TABLE OF CONTENTS




|                               |                                                                   |                                            |  |  |  |  |  | 
|------------------------------ | ----------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                     
|                               |                                                                   | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                   | CONSOLIDATED STATEMENT OF OPERATIONS      
|                               |                                                                   | CONSOLIDATED STATEMENT OF CASH FLOWS      
|                               |                                                                   | STATEMENT OF COMPREHENSIVE INCOME         
|                               |                                                                   | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|PART II  OTHER INFORMATION   
|                               | Item 2. Changes in Securities                                    
|                               | Item 6. Exhibits and Reports on Form 8-K                         
|SIGNATURES                    
|EXHIBIT INDEX                 
|Exhibit 11                    



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##### Table of Contents



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, 2001

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

|                                                               |  |                          |  |                                     
|-------------------------------------------------------------- |  | ------------------------ |  | ------------------------------------
|NEVADA                                                         |  | 0-29266                  |  | 87-0429335                          
|                                                              
|                                                              
|                                                              
|                                                              
|(State or other jurisdiction
of incorporation or organization) |  | (Commission File
Number) |  | (I.R.S. Employer
Identification No.)

916 CENTER STREET
LEWISTON, NEW YORK 14092
(716) 754-7883
(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 2, 2001, there were 9,118,972 shares of common stock, $0.001 par
value per share, of the issuer outstanding.

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





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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |             |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ----------- | ---------- | ------------ | ---------- | ----------- | ---------- | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |            | March 31,   |            | December 31,
|                                                                                                                                                       |                                                                                                                                                          |                                            |            | 2001        |            | 2000        
|                                                                                                                                                       |                                                                                                                                                          |                                            |            | (unaudited) |            | (audited)   
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |             
|                                                                                                                                                       |                                                                                                                                                          | ASSETS                                    
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|CURRENT ASSETS:                                                                                                                                       
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Cash and cash equivalents                                                                                                                                |                                            | $          | 2,874,216   |            |              | $          | 495,642     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Short-term investments                                                                                                                                   |                                            |            |            |            |              |            | 261,866     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Restricted cash                                                                                                                                          |                                            |            | 176,409     |            |              |            | 185,501     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Trade receivables                                                                                                                                        |                                            |            | 1,680,028   |            |              |            | 2,370,247   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Inventory                                                                                                                                                |                                            |            | 1,574,927   |            |              |            | 1,488,466   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Prepaid expenses and other                                                                                                                               |                                            |            | 85,722      |            |              |            | 87,852      |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Income taxes receivable                                                                                                                                  |                                            |            | 10,013      |            |              |            | 2,532,003   |           
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | TOTAL CURRENT ASSETS                       |            |             | 6,401,315  |              |            |             | 7,421,577  | 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Property and equipment, net of accumulated depreciation                                                                                                |                                                                                                                                                          |                                            | 304,692    |             |            |              | 347,533    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Holdings, carried at cost or equity                                                                                                                    |                                                                                                                                                          |                                            | 419,832    |             |            |              | 491,904    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Holdings (in public companies) available for sale, at market                                                                                           |                                                                                                                                                          |                                            | 1,809,326  |             |            |              | 4,524,422  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Technology                                                                                                                                             |                                                                                                                                                          |                                            | 1,716,985  |             |            |              | 1,900,497  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Goodwill, net of accumulated amortization                                                                                                              |                                                                                                                                                          |                                            | 5,655,708  |             |            |              | 6,134,929  |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | TOTAL ASSETS                               |            | $           | 16,307,858 |              |            | $           | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | LIABILITIES AND STOCKHOLDERS EQUITY      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|CURRENT LIABILITIES:                                                                                                                                  
