##### 



U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549




FORM 10-QSB

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

For the quarterly period ended March 31, 2002

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

|                                  |  |                  |  |                   
|--------------------------------- |  | ---------------- |  | ------------------
|NEVADA                            |  | 0-29266          |  | 87-0429335        
|(State or other jurisdiction      |  | (Commission File |  | (I.R.S.Employer   
|of incorporation or organization) |  | Number)          |  | IdentificationNo.)

8604 Main Street, Suite 1
WILLIAMSVILLE, NEW YORK 14221
(716) 565-4711
(Address, including zip code, and telephone number,
including area code, of issuers principal executive offices)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]

As of May 7, 2002, there were 10,201,219 shares of common stock, $0.001
par value per share, of the issuer outstanding.

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




PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |              |           |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ----------- | --------- | ----------- | --------- | ------------ | --------- |  |  | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           | March 31,   |           | December 31,
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           | 2002        |           | 2001        
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           | (unaudited) |           | (audited)   
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           | (Note 2)    |           | (Note 2)    
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      | ASSETS      |           |             |           |              |           |  |  | 
|CURRENT ASSETS:                                                                                                                                        |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       | Cash and cash equivalents                                                                                                                                |                                            | $                                    | 269,284     |           |             | $         | 422,538      |          
|                                                                                                                                                       | Restricted cash                                                                                                                                          |                                            |                                      | 126,798     |           |             |           | 126,748      |          
|                                                                                                                                                       | Trade receivables                                                                                                                                        |                                            |                                      | 1,228,349   |           |             |           | 1,141,758    |          
|                                                                                                                                                       | Inventory (Note 5)                                                                                                                                       |                                            |                                      | 981,005     |           |             |           | 972,804      |          
|                                                                                                                                                       | Prepaid expenses and other                                                                                                                               |                                            |                                      | 81,219      |           |             |           | 82,640       |          
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          | TOTAL CURRENT ASSETS                       |                                      |             | 2,686,655 |             |           |              | 2,746,488 | 
|Property and equipment, net of accumulated depreciation                                                                                                |                                                                                                                                                          |                                            | 231,023                              |             |           |             | 247,625   |             
|Holdings, carried at cost or equity                                                                                                                    |                                                                                                                                                          |                                            | 256,265                              |             |           |             | 276,634   |             
|Holdings (in public companies) available for sale, at market                                                                                           |                                                                                                                                                          |                                            | 560,909                              |             |           |             | 1,338,753 |             
|Technology, net of accumulated amortization                                                                                                            |                                                                                                                                                          |                                            | 1,261,379                            |             |           |             | 1,348,645 |             
|Goodwill, net of accumulated amortization                                                                                                              |                                                                                                                                                          |                                            | 1,882,205                            |             |           |             | 1,886,710 |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          | TOTAL ASSETS                               |                                      | $           | 6,878,436 |             |           | $            | 7,844,855 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          |                                            | LIABILITIES AND STOCKHOLDERS EQUITY |             |           |             |           |              |           |  | 
|CURRENT LIABILITIES:                                                                                                                                   |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       | Bank indebtedness                                                                                                                                        |                                            | $                                    | 321,475     |           |             | $         | 287,417      |          
|                                                                                                                                                       | Current portion of long-term debt                                                                                                                        |                                            |                                      | 100,272     |           |             |           | 100,512      |          
|                                                                                                                                                       | Subsidiary loans past due or in default                                                                                                                  |                                            |                                      | 305,104     |           |             |           | 305,834      |          
|                                                                                                                                                       | Trade payables and accrued liabilities                                                                                                                   |                                            |                                      | 3,479,954   |           |             |           | 3,381,094    |          
|                                                                                                                                                       | Debt equivalent                                                                                                                                          |                                            |                                      | 438,690     |           |             |           | 439,740      |          
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          | TOTAL CURRENT LIABILITIES                  |                                      |             | 4,645,495 |             |           |              | 4,514,597 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|Deferred income taxes                                                                                                                                  |                                                                                                                                                          |                                            | 573,098                              |             |           |             | 776,583   |             
|Minority interest                                                                                                                                      |                                                                                                                                                          |                                            | 490,960                              |             |           |             | 578,024   |             
|Pension obligation                                                                                                                                     |                                                                                                                                                          |                                            | 449,561                              |             |           |             | 455,285   |             
|Preferred and other non-voting stock of subsidiaries                                                                                                   |                                                                                                                                                          |                                            | 196,423                              |             |           |             | 196,894   |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          |                                            | 1,710,042                            |             |           |             | 2,006,786 |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|Redeemable Series A preferred stock, $0.001 par value,
redeemable at $18.25 per shares, authorized 500,000 shares,
issued and outstanding 3,477 shares |                                                                                                                                                          |                                            | 63,455                               |             |           |             | 63,455    |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          |                                            | 6,418,992                            |             |           |             | 6,584,838 |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|STOCKHOLDERS EQUITY:                                                                                                                                  |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       | Common stock, $0.001 par value, authorized 50,000,000 shares,
10,201,219 issued and 481,700 in treasury                                                  |                                            |                                      | 10,683      |           |             |           | 10,399       |          
|                                                                                                                                                       | Series B convertible preferred stock, $0.001 par value,
liquidation preference of 30% of stated value, authorized,
issued and outstanding 342,000 shares |                                            |                                      | 342         |           |             |           | 345          |          
|                                                                                                                                                       | Warrants                                                                                                                                                 |                                            |                                      | 629,447     |           |             |           | 629,447      |          
|                                                                                                                                                       | Additional paid in capital                                                                                                                               |                                            |                                      | 27,215,233  |           |             |           | 27,191,238   |          
|                                                                                                                                                       | Treasury stock                                                                                                                                           |                                            |                                      | (2,747,174  | )         |             |           | (2,746,129   | )        
|                                                                                                                                                       | Accumulated other comprehensive loss                                                                                                                     |                                            |                                      | (941,142    | )         |             |           | (676,633     | )        
|                                                                                                                                                       | Accumulated deficit                                                                                                                                      |                                            |                                      | (23,707,945 | )         |             |           | (23,148,650  | )        
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          | TOTAL STOCKHOLDERS EQUITY                 |                                      |             | 459,444   |             |           |              | 1,260,017 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             
|                                                                                                                                                       |                                                                                                                                                          | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                      | $           | 6,878,436 |             |           | $            | 7,844,855 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |                                      |             |           |             |           |             

