defined in
the Agreement), without the prior written consent of the other party, which
consent shall not be unreasonably withheld, except that Allergan Sales may
assign its rights and obligations without the prior written consent of the
company to Allergan Sales' affiliates and upon a sale of all or substantially
all of the assets or equity of the business entity, division or unit, as
applicable, that markets, distributes or sells the Product.

On March 28, 2008, we were notified that Allergan Sales intends to assign its
rights and obligations to Allergan USA, Inc., an affiliated entity of Allergan
Sales, effective on May 8, 2008.

The Agreement includes other terms and conditions, including provisions
regarding regulatory responsibilities, audit rights, insurance, indemnification
and confidentiality.

In November 2006, we received $500,000 under the terms of this Agreement which
was recorded as deferred revenue and is being amortized over eight years, the
initial term of the agreement. During the fiscal years ended March 31, 2008 and
2007, we have recognized $62,500 and $26,042, respectively, as amortized revenue
from this agreement included in Licensing Sales and Fees on our Statement of
Operations.

9. INCOME TAXES

Net operating losses for tax purposes of approximately $19,289,000 at March 31,
2008 are available for carryover. The net operating losses will expire from 2010
through 2028. We have provided a 100% valuation allowance for the deferred tax
benefit resulting from the net operating loss carryover due to our limited
operating history. In addressing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences are deductible. A
reconciliation of the statutory Federal income tax rate and the effective income
tax rate for the years ended March 31, 2008 and 2007 follows:


                                                      March 31,      March 31,
                                                       2008          2007
                                                   -------------  ------------

      Statutory federal income tax rate                    (34)%         (34)%

      State income taxes, net of federal taxes              (6)%          (6)%

      Non-deductible items
         Share based compensation                            9%           11%
         Share based financing penalties                      -            7%

      Valuation allowance                                   31%           22%
                                                   -------------  ------------

      Effective income tax rate                              0%            0%
                                                   =============  ============


Significant components of deferred tax assets and liabilities are as follows:

                                                     March 31,       March 31,
                                                      2008              2007
                                                   -----------      -----------
      Deferred tax assets (liabilities):
      Bad debts                                    $    14,000      $    15,000
      Net operating loss carryforwards               7,715,000        5,427,000
                                                   -----------      -----------
      Deferred tax assets, net                       7,729,000        5,442,000
      Valuation allowance                           (7,729,000)      (5,442,000)
                                                   -----------      -----------

      Net deferred tax assets                      $        --      $        --
                                                   ===========      ===========


10. OPTIONS AND WARRANTS OUTSTANDING

We have instituted a stock option plan for the issuance of 3,750,000 shares. As
of March 31, 2008 and 2007, 1,934,975 and 1,885,600 options, respectively, were
awarded, with 1,815,025 reserved for future issuance as of March 31, 2008. The
weighted average fair value of options issued to employees and directors during
the years ended March 31, 2008 and 2007 is $2.78 and $2.63 per share,
respectively.

                                       65

<PAGE>

Included in the table below are 775,000 of non-plan options to Steven
Gluckstern, our Chairman of the Board, that were granted during the fiscal year
ended March 31, 2007 at an exercise price of $5.11.

In connection with the private placements with ADM in December 2004 and February
2005, we issued 1,191,827 Common Stock Purchase Warrants ("CSPW") and an
additional 438,380 CSPWs as a penalty due to our delayed IPO. As of March 31,
2008, 106,196 of these CSPWs have been exercised. In addition, we issued 392,157
CSPWs in connection with our private placements completed in November 2005 and
March 2006. Further, we issued 260,000 CSPWs to our consultants as well as
327,327 CSPWs issued to the Maxim Group, who acted as our placement agent in
connection with our private placement as well as acting as an advisor to the
company. Also, during October 2007, we issued 100,000 CSPWs to RFJM Consulting
for consulting services rendered.

In connection with the Private Placement Transaction which closed on October 18,
2007 (see Note 4), we issued an additional 15,746 CSPWs as a result of the
dilution caused by the one million shares issued.

                    COMMON SHARE OPTIONS AND WARRANTS ISSUED

The following table summarizes information on all common share purchase options
and warrants issued by us for the periods ended March 31, 2008 and 2007,
including common share equivalents relating to the convertible debenture share
purchase warrants.

<TABLE>
<S>            <C>
                                                         March 31, 2008                March 31, 2007
                                                 -----------------------------   -----------------------------
                                                                   Weighted                        Weighted
                                                                   Average                         Average
                                                    Number      Exercise Price     Number       Exercise Price
                                                 -------------   -------------   -------------   -------------
      Outstanding, beginning of the year             5,270,291     $    3.81         3,740,108     $    3.50
      Granted                                          272,271          4.29         1,571,433          4.95
      Exercised                                       (158,346)         2.58                --            --
      Terminated                                       (55,000)         5.41           (41,250)         5.73
                                                 -------------   -------------   -------------   -------------

      Outstanding, end of the year                   5,329,216     $    3.79         5,270,291     $    3.81
                                                 =============   =============   =============   =============

      Exercisable, end of year                       4,244,425     $    3.71         3,600,092     $    3.68
                                                 =============   =============   =============   =============
</TABLE>

The number and weighted average exercise prices of all common shares and common
share equivalents issuable and stock purchase options and warrants outstanding
as of March 31, 2008 is as follows:

                                             WEIGHTED        WEIGHTED
             RANGE OF          REMAINING      AVERAGE         AVERAGE
             EXERCISE            NUMBER     CONTRACTUAL      EXERCISE
              PRICES          OUTSTANDING    LIFE(YEARS)       PRICE
      --------------------------------------------------------------------------
         $0.00 to $1.00         1,084,563        6.4           $0.16
         $1.01 to $3.00            46,638        6.3            1.74
         $3.01 to $4.00         1,716,471        5.6            3.51
         $4.01 to $6.00         2,267,568        7.9            5.55
         $6.01 to $9.00           213,976        6.6            6.29
                           -----------------------------------------------------

                                5,329,216        6.8           $3.79
                           =====================================================

During May and June 2008, we awarded a total of 711,000 options to employees and
consultants. The weighted average fair value of these options ranges from $1.26
to $1.75 per share for a total value of $1,112,000 which will be expensed over
the expected service period.


                                       66

<PAGE>

SHARE BASED COMPENSATION

Share based compensation expense consists of the following components:

                                             2008             2007
                                        ---------------  ----------------
      Cost of rentals                    $          42     $          45
      Research and development                 413,795           581,712
      Sales and marketing                      152,626           176,691
      General and administrative             1,202,613         1,384,000
                                        ---------------  ----------------

                                         $   1,769,076     $   2,142,448
                                        ===============  ================

11. COMMITMENTS AND CONTINGENCIES

Our medical devices are sold under agreements providing for the repair or
replacement of any devices in need of repair, at our cost, for up to one year
from the date of delivery, unless such need was caused by misuse or abuse of the
device. Based on prior experience, no amounts have been accrued for potential
warranty costs and such costs are expected to be nominal for the fiscal year
ended March 31, 2009.

We received our first order from Allergan during September, 2007 for 20,000
units. We have provided multiple shipments of these units to Allergan through
April, 2008. We have also received orders from Allergan for sample units as
required under our agreement. Allergan can receive samples free of charge in
accordance with the agreement each year up to an approved allotment and any
samples in addition to the approved allotment as defined by the parties are sold
to Allergan at prices negotiated between the parties. Our licensing sales and
fees from Allergan for the fiscal year ended March 31, 2008 were as follows:
sales of our units to Allergan of $364,383, amortization of our upfront $500,000
licensing fee received from Allergan upon signing our agreement of $62,500 and
royalties received from Allergan on sales of our units by Allergan of $1,040.
Royalties received from Allergan sales are from a limited launch of our product
to select doctors in select geographic markets. Our cost of licensing sales of
$495,008 on licensing sales of our units to Allergan of $364,383 is a loss on
gross margin of $130,625 or 36%. The negative gross margin is the result of
limited production runs of our product upon receiving an initial order for
20,000 units from Allergan. The units were all shipped by April 2008. As
production volume increases, we expect more economies of scale, although we can
not predict when we will be at break even levels predicted under the Allergan
agreement. Royalties from Allergan are received by us from Allergan in the
quarter following Allergan's sale of product to their customers. We expect, once
Allergan completes its product launch, our royalties received from Allergan on
these sales will far exceed our production losses.

                        RESEARCH AND DEVELOPMENT STUDIES

We were a party to a sponsored research agreement with Montefiore Medical Center
pursuant to which we funded research in the fields of pulsed electro-magnetic
frequencies at Montefiore Medical Center's Department of Plastic Surgery that
commenced on October 17, 2004 and expires on December 31, 2009. We were notified
prior to our fiscal year ended March 31, 2007, that the research being conducted
at Montefiore Medical Center's Department of Plastic Surgery has concluded and
this agreement will not be renewed. We expect to receive the data from this
study during the summer of 2008 after a payment is made by us of up to $90,000,
which was accrued by us and recorded in our March 31, 2008 financial statements.

We fund research in the field of neurosurgery under the supervision of Dr.
Casper, of Montefiore Medical Center's Department of Neurosurgery. Dr. Casper
also uses our product in this research. The research will be conducted over a
period of several years but our funding is determined yearly, based on annual
budgets that mutually approved. We expensed $222,850 and $225,000 during the
fiscal years ended March 31, 2008 and 2007, respectively to continue Dr.
Casper's research. We expect to fund Dr. Casper's research in the field of
neurosurgery during the fiscal year ending March 31, 2009 with approximately
$455,000.

In January 2006, we entered into a Master Clinical Trial Agreement with
Cleveland Clinic Florida, a not-for-profit multispecialty medical group practice
to conduct an IRB-approved, double-blind randomized placebo-controlled clinical
trial in patients who are not candidates for angioplasty or cardiac bypass
surgery. The term of the agreement expires on January 9, 2009. The estimated
total cost of the trial is $290,000, which was expensed in the fiscal year ended
March 31, 2007 and, of which approximately $129,000 was paid by us through March
31, 2008.

During the fiscal year ended March 31, 2009, we will fund additional studies in
cardiovascular ischemia, up to $385,000, to establish clear dose and response
curves as well as dosing regimens for the use of our PEMF device in
cardiovascular ischemia, in standard cardiovascular models.



                                       67
<PAGE>

In June, 2007, we entered into a Research Agreement with Indiana State
University to conduct randomized, double-blind animal wound studies to assist us
in determining optimal signal configurations and dosing regimens. The total cost
of the research studies is approximately $160,000 of which we expensed
approximately $90,000 during the fiscal year ended March 31, 2008 and we expect
to expense the remainder, approximately $70,000, during our fiscal year ended
March 31, 2009.

On May 1, 2008 we signed a research agreement with the Henry Ford Health System.
The principal investigator, Dr. Fred Nelson in the Department of Orthopedics
will study our prototype device using targeted tPEMF signal configurations on
human patients, with established osteoarthritis of the knee, that are active at
least part of the day. We are awaiting approval of the IRB at The Henry Ford
Health System to begin the double blind randomized controlled study, but we
expect the trial to begin by July 2008 and enrollment to continue for up to 12
months. If approval is granted, then we expect to expense approximately $110,000
during the fiscal year ending March 31, 2009, however, there can be no assurance
that this trial will be completed within this time frame or within this cost.

                      EMPLOYMENT AND CONSULTING AGREEMENTS

We have entered into various employment agreements with certain individuals to
secure their continued service as our employees. The employment agreements
provide for severance benefits if employment is terminated. In addition, we have
entered into various consulting agreements in exchange for cash and share based
compensation with individuals and companies to assist in operating our business.
Consulting expense totaled $1,686,807 and $1,509,493 for the years ended March
31, 2008 and 2007 (including share based compensation), respectively. Certain of
the agreements contain automatic renewal provisions.

The company's future minimum payments required under our employment and
consulting agreements are as follows:

         March 31, 2009    $ 2,075,035
                   2010        360,000
                   2011        120,000
                   2012         20,000
                   2013              -
                   2014              -


                                     LEASES

During October 2007 we moved our headquarters to Montvale, New Jersey. The
Montvale office lease was executed during June 2007 and covers 7,494 square feet
of office space. The term of the lease began on October 1, 2007 and expires on
November 1, 2014, subject to our option to renew the lease for an additional
five year period on terms and conditions set forth therein. Pursuant to the
lease, we are required to pay rent in the amount of $14,051 per month during the
first two years of the lease term, with the exception of month 13 at no cost,
and $15,613 per month thereafter.

We retained certain office and laboratory space through an agreement with ADM,
(see footnote 15).

During March 2008, we entered into lease agreements to rent two apartments
located in Park Ridge, NJ, for use by employees who are not based in the area
and therefore cannot commute to their homes. Monthly rent is $2,000 and $1,500,
respectively, and security deposits are $3,000 and $2,250, respectively. Both
leases expire on March 31, 2009.