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Bank indebtedness (subsidiary)                                                                                                                           |                                            | $          | 339,355     |            |              | $          | 188,150     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Current portion of long-term debt (subsidiary)                                                                                                           |                                            |            | 351,564     |            |              |            | 281,259     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Subsidiary loans in breach of covenants                                                                                                                  |                                            |            | 147,174     |            |              |            | 309,324     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Trade payables                                                                                                                                           |                                            |            | 3,537,668   |            |              |            | 3,440,854   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accrued liabilities                                                                                                                                      |                                            |            | 459,561     |            |              |            | 611,726     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Dividends payable on Series A and Series B preferred stock                                                                                               |                                            |            | 62,333      |            |              |            | 11,384      |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Dividends payable on subsidiarys shares                                                                                                                 |                                            |            | 304,401     |            |              |            | 307,579     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Debt equivalent (subsidiary)                                                                                                                             |                                            |            | 444,150     |            |              |            | 487,056     |           
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | TOTAL CURRENT LIABILITIES                  |            |             | 5,646,206  |              |            |             | 5,637,332  | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|Long term debt (subsidiary)                                                                                                                            |                                                                                                                                                          |                                            | 95,175     |             |            |              | 66,720     |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Deferred income taxes                                                                                                                                  |                                                                                                                                                          |                                            | 919,011    |             |            |              | 1,917,060  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Minority interest                                                                                                                                      |                                                                                                                                                          |                                            | 3,226,421  |             |            |              | 3,662,770  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Pension obligation                                                                                                                                     |                                                                                                                                                          |                                            | 459,307    |             |            |              | 491,794    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Preferred and other non-voting stock of subsidiaries                                                                                                   |                                                                                                                                                          |                                            | 233,766    |             |            |              | 245,813    |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          |                                            | 4,933,680  |             |            |              | 6,384,157  |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|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     |             |            |              | 66,521     |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          |                                            | 10,643,341 |             |            |              | 12,088,010 |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|STOCKHOLDERS EQUITY:                                                                                                                                 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Common stock, $0.001 par value, authorized 50,000,000 shares,
9,495,440 issued and 440,700 in treasury                                                   |                                            |            | 9,560       |            |              |            | 9,376       |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Series B convertible preferred stock, $0.001 par value,
liquidation preference of 30% of stated value, authorized,
issued and outstanding 350,000 shares |                                            |            | 345         |            |              |            | 350         |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Warrants                                                                                                                                                 |                                            |            | 629,447     |            |              |            | 629,447     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Additional paid in capital                                                                                                                               |                                            |            | 26,814,347  |            |              |            | 26,638,313  |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Treasury stock                                                                                                                                           |                                            |            | (2,711,889  | )          |              |            | (2,711,889  | )         
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accumulated other comprehensive income                                                                                                                   |                                            |            | (591,963    | )          |              |            | 1,173,596   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accumulated deficit                                                                                                                                      |                                            |            | (18,485,330 | )          |              |            | (17,006,341 | )         
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |            
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | TOTAL STOCKHOLDERS EQUITY                 |            |             | 5,664,517  |              |            |             | 8,732,852  | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                          | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |            | $           | 16,307,858 |              |            | $           | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                          |                                            |            |             |            |              |            |            