See notes to consolidated financial statements





---



##### 



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

|                                                                  |                                                         |                                   |            |                              |           |          |            |           |           | 
|----------------------------------------------------------------- | ------------------------------------------------------- | --------------------------------- | ---------- | ---------------------------- | --------- | -------- | ---------- | --------- | --------- | 
|                                                                  |                                                         |                                   |            | Three months ended March 31,
|                                                                  |                                                         |                                   |            |                             
|                                                                  |                                                         |                                   |            | 2002                         |           | 2001    
|                                                                  |                                                         |                                   |            |                              |           |         
|                                                                  |                                                         |                                   |            | (Note 2)                     |           | (Note 2)
|                                                                 
|SALES                                                             |                                                         | $                                 | 2,483,116  |                              |           | $        | 3,468,914  |          
|COST OF SALES                                                     |                                                         |                                   | 2,044,979  |                              |           |          | 3,359,689  |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|GROSS MARGIN                                                      |                                                         |                                   | 438,137    |                              |           |          | 109,225    |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|EXPENSES:                                                         |                                                         |                                   |            |                              |           |          |            |          
|                                                                  | Selling, general and administrative                     |                                   |            | 1,097,193                    |           |          |            | 1,670,768 |          
|                                                                  | Research and development                                |                                   |            | 105,483                      |           |          |            | 270,070   |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|                                                                  |                                                         | TOTAL EXPENSES                    |            |                              | 1,202,676 |          |            |           | 1,940,838 | 
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|(LOSS) FROM CONTINUING OPERATIONS BEFORE UNDER NOTED ITEMS        |                                                         |                                   | (764,539   | )                            |           |          | (1,831,613 | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|OTHER INCOME AND (EXPENSES):                                      |                                                         |                                   |            |                              |           |          |            |          
|                                                                  | Interest (expense), net                                 |                                   |            | (27,110                      | )         |          |            | (23,840   | )        
|                                                                  | Other income, net                                       |                                   |            | 7,557                        |           |          |            | 50,210    |          
|                                                                  | (Loss) from equity investees                            |                                   |            | (28,545                      | )         |          |            | (52,528   | )        
|                                                                  | Gain on sale of holdings                                |                                   |            | 190,506                      |           |          |            | 277,940   |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|                                                                  |                                                         | TOTAL OTHER INCOME AND (EXPENSES) |            |                              | 142,408   |          |            |           | 251,782   | 
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|(LOSS) FROM CONTINUING OPERATIONS BEFORE
RECOVERY OF INCOME TAXES |                                                         |                                   | (622,131   | )                            |           |          | (1,579,831 | )        
|                                                                  | Recovery of income taxes                                |                                   |            | (28,445                      | )         |          |            | (28,447   | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|NET (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST    |                                                         |                                   | (593,686   | )                            |           |          | (1,551,384 | )        
|MINORITY INTEREST IN LOSS                                         |                                                         |                                   | 85,752     |                              |           |          | 161,130    |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|NET (LOSS) FROM CONTINUING OPERATIONS                             |                                                         |                                   | (507,934   | )                            |           |          | (1,390,254 | )        
|                                                                  | (Loss) from operations of discontinued segment (Note 3) |                                   |            |                             |           |          |            | (34,747   | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|NET (LOSS)                                                        |                                                         |                                   | (507,934   | )                            |           |          | (1,425,001 | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|BASIC (LOSS) PER SHARE                                            |                                                         | $                                 | (0.06      | )                            |           | $        | (0.16      | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|DILUTED (LOSS) PER SHARE                                          |                                                         |                                   | (0.06      | )                            |           |          | (0.16      | )        
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|WEIGHTED SHARES USED IN COMPUTATION  BASIC                       |                                                         |                                   | 10,061,777 |                              |           |          | 8,979,909  |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          
|WEIGHTED SHARES USED IN COMPUTATION  DILUTED                     |                                                         |                                   | 10,061,777 |                              |           |          | 8,979,909  |          
|                                                                  |                                                         |                                   |            |                              |           |          |            |          