The company's future minimum lease payments required under operating leases are
as follows:

    March 31, 2009      $ 196,561
              2010        177,981
              2011        187,350
              2012        187,350
              2013        187,350
              2014        124,900

                                       68


<PAGE>

12. RETIREMENT PLAN

During fiscal 2007, the Company implemented a 401(k) plan that covers
substantially all employees. Under the terms of the plan, the Company matches up
to 3% of each employee-participant's salary, beginning with fiscal 2008. During
2008, the Company has expensed $56,349 as employer 401(k) plan contributions.
Since the plan was adopted in March 2007, we had no expense for the fiscal year
ended March 31, 2007.

13. LEGAL PROCEEDINGS

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004, pursuant to which: (i) we appointed NYHHC as exclusive
distributor of our products in a defined market place for so long as NYHHC
secured a minimum number of placements of our products and (ii) NYHHC agreed to
pay us $2,500 per month for each product shipped to NYHHC. By letter, dated
August 9, 2005, we terminated the agreement due to NYHHC's failure to make the
payments required under the agreement and failure to achieve the minimum number
of placements required under the agreement. We are seeking various forms of
relief, including: (i) relief from money damages, including amounts due under
unpaid invoices in an aggregate amount of $236,560, (ii) an accounting and (iii)
the return of our products. The defendants filed a motion to dismiss, alleging
lack of jurisdiction and failure to state a claim with regard to Harry Ruddy. We
opposed the defendant's motion to dismiss. On November 18, 2005, the Court
denied, without prejudice, the defendant's motion to dismiss, based upon lack of
jurisdiction. The complaint was dismissed against Harry Ruddy, individually. The
Court permitted a period of discovery to determine the jurisdiction issue, which
discovery is substantially complete. The defendants filed another motion to
dismiss based upon a claim of lack of jurisdiction, which was heard and denied
by the Court on June 9, 2006. On or about July 10, 2006, the defendants filed an
answer, and NYHHC filed counterclaims against us for breach of contract, breach
of the implied covenant of good faith and fair dealing, restitution, unjust
enrichment and fraudulent inducement. An answer to the counterclaim was filed on
August 9, 2006. Discovery is now continuing on the merits of the claims in the
complaint and counterclaim. On April 30, 2008 during a conference before the
Hon. Brian R. Martinotti J.S.C., all claims were settled and the terms of the
settlement were placed on the record. The settlement calls for the defendants to
dismiss with prejudice all counterclaims filed against us and to pay us the sum
of $120,000.00 in installments. The terms provide for an initial payment of
$15,000.00 and the balance to be paid in equal monthly installments of
$5,000.00. The amount of the settlement will be reduced to $100,000.00 if that
sum is paid on or before June 30, 2008. In the event of default, defendants
shall be liable for an additional payment of $30,000.00, interest at the rate of
8% per annum as well as costs and attorney's fees. The settlement was documented
in a written agreement executed by the parties and the initial payment of
$15,000 was paid on June 18, 2008.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount that Ivivi has refuted. We responded to Stonefield Josephson's demand for
arbitration, which we believe was procedurally defective and premature due to
Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,
2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No. BER-l-872-08 on January 31, 2008. A commencement of arbitration
notice initiated by Stonefield Josephson was received by us on March 11, 2008.
In March and April motions were filed by us and Stonefield Josephson which
sought various forms of relief including the forum for resolution of the claims.
On June 3, 2008 the Hon. Menelaos W. Toskos J.S.C. determined that the language
in the engagement agreement constituted a forum selection clause and the claims
should be decided in California. On June 19, 2008 we filed a complaint against
Stonefield Josephson in the Superior Court of California, Los Angeles County.

Other than the foregoing, we are not a party to, and none of our property is the
subject of, any pending legal proceedings other than routine litigation that is
incidental to our business.

                                       69


<PAGE>

14. CONCENTRATIONS

During the fiscal year ended March 31, 2008, two customers accounted for 67% of
our direct sales revenue, one customer accounted for 38% of our rental revenue
and one customer accounted for 100% of our licensing sales and fees revenue.
During the fiscal year ended March 31, 2007, three customers accounted for 80%
of our direct sales revenue, two customers accounted for 44% of our rental
revenue and one customer accounted for 100% of our licensing sales and fees
revenue. At March 31, 2008, two customers accounted for 60% of our accounts
receivable. At March 31, 2007, two customers accounted for 57% of our accounts
receivable. The loss of these major customers could have a material adverse
impact on our operations and cash flow.

15. RELATED PARTY TRANSACTIONS

As discussed in Note 3, we used approximately $77,000 and $19,000 of the net
proceeds from our IPO to pay Ajax and Kenneth S. Abramowitz Co., Inc.,
respectively, any and all interest with respect to the November 2005 and March
2006 private placement notes.

In connection with the IPO, we repaid approximately $2.6 million to ADM,
representing the balance in our inter-company accounts at October 24, 2006 due
to ADM from us for product manufacturing and allocations of support services
provided by ADM to us for the period from March 1989 to October 2006.

In addition, we repaid our note payable to Ajax with a payment of $257,123,
which represented the outstanding principal and interest under the unsecured
subordinated loan. The note bore interest at an annual rate of 8%.

As discussed in Note 8, on December 22, 2006, our Audit Committee approved the
termination of the Revenue Sharing Agreement with Ajax dated, August 28, 2006.
In connection with the termination, Ajax transferred to us all of its rights,
title and interest in and to the units of the Roma3 and the SofPulse M-10
purchased by Ajax on the date of the Revenue Sharing Agreement, and we paid Ajax
$296,136.

Pursuant to a management services agreement, dated as of August 15, 2001, ADM
provides us with administrative, technical, engineering and regulatory services
and allocates portions of its real property facilities for use by us. Effective,
January 2008, ADM allocates a portion of its real property facilities costs for
our research and development employees who maintain offices in ADM's facilities.
Effective, January 2008 ADM provides us with very limited services outside of
providing our research and development employees with offices as a result of our
move to our own facilities which concluded as of the end of December, 2007. In
addition, effective April 1, 2007, we only purchase finished goods from ADM
which in some cases requires us to pay deposits towards these finished goods.
Pursuant to an IT Services agreement, we share certain costs related to
hardware, software and employees. We have not billed ADM nor has ADM billed us
for any charges under this agreement for the year end March 31, 2008. In
addition, ADM serves as the exclusive manufacturer of medical and other devices
or products to be distributed by us.

The amounts included in cost of rental revenue on our Statements of Operations
relating to these services provided by ADM were $4,982 and $75,584 for the
fiscal years ended March 31, 2008 and 2007.

The amounts included in general and administrative expense representing ADM's
allocations for the fiscal year ended March 31, 2008 and 2007 were $198,247 and
$242,595, respectively, consisting of amounts payable under our management
services agreement with ADM.

We purchased $906,827 and $59,789 of finished goods from ADM at contracted rates
during the fiscal years ended March 31, 2008 and 2007, respectively.

Our activity with ADM is summarized as follows:

      Fiscal years ended March 31,                  2008                2007
                                                 -----------        -----------

      Balance, beginning of year                 $   (36,657)       $(2,602,695)

      Advances                                            --            (12,218)
      Purchases                                     (901,845)           (59,789)
      Charges                                       (203,229)          (318,179)
      Payments                                     1,383,559          2,956,224
                                                 -----------        -----------

      Balance, end of year                       $   241,828        $   (36,657)
                                                 ===========        ===========

                                       70

<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

NONE.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as such term is defined in Rules
13(d)-15(e) under the Exchange Act that are designed to ensure that information
required to be disclosed in our Exchange Act reports are recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms, and that such information is accumulated
and communicated to management, including our Co-Chief Executive Officers and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.

Management necessarily applies its judgment in assessing the costs and benefits
of such controls and procedures, which, by their nature, can provide only
reasonable assurance regarding management's control objectives.

As of the end of the period covered by this Annual Report on Form 10-KSB, we
carried out an evaluation, with the participation of our management, including
our Co-Chief Executive Officers and Chief Financial Officer, of the
effectiveness of our disclosure controls and procedures pursuant to Securities
Exchange Act Rule 13a-15. Based upon that evaluation as of March 31, 2008, our
Co-Chief Executive Officers and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by us in the reports that we file or submit under the
Securities Exchange Act is accumulated and communicated to our management
including our Co-Chief Executive Officers and Chief Financial Officer, to ensure
that such information is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

We will continue to review and evaluate the design and effectiveness of our
disclosure controls and procedures on an ongoing basis and to improve our
controls and procedures over time and correct any deficiencies that we may
discover in the future. Our goal is to ensure that our senior management has
timely access to all material financial and non-financial information concerning
our business. While we believe the present design of our disclosure controls and
procedures is effective to achieve our goals, future events affecting our
business may cause us to modify our disclosure controls and procedures.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management, including our principal executive and financial officers, is
responsible for establishing and maintaining adequate internal control over our
financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our
management has evaluated the effectiveness of our internal controls as of the
end of the period covered by this Annual Report on Form 10-KSB for the fiscal
year ended March 31, 2008. In making our assessment of internal control over
financial reporting, management used the criteria set forth by the Committee of
Sponsoring Organizations ("COSO") of the Treadway Commission in INTERNAL CONTROL
OVER FINANCIAL REPORTING - GUIDANCE FOR SMALLER PUBLIC COMPANIES.

Based on management's assessment and these criteria, our management concluded
that our internal control over financial reporting was effective as of March 31,
2008.

This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this annual
report.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There have been no changes in our internal controls over financial reporting
that occurred during our last fiscal quarter to which this Annual Report on Form
10-KSB relates that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.

We will continue to review and evaluate our internal controls over financial
reporting and improve our controls and procedures over time, including the
documentation of our internal approval processes, and correct any deficiencies
that we may discover in the future. Our goal is to ensure that our internal
controls over financial reporting are effective. While we believe the present
design of our internal controls are effective to achieve our goals, future
events affecting our business may cause us to modify our internal controls.

ITEM 8B. OTHER INFORMATION

None.

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<PAGE>

                                    PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE

GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

                                    DIRECTORS

Set forth below are the names, ages and titles of all of our directors as of
June 19, 2008, and the years in which such directors became directors. All
directors hold office until the next annual meeting of shareholders, or until
their respective successors are elected and qualified.

<TABLE>
<S>       <C>
   NAME                                   AGE     TITLE                                DIRECTOR SINCE
   ----                                   ---     -----                                --------------
   Steven M. Gluckstern                   57      Chairman of the Board and Director        2006
   Andre' A. DiMino                       52      Vice Chairman of the Board,               2004
                                                  Co-Chief Executive Officer and
                                                  Director
   David Saloff                           55      President, Co-Chief Executive             2004
                                                  Officer and Director
   Kenneth S. Abramowitz (1)(2)(4)        57      Director                                  2006
   Louis J. Ignarro, Ph.D. (3)(4)         67      Director                                  2006
   Pamela J. Newman, Ph.D. (1)(2)(3)(4)   60      Director                                  2006
   Jeffrey A. Tischler (1)(2)(3)(4)       52      Director                                  2006
</TABLE>
________________

(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Nominating Committee
(4) This director is an independent director as defined under NASDAQ Marketplace
    Rule 4200 (a) (15).

The biographies of each of our directors are set forth below.

STEVEN M. GLUCKSTERN began to serve as our Chairman of the Board and a director
in October 2006. Mr. Gluckstern is an active private investor within numerous
areas including alternative healthcare and non-traditional healing modalities.
From March 2002 until February 2005, Mr. Gluckstern served as CEO of Azimuth
Trust Company, LLC, a specialized alternative asset management firm, which he
co-founded, offering asset allocation, portfolio construction, manager selection
and comprehensive risk management. From 1988 to 1998 and then from 2001 to 2002,
Mr. Gluckstern held a range of entrepreneurial, executive and financial
positions within Zurich Financial Services including: Member of the Executive
Committee of its Group Management Board; CEO of Zurich Global Assets; CEO of the
then NYSE-traded Zurich Re (now Converium Holdings); and Chairman of both Zurich
Capital Markets (hedge funds and specialty finance) and Zurich Scudder
Investments (mutual funds). In 1998, Mr. Gluckstern co-founded Capital Z
Partners, an alternative asset management firm that managed over $4 billion in
two global funds. In 1988, Mr. Gluckstern and a partner co-founded Centre
Reinsurance, the first specialty financial reinsurer which was subsequently
acquired by the Zurich Group in 1993. Mr. Gluckstern served as general manager
of a unit of the Berkshire Hathaway Insurance Group from December 1985 to
December 1986. Prior to this, Mr. Gluckstern served as CFO of Healthco Inc., the
then largest distributor of dental products in the world and as an investment
banker at Lehman Brothers Kuhn Loeb. An Arjay Miller Scholar and 1982 M.B.A.
graduate of the Stanford Graduate School of Business, Mr. Gluckstern also holds
degrees from the University of Massachusetts at Amherst and Amherst College,
where he currently serves as a member of its Board of Trustees.