See notes to consolidated financial statements





---



##### 



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

|                                                             |                                                                                    |                                                    |          |                              |          |          |           |            |           |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------- | -------------------------------------------------- | -------- | ---------------------------- | -------- | -------- | --------- | ---------- | --------- | -
|                                                             |                                                                                    |                                                    |          | Three Months Ended March 31,
|                                                             |                                                                                    |                                                    |          |                             
|                                                             |                                                                                    |                                                    |          | 2002                         |          | 2001    
|                                                             |                                                                                    |                                                    |          |                              |          |         
|                                                             |                                                                                    |                                                    |          | (Note 2)                     |          | (Note 2)
|CASH FLOW FROM OPERATING ACTIVITIES:                         |                                                                                    |                                                    |          |                              |          |          |           |           
|                                                             | Net (loss)                                                                         |                                                    | $        | (507,934                     | )        |          | $         | (1,425,001 | )        
|                                                             | Adjustments to reconcile net (loss)
from operating activities:                     |                                                    |          |                              |          |          |           |            |          
|                                                             |                                                                                    | Depreciation and amortization                      |          |                              | 100,135  |          |           |            | 378,742   |  
|                                                             |                                                                                    | Loss from equity investees                         |          |                              | 28,545   |          |           |            | 52,528    |  
|                                                             |                                                                                    | Gain on sale of holdings                           |          |                              | (190,506 | )        |           |            | (277,940  | )
|                                                             |                                                                                    | Common stock issued in lieu of cash                |          |                              |         |          |           |            | 57,074    |  
|                                                             |                                                                                    | Minority interest in (losses) of subsidiaries      |          |                              | (85,752  | )        |           |            | (191,383  | )
|                                                             |                                                                                    | Pension expense                                    |          |                              | 6,649    |          |           |            | 3,130     |  
|                                                             | Changes in non-cash working capital items
(Increase) decrease in trade receivables |                                                    |          | (89,389                      | )        |          |           | 591,603    |          
|                                                             |                                                                                    | Increase in inventory                              |          |                              | (10,533  | )        |           |            | (164,286  | )
|                                                             |                                                                                    | Decrease (increase) in prepaid expenses and other  |          |                              | 1,224    |          |           |            | (2,242    | )
|                                                             |                                                                                    | Decrease in income taxes receivable                |          |                              |         |          |           |            | 2,471,211 |  
|                                                             |                                                                                    | Increase in trade payables and accrued liabilities |          |                              | 43,859   |          |           |            | 149,561   |  
|                                                             |                                                                                    | (Decrease) in income taxes payable                 |          |                              |         |          |           |            | (1,911    | )
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|                                                             |                                                                                    |                                                    | (195,768 | )                            |          |          | 3,066,087 |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES              |                                                                                    |                                                    | (703,702 | )                            |          |          | 1,641,086 |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                        |                                                                                    |                                                    |          |                              |          |          |           |           
|                                                             | Purchase of property and equipment                                                 |                                                    |          |                             |          |          |           | (5,522     | )        
|                                                             | Investments in and advances to equity investees                                    |                                                    |          | (28,224                      | )        |          |           | (4,577     | )        
|                                                             | Proceeds from sale of holdings                                                     |                                                    |          | 535,225                      |          |          |           | 516,254    |          
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH PROVIDED BY INVESTING ACTIVITIES                        |                                                                                    |                                                    | 507,001  |                              |          |          | 506,155   |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                        |                                                                                    |                                                    |          |                              |          |          |           |           
|                                                             | Borrowings of debt                                                                 |                                                    |          | 34,772                       |          |          |           | 60,663     |          
|                                                             | Decrease in restricted cash                                                        |                                                    |          | (353                         | )        |          |           |           |          
|                                                             | Purchase of treasury stock                                                         |                                                    |          | (1,045                       | )        |          |           |           |          
|                                                             | Redemption of shares in stock of subsidiaries                                      |                                                    |          |                             |          |          |           | (19,617    | )        
|                                                             | Purchase of holdings available for sale                                            |                                                    |          | (290                         | )        |          |           |           |          
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH PROVIDED BY FINANCING ACTIVITIES                        |                                                                                    |                                                    | 33,084   |                              |          |          | 41,046    |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS |                                                                                    |                                                    | 10,363   |                              |          |          | (71,579   | )         
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS         |                                                                                    |                                                    | (153,254 | )                            |          |          | 2,116,708 |           
|CASH AND CASH EQUIVALENTS  beginning of period              |                                                                                    |                                                    | 422,538  |                              |          |          | 757,508   |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           
|CASH AND CASH EQUIVALENTS  end of period                    |                                                                                    | $                                                  | 269,284  |                              |          | $        | 2,874,216 |           
|                                                             |                                                                                    |                                                    |          |                              |          |          |           |           

See notes to consolidated financial statements





---



##### 



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

|                                        |                                                                  |                                                                                                                                                               |          |                              |   |      |            |            |   | 
|--------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ---------------------------- | - | ---- | ---------- | ---------- | - | 
|                                        |                                                                  |                                                                                                                                                               |          | Three months ended March 31,
|                                        |                                                                  |                                                                                                                                                               |          |                             
|                                        |                                                                  |                                                                                                                                                               |          | 2002                         |   | 2001
|                                        |                                                                  |                                                                                                                                                               |          |                              |   |     
|Net (loss)                              |                                                                  | $                                                                                                                                                             | (507,934 | )                            |   | $    | (1,425,001 | )         
|                                        |                                                                  |                                                                                                                                                               |          |                              |   |      |            |           
|Other comprehensive income, net of tax: |                                                                  |                                                                                                                                                               |          |                              |   |      |            |           
|                                        | Foreign currency translation adjustments                         |                                                                                                                                                               |          | (5,701                       | ) |      |            | (362,614   | )
|                                        | Unrealized holding gains:                                        |                                                                                                                                                               |          |                              |   |      |            |            |  
|                                        | Unrealized holding losses arising during period (see note below) |                                                                                                                                                               |          | (258,909                     | ) |      |            | (1,402,945 | )
|                                        | Total other comprehensive income (loss)                          |                                                                                                                                                               |          | (264,610                     | ) |      |            | (1,765,559 | )
|                                        |                                                                  |                                                                                                                                                               |          |                              |   |      |            |           
|                                        | Comprehensive (loss) during period                               |                                                                                                                                                               | $        | (772,544                     | ) |      | $          | (3,190,560 | )
|                                        |                                                                  |                                                                                                                                                               |          |                              |   |      |            |           
|                                        |                                                                  | Note: Unrealized holding gains are net of tax expense (benefit) of ($172,606)
and ($935,297)) for the three months ended March 31, 2002 and 2001
respectively |          |                              |   |      |            |            |   | 