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<PAGE>

ANDRE' A. DIMINO has served as our Vice Chairman of the Board and Co-Chief
Executive Officer since October 2006 and as a director since January 2004. From
January 2004 until October 2006, Mr. DiMino served as our Chairman of the Board
and our Chief Financial Officer. Mr. DiMino served as our President from 1989
until December 2003. Mr. DiMino also serves as the President and Chief Financial
Officer of ADM Unlimited, Inc., a publicly traded technology-based developer and
manufacturer of a diversified line of products and our largest shareholder,
positions he has held since December 2001 after the passing of his father, Dr.
Alfonso DiMino - the founder of ADM. Mr. DiMino served as the Chief Operating
Officer and Chief Financial Officer of ADM from July 1991 to December 2001, and
served as the Technical Director of ADM from January 1982 to June 1991. In
addition to his finance and operating responsibilities, Mr. DiMino has been
involved in research and product development for us and ADM. He holds several
patents which have been assigned to us or ADM and has been responsible for the
commercialization of medical device products and for regulatory aspects related
to our business and the business of ADM. Mr. DiMino holds a Bachelor of Science
degree in engineering and an MBA in Finance both from Fairleigh Dickinson
University.

DAVID SALOFF has served as our Co-Chief Executive Officer since October 2006 and
as our President and a director since July 2004. Mr. Saloff served as our Chief
Executive Officer from July 2004 until he resigned from such position and began
to serve as Co-Chief Executive Officer. Mr. Saloff has also served as a director
of ADM since December 2001. From September 2003 to December 2003, Mr. Saloff was
the President of Palisades Partners, a management consulting company.. From
November 1999 to September 2003, Mr. Saloff was the President of LifeWaves
International, a health and wellness start-up company. In 1992, Mr. Saloff
founded Electropharmacology, Inc., and was responsible for the design,
development and subsequent FDA clearance of the original device (the MRT) for
the adjunctive use in the palliative treatment of post-operative pain and edema
in superficial tissue. Prior to starting EPI, Mr. Saloff served as a consultant
for DH Blair, Inc. in connection with the start up of Xsirius, Inc., a publicly
traded research and development company involved in researching and developing
advanced detection systems. In 1991, Mr. Saloff became the Chief Operating
Officer of Xsirius, and Executive Vice President and Director of Advanced
Photonix, Inc. (API), which was involved in the design and development of
advanced solid state light detection systems as well as the production and
marketing of conventional solid state detection components and a subsidiary of
Xsirius which commenced trading on the Nasdaq Capital Market (formerly known as
the Nasdaq SmallCap Market) in 1992. In 1982, Mr. Saloff joined Akros
Manufacturing as President and co-owner, a medical device company, which was
sold to Lumex (Cybex) Corp. in 1986. Mr. Saloff earned his Bachelor of Science
degree in business from Adelphi University.

KENNETH S. ABRAMOWITZ began to serve as a director of our company in October
2006. Mr. Abramowitz is a Managing General Partner and a co-founder of NGN
Capital, a $250 million worldwide healthcare venture capital fund. In 2003, he
joined NGN from The Carlyle Group in New York where he was Managing Director
from 2001 to 2003, focusing on U.S. buyout opportunities in the healthcare
industry. In July 2003, he transitioned to Senior Advisor at The Carlyle Group
in order to devote the time necessary to create a dedicated healthcare fund on
behalf of The Carlyle Group. Prior to joining The Carlyle Group, Mr. Abramowitz
worked as an Analyst at Sanford C. Bernstein & Co., where he covered the
medical-supply, hospital-management and HMO industries for 23 years, after which
he was an EGS Securities Healthcare Fund Manager. Mr. Abramowitz has published
several notable studies on healthcare service companies, major medical mergers
and cardiovascular device innovation. Mr. Abramowitz currently sits on the Board
of Directors EKOS Corp., OptiScan Biomedical Corp. and Small Bone Innovations
LLC, each a privately held medical device company, and previously served on the
Board of Directors of each of Power Medical Inventions, Inc., a provider of
computer-assisted, power-astuated surgical stapling products and Option Care,
Inc., a provider of home infusion pharmacy services and specialty pharmacy
services. Mr. Abramowitz received a B.A. from Columbia University in 1972 and an
M.B.A. from Harvard Business School in 1976.

LOUIS J. IGNARRO, PH.D., began to serve as a director of our company in October
2006. Dr. Ignarro has been a Professor of Pharmacology at the UCLA School of
Medicine since 1985. His current endowed position is the Jerome J. Belzer, MD,
Distinguished Professor of Pharmacology. Dr. Ignarro's first research position
after training was with the CIBA-Geigy Pharmaceutical Company and in 1973 took
on his first academic position at Tulane Medical Center in the Department of
Pharmacology. Dr. Ignarro has received many awards, including: The Basic
Research Prize of the American Heart Association, Election into the National
Academy of Sciences, Election into the Academy of Arts and Sciences, and the
1998 Nobel Prize in Physiology and Medicine. Dr. Ignarro received his Bachelor
of Science degree in Pharmacy/Chemistry from Columbia University in 1962, and a
Doctorate degree in Pharmacology/Physiology from the University of Minnesota in
1966. Dr. Ignarro did a postdoctoral fellowship at the N.I.H. in the Laboratory
of Chemical Pharmacology from 1966 to 1968.

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<PAGE>

PAMELA J. NEWMAN, PH.D. began to serve as a director of our company in October
2006. Since 1979, Dr. Newman has served as an international insurance broker,
specializing in Fortune 500 clients worldwide, for AON Corporation, a world
leader in integrated risk management, insurance and reinsurance brokerage.
Before joining AON, Dr. Newman worked for Marsh & McLennan for 12 years and
before that she worked for Peat, Marwick, Mitchell & Co. Dr. Newman also serves
on the Board of Directors of each of RKO Pictures, an entertainment provider,
and Interactive Metronome, Inc., on the Medical Center Advisory Board of the New
York Hospital-Cornell Medical Center and on the Board of the McGowan Transplant
Center, the Brain Trauma Foundation and American ORT. Dr. Newman also serves on
the Board of Trustees of The American University of Paris, the Corporate Board
of Carnegie Hall and the Associate Committee of The Julliard School and is a
Fellow of the Foreign Policy Association. Dr. Newman earned her Bachelor of Arts
degree in English her Masters degree in English and her Doctorate degree in
Communications from the University of Michigan.

JEFFREY A. TISCHLER began to serve as a director of our company in October 2006.
Mr. Tischler is currently an independent consultant. From May 2005 through May
2008, Mr. Tischler served as the Chief Financial Officer of Acies Corporation, a
provider of electronic payment processing solutions and a corporation which
files reports pursuant to the Securities Exchange Act of 1934, and since May
2006 has also served as Executive Vice President, Treasurer and a director of
Acies Corporation. From 2000 to 2005, Mr. Tischler served as Vice President of
Asta Funding, Inc., a consumer receivables asset management company, where his
responsibilities included involvement in operational and financial functions
ranging from strategic planning to strengthening the company's infrastructure.
From 1993 to 2000, Mr. Tischler served as Executive Vice President and Chief
Financial Officer of LandAmerica Financial Group, Inc., including serving as
Executive Vice President and Chief Financial and Administrative Officer of
LandAmerica's acquired predecessors, Commonwealth Land Title Insurance Company
and Transnation Title Insurance Company. From 1980 to 1993, Mr. Tischler was
with Reliance Group Holdings, Inc., where he held the position of Vice President
of Financial Planning and Analysis. A certified public accountant, Mr. Tischler
was a senior accountant with KPMG Peat Marwick from 1978 to 1980. Mr. Tischler
received an M.B.A. degree in Finance and Accounting from the University of
Rochester's Simon School of Business in 1978, and a B.A. in Economics from the
University of Rochester in 1977.

There are no family relationships between any of our executive officers or
directors.

COMMITTEES OF THE BOARD OF DIRECTORS

The standing committees of our Board of Directors include an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance Committee.

AUDIT COMMITTEE. The Audit Committee, which is a separately designated standing
audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), oversees and
monitors our financial reporting process and internal control system, reviews
and evaluates the audit performed by our outside auditors and reports to our
Board of Directors any substantive issues found during the audit. The Audit
Committee is directly responsible for the appointment, compensation and
oversight of the work of our independent auditors. The Audit Committee also
reviews and approves all transactions with affiliated parties. All members of
the Audit Committee are independent directors as defined under the NASDAQ
Marketplace Rules. Each of Kenneth Abramowitz, Pamela Newman and Jeffrey
Tischler began to serve as members of the Audit Committee and Jeffrey Tischler
began to serve as the Chairman of the Audit Committee and our "audit committee
financial expert," as such term is defined by the Securities and Exchange
Commission, on October 18, 2006.

COMPENSATION COMMITTEE. The Compensation Committee provides advice and
recommendations to the Board of Directors in the areas of employee salaries and
benefit programs. The Compensation Committee also reviews the compensation of
our President and our Co-Chief Executive Officers and makes recommendations in
that regard to the Board of Directors as a whole. All members of the
Compensation Committee are independent directors as defined under the NASDAQ
Marketplace rules. Each of Kenneth S. Abramowitz, Pamela J. Newman, and Jeffrey
A. Tischler began to serve as a member of the Compensation Committee on October
18, 2006.

                                       74


<PAGE>

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and Corporate
Governance Committee meets to recommend the nomination of directors to the full
Board of Directors to fill the terms for the upcoming year or to fill vacancies
during a term. All members of the Nominating and Corporate Governance Committee
are independent directors as defined under the NASDAQ Marketplace Rules. Each of
Pamela Newman, Louis Ignarro and Jeffrey Tischler began to serve as a member of
the Nominating and Corporate Governance Committee on October 18, 2006.

The Nominating and Corporate Governance Committee will consider recommendations
for nominations from shareholders if submitted in a timely manner in accordance
with the procedures established in our bylaws and will apply the same criteria
to all persons being considered. Nominations must be delivered to our Secretary
at our principal executive offices not later than the close of business on the
ninetieth (90th) day nor earlier than the close of business on the one hundred
twentieth (120th) day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is advanced more than thirty (30) days prior to or delayed by more than
thirty (30) days after the anniversary of the preceding year's annual meeting,
notice by the shareholder to be timely must be so delivered not earlier than the
close of business on the one hundred twentieth (120th) day prior to such annual
meeting and not later than the close of business on the later of the ninetieth
(90th) day prior to such annual meeting or the tenth (10th) day following the
day on which public announcement of the date of such meeting is first made. In
no event shall the public announcement of an adjournment of an annual meeting
commence a new time period for the giving of a shareholder's notice as described
above. The nomination notice must set forth as to each person whom the proponent
proposes to nominate for election as a director: (a) all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Exchange Act (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected) and (b) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (1) the name and address of such shareholder, as they appear
on our books, and the name and address of such beneficial owner, (2) the class
and number of shares of common stock which are owned beneficially and of record
by such shareholder and such beneficial owner and (3) whether either such
shareholder or beneficial owner intends to deliver a proxy statement and form of
proxy to holders of a sufficient number of holders of our voting shares to elect
such nominee or nominees.

BOARD OBSERVER

We have agreed, for a period of at least three years following the consummation
of our initial public offering, to engage a designee of Maxim Group LLC, one of
the lead managing underwriters of our initial public offering, as an observer to
our Board of Directors, where the observer shall attend meetings of our Board of
Directors and receive all notices and other correspondence and communications
sent by us to members of our Board of Directors. In addition, the observer is
entitled to reimbursement for all costs incurred by it in attending any meetings
of our Board of Directors. Maxim has not elected an observer to our Board of
Directors.

CODE OF ETHICS

We have a code of ethics that applies to our Co-Chief Executive Officers, Chief
Financial Officer and Controller and other persons who perform similar
functions. A copy of our code of ethics can be found on our website at
www.ivivitechnologies.com. Our code of ethics is intended to be a codification
of the business and ethical principles that guide it, and to deter wrongdoing,
to promote honest and ethical conduct, to avoid conflicts of interest, and to
foster full, fair, accurate, timely and understandable disclosures, compliance
with applicable governmental laws, rules and regulations, the prompt internal
reporting of violations and accountability for adherence to this code.

                               EXECUTIVE OFFICERS

Set forth below are the names, ages and titles of all of our executive officers
as of June 19, 2008, and the years in which such executive officers became our
executive officers. All executive officers serve at the discretion of the Board
of Directors with no fixed term.

                                                                    EXECUTIVE
   NAME                  AGE    TITLE                             OFFICER SINCE
   ----                  ---    -----                             -------------
   Andre' A. DiMino      52     Vice Chairman of the Board and        2004
                                Co-Chief Executive Officer
   David Saloff          55     Co-Chief Executive Officer and        2004
                                President
   Alan V. Gallantar     50     Chief Financial Officer               2006
   Edward J. Hammel      58     Executive Vice President and
                                Chief Operating Officer               2004

                                       75

<PAGE>

ANDRE' A. DIMINO, our Vice Chairman of the Board, has served as our Co-Chief
Executive Officer since October 2006. From July 2004 until October 2006, Mr.
DiMino served as our Chief Financial Officer. See Mr. DiMino's biographical
information above.

DAVID SALOFF, one of our directors, has served as our Co-Chief Executive Officer
since October 2006 and as our President since July 2004. From July 2004 until
October 2006, Mr. Saloff served as our Chief Executive Officer. See Mr. Saloff's
biographical information above.

ALAN V. GALLANTAR, CPA, began to serve as our Chief Financial Officer in October
2006. From April 2004 until October 2006, Mr. Gallantar served as an executive
consultant to a variety of clients, providing management consulting and chief
financial officer services. From October 1999 until April 2004, Mr. Gallantar
served as Chief Financial Officer of Advanced Viral Research Corp, a publicly
traded corporation. Mr. Gallantar served as Treasurer and Controller of AMBI,
Inc. (currently Nutrition 21, Inc.), a nutraceutical company, from 1998 to 1999,
and as Senior Vice President and Chief Financial Officer of Bradley
Pharmaceuticals, Inc., a pharmaceutical manufacturer, from 1992 to 1997. Mr.
Gallantar also served in senior financial positions at PaineWebber Incorporated
(currently UBS Paine Webber, Inc.), Chase Bank (currently JPMorgan Chase),
Phillip Morris, Inc. (currently Altria Group) and Deloitte & Touch LLP. Mr.
Gallantar is a Certified Public Accountant and received a B.A. in accounting
from Queens College in 1979.

EDWARD J. HAMMEL has served as our Executive Vice President since July 2004 and
as our Chief Operating Officer from October 2007. From September 2003 to June
2004, Mr. Hammel was a partner in Palisades Partners, a management consulting
company. From March 2001 until September 2003, Mr. Hammel served as the Chief
Financial Officer of LifeWaves International, a health and wellness start-up
company. From 1999 to 2001, Mr. Hammel was the managing director and founder of
Hillcrest Consulting Services, Inc., a healthcare consulting company. From 1997
to 1999, Mr. Hammel served as Senior Vice President and Chief Financial Officer
of WellMed Medical Management, a physician practice management company. From
1993 to 1997, he served as Senior Vice President and Chief Financial Officer of
Riscorp, Inc., a worker's compensation insurance company. From 1978 to 1993, he
was employed by Reliance Group Holdings, a diversified financial holding company
eventually serving as Vice President. Mr. Hammel received a B.A. from the
University of Denver in 1972 and a Masters Degree in Management from
Northwestern University in 1977.

KEY EMPLOYEES AND CONSULTANTS

Set forth below is information concerning our key employees and paid
consultants.

    NAME                               AGE             POSITION
    ----                               ---             --------
    Arthur A. Pilla, Ph. D.            72              Science Director
    Berish Strauch, M.D.               74              Consultant
    Sean D. Hagberg, Ph. D.            49              Chief Science Officer


ARTHUR A. PILLA, PH. D. has served as our Science Director and Chairman of our
Scientific Advisory Board since April 2004. Dr. Pilla is a Professor in the
Department of Biomedical Engineering, Columbia University, NY and Professor
Emeritus of Orthopedic Research in the Department of Orthopedics at Mount Sinai
School of Medicine, NY. Dr. Pilla offered the first graduate course in
Bioelectromagnetics at Columbia University in 1973, currently still being
offered in the Department of Biomedical Engineering. Dr Pilla has published
nearly 200 peer-reviewed studies in Bioelectromagnetics. His early research led
to the invention of specially configured electromagnetic fields for clinical use
on recalcitrant bone fractures. Dr. Pilla is the inventor of the first
bone-growth electromagnetic stimulator device cleared by the FDA and the
cofounder of Electrobiology, Inc. (EBI), now part of Biomet, an orthopedic
device manufacturer. His patents with EBI were seminal, leading to devices
commercially available for clinical use. Dr. Pilla continues to make progress in
the understanding of the basic biophysical mechanisms involved in the bioeffects
of electromagnetic signals. Dr. Pilla received his PhD, cum laude, from the
University of Paris, France in 1965 and commenced studies of the bioeffects of
weak magnetic and electric fields in 1969. Dr. Pilla is a paid consultant to us
and currently receives cash compensation for his services to us.

                                       76

<PAGE>

DR. BERISH STRAUCH has served as Chairman of our Medical Advisory Board since
August 2004 and directs the "Center for Excellence in Bioelectromagnetic
Studies" we established at Montefiore Medical Center. Dr. Strauch is an
internationally known plastic surgeon, board certified in general surgery,
plastic and reconstructive surgery and hand surgery. Dr. Strauch has conducted
extensive clinical research using our technology and is the author of the 2000
study demonstrating the angiogenic properties of the technology. He has served
as the Chairman of the Department of Plastic Surgery at Montefiore Medical
Center and is a founder and first president of the American Society of
Reconstructive Microsurgery, and has been an officer and committee member in
numerous regional, national, and international professional organizations. Dr.
Strauch is the senior editor of the three-volume Encyclopedia of Flaps, the
senior author of the Atlas of Microsurgical Flaps, and co-author of the Atlas of
Hand Anatomy and is also the founder and ongoing Editor-in-Chief of the Journal
of Reconstructive Microsurgery. He received his medical degree form Columbia
University in 1959, completed a general surgery residency at Montefiore Medical
Center from 1960 to 1964, had a surgery fellowship at Roosevelt Hospital in 1961
and had a plastic and reconstruction surgery fellowship at Stanford University
Hospital from 1966 to 1968. Dr. Strauch is a paid consultant to us and currently
receives cash compensation for his services to us.

SEAN D. HAGBERG, Ph. D. has served as our Chief Science Officer and employed by
us since July 2004. Prior to joining Ivivi, Dr. Hagberg served as the Chief
Knowledge Officer for LifeWaves International, a health and wellness startup
company, from 2000 to 2004, where he oversaw knowledge based development,
multiple clinical trials, raising investment capital, hardware and software
development, technical and marketing writing, and FDA/FTC compliance. Prior to
joining LifeWaves, Dr. Hagberg was a post-doctoral fellow in community medicine
at Brown University medical school (1998-2000), served as technical analyst on
the Rhode Island state-wide TOPPS II behavioral health program (1998-2000), as
well as a consultant with the Decision Science Institute (1999-2001), and a
principal in Brewer's Heaven, a start-up brewing concern (1999-2004). From
1997-1998 Dr. Hagberg served as associate administrator for Good Hope Hospital
(owned by publicly traded Pioneer HealthCare), where he was responsible for
building a successful adolescent behavior health program, outside marketing and
contract management to private payors, including unions and other organizations.
Dr. Hagberg has been responsible for building behavioral health triage systems
for Managed Behavioral Healthcare Organizations and written and testified on
significant healthcare legislation at the state level and co-authored
Congressional reports on behavioral healthcare. Dr. Hagberg has co-authored NIH,
SAMSHA and foundation grants and protocols. Dr. Hagberg received his Ph.D. in
cultural anthropology from SUNY-Buffalo, where he was a Fellow in cognitive
science. Dr. Hagberg completed a two-year NIH-funded post-doctoral training at
the Brown University Department of Community Medicine, 1998-2000 and on was on
the medical faculty from 1998-2004.

MEDICAL ADVISORY BOARD

We have established a panel of eight medical advisors to assist management in
its efforts with respect to clinical applications of our products. The medical
advisors are set forth below:

BARRY E. DIBERNARDO, M.D., FACS, is a board certified plastic surgeon with a
diversified private surgical practice in Montclair, New Jersey. He is a Clinical
Associate Professor in the Department of Surgery University of Medicine and
Dentistry of New Jersey. He received his M.D. from Cornell University Medical
College, New York in 1984 with general surgical training at Mt. Sinai Medical
Center, Miami Beach, Florida from 1984 to 1989 and plastic surgical training at
Montefiore Medical Center - Albert Einstein College, Bronx, NY from 1989 to
1991. He is a member of the American Society of Plastic Surgeons.

MEG JORDAN, PHD, RN, is a medical anthropologist, an international health
journalist, editor and founder of American Fitness Magazine, and a radio/TV
personality known as the Global Medicine Hunter(TM). Her syndicated columns,
television reports, and special media projects cover health, wellness,
integrative medicine, indigenous healing traditions and cultural trends. Dr.
Jordan is the CEO of Global Medicine Enterprises, Inc., a health communications
and research firm, which provide groundbreaking reports to television,
newspapers and magazines. Her syndicated columns on health and wellness are
distributed to over major newspapers and magazines worldwide. Dr. Jordan is a
national keynote speaker, author of five books, editor of American Fitness
magazine, and health talk radio host on Sirius Satellite and Health Radio
Networks. She has served on numerous advisory boards, including the National
Wellness Institute, California Association of Naturopathic Physicians, the
California Institute of Integral Studies, Health Medicine Institute, and
ValleyCare Health System. Dr. Jordan currently teaches holistic health at San
Francisco State University.


                                       77

<PAGE>

RICHARD LINCHITZ, MD, received his medical education at both, the University of
Lusanne, Switzerland, and Cornell University, where he received his M.D. in
1973. Dr. Linchitz is certified by the American Board of Psychiatry and
Neurology, Pain Medicine and Medical Acupuncture. For many years, Dr. Linchitz
served as medical director of his own pain clinic in New York, was a regular
speaker and media expert on the topic of chronic pain and served on numerous
committees for the American Academy of Pain Medicine, where he served on the
Board of Directors from 1995 to 1998. Dr. Linchitz has significant experience in
the clinical practice of pain medicine, was active in establishing the field as
a specialty and has been involved in the development of the field for over 20
years. In addition to his expertise in pain medicine, Dr. Linchitz has been
studying alternative and complementary forms of therapy, and is writing a book
on this topic.

DR. COURTNEY H. LYDER, ND, GNP, FAAN, is Professor of Nursing, Internal Medicine
& Geriatrics and holds the first University of Virginia Medical Center
Professorship in Nursing. He is currently Chairman, Department of Acute and
Specialty Care at the University of Virginia. Dr. Lyder has received as a
Principal Investigator or Co-Investigator nearly $7 million in research and
training grants, published 2 books, 50 journal articles and book chapters. Dr.
Lyder is a Past President of the National Pressure Ulcer Advisory Panel. He is
also a senior consultant to the U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services where he has influenced the
development of wound care regulations. Dr. Lyder is a paid consultantto us and
currently receives cash compensation for his services to us.

DR. LEONARD MAKOWKA, M.D., PH.D., FRCS(C), FACS, has served as a consultant to
us since February 2004. Dr. Makowka received his M.D. degree from the University
of Toronto Medical School in 1977, and Ph.D. from the University of Toronto's
Department of Pathology in 1982. He has published over 400 articles and chapters
in both clinical and basic scientific research and has lectured worldwide. Dr.
Makowka is a distinguished clinical and transplantation surgeon and medical
researcher. Between 1989 and 1995, Dr. Makowka was the Chairman of the
Department of Surgery and Director of Transplantation Services at Cedars-Sinai
Medical Center in Los Angeles, California. He was also Professor of Surgery at
the UCLA School of Medicine. Dr. Makowka has retired from the active practice of
medicine to pursue investment strategies and business development in healthcare,
life sciences, finance and other industry sectors. Dr. Makowka was a Founding
Partner in the syndicated radio company After MidNite Entertainment, Inc., which
was purchased by Premiere Radio Networks in 1997 and now resides within the
Clear Channel portfolio of companies. He was a shareholder in Metro Capital,
Inc., a Canadian based company with significant real estate holdings in the
Toronto area. Dr. Makowka was a Managing Director of Innovative Technology
Partners LLC, a late stage technology venture fund. In 1999, Dr. Makowka founded
Drive Thru Technology, a national provider of wireless and surveillance
equipment for the restaurant and hospitality industries. He is currently a
Managing Director of ITF Global Partners, an international financial advisory,
strategic and a capital investment company. Dr. Makowka is actively involved as
an advisor to or member of the Board of Directors of several companies. He has
been a Corporate Member of Blue Shield of California since 1995. He served from
1998 until June 2003, on the Board of Directors of Hollis Eden Pharmaceuticals
(NASDAQ: HEPH). He is a member of the Board of Directors of Kinemed, Inc., a
biotech company. He is the Chief Scientific Advisor for Universal Detection
Systems, a publicly traded company developing environmental monitoring
technologies for bio-terrorism. Most recently, Dr. Makowka is a member of the
Advisory Board for the UCLA School of Public Affairs. Dr. Makowka is a paid
consultantto us and currently receives cash compensation for his services to us.

G. PATRICK MAXWELL, M.D., is a plastic surgeon and an assistant clinical
professor of surgery at Vanderbilt University. Dr. Maxwell received his M.D.
from Vanderbilt University, and subsequently trained in general and then plastic
surgery at the Johns Hopkins Medical Center in Baltimore, MD. He completed a
fellowship in microsurgery at the University of California, San Francisco and in
hand surgery at the Curtis Hand Center in Baltimore, MD. Dr. Maxwell was a
co-founder of, and currently serves as, Executive EVP for Diversified Specialty
Institutes, a healthcare and specialty hospital development company. He is also
a founder and board member of the non-profit Aspen Center for Integrative
Health.

ROBERT J. SNYDER, D.P.M., F.A.C.F.A.S., CWS, is nationally and internationally
recognized for his expertise in wound healing. In addition to his many board
certifications, honors and awards, he is a Diplomat, American Academy of Wound
Management; Diplomat, American Board of Podiatric Surgery; Fellow, American
College of Foot and Ankle Surgery; and a Certified Wound Specialist. Dr. Snyder
also published over 75 papers in the field of wound healing and has conducted
research for major wound care companies.