See notes to consolidated financial statements





---



##### 



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(UNAUDITED)

1.     BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying financial statements are unaudited, but reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of financial position and the results of operations for the
interim periods presented. All such adjustments are of normal and recurring
nature. The results of operations for any interim period are not
necessarily indicative of the results attainable for a full fiscal year.



| |                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results
could differ from those estimates.



| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | Certain of the comparative figures have been reclassified to conform with
the presentation adopted in the current period.

2.     GOING CONCERN



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | These consolidated financial statements have been prepared on a going
concern basis, which presumes that assets will be realized and liabilities
discharged in the normal course of business over the foreseeable future.
The consolidated companys current liabilities exceed its current assets and
the consolidated company has incurred losses over the quarter and for the
past several quarters, which have reduced the companys cash reserves.
These conditions raise substantial doubt about the consolidated companys
ability to continue in the normal course of business as a going concern as
the companys primary need for cash is to maintain its ability to support
the operations of some of its companies and ultimately the carrying values,
of its individual investee companies. During the first quarter 2002 two of
its investee companies achieved operating profitability and one of these
investee companies had positive cash flow. In April 2002 the company sold
its interest in Dantec for $425,000 (see Note 10). The company is actively
pursuing the sale of its interests in two of its other investee companies
and has retained investment bankers in order to realize value and focus its
efforts and resources. In addition, the company is using its marketable
securities (which had a market value of $560,909 as of March 31, 2002) as a
source of liquidity. The proceeds of any such sales will be used to increase
cash reserves. In addition, the company will continue to assist its investee
companies in their efforts to obtain outside financing in order to fund the
growth and development of their respective businesses. The companys ability
to continue to realize assets and discharge liabilities in the normal course
is uncertain and dependent on these and other initiatives. These financial
statements do not include any of the adjustments to the amounts or
classification of assets and liabilities that might be necessary should the
company be unable to continue its business in the normal course.





---



##### 



3.     DISCONTINUED OPERATIONS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In September 2001, Elements (Retail Products), a subsidiary company
of which CVF has a 61% interest, decided to discontinue its operations. The
retail store and internet site were closed but will not be sold and the
discontinuance is complete. Sales of the segment for the three month periods
ended March 2001 were $93,410. The results in 2001 are shown on the income
statement as a separate line item, loss from operations of discontinued
segment.

4.     INCOME (LOSS) PER SHARE



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Basic earnings (loss) per share is computed by dividing net income
(loss) from continuing operations available to common stockholders from
continuing operations by the weighted average number of common shares
outstanding during the period. The net income (loss) from continuing
operations available to common stockholders consists of net income (loss)
from continuing operations reduced by the dividends on the Companys Series
A and B preferred stock. Diluted earnings (loss) per share reflects the per
share amount that would have resulted if diluted potential common stock had
been converted to common stock, as prescribed by SFAS 128.

5.     INVENTORY



| |                                     
| | ------------------------------------
| | Inventory consists of the following:

|               |  |                |         |                  |  |   |         | 
|-------------- |  | -------------- | ------- | ---------------- |  | - | ------- | 
|               |  | March 31, 2002 |         | December 31,2001
|               |  |                |         |                 
|Raw Material   |  | $              | 587,527 |                  |  | $ | 687,168 | 
|Finished goods |  |                | 393,478 |                  |  |   | 285,636 | 
|               |  |                |         |                  |  |   |         | 
|               |  | $              | 981,005 |                  |  | $ | 972,804 | 

6.     INVESTMENTS



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The following table gives certain summarized unaudited financial
information related to the Companys equity basis holdings:

|                      |  |                    |         |      |  |   |         |  
|--------------------- |  | ------------------ | ------- | ---- |  | - | ------- | -
|                      |  | Three Months Ended
|                      |  | March 31,         
|                      |  |                   
|                      |  | 2002               |         | 2001
|                      |  |                    |         |     
|Net Sales             |  | $                  | 27,949  |      |  | $ | 40,779  |  
|Gross profit on sales |  |                    | 22,919  |      |  |   | 40,283  |  
|Net (loss)            |  |                    | (34,936 | )    |  |   | (55,802 | )





---



##### 



7.     INTERIM FINANCIAL STATEMENT DISCLOSURES



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain information and footnote disclosures normally included in
annual financial statements presented in accordance with generally
accepted accounting principles have been condensed or omitted from the
accompanying unaudited interim financial statements. Reference is made
to the Companys audited financial statements for the year ended December
31, 2001 included in the Companys Annual Report on Form 10-KSB filed
with the Securities and Exchange Commission on April 16, 2002.

8.     IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS



| |                                                         
| | --------------------------------------------------------
| | BUSINESS COMBINATIONS AND GOODWILL AND INTANGIBLE ASSETS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2001, the FASB issued SFAS No. 141, Business Combinations
and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. SFAS No. 141 also specifies
criteria which intangible assets acquired in purchase method business
combinations after June 30, 2001 must meet to be recognized and reported
apart from goodwill. SFAS No. 142 addresses the initial recognition and
measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to their acquisition. SFAS No. 142 requires that intangible
assets with finite useful lives be amortized, and that goodwill and
intangible assets with indefinite lives no longer be amortized, but
instead be tested for impairment at least annually.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company adopted the provisions of SFAS No. 141 on July 1, 2001. Such
adoption had no effect on the Companys financial position or results of
operations. The Company adopted the provisions of SFAS No. 142 effective
January 1, 2002, at which time the amortization of the Companys existing
goodwill ceased. The new standard also requires that the Company test the
goodwill for impairment before June 30 2002. Any impairment, which
arises as a result of the test will be charged to income. The
amortization expense related to goodwill that would have been recorded
during the quarter ended March 31, 2002 had the accounting standard not
changed would have been $112,583. This would have increased the net loss
to $620,517 and increased basic and fully diluted loss per share to
($.07).





---



##### 





| |                                 
| | --------------------------------
| | ACCOUNTING FOR ASSET RETIREMENTS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2001, the FASB issued SFAS 143, Accounting for Asset
Retirement Obligations which addresses financial accounting and
reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It requires
recognition of the fair value of a liability for an asset retirement
obligation in the period in which it is incurred if a reasonable estimate
of fair value can be made effective for fiscal periods beginning after
June 15, 2002. The Company is currently assessing SFAS 143 and the
impact that adoption, in 2003, will have on the consolidated financial
statements.



| |                                                            
| | -----------------------------------------------------------
| | ACCOUNTING FOR IMPAIRMENT AND DISPOSAL OF LONG LIVED ASSETS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In August 2001, the FASB issued SFAS 144, Accounting for the
Impairment and Disposal of Long Lived Assets. SFAS 144 established a
single model for the impairment of long lived assets and broadens the
presentation of discountined operations to include more disposal
transactions and is effective for fiscal periods beginning after December
15, 2001. Adoption of SFAS 144 may change the nature and extent of
disclosure of the Companys future asset disposals, and allocations
between accounting periods.

9.     SEGMENTED INFORMATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has four reportable segments: bioremediation, machine
controls, precious gem identification and general corporate. The bioremediation
segment consists of one company that applies bioconversion and
biotransformation technology to municipal and industrial environmental
applications. The machine controls division designs, manufactures and sells
electric motor controls to machine manufacturers. The gem identification
segment consists of one company that has developed identification and database
systems, and markets its products and services to the companies in the precious
gem business, including producers, cutters, distributors and retailers. The
Companys general corporate segment includes one company which provides funding
and management overview services to the holdings. This segments profits
include interest income and gains on sales of its various holdings.



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company evaluates performance and allocates resources based on
continuing profit or loss from operations before income taxes,
depreciation and research and development. The accounting policies of the
reportable segments are the same as those described in the summary of
significant accounting policies.





---



##### 





| |                                                              
| | -------------------------------------------------------------
| | There are no intersegment sales, transfers or profit or loss.



| |                                                                     
| | --------------------------------------------------------------------
| | Industry Segments for the Three Months Ended March 31, 2002 and 2001

|                                                             |  |                 |          |                  |  |         |           |                 |  |                    |          |       |  |   |          |   |  |   |           |   |  |   |            |  
|------------------------------------------------------------ |  | --------------- | -------- | ---------------- |  | ------- | --------- | --------------- |  | ------------------ | -------- | ----- |  | - | -------- | - |  | - | --------- | - |  | - | ---------- | -
|                                                             |  |                 |          |                  |  |         |           |                 |  | Gem Identification |          |       |  |   |          |   |  |   |           |   |  |  
|                                                             |  | Bio-remediation |          | Machine Controls |  | Systems |           | Corporate Admin |  | All Other          |          | Total
|2002                                                         |  | $               |          |                  |  | $       |           |                 |  | $                  |          |       |  | $ |          |   |  | $ |           |   |  | $ |            |  
|Sales                                                        |  |                 | 636,134  |                  |  |         | 1,520,872 |                 |  |                    | 165,237  |       |  |   |         |   |  |   | 160,873   |   |  |   | 2,483,116  |  
|Income (loss) from
continuing
operations                     |  |                 | 89,739   |                  |  |         | (184,857  | )               |  |                    | 8,697    |       |  |   | (403,062 | ) |  |   | (275,056) | ) |  |   | (764,539   | )
|Other income
(expense)                                       |  |                 | 3,162    |                  |  |         | 46,074    |                 |  |                    | (18,964  | )     |  |   | 162,318  |   |  |   | 35,570    |   |  |   | 228,160    |  
|Income (loss) from
continuing
operations before
income taxes |  |                 | 92,901   |                  |  |         | (138,783  | )               |  |                    | (10,267  | )     |  |   | (240,744 | ) |  |   | (239,486  | ) |  |   | (536,379   | )
|2001                                                         |  |                 |          |                  |  |         |           |                 |  |                    |          |       |  |   |          |   |  |   |           |   |  |   |            |  
|Sales                                                        |  |                 | 124,958  |                  |  |         | 3,025,113 |                 |  |                    | 131,882  |       |  |   |         |   |  |   | 186,961   |   |  |   | 3,468,914  |  
|(Loss) from
continuing
operations                            |  |                 | (152,506 | )                |  |         | (153,090  | )               |  |                    | (165,298 | )     |  |   | (633,639 | ) |  |   | (727,080  | ) |  |   | (1,831,613 | )
|Other income
(expense)                                       |  |                 | 7,640    |                  |  |         | 51,574    |                 |  |                    | 949      |       |  |   | 225,478  |   |  |   | 127,271   |   |  |   | 412,912    |  
|(Loss) from
continuing
operations before
income taxes        |  |                 | (144,866 | )                |  |         | (101,516  | )               |  |                    | (164,349 | )     |  |   | (408,161 | ) |  |   | (599,809  | ) |  |   | (1,418,701 | )