DR. BERISH STRAUCH, one of our key consultants, serves as the Chairman of our
Medical Advisory Board. Dr. Strauch is a paid consultant to us and currently
receives cash compensation for his services to us.

                                       78

<PAGE>

SCIENTIFIC ADVISORY BOARD

We have established a panel of two scientific advisors to assist management in
its efforts with respect to the physical parameters of the technologies we use.
The scientific advisors are set forth below:

DR. ARTHUR A. PILLA, one of our key consultants, serves as the Chairman of our
Scientific Advisory Board.

DAVID J. MUEHSAM is a research associate at the Bioelectrochemistry Laboratory,
Mt. Sinai School of Medicine in New York City, where he is involved in, among
other things, mathematical modeling of electromagnetic field bioeffects, and
design and biomedical applications of therapeutic electromagnetic field signals.
Mr. Muehsam received his B.A. degree in Physics, Mathematics and Music from
Hampshire College in 1987, and has published over 25 articles in both clinical
and basic scientific research, with a primary emphasis on mathematical modeling
and interpretation. Mr. Muehsam is a paid consultant to us and currently
receives cash compensation for his services to us.

ADVISORY BOARD COMPENSATION

Other than reimbursement for their expenses incurred on our behalf, members of
our Medical Advisory Board and Scientific Advisory Board do not receive any
compensation for services in their capacities as such. From time to time,
members of our Medical Advisory Board and Scientific Advisory Board do receive
consulting fees for consulting services they provide to us in their capacities
as consultants.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers, directors and
persons who own more than 10% of a registered class of our equity securities to
file statements on Form 3, Form 4 and Form 5 of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% shareholders are required by the regulation to furnish us with
copies of all Section 16(a) reports that they file.

Based solely upon a review of Forms 3 and 4 and amendments to these forms
furnished to us, all parties subject to the reporting requirements of Section
16(a) filed all such required reports during and with respect to the fiscal year
ended March 31, 2008, except that on October 9, 2007, Dr. Ignarro filed a Form 4
with respect to options granted under our 2004 Amended and Restated Stock Option
Plan, as amended, four business days following the date such Form 4 was due.

                                       79


<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

CASH AND OTHER COMPENSATION

The following table, which should be read in conjunction with the explanations
provided below, provides certain compensation information concerning our
Co-Chief Executive Officers, our Chief Financial Officer and our Executive Vice
President, who are sometimes referred to in this Part III of our Annual Report
on Form 10-KSB as our "named executive officers" for the fiscal year ended March
31, 2008.

<TABLE>
<S>            <C>
    Principal Position        Year     Salary       Bonus      Awards (1)    ($) Total
---------------------------   ------  ----------   ---------  -------------  -----------

Andre' DiMino (1)(3)          2008      240,000      24,000          4,862      268,862
      Vice Chairman and       2007      185,731           -          4,870      190,601
      Co-Chief Executive      2006       84,500           -              -       84,500
      Officer

David Saloff (2)(3)           2008      240,000      24,000         28,159      292,159
      President and Co-       2007      190,574           -         31,283      221,857
      Chief Executive         2006      152,300           -              -      152,300
      Officer

Alan Gallantar (2)(3)         2008      231,000      22,500        112,537      366,037
      Chief Financial         2007       95,192           -         51,579      146,771
      Officer                 2006            -           -              -            -

Edward J. Hammel(3)           2008      180,000           -          5,780      185,780
      Executive Vice          2007      139,593           -          5,777      145,370
      President & COO         2006      107,000           -              -      107,000
</TABLE>
_______________


(1) Represents the expense to us pursuant to FAS 123(R) for the respective year
for restricted stock or stock options granted as long-term incentives pursuant
to our 2004 Amended and Restated Stock Option Plan. See notes to our Financial
Statements for the fiscal years ended March 31, 2008 and 2007 for the
assumptions used for valuing the expense under FAS 123(R).

(2) In October 2006, (i) Mr. DiMino resigned from his positions as Chairman of
the Board and Chief Financial Officer and began to serve as Vice Chairman of the
Board and Co-Chief Executive Officer, (ii) Mr. Saloff resigned from his position
as Chief Executive Officer and began to serve as President and Co-Chief
Executive Officer and (iii) Mr. Gallantar began to serve as Chief Financial
Officer.

(3) On May 1, 2008, the Compensation Committee approved the following:

(a) Guaranteed bonuses in the amount of 10% of compensation for Messrs. DiMino,
Saloff and Gallantar in the amount of $24,000, $24,000 and $22,500, respectively
for fiscal 2007-2008, which were paid by us during May 2008 and accrued by us at
March 31, 2008.

(b) Salaries, effective April 1, 2008, for Messrs. DiMino, Saloff, Gallantar and
Hammel of $256,080, $256,080, $233,550 and $192,060, respectively, which amounts
represent the Consumer Price Index increases pursuant to the terms of the
respective employment agreements.

(c) Stock Options under our Stock Option Plan for DiMino, Saloff, Gallantar and
Hammel of 120,000, 120,000, 60,000 and 60,000, respectively, with an exercise
price of $2.82 (except for Mr. DiMino which exercise price is $3.102, 110% of
the closing price), the closing price of our common stock on the NASDAQ Stock
Market. The options vest equally on May 1, 2009, 2010 and 2011 and expire in 10
years from the date of grant except for Mr. DiMino's options which expire 5
years from the date of grant.

GRANTS OF PLAN-BASED AWARDS FOR THE FISCAL YEAR END

During the fiscal year ended March 31, 2008, no stock options were granted to
any of our named executive officers. On May 1, 2008, options under our 2004
Amended and Restated Stock Option Plan were granted to Messrs. DiMino, Saloff,
Gallantar and Hammel to purchase 120,000, 120,000, 60,000 and 60,000,
respectively, at an exercise price equal to the closing price of our common
stock on the NASDAQ Capital Market on May 1, 2008, which was $2.82 per share,
except for Mr. DiMino's options whose exercise price was equal to 110% of the
closing price of our common stock on the NASDAQ Capital Market on May 1, 2008,
which was $3.102 per share. Each such option vests equally on May 1, 2009, 2010
and 2011 and expires in 10 years from the date of grant except that Mr. DiMino's
option expires five years from the date of grant.

                                       80

<PAGE>

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table provides certain information concerning outstanding equity
awards held by each of our named executive officers at March 31, 2008.

<TABLE>
<S>            <C>
                         Option Awards                                               Stock Awards
                        ----------------------------------------------------------  ---------------------------------

                          Number of        Number of                                  Number of        Market Value
                         Securities       Securities                                  Shares or         of Shares
                         Underlying       Underlying                                   Units of        or Units of
                         Unexercised      Unexercised      Option       Option        Stock That        Stock That
                         Options (#)      Options (#)     Exercise    Expiration       Have Not          Have Not
        Name             Exercisable     Unexercisable    Price ($)      Date       Vested (#) (1)    Vested ($) (1)
---------------------   ----------------------------------------------------------  ---------------------------------

Andre' A. DiMino              204,750            39,000     $ 0.06      1/13/2014           37,375         $ 127,075
                               68,250            13,000     $ 0.31      2/19/2014
David Saloff                  204,750            39,000     $ 0.06      4/22/2014           70,525         $ 239,785
                               68,250            13,000     $ 0.31      2/19/2014
Alan V. Gallantar              46,666            93,334     $ 6.00     10/18/2016
Edward J. Hammel               27,300             5,200     $ 0.06      4/22/2014           17,875          $ 60,775
_____________
</TABLE>


(1) Based upon the closing market price of our stock of $3.40 on March 31, 2008.

EMPLOYMENT AGREEMENTS

On October 18, 2006, we entered into employment agreements with David Saloff to
secure his continued service as President and his service as Co-Chief Executive
Officer, with Andre' DiMino to secure his service as Vice Chairman of the Board
(for so long as Mr. DiMino continues to be a member of the Board of Directors)
and as Co-Chief Executive Officer and with Edward Hammel to secure his service
as Executive Vice President. As of July 13, 2006, we entered into an employment
agreement with Alan Gallantar to secure his service as Chief Financial Officer,
effective as of October 18, 2006. Each of these employment agreements has a
five-year term except in the case of Mr. Gallantar's agreement, a three-year
term, which will be automatically extended prior to the end of then current term
for successive one-year periods until either we or the executive notifies the
other at least 120 days prior to the end of the term that such party does not
wish to further extend it. Each of these agreements provides for a minimum
annual salary of $240,000 and a fixed annual bonus equal to 10% of such annual
salary, in the case of Messrs. DiMino and Saloff, a minimum salary of $225,000
and a fixed annual bonus equal to 10% of such annual salary, in the case of Mr.
Gallantar, and a minimum salary of $180,000, in the case of Mr. Hammel,
discretionary annual cash bonuses and participation on generally applicable
terms and conditions in other compensation and fringe benefit plans. Mr.
DiMino's employment agreement requires Mr. DiMino to devote at least a majority
of his work-time toward Ivivi. Pursuant to the terms of the employment
agreements, the annual salaries were increased to $256,000, $256,000, $233,550
and $182,060 for Messrs. DiMino, Saloff, Gallantar and Hammel effective April 1,
2008.

The terms of the employment agreements provide that each executive will be
entitled to severance benefits in the amount of such executive's base salary for
a period of 12 months following the date of termination if his employment is
terminated without "cause" or if he resigns for "good reason" (as such terms are
defined below), or 18 months following the date of termination if his employment
is terminated without "cause" or if he resigns for "good reason" within 12
months following a "change in control" (as such terms are defined below), in
each case subject to the execution and delivery to us by the employee of a
general release.

For purposes of the employment agreements, the following terms have the
following meanings:

"CAUSE" means the executive's (i) conviction of, plea of guilty or nolo
contendre to, or confession of guilt of, a felony or criminal act involving
moral turpitude (ii) commission of a fraudulent, illegal or dishonest act (which
dishonest act results in material damage to us) in respect of us, (iii) willful
misconduct or gross negligence that reasonably could be expected to be injurious
in our reasonable discretion to our business, operations or reputation
(monetarily or otherwise), (iv) material violation of our policies or procedures
in effect from time to time, subject to applicable cure periods after written
notice thereof, (v) after a written warning and a reasonable opportunity to cure
non-performance, continued failure to perform the executive's duties as assigned
to the executive from time to time, or (vi) any other material breach of the
employment agreement.

                                       81

<PAGE>

"GOOD REASON" means, in the absence of the consent of the executive, (i) our
failure to pay any amounts due to the executive or to fulfill any other material
obligations there under, other than failures that are remedied by us within 30
days after receipt of written notice thereof given by the executive; (ii) action
by us that results in a material diminution in the executive's title, position,
authority or duties from those contemplated in the employment agreement, subject
to certain exceptions; (iii) for purposes of the employment agreements with
Messrs. DiMino, Gallantar and Hammel, any move of our offices that would require
the executive to commute more than 10 miles more each way than such executive
commutes immediately prior to such move; or (iv) any material reduction in the
amount of our director and officer liability insurance coverage in effect as of
the consummation of our initial public offering.

"CHANGE IN CONTROL" means (i) any person becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of our securities
representing more than 50% of the total voting power represented by the
executive's then outstanding voting securities; provided, however, that the
consummation of our initial public offering in and/or the exercise or conversion
of any instruments as of the consummation of our initial public offering will
not be deemed a "change of control;" (ii) our merger or consolidation with any
other corporation, other than a merger or consolidation which would result in
our voting securities outstanding immediately prior thereto continuing to
represent at least fifty percent (50%) of the total voting power represented by
the voting securities of our company or such surviving entity outstanding
immediately after such merger or consolidation; or (iii) the sale or disposition
by us of all or substantially all of our assets.

During the term of the employment agreements and for a period of 18 months
thereafter, subject to applicable law, the executives will be subject to
restrictions on competition with us and restrictions on the solicitation of our
customers and executives. For all periods during and after the term, the
executives will be subject to nondisclosure and confidentiality restrictions
relating to our confidential information and trade secrets.

Section 280G of the Internal Revenue Code denies a corporation a deduction for
"excess parachute payments." Excess parachute payments generally consist of
payments to specified individuals that are contingent upon a change in ownership
or control of a corporation, or a change in a substantial portion of the
corporation's assets, and that exceed a statutorily determined base amount. In
the event that any payment, coverage or benefit provided under the employment
agreements would not be deemed to be deductible in whole or in part in the
calculation of the Federal income tax of the executive or any other person
making such payment or providing such coverage or benefit, by reason of Section
280G of the Internal Revenue Code, the aggregate payments, coverage or benefits
provided under the employment agreement will be reduced to the "safe harbor"
level under Section 280G of the Internal Revenue Code so that the entire amount
which is paid or provided to the executive will be deductible notwithstanding
the provisions of Section 280G of the Internal Revenue Code. As of June 19,
2007, the "safe harbor" level under Section 280G of the Internal Revenue Code is
2.99 times the average of five years of W-2 compensation.