10.     SUBSEQUENT EVENT



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 19, 2002 the Company accepted an offer to dispose its interest in
Dantec. The Company has continued to present the related net assets as
held for use in the financial statements as the plan for sale was approved
subsequent to the quarter end but prior to the issuance of the March 31,
2002 financial statements. The Company expects undiscounted cash flows of
approximately $425,000, which are inclusive of net proceeds of the sale. The
result will be a gain of approximately $385,000 on the expected disposal of
Dantec, which will be recorded in the Companys second quarter. The reported
revenue of Dantec for the three-month periods of 2002 and 2001 were $67,155
and $52,062 respectively. The consolidated balance sheet includes the
following amounts in connection with Dantec.

|                    |  |  |         | 
|------------------- |  |  | ------- | 
|                    |  |  | $       | 
|                    |  |  |         | 
|Current assets      |  |  | 334,815 | 
|Fixed Assets        |  |  | 32,861  | 
|Goodwill            |  |  | 480,337 | 
|                    |  |  |         | 
|                    |  |  | 848,013 | 
|                    |  |  |         | 
|Current liabilities |  |  | 699,786 | 
|Minority interest   |  |  | 108,479 | 
|Preferred stock     |  |  | 39,748  | 
|                    |  |  |         | 
|                    |  |  | 848,013 | 
|                    |  |  |         | 





---



##### 






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

Critical Accounting Policies

CVF Technologies Corporation CVF or the Company) is involved in the
business of developing and managing start-up and early stage companies
primarily engaged in the information technology and environmental technology
sectors. CVFs mandate is to acquire significant holdings in new and emerging
technology companies and then to assist them in their management, and through
them to engage in their respective businesses. CVFs current holdings include
investments made in its investee companies during the period from 1989 to the
present.

CVFs mandate is to generate revenues and profits through consolidation of the
operating results of its investee companies. CVF also endeavors to realize
gains through the eventual sale of all or a portion of its holdings in these
companies at such time as management determines that CVFs funds can be better
deployed in other industries or companies. CVFs goal is to maximize the value
of its holdings in its investee companies for the Companys shareholders. One
important way that CVF accomplishes this is by taking an investee company
public at the appropriate time. This has been done with the investee companies
Certicom Corporation and TurboSonic Technologies, Inc. CVF plans to offer its
shareholders the opportunity to directly participate in public offerings of its
investee companies, where this is considered appropriate.

After CVFs initial investment, an investee company often requires additional
capital to meet its business plan. Consequently, the Company actively assists
its investee companies in obtaining additional capital which is usually sourced
through CVFs own resources or via other participants.

An understanding of our accounting policies is necessary for a complete
analysis of our results, financial position, liquidity and trends. We focus
your attention on the following accounting policies of the Company:

Going concern  The consolidated financial statements have been prepared on a
going concern basis, which presumes that assets will be realized and
liabilities discharged in the normal course of business over the foreseeable
future. The consolidated companys current liabilities exceed its current
assets and the consolidated company has incurred losses over the quarter and
for the past several quarters, which have reduced the companys cash reserves.

These conditions raise substantial doubt about the consolidated companys
ability to continue in the normal course of business as a going concern. The
companys primary need for cash is to maintain its ability to support the
operations and ultimately the carrying values, of its individual investee
companies. During the first quarter 2002 two of its investee companies achieved
operating profitability and one of these investee companies had positive cash
flow. In April 2002 the Company sold its interest in Dantec for $425,000. The
company is actively pursuing the sale of its interests in two other of its
investee companies and has retained investment bankers in order to realize
value and focus its efforts and resources. In addition, the company is using
its marketable securities (which had a market value of $560,909 as of March 31,
2002) as a source of liquidity. The proceeds of any such sales will be used to
increase cash reserves. In addition, the company will continue to assist its
investee companies in their efforts to obtain outside financing in order to
fund the growth and development of their respective businesses. The companys
ability to continue to realize assets and discharge liabilities in the normal
course is uncertain and dependent on these and other initiatives. These
financial statements do not include any of the adjustments to the amounts or
classification of assets and liabilities that might be necessary should the
company be unable to continue its business in the normal course.

Revenue recognition  Revenue from the sale of manufactured products is
recognized when the goods are shipped and accepted by the customer. The Company
recognizes revenue on long-term contracts on the percentage of completion
basis, based on costs incurred relative to the estimated total contract costs.





---



##### 



Losses on such contracts are accrued when the estimate of total costs indicates
that a loss will be realized. Contract billings in excess of costs and accrued
profit margins are included as deferred revenue and included in current
liabilities. Service revenue is recognized when the services are performed.

Inventory  Finished goods are stated at the lower of cost or market using the
first-in, first-out method of costing. Raw materials are stated at the lower
of cost or replacement value, using the first-in, first-out method.

Goodwill  Goodwill is recorded in connection with the acquisition of
subsidiaries. Goodwill also exists in connection with the acquisition of
equity basis holdings, representing the difference between the fair value of
identifiable net assets of the underlying equity interest purchased and the
amount paid for the interest. Goodwill is amortized over a period of 10 years.
Amounts amortized in connection with subsidiaries are charged to amortization
expense. The amortization of goodwill implied in the cost of equity
investments is charged to gain or loss from equity investees. The Company
assesses the recoverability of goodwill by determining whether the amortization
of goodwill over its remaining life can be recovered through projected,
undiscounted, future cash flows of the related companies. If an impairment is
identified, goodwill is written down to the extent that the carrying value
exceeds fair value.

Contingencies  The Company is involved from time to time in litigation, which
arises in the normal course of business. In respect of these claims the
Company believes it has valid defenses and/or appropriate insurance coverage in
place. In managements judgment, no material exposure exists on the eventual
settlement of such litigation, and accordingly, no provision has been made in
the accompanying financial statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2001:

Consolidated sales of CVF Technologies Corporation for the three months ended
March 31, 2002 amounted to $2,483,116, representing a decrease of $985,798
(28.4%) compared to sales of $3,468,914 for the same period in 2001. On a
stand-alone basis, CVF has no sales from operations. Sales and gross profit
from sales reflect the operations of CVFs consolidated subsidiaries only. The
consolidated subsidiaries are Biorem Technologies Inc. (Biorem), Dantec
Corporation (Dantec), Grand Island Marketing Inc. (Elements), Gemprint
Corporation (Gemprint), SRE Controls Inc. (SRE), Ecoval Corporation
(Ecoval), CVF Capital Management Corporation (CVF Capital Management),
Eastview Marketing One LLC, and Grand Island Marketing Two LLC. CVF records
profit and loss using the equity method for companies in which CVF holds 50% to
20% ownership. These companies are Petrozyme Technologies Inc. (Petrozyme)
and IMT Systems (IMT). The results of RDM Corporation (RDM) and TurboSonic
Technologies Inc. (TurboSonic), companies in which CVF has less than 20%
ownership, are not included in the Consolidated Statement of Operations. CVFs
investments in RDM and TurboSonic are carried at market value on the
Consolidated Balance Sheet under Holdings Available for Sale.

For the three months ended March 31, 2002, Biorems sales increased by $511,177
or 409% compared to the same quarter of 2001. This increase was due to: 1) the
result of accelerated bookings at the end of 2001, 2) a major biofilter media
replacement project at a plant in Quebec, 3) the manufacture of four of the
six modular BASYS units for a large odor control project in Alabama, and 4)
work underway for three municipal odor control projects in South Carolina.
Dantecs sales in the first quarter of 2002 increased by $15,093 (29%) compared
to the same quarter of 2001 due to very low volume in the 2001 period-less than
5% of the 2001 full year. Gemprints sales increased by $33,355 (25%) during
the first quarter of 2002 compared to the same period in 2001 due to increased
Gemprint registrations by new customers and a large order for gemprinting by a
manufacturer of diamond rings, multi-stone bands and other items of jewelry).
SREs sales decreased in the 2002 by $1,504,242 (50%) from the 2001 period due
to the economic downturn. It is expected that as a result of the introduction
of new products in 2002, there will be a significant increase in sales later in
the year. During the first quarter of 2002, SRE continued full production on a
strategic relationship contract (which began in the third quarter of 1998) with
a major original equipment manufacturer (OEM). Ecovals sales decreased by
$41,181 (31%) in the 2002 period compared to the 2001 period due to shifting in
shipments of some orders forward into December 2001 and back to April 2002.





---



##### 



CVFs gross margin of $438,137 for the first quarter of 2002 represents an
increase of $328,912 (301%) from the same period last year. Gross margin as a
percentage of sales increased to 17.6% for the first quarter of 2002 from 3.1%
for the first quarter of 2001. This increase is mainly due to Biorem attaining
higher gross margins than in the previous year due to higher sales volumes.
Also, Ecoval had a 38.5% gross margin in the 2002 period compared to a lower
gross margin in the first quarter of 2001. SRE, with an overall low gross
margin had a significant sales decrease in the first quarter of 2002 due to the
soft economy.

Selling, general and administrative expenses on a consolidated basis for the
three months ended March 31, 2002 amounted to $1,097,193, representing a
decrease of $573,575 (34.3%) compared to expense of $1,670,768 for the same
period in 2001. Of this decrease, $258,394 is due to decreased amortization of
goodwill which ceased in accordance with SFAS No. 142. Also, consulting fees
were reduced by $85,638 (40%) and investor relations expense was reduced by
$31,390 (88%). Other declines in expenses relate to the overall sales decrease
in the first quarter of 2001. Management continues to undertake a concerted
effort to effect an overall reduction in administrative costs. Over the past 6
months CVF has undertaken many initiatives to lower the Companys expenses.
(See further discussion in the Liquidity and Capital Resources section).

Research and development expenses for the first quarter of 2002 amounted to
$105,483 compared to $270,070 incurred in the comparable 2001 period, or a
decrease of $164,587 (61%). Spending was decreased at all the investee
companies however, most of the decrease was at SRE (a $62,512 or 54% decrease)
and Ecoval (a $59,220 or 70% decrease).

Net interest expense increased to $27,110 for the first quarter of 2002
compared to net interest expense of $23,840 for the first quarter of 2001. This
increase is due to lower average cash balances invested during the 2002 period.

Other income earned by CVF in the first quarter of 2002 amounted to $7,557,
representing a decrease of $42,653 over the comparable amount for the 2001
period. This decrease is mainly due to the settlement of an outstanding account
payable of Gemprint for less than the recorded amount in the 2001 period.

Losses of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) decreased to $28,545 in the 2002 period from $52,528 in the 2001
period. This decrease is attributable to lower losses incurred in the 2002
period for both Petrozyme and IMT.

Gain on sale of holdings amounted to $190,506 in the 2002 period compared to
$277,940 in the 2001 period. The gain in the 2002 period represents the sale of
a portion of CVFs holdings in RDM and TurboSonic and in the 2001 period the
sale of a portion of CVFs holdings in RDM.