2004 AMENDED AND RESTATED STOCK OPTION PLAN

In February 2005, our board of directors and shareholders adopted the 2004
Amended and Restated Stock Option Plan, which was amended and restated in
February 2005, November 2005 and May 2006 and amended in February 2007 and
October 2007. The purpose of the 2004 Amended and Restated Stock Option Plan is
to advance our interests by encouraging and enabling the acquisition of a
personal financial interest in us for those employees and directors whose
judgment and efforts we are largely dependent on for the successful conduct of
our operations, and by those consultants, agents, independent contractors,
advisors, professionals and other third parties whose contributions to our
welfare may be recompensed in a manner that provides an ownership interest in
us. An additional purpose of this Plan is to provide a means by which our
employees and directors can acquire and maintain ownership in us, thereby
strengthening their commitment to our success and their desire to remain in our
employ. In furtherance of that purpose, the 2004 Amended and Restated Stock
Option Plan authorizes the grant to our directors, executives and other key
employees and consultants of incentive and/or non-qualified stock options.

The maximum number of shares of our common stock with respect to which options
may be granted pursuant to the 2004 Amended and Restated Stock Option Plan is
3,750,000, 1,934,975 shares of which have been granted at per share exercise
prices ranging from $.031 to $6.00. No participant may be granted options that
exceed the number of shares issuable under the plan during any fiscal year.

Shares issuable under the 2004 Amended and Restated Stock Option Plan may be
either treasury shares or authorized but un-issued shares. The number of shares
available for issuance will be subject to adjustment to prevent dilution in the
event of stock splits, stock dividends or other changes in our capitalization.
If an option is forfeited or expires without having been exercised, the shares
subject to such option will again be available for issuance under the Plan.

                                       82

<PAGE>

The 2004 Amended and Restated Stock Option Plan will be administered by a
committee consisting of not less than two (2) members of the Board of Directors
who are directors who are not also employees of Ivivi, or in the absence of such
committee, the entire Board. The Board has designated its compensation committee
as administrator of the 2004 Amended and Restated Stock Option Plan. Except for
certain options granted to non-employee directors (see "Director Options" and
"Committee Chairman Options" below), the Committee will determine the persons to
whom options will be granted, the type of option and the number of shares to be
covered by the option.

TYPES OF OPTIONS

STOCK OPTIONS. Options granted under the 2004 Amended and Restated Stock Option
Plan may be "incentive stock options" ("Incentive Options") or stock options
which are not incentive stock options ("Non-Qualified Options" and, collectively
with Incentive Options, hereinafter referred to as "Options"). Incentive Options
generally provide the employee with more effective tax treatment if the
requirements described in the 2004 Amended and Restated Stock Option Plan are
satisfied by the holder of the option. The Committee may determine the number of
shares subject to each Option and the prices at which Options may be exercised
(which, in the case of Incentive Options, shall not be less than the Fair Market
Value, as defined by the Plan, of our common stock on the date of grant).
Whether an Option will be an Incentive Option or a Non-Qualified Option, the
time or times and the extent to which Options may be exercised, and all other
terms and conditions of Options, will be determined by the Committee.

Each Incentive Option shall terminate no later than ten years from the date of
grant, (five years in the case of an Incentive Option granted to a person
possessing more than 10% of the total combined voting power of all shares of our
stock or of a parent or subsidiary of ours ("10% Stockholder")). The exercise
price at which the shares may be purchased with respect to Incentive Options may
not be less than the Fair Market Value of shares of our common stock at the time
the Option is granted (and not less than 110% of the Fair Market Value at the
time the Option is granted with respect to Incentive Options granted to a 10%
Stockholder. The exercise price at which the shares may be purchased with
respect to Non-Qualified Options may not be less than 85% of the Fair Market
Value of shares of our common stock at the time the Option is granted. The
exercise price of the shares to be purchased pursuant to each Option shall be
paid in full in cash, by tendering other shares of our common stock, owned by
the optionee, or such other method as may be authorized by the Committee.

DIRECTOR OPTIONS. Each non-employee director (other than Steven Gluckstern in
his capacity as Chairman of the Board) was automatically granted Non-Qualified
Options ("Director Options") to acquire 20,000 shares of our common stock upon
the consummation of our initial public offering and was granted an additional
20,000 shares of our common stock on October 1, 2007, the date of our annual
meeting of stockholders. The exercise price at which the shares may be purchased
with respect to Director Options may not be less than the Fair Market Value of
shares of our common stock at the time the Option is granted. Each Director
Option shall terminate ten years from the date of grant. Director options shall
vest as to one-third of the shares subject to the option upon the date of grant,
and one-third upon each of the first and second anniversaries of the date of
grant.

COMMITTEE CHAIRMAN OPTIONS. Non-Qualified Options ("Committee Chairman Options")
may be granted from time to time to each non-employee director that serves as a
chairman of our audit committee, compensation committee or nominating and
corporate governance committee. The exercise price at which the shares may be
purchased with respect to Committee Chairman Options may not be less than the
Fair Market Value of shares of our common stock at the time the Committee
Chairman Option is granted. Each Committee Chairman Option shall terminate ten
years from the date of grant. Committee Chairman Options shall vest as to
one-third of the shares subject to the option upon the date of grant, and
one-third upon each of the first and second anniversaries of the date of grant.

CORPORATE TRANSACTIONS. Upon a Corporate Transaction (as defined), any option
carrying a right to exercise that was not previously exercisable shall become
fully exercisable, except in certain circumstances were the options are assumed
by the successor company.

TRANSFERS. Options granted under the 2004 Amended and Restated Stock Option Plan
may not be transferred, pledged, mortgaged, hypothecated or otherwise encumbered
other than by will or under the laws of descent and distribution, except that
the Committee may permit transfers of options for estate planning purposes.


                                       83

<PAGE>

AMENDMENTS AND TERMINATIONS. The Board may amend, alter, suspend, discontinue or
terminate the 2004 Amended and Restated Stock Option Plan at any time, except
that any such action shall be subject to shareholder approval at the annual
meeting next following such Board action if such shareholder approval is
required by federal or state law or regulation or the rules of any exchange or
automated quotation system on which our common stock may then be listed or
quoted, or if the Board of Directors otherwise determines to submit such action
for shareholder approval. In addition, no amendment, alteration, suspension,
discontinuation or termination to the 2004 Amended and Restated Stock Option
Plan may materially impair the rights of any participant with respect to any
option without such participant's consent. Unless terminated earlier by action
of the Board of Directors, the 2004 Amended and Restated Stock Option Plan shall
terminate on January 5, 2014.

COMPENSATION OF DIRECTORS

Until October 18, 2006, our directors did not receive compensation for serving
on our Board of Directors, but were entitled receive reimbursement for travel
and related expenses. From and after October 18, 2006, for each year of service
as a director of our company, each non-employee director (other than Steven
Gluckstern in his capacity as our Chairman of the Board, as discussed below)
will receive $10,000 ($2,500 per fiscal quarter). In addition, each non-employee
director (other than Steven Gluckstern in his capacity as our Chairman of the
Board) will receive non-qualified options to purchase 20,000 shares of our
common stock when such person is initially elected to our Board of Directors,
and for each year of service as a director of our company thereafter, options to
purchase 20,000 shares of our common stock, in each case at an exercise price
per share equal to the fair market value price per share of our common stock on
the grant date. Each of such options will fully vest one-third on the date of
grant and one-third upon each of the first and second anniversaries of the date
of grant.

On October 18, 2006, Steven Gluckstern, who began to serve as our Chairman of
the Board at such time, received options to purchase 775,000 shares of our
common stock at an exercise price equal to $5.11 per share, one-third of which
options vested upon the date of grant and one-third of which will vest on each
one-year anniversary thereafter. Such options will expire on the tenth
anniversary of the date of grant.

The following table provides certain information with respect to the
compensation earned by our non-employee directors during the fiscal year ended
March 31, 2008.

                                   DIRECTOR COMPENSATION

                                      Fees
                                    earned or
                                     paid in      Option Awards
                Name(1)              cash ($)       ($)(2)(3)        Total ($)
         ------------------------   ----------    -------------     ----------
         Steven Gluckstern              -           $ 703,604       $ 703,604
         Kenneth S. Abramowitz       10,000            30,986          40,986
         Louis J. Ignarro, Ph.D.     10,000            30,986          40,986
         Pamela J. Newman, Ph.D.     10,000            30,986          40,986
         Jeffrey A. Tischler         10,000            30,986          40,986
____________

(1) Each of Kenneth S. Abramowitz, Louis J. Ignarro, Ph.D., Pamela J. Newman,
Ph.D. and Jeffrey A. Tischler began to serve as a director of our company on
October 18, 2006.

(2) Represents the expense to us pursuant to FAS 123(R) for the respective year
for stock options granted as long-term incentives pursuant to our 2004 Amended
and Restated Stock Option Plan, other than Mr. Gluckstern's options which were
granted outside the plan. See Notes to our Financial Statements for the fiscal
years ended March 31, 2008 and 2007 for the assumptions used for valuing the
expense under FAS 123(R).

(3) At March 31, 2008, Steven Gluckstern had an option to purchase 775 000
shares of our common stock and each of Kenneth S. Abramowitz, Louis J. Ignarro,
Ph.D., Pamela J. Newman, Ph.D. and Jeffrey A. Tischler had options to purchase
40,000 shares of our common stock.

CONSULTING AGREEMENTS

We have entered into various consulting agreements in exchange for cash and
share based compensation with individuals and companies to assist in our
research and development, sales and marketing and administration. These
agreements are not with specific research and development facilities discussed
within Research and Development in our Form 10-KSB. Consulting expense totaled
$1,686,807 and $1,509,493 for the years ended March 31, 2008 and 2007 (including
share based compensation), respectively. Certain of the agreements contain
automatic renewal provisions. We intend to spend approximately $1,200,000
(excluding share based compensation) during our fiscal year ending March 31,
2009 on these consulting agreements. The dollar amount of our commitments
(excluding share based compensation) under our consulting agreements extending
beyond our fiscal year ending March 31, 2009 is approximately $730,000.

                                       84

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table provides information about our common stock that may be
issued upon the exercise of options and warrants under our equity compensation
plans. Our 2004 Amended and Restated Stock Option Plan was our only equity
compensation plan approved by our shareholders in existence as of March 31,
2008.

<TABLE>
<S>                 <C>
                                                                                                 NUMBER OF SECURITIES
                                                                                                  REMAINING AVAILABLE
                                               NUMBER OF SECURITIES TO      WEIGHTED AVERAGE      FOR FUTURE ISSUANCE
                                               BE ISSUED UPON EXERCISE     EXERCISE PRICE OF          (EXCLUDING
                                               OF OUTSTANDING OPTIONS,    OUTSTANDING OPTIONS,   SECURITIES REFLECTED
                                                 WARRANTS AND RIGHTS      WARRANTS AND RIGHTS      UNDER COLUMN (a))
      PLAN CATEGORY                                      (a)                      (b)                     (c)
      ----------------------------------------------------------------------------------------------------------------
      Equity compensation plans approved by           1,934,975                  $2.59                1,815,025
       security holders

      Equity compensation plans not Approved
       by security holders                            1,185,358*                 $5.36                       --

      Total                                           3,120,153                  $3.64                1,815,025
      ================================================================================================================
</TABLE>


*Includes 775,000 of options issued to Steven Gluckstern and 410,358 of warrants
issued to consultants. See"Item 7-Financial Statements- Note 10."

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information regarding ownership of shares of our
common stock, as of June 18, 2008:

o     by each person known by us to be the beneficial owner of 5% or more of our
      common stock;

o     by each of our directors and executive officers; and

o     by all of our directors and executive officers as a group.

Except as otherwise indicated, each person and each group shown in the table
below has sole voting and investment power with respect to the shares of common
stock indicated. For purposes of the table below, in accordance with Rule 13d-3
under the Exchange Act, a person is deemed to be the beneficial owner of any
shares of our common stock over which he or she has or shares, directly or
indirectly, voting or investment power or of which he or she has the right to
acquire beneficial ownership at any time within 60 days. As used in herein,
"voting power" is the power to vote or direct the voting of shares and
"investment power" includes the power to dispose or direct the disposition of
shares. Common stock beneficially owned and percentage ownership as of June 18,
2008 was based on 10,715,130 shares outstanding. Unless otherwise indicated, the
address of each beneficial owner is c/o Ivivi Technologies, Inc., 135 Chestnut
Ridge Road, Montvale, NJ 07645.

<TABLE>
<S>            <C>
                                                                         SHARES BENEFICIALLY OWNED
   NAME OF BENEFICIAL OWNER, OFFICERS AND DIRECTORS                        NUMBER            %

   ADM Unlimited, Inc. (1)                                               3,250,000          30.3
   Andre' A. DiMino (1)(2)                                               1,768,001          16.1
   David Saloff (3)                                                        671,125           6.1
   Alan V. Gallantar (4)                                                    46,666            *
   Edward J. Hammel (5)                                                    129,863           1.2
   Kenneth Abramowitz (6)                                                  119,013           1.1
   Steven M. Gluckstern (7)                                                793,995           7.1
   Louis J. Ignarro (8)                                                     19,999            *
   Pamela J. Newman (9)                                                     19,999            *
   Jeffrey A. Tischler (10)                                                 19,999            *
   Sherleigh Associates, Inc. Profit Sharing Plan (11)                   1,113,635           9.9
   All directors and executive officers as a group (9 persons)(12)       3,062,322          25.4
________________
</TABLE>

* Less than 1%.

                                       85

<PAGE>

(1) Andre' DiMino, our Vice Chairman and Co-Chief Executive Officer, has the
right to vote approximately 36% of the outstanding common stock of ADM
Unlimited, Inc. In addition, Mr. DiMino, together with other members of the
DiMino family, has the right to vote approximately 39% of the outstanding common
stock of ADM Unlimited, Inc.

(2) Represents: (i) 273,000 shares of common stock issuable upon exercise of
options that are exercisable within 60 days of June 18, 2008; (ii) 186,875
shares of common stock owned of record by Mr. DiMino including 16,250 shares of
common stock subject to a share purchase right agreement among Mr. DiMino, David
Saloff, Edward Hammel, Sean Hagberg, Ph.D., Arthur Pilla, Ph.D. and Steven
Gluckstern pursuant to which Mr. Gluckstern has the right to purchase such
shares from Mr. DiMino during the period from November 8, 2005 to November 8,
2010; and (iii) 1,309,126 shares of common stock beneficially owned by David
Saloff, Edward Hammel and certain other of our shareholders (excluding shares
underlying options held by such shareholders) which are subject to a voting
agreement under which Mr. DiMino has the right to vote such shares. Mr. DiMino
disclaims beneficial ownership of the shares beneficially owned by David Saloff
and Edward Hammel and such other shareholders. The voting agreement, with
respect to shares held by, and shares underlying options held by, the
shareholders party thereto, other than one shareholder, shall terminate on
October 24, 2009, and with respect to 81,250 shares of such common stock, shall
terminate upon the earlier to occur of October 24, 2009 and the purchase of such
shares by Mr. Gluckstern pursuant to the share purchase right agreement. Mr.
DiMino shall have the right to vote the 349,375 shares of common stock
beneficially owned by the other shareholder indefinitely unless and until such
right is terminated by Mr. DiMino and such other shareholder. Of the shares
beneficially owned by Mr. DiMino, 37,375 shares are subject to forfeiture and
vest in equal yearly installments on January 5 of each year through January 5,
2009. Excludes 172,000 shares of common stock issuable upon exercise of options
that are not exercisable within 60 days of June 18, 2008.

(3) Represents: (i) 273,000 shares of common stock issuable upon exercise of
options that are exercisable within 60 days of June 18, 2008; and (ii) 398,125
shares of common stock owned of record by Mr. Saloff, all of which shares are
subject to a voting agreement under which Mr. DiMino has the right to vote such
shares, including 30,875 shares of common stock subject to a share purchase
right agreement among Mr. Saloff, Mr. DiMino, Mr. Hammel, Dr. Hagberg, Dr. Pilla
and Mr. Gluckstern pursuant to which Mr. Gluckstern has the right to purchase
such shares from Mr. Saloff during the period from November 8, 2005 to November
8, 2010. The voting agreement, with respect to 588,250 shares of our common
stock (including 273,000 shares underlying options to purchase shares held by
Mr. Saloff that are exercisable within 60 days of June 18, 2008), shall
terminate on October 24, 2009 and with respect to 30,875 shares of our common
stock, shall terminate upon the earlier to occur of October 24, 2009 and the
purchase of such shares by Mr. Gluckstern pursuant to the share purchase right
agreement. Of the shares beneficially owned by Mr. Saloff, 70,525 shares are
subject to forfeiture and vest in equal yearly installments on January 5 of each
year through January 5, 2009. Excludes 172,000 shares of common stock issuable
upon exercise of options that are not exercisable within 60 days of June 18,
2008.

(4) Represents 46,666 shares of common stock issuable upon exercise of options
that are exercisable within 60 days of June 18, 2008. Excludes 153,334 shares of
common stock issuable upon exercise of options that are not exercisable within
60 days of June 18, 2008.

(5) Represents: (i) 27,300 shares of common stock issuable upon exercise of
options that are exercisable within 60 days of June 18, 2008; and (ii) 102,563
shares of common stock owned of record by Mr. Hammel, all of which shares are
subject to a voting agreement under which Mr. DiMino has the right to vote such
shares, including, 8,125 shares of common stock subject to a share purchase
right agreement among Mr. Hammel, Mr. DiMino, Mr. Saloff, Dr. Hagberg, Dr. Pilla
and Mr. Gluckstern pursuant to which Mr. Gluckstern has the right to purchase
such shares from Mr. Hammel during the period from November 8, 2005 to November
8, 2010. The voting agreement, with respect to 120,738 shares of our common
stock (including 27,300 shares underlying options to purchase shares held by Mr.
Hammel that are exercisable within 60 days of June 18, 2008) shall terminate on
October 24, 2009 and with respect to 8,125 shares of our common stock, shall
terminate upon the earlier to occur of October 24, 2009 and the purchase of such
shares by Mr. Gluckstern pursuant to the share purchase right agreement. Of the
shares beneficially owned by Mr. Hammel, 17,875 shares are subject to forfeiture
and vest in equal yearly installments on January 5 of each year through January
5, 2009. Excludes 65,200 shares of common stock issuable upon exercise of
options that are not exercisable within 60 days of June 18, 2008.

(6) Represents: (i) 49,020 shares of common stock beneficially owned by Kenneth
S. Abramowitz & Co., Inc., an investment fund wholly-owned by Mr. Abramowitz;
(ii) 49,994 shares of common stock underlying warrants beneficially owned by
Kenneth S. Abramowitz & Co., Inc., an investment fund wholly-owned by Mr.
Abramowitz, that are exercisable within 60 days of June 18, 2008; and (iii)
19,999 shares of common stock issuable upon exercise of options to purchase
shares of our common stock that are exercisable within 60 days. Excludes 20,001
shares of common stock issuable upon exercise of options that are not
exercisable within 60 days of June 18, 2008.

                                       86

<PAGE>

(7) Represents: (i) 196,078 shares of common stock beneficially owned by Ajax
Capital LLC, an investment fund wholly-owned by Mr. Gluckstern; (ii) 81,250
shares of common stock issuable upon exercise of rights to purchase an aggregate
of up to 81,250 shares of common stock during the period from November 8, 2005
to November 8, 2010 granted by Mr. DiMino, Mr. Saloff, Mr. Hammel, Dr. Hagberg
and Dr. Pilla pursuant to a share purchase right agreement, 65,000 shares of
which are subject to a voting agreement under which Mr. DiMino has the right to
vote such shares; provided, however, that the voting agreement with respect to
such shares shall terminate on October 24, 2009 and the purchase of such shares
by Mr. Gluckstern pursuant to the share purchase right agreement; and (iii)
516,667 shares of our common stock issuable upon exercise of options to purchase
shares of our common stock that are exercisable within 60 days of June 18, 2008.
Excludes 258,333 shares of common stock issuable upon exercise of options that
are not exercisable within 60 days of June 18, 2008. See footnote numbers (2)
and (3).

(8) Represents: 19,999 shares of our common stock issuable upon exercise of
options to purchase shares of our common stock issuable upon exercise of options
to purchase shares of our common stock that are exercisable within 60 days of
June 18, 2008. Excludes 20,001 shares of common stock issuable upon exercise of
options that are not exercisable within 60 days of June 18, 2008.

(9) Represents: 19,999 shares of our common stock issuable upon exercise of
options to purchase shares of our common stock issuable upon exercise of options
to purchase shares of our common stock that that are exercisable within 60 days
of June 18, 2008. Excludes 20,001 shares of common stock issuable upon exercise
of options that are not exercisable within 60 days of June 18, 2008.

(10) Represents: 19,999 shares of our common stock issuable upon exercise of
options to purchase shares of our common stock issuable upon exercise of options
to purchase shares of our common stock that that are exercisable within 60 days
of June 18, 2008. Excludes 20,001 shares of common stock issuable upon exercise
of options that are not exercisable within 60 days of June 18, 2008.

(11) Represents: (i) 596,766 shares of common stock beneficially owned by
Sherleigh Associates Inc. Profit Sharing Plan; and (ii) 516,869 shares of common
stock underlying warrants held by Sherleigh Associates Defined Benefit Pension
Plan. Jack Silver is trustee of the Sherleigh Associates, Inc. Profit Sharing
Plan and has voting and investment control over such securities. The address for
the reporting person is SIAR Capital LLC, 660 Madison Avenue, New York, New
York, 10021. The foregoing information was derived from a schedule 13G /A, which
was filed on behalf of the reporting person on February 13, 2008, and additional
information provided to us by the reporting person.

(12) See footnotes (1) through (10).

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have entered into a management service agreement and a manufacturing
agreement with ADM Unlimited, Inc., our largest shareholder, each of which is
described below. In addition, some of our officers and directors are also
officers and directors of ADM. These relationships may cause conflicts of
interests to arise between us and ADM.

                          MANAGEMENT SERVICES AGREEMENT

In order to keep our operating expenses manageable, we entered into a management
services agreement, dated as of August 15, 2001, with ADM under which ADM
provides us and its subsidiaries, Sonotron Medical Systems, Inc. and Pegasus
Laboratories, Inc., with management services and allocates portions of its real
property facilities for use by us and the other subsidiaries for the conduct of
our respective businesses.

The management services provided by ADM under the management services agreement
include administrative, technical, engineering and regulatory services with
respect to our products. We pay ADM for such services on a monthly basis
pursuant to an allocation determined by ADM based on a portion of its applicable
costs plus any invoices it receives from third parties specific to us. As we
have added employees to our marketing and sales staff and administrative staff
following the consummation of initial public offering, our reliance on the use
of the management services of ADM has been reduced.

We also use office, manufacturing and storage space in a building located in
Northvale, NJ, currently leased by ADM, pursuant to the terms of the management
services agreement to which we, ADM and two of ADM's subsidiaries are parties.
Pursuant to the management services agreement, ADM determines, on a monthly
basis, the portion of space utilized by us during such month, which may vary
from month to month based upon the amount of inventory being stored by us and
areas used by us for research and development, and we reimburse ADM for our
portion of the lease costs, real property taxes and related costs based upon the
portion of space utilized by us. We have incurred $42,360 and $43,795 for the
use of such space during the fiscal years ended March 31, 2008 and 2007,
respectively.

                                       87

<PAGE>

ADM determines the portion of space allocated to us and each subsidiary on a
monthly basis, and we and the other subsidiaries are required to reimburse ADM
for our respective portions of the lease costs, real property taxes and related
costs.

We have incurred $198,246 and $242,595 for management services and the use of
real property provided to us by ADM pursuant to the management services
agreement during the fiscal years ended March 31, 2008 and March 31, 2007,
respectively.

                             MANUFACTURING AGREEMENT

We, ADM and one other subsidiary of ADM, Sonotron Medical Systems, Inc, are
parties to a second amended and restated manufacturing agreement. Under the
terms of the agreement, ADM has agreed to serve as the exclusive manufacturer of
all current and future medical and non-medical electronic and other devices or
products to be sold or rented by us. For each product that ADM manufactures for
us, we pay ADM an amount equal to 120% of the sum of (i) the actual, invoiced
cost for raw materials, parts, components or other physical items that are used
in the manufacture of the product and actually purchased for us by ADM, if any,
plus (ii) a labor charge based on ADM standard hourly manufacturing labor rate,
which we believe is more favorable than could be attained from unaffiliated
third-parties. We generally purchase and provide ADM with all of the raw
materials, parts and components necessary to manufacture our products and, as a
result, the manufacturing fee paid to ADM is generally 120% of the labor rate
charged by ADM. On April 1, 2007, we instituted a procedure whereby ADM invoices
us for finished goods at ADM's cost plus 20%.

Under the terms of the agreement, if ADM is unable to perform its obligations
under our manufacturing agreement or is otherwise in breach of any provision of
our manufacturing agreement, we have the right, without penalty, to engage third
parties to manufacture some or all of our products. In addition, if we elect to
utilize a third-party manufacturer to supplement the manufacturing being
completed by ADM, we have the right to require ADM to accept delivery of our
products from these third-party manufacturers, finalize the manufacture of the
products to the extent necessary and ensure that the design, testing, control,
documentation and other quality assurance procedures during all aspects of the
manufacturing process have been met. Although we believe that there are a number
of third-party manufacturers available to us, we cannot assure you that we would
be able to secure another manufacturer on terms favorable to us or at all or how
long it will take us to secure such manufacturing. The initial term of the
agreement expires on March 31, 2009, subject to automatic renewals for
additional one-year periods, unless either party provides three months' prior
written notice to the other prior to the end of the relevant term of its desire
to terminate the agreement.

We have incurred $4,982 and $75,584 for ADM's manufacture of our products
pursuant to the manufacturing agreement during the fiscal years ended March 31,
2008 and March 31, 2007, respectively.