Minority interest portion of the loss decreased to $85,752 in the first quarter
of 2002 from $161,130 in the comparable 2001 period due to the attribution to
minority interest of the smaller losses incurred by Dantec and SRE in the more
recent period.

Loss from Operations of Discontinued Segment was $34,747 in the 2001 period.
The Elements operation was closed in September 2001.

CVF recorded a net loss of $507,934 for the three months ended March 31, 2002
resulting from the operations described above. This compares to a net loss of
$1,425,001 incurred in the corresponding period of 2001.

LIQUIDITY AND CAPITAL RESOURCES:

Stockholders equity as of March 31, 2002 amounted to $459,444 compared to
$1,260,017 at December 31, 2001. This net decrease of $800,573 is primarily
attributable to the net loss of $507,934 and a decrease of $258,909 in
unrealized gains on investment holdings which was recognized in the same
period.





---



##### 



The current ratio of CVF at March 31, 2002 is .58 to 1., which has declined
from .61 to 1 at December 31, 2001. This decline in the current ratio is
attributable to the use of cash and cash equivalents to fund ongoing operations
during the first three months of 2002. If the holdings in public companies
available for sale were classified as a current asset, then the current ratio
would improve to .70 to 1.

CVF sold its investment in Dantec, one of its investee companies, for gross
proceeds of $900,000 Cdn., on April 19, 2002. In addition, CVF is using its
publicly traded marketable securities (which are not included in its current
assets but which had a market value of $560,909 as of March 31, 2002) as a
source of liquidity.

CVF management anticipates that over the next twelve month period CVF should
have sufficient cash from various sources to sustain itself. Between cash on
hand and marketable securities available for sale at March 31, 2002, plus the
sale and closing of Dantec (which took place on April 19, 2002) and the
potential sales of a portion of its holdings in certain investee companies, the
company expects to have enough cash to fund itself and its investee companies.
Additionally, the parent company has no outside debt and a line of credit will
be sought.

Managements analysis of cash resources was included in the December 31, 2001,
10KSB. The analysis included anticipated net proceeds from sale of Dantec of
$564,000 in April 2002 and net cash outflows from operations of $623,000. The
company will receive net proceeds of $425,000 from the disposition of Dantec
and incurred net cash outflows from operations of $704,000. The shortfall
resulting from these variances has been mitigated to some extent by gains on
disposition of marketable securities. Management continues to carefully
monitor and manage the companys liquidity and believes that the analysis
included in the 10K is a reasonable indication of anticipated overall cash
flows. The Company intends to mitigate the net cash outflow by selling more of
its holdings or a portion of its holdings in certain investee companies.

Over the past 6 months CVF has undertaken many initiatives to lower its
expenses. These initiatives have included lowering the head count of its office
staff as well as the elimination of one executive position. Also, the office in
Charlotte was closed and the headquarters office relocated resulting in lower
costs. The office closing/relocation and manpower reduction itself should save
CVF approximately $200,000 per year going forward. The use of consultants has
been reduced except those consultants who have agreed to receive their fee in
CVF common shares. Travel and entertainment has been significantly reduced over
the last few months and will continue at the reduced level going forward. CVF
management has adopted a very aggressive cost and expenditure controls and
monitoring policy.

The Company will no longer be required to fund Dantec as the investment in
Dantec was sold in April 2002. Also, Gemprint had a record sales month in March
2002 and had positive cash flow for the first time in the first quarter of
2002. The changes in Ecoval have also resulted in significantly lower costs and
Biorem reported higher sales activity in the first quarter of 2002 than in all
of 2001. Biorem also expects to provide cash to the Company later in 2002. The
Elements operation was shut down in September 2001 requiring zero cash after
that date from CVF.

FORWARD LOOKING STATEMENTS

CVF believes that certain statements contained in this Quarterly Report on Form
10-QSB constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the Companys actual results, performance or achievements to
vary materially from the Companys expected results, performance or
achievements. These factors include, among others, the following:



| |  |  | general economic and business conditions;                    
| | - |  | -------------------------------------------------------------
|
| |  |  | foreign currency fluctuations, particularly involving Canada:



---



##### 





|
|
|
|
|

The Company will not update any forward-looking statements to reflect actual
results or changes in the factors affecting the forward-looking statements.





---



##### 






PART II  OTHER INFORMATION




Item 2. Changes in Securities

In February 2002, the Company issued 76,896 shares of its common stock to
Leo Hirsch and 24,280 shares of its common stock to James Sbrolla in
consideration of consulting services rendered to the Company. These
transactions were exempt from registration under Section 4 (2) of the
Securities Act of 1933, as amended.

Item 6. Exhibits and Reports on Form 8-K

|     |  |                                               
|---- |  | ----------------------------------------------
|(a)  |  | Exhibits                                      
|(11) |  | Statement re computation of per share earnings
|(b)  |  | Reports on Form 8-K.                          
|     |  | None.                                         





---



##### 






SIGNATURES

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

DATED: May 20, 2002

|                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------
|CVF TECHNOLOGIES CORPORATION                                                                                            
|                                                                                                                        
|By:    /s/ Jeffrey I. DrebenName:  Jeffrey I. Dreben
Title: Chairman of the Board, President
and Chief Executive Officer
|                                                                                                                        
|By:   /s/ Robert L. MillerName:  Robert L. Miller
Title: Chief Financial Officer                                        





---



##### 






EXHIBIT INDEX

|    |  |                                               
|--- |  | ----------------------------------------------
|No. |  | Description                                   
|    |  |                                               
|11  |  | Statement re computation of per share earnings