                              IT SERVICES AGREEMENT

Effective February 1, 2008, we entered into an agreement to share certain
information technology (IT) costs with ADM. During the fiscal year ended March
31, 2008, there have been no cost reimbursements under this agreement.

                      STOCK ISSUANCES AND VOTING AGREEMENT

In January 2004, we issued an aggregate of 186,875 and 398,125 shares of our
common stock to Andre' DiMino, our Vice Chairman and Co-Chief Executive Officer,
and David Saloff, our President and Co-Chief Executive Officer, respectively. Of
the shares of our common stock issued to Mr. Saloff, 141,050 of the shares are
subject to forfeiture and vest in equal yearly installments on January 5 of each
year through January 5, 2009. In addition, all of the shares issued to Mr.
Saloff are subject to a voting agreement among Mr. DiMino, Mr. Saloff, Edward
Hammel, our Executive Vice President, Sean Hagberg, Ph.D., our Chief Science
Officer, Arthur Pilla, Ph.D., one of our consultants, our Science Director and
the Chairman of our Scientific Advisory Board, Berish Strauch, M.D., one of our
consultants and a member of our Medical Advisory Board, and Fifth Avenue Capital
Partners, one of our shareholders. Under the voting agreement, in addition to
the shares of common stock beneficially owned by Mr. DiMino, Mr. DiMino has the
right to vote the shares of common stock held by such shareholders,
representing, as of June 18, 2008, an aggregate of 1,663,026 additional shares
of our common stock (including shares underlying options held by such
shareholders that are exercisable within 60 days of the date hereof). The voting
agreement, with respect to shares of common stock, and shares of common stock
underlying options, held by all of the shareholders party thereto, will expire
on October 24, 2009. Mr. DiMino shall continue to have the right to vote an
additional 349,375 shares of our common stock held by Fifth Avenue Capital
Partners indefinitely unless otherwise agreed to by Mr. DiMino and such
shareholder.

                                       88

<PAGE>

                            SHARE PURCHASE AGREEMENT

On November 8, 2005, each of Andre' DiMino, David Saloff, Edward Hammel, Sean
Hagberg, Ph.D. and Arthur Pilla, Ph.D., granted Steven Gluckstern, our Chairman
of the Board, the right to purchase up to 16,250, 30,875, 8,125, 8,125 and
17,875 shares of common stock, respectively, at an exercise price per share
equal to the lesser of (i) the initial public offering price per share and (ii)
$5.11 (subject to adjustment for any recapitalization, stock-split or other
similar event); provided, however, that if an initial public offering of our
common stock was not consummated on or before May 8, 2006, the exercise price
per share would be $4.31 and be decreased by $.31 each month after May 8, 2006
until the earlier to occur of (i) November 8, 2006 and (ii) the date a
registration statement with respect to an initial public offering of our common
stock was declared effective by the Securities and Exchange Commission; provided
further, however, that in no event would the exercise price be less than $100
per share. Since the consummation of our initial public offering occurred on
October 24, 2006, the exercise price is $2.76 per share. These purchase rights
are exercisable at any time and from time to time during the period from
November 8, 2005 to November 8, 2010.

We believe that all of the transactions set forth above were made on terms no
less favorable to us than could have been obtained from unaffiliated third
parties. At the time of the above referenced transactions, we did not have
sufficient disinterested directors to approve or ratify such transactions.
However, all such transactions have been reviewed by the audit committee of our
Board of Directors and ratified by them. All future transactions between us and
our officers, directors and principal shareholders and their affiliates will be
on terms no less favorable than could be obtained from unaffiliated third
parties and will be approved by our audit committee or another independent
committee of our Board of Directors.

DIRECTOR INDEPENDENCE

We have seven directors, Steven M. Gluckstern, Andre' A. DiMino, David Saloff,
Kenneth S. Abramowitz, Louis J. Ignarro, Ph.D., Pamela J. Newman, Ph.D. and
Jeffrey A. Tischler. Our Board of Directors has determined that each of Kenneth
S. Abramowitz, Louis J. Ignarro, Ph.D., Pamela J. Newman, Ph.D. and Jeffrey A.
Tischler are "independent" as defined under the NASDAQ listing standards.


                                       89

<PAGE>
<TABLE>
<S>              <C>

ITEM 13. EXHIBITS


Exhibit No.      Description
-----------      -----------

3.1              Restated Certificate of Incorporation of Ivivi Technologies, Inc. (1)
3.2              Amended and Restated By-Laws of Ivivi Technologies, Inc. (1)
4.1              Form of Stock Certificate of Ivivi Technologies, Inc. (2)
4.2              Warrant issued to certain investors (one in a series of warrants with identical terms) (3)
4.3              Form of Warrant issued to Placement Agent (3)
4.4              Warrant issued to certain investors (one in a series of warrants with identical terms) (4)
4.5              Registration Rights Agreement among Ivivi Technologies, Inc. and certain investors (included as
                 Exhibit E to form of Subscription Agreement filed as Exhibit 10.19)
4.6              Registration Rights Agreement among Ivivi Technologies, Inc. and certain investors (included as
                 Exhibit C to form of Subscription Agreement filed as Exhibit 10.20)
4.7              Registration Rights Agreement among Ivivi Technologies, Inc. and certain investors (2)
4.8              Form of Warrant issued to consultants (2)
4.9              Form of Warrant issued to certain advisors (2)
4.10             Registration Rights Agreement, dated as of October 15, 2007, between Ivivi Technologies, Inc. and
                 the investor named therein (11)
10.1             2004 Amended and Restated Stock Option Plan, as amended(1)
10.2             Second Amended and Restated Manufacturing Agreement, dated as of June 15, 2006, among Ivivi
                 Technologies, Inc., ADM Tronics Unlimited, Inc., and certain subsidiaries of ADM TronicsUnlimited,
                 Inc. (6)
10.3             Management Services Agreement, dated August 15, 2001, among Ivivi Technologies, Inc., ADM Tronics
                 Unlimited, Inc. and certain subsidiaries of ADM Tronics Unlimited, Inc., as amended (7)
10.4             Form of Indemnification Agreement between Ivivi Technologies, Inc. and each of its directors and
                 officers (9)
10.5             Amended and Restated Voting Agreement among the parties named therein (9)
10.6             Agreement, effective as of February 10, 2005, between Ivivi Technologies, Inc. and ADM Tronics
                 Unlimited, Inc. (5)
10.7             Master Clinical Trial Agreement, dated as of January 9, 2006, between Ivivi Technologies, Inc. and
                 Cleveland Clinic Florida (6)
10.8             Form of Distribution Agreement (5)
10.9             Employment Agreement, dated October 18, 2007, between Ivivi Technologies, Inc. and Andre' DiMino
                 (12)
10.10            Employment Agreement, dated October 18, 2007, between Ivivi Technologies, Inc. and David Saloff (12)
10.11            Employment Agreement, dated as of July 13, 2006, between Ivivi Technologies, Inc. and Alan
                 Gallantar (7)
10.12            Employment Agreement, dated October 18, 2007, between Ivivi Technologies, Inc. and Edward Hammel
                 (12)
10.13            Option Agreement, dated as of June 16, 2006, between Ivivi Technologies, Inc. and Steven M.
                 Gluckstern (6)
10.14            Share Purchase Right Agreement, dated as of November 8, 2005, between Ivivi Technologies, Inc. and
                 Steven Gluckstern (6)
10.15            Subscription Agreement between Ivivi Technologies, Inc. and certain investors (2)
10.16            Subscription Agreement between Ivivi Technologies, Inc. and certain investors (2)
10.17            Exclusive Distribution Agreement, dated as of November 9, 2006, between Ivivi Technologies, Inc.
                 and Inamed Medical Products Corporation (10) +
10.19            Lease Agreement, dated as of June 18, 2007, between Ivivi Technologies, Inc. and Mack-Cali East
                 Lakemont LLC (12)
                 IS THIS GOING TO BE FILED AS A MATERIAL AGREEMENT?
14.1             Ivivi Technologies, Inc. Code of Ethics for Senior Financial Officers, Executive Officers and
                 Directors (2)
23.1             Consent of Raiche Ende Malter & Co. LLP *
31.1             Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                 2002 *
31.2             Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                 2002 *
31.3             Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32               Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002 *
99.1             Audit Committee charter (2)
-----------------
</TABLE>

*    Filed herewith.

+ Portions of this document have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request or confidential
treatment in accordance with Rule 406 of the Securities Act.

(1) Incorporated by reference to Ivivi Technologies, Inc.'s Registration
Statement on Form S-8, filed with the Securities and Exchange Commission on
February 13, 2007.

(2) Incorporated by reference to Amendment No. 7 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on October 13, 2006.

(3) Incorporated by reference to Ivivi Technologies, Inc.'s Registration
Statement on Form SB-2, filed with the Securities and Exchange Commission on
February 11, 2005.

                                       90

<PAGE>

(4) Incorporated by reference to Amendment No. 3 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on April 20, 2006.

(5) Incorporated by reference to Amendment No. 2 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on May 13, 2005.

(6) Incorporated by reference to Amendment No. 4 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on June 19, 2006.

(7) Incorporated by reference to Amendment No. 5 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on August 29, 2006.

(8) Incorporated by reference to Amendment No. 1 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on March 3, 2005.

(9) Incorporated by reference to Amendment No. 6 to Ivivi Technologies, Inc.'s
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on September 14, 2006.

(10) Incorporated by reference to Ivivi Technologies, Inc.'s Quarterly Report on
Form 10-QSB for the quarter ended September 30, 2006, filed with the Securities
and Exchange Commission on December 4, 2006.

(11) Incorporated by reference to Ivivi Technologies, Inc.'s Current Report on
Form 8-K filed with the Securities and Exchange Commission on October 16, 2007.

(12) Incorporated by reference to Ivivi Technologies, Inc.'s Annual Report on
Form 10-KSB filed with the Securities and Exchange Commission on June 29, 2007.


                                       91

<PAGE>


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Raich Ende Malter & Co. LLP served as the independent registered public
accounting firm that audited our financial statements for the fiscal years ended
March 31, 2008 and 2007.

AUDIT AND AUDIT RELATED FEES

The aggregate fees billed by Raich Ende Malter & Co. LLP for professional
services rendered for the audit of our annual financial statements for the
fiscal years ended March 31, 2008 and 2007, and for the review of the financial
statements included in our Quarterly Reports on Form 10-QSB for the fiscal years
ended March 31, 2008 and 2007 were as follows:

<TABLE>
<S>            <C>
   -----------------------------------------------------------------------------------------
                                                        March 31, 2008      March 31, 2007
   -----------------------------------------------------------------------------------------
   Audit fees including quarterly reviews                  $126,792            $89,165
   Audit related fees                                         --                  --
   Tax fees                                                  15,762             27,194
   All other fees including Registration Statements           --               116,979
   -----------------------------------------------------------------------------------------
   Total fees                                              $142,554           $233,338
   -----------------------------------------------------------------------------------------
</TABLE>

AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee pre-approves all services, including both audit and
non-audit services, provided by our independent accountants. For audit services,
each year the independent registered public accounting firm provides the Audit
Committee with an engagement letter outlining the scope of the audit services
proposed to be performed during the year, which must be formally accepted by the
Audit Committee before the audit commences. The independent registered public
accounting firm also submits an audit services fee proposal, which also must be
approved by the Audit Committee before the audit commences.

                                       92


<PAGE>



                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Annual Report on Form 10-KSB to be signed on its behalf by the
undersigned, thereunto duly authorized on June 30, 2008.

                                        IVIVI TECHNOLOGIES, INC.

                                        By: /s/ Andre' A. DiMino
                                            -----------------------------
                                            Andre' A. DiMino
                                            Co-Chief Executive Officer


In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated,
on June 30, 2008.

<TABLE>
<S>                              <C>
         SIGNATURE                             CAPACITIES                         DATE
------------------------------   ---------------------------------------   -----------------

/s/ Andre' A. DiMino
--------------------------       Co-Chief Executive Officer                  June 30, 2008
Andre' A. DiMino                 (Principal Executive Officer) and
                                 Director

/s/ David Saloff
--------------------------       President and Co-Chief Executive            June 30, 2008
David Saloff                     Officer (Principal Executive Officer)
                                 and Director

/s/ Alan V. Gallantar
--------------------------       Chief Financial Officer                     June 30, 2008
Alan V. Gallantar                Principal Financial Officer and
                                 (Principal Accounting Officer)

/s/ Steven M. Gluckstern
--------------------------       Chairman of the Board                       June 30, 2008
Steven M. Gluckstern


/s/ Kenneth S. Abramowitz
--------------------------       Director                                    June 30, 2008
Kenneth S. Abramowitz


/s/ Louis J. Ignarro, Ph.D.
--------------------------       Director                                    June 30, 2008
Louis J. Ignarro, Ph.D.


/s/ Pamela J. Newman, Ph.D.
--------------------------       Director                                    June 30, 2008
Pamela J. Newman, Ph.D.


/s/ Jeffrey A. Tischler
--------------------------       Director                                    June 30 2008
Jeffrey A. Tischler
</TABLE>

                                       93