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES




CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

|                                                               |                                          |   |                                   |           |                              |           |            |           |   |           |  
|-------------------------------------------------------------- | ---------------------------------------- | - | --------------------------------- | --------- | ---------------------------- | --------- | ---------- | --------- | - | --------- | -
|                                                               |                                          |   |                                   |           | Three months ended March 31,
|                                                               |                                          |   |                                   |           |                             
|                                                               |                                          |   |                                   |           | 2001                         |           | 2000      
|                                                               |                                          |   |                                   |           |                              |           |           
|SALES                                                          |                                          | $ | 3,562,324                         |           |                              | $         | 3,921,971  |          
|                                                              
|                                                              
|                                                              
|                                                              
|COST OF SALES                                                  |                                          |   | 3,427,797                         |           |                              |           | 3,537,190  |          
|                                                               |                                          |   |                                   |           |                              |           |            |          
|GROSS MARGIN                                                   |                                          |   | 134,527                           |           |                              |           | 384,781    |          
|                                                               |                                          |   |                                   |           |                              |           |            |          
|EXPENSES:                                                     
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Selling, general and administrative      |   |                                   | 1,760,328 |                              |           |            | 2,002,530 |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Research and development                 |   |                                   | 270,070   |                              |           |            | 138,407   |  
|                                                               |                                          |   |                                   |           |                              |           |            |          
|                                                               |                                          |   | TOTAL EXPENSES                    |           |                              | 2,030,398 |            |           |   | 2,140,937 |  
|                                                               |                                          |   |                                   |           |                              |           |            |          
|(LOSS) FROM OPERATIONS                                         |                                          |   | (1,895,871                        | )         |                              |           | (1,756,156 | )        
|                                                               |                                          |   |                                   |           |                              |           |            |          
|OTHER INCOME AND (EXPENSES):                                  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Interest (expense) income, net           |   |                                   | (24,582   | )                            |           |            | 4,732     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Other income, net                        |   |                                   | 50,210    |                              |           |            | 2,067     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | (Loss) from equity investees             |   |                                   | (52,528   | )                            |           |            | (251,090  | )
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Gain on sale of holdings                 |   |                                   | 277,940   |                              |           |            |          |  
|                                                               |                                          |   |                                   |           |                              |           |            |          
|                                                               |                                          |   | TOTAL OTHER INCOME AND (EXPENSES) |           |                              | 251,040   |            |           |   | (244,291  | )
|                                                               |                                          |   |                                   |           |                              |           |            |          
|(LOSS) BEFORE PROVISION FOR INCOME TAXES AND
MINORITY INTEREST |                                          |   | (1,644,831                        | )         |                              |           | (2,000,447 | )        
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | (Recovery of) provision for income taxes |   |                                   | (28,447   | )                            |           |            | 482       |  
|                                                               |                                          |   |                                   |           |                              |           |            |          
|(LOSS) BEFORE MINORITY INTEREST                                |                                          |   | (1,616,384                        | )         |                              |           | (2,000,929 | )        
|                                                              
|                                                              
|                                                              
|                                                              
|MINORITY INTEREST IN LOSS                                      |                                          |   | 191,383                           |           |                              |           | 237,449    |          
|                                                               |                                          |   |                                   |           |                              |           |            |          
|NET (LOSS)                                                     |                                          |   | (1,425,001                        | )         |                              |           | (1,763,480 | )        
|                                                               |                                          |   |                                   |           |                              |           |            |          
|BASIC (LOSS) PER SHARE                                         |                                          | $ | (0.16                             | )         |                              | $         | (0.26      | )        
|                                                               |                                          |   |                                   |           |                              |           |            |          
|DILUTED (LOSS) PER SHARE                                       |                                          |   | (0.16                             | )         |                              |           | (0.26      | )        
|                                                               |                                          |   |                                   |           |                              |           |            |          
|WEIGHTED SHARES USED IN COMPUTATION  BASIC                    |                                          |   | 8,979,909                         |           |                              |           | 6,889,867  |          
|                                                               |                                          |   |                                   |           |                              |           |            |          
|WEIGHTED SHARES USED IN COMPUTATION  DILUTED                  |                                          |   | 8,979,909                         |           |                              |           | 6,889,867  |          
|                                                               |                                          |   |                                   |           |                              |           |            |          

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES




CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

|                                                     |                                                                    |                                                    |           |                              |           |      |            |            |          |  
|---------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------------------------- | --------- | ---------------------------- | --------- | ---- | ---------- | ---------- | -------- | -
|                                                     |                                                                    |                                                    |           | Three Months Ended March 31,
|                                                     |                                                                    |                                                    |           |                             
|                                                     |                                                                    |                                                    |           | 2001                         |           | 2000
|                                                     |                                                                    |                                                    |           |                              |           |     
|CASH FLOW FROM OPERATING ACTIVITIES:                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net (loss)                                                         |                                                    | $         | (1,425,001                   | )         |      | $          | (1,763,480 | )       
|                                                    
|                                                     | Adjustments to reconcile net (loss) from operating activities:    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Depreciation and amortization                      |           |                              | 378,742   |      |            |            | 332,114  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Loss from equity investees                         |           |                              | 52,528    |      |            |            | 251,090  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Gain on sale of holdings                           |           |                              | (277,940  | )    |            |            |         |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Common stock issued in lieu of cash                |           |                              | 57,074    |      |            |            | 122,397  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Minority interest in (losses) of subsidiaries      |           |                              | (191,383  | )    |            |            | (237,449 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Pension expense                                    |           |                              | 3,130     |      |            |            | 7,143    |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Changes in operating assets and liabilities (net of acquisitions):
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Decrease (increase) in trade receivables           |           |                              | 591,603   |      |            |            | (507,682 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Increase) in inventory                            |           |                              | (164,286  | )    |            |            | (147,802 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Increase) in prepaid expenses and other           |           |                              | (2,242    | )    |            |            | (28,259  | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Decrease in income taxes receivable                |           |                              | 2,471,211 |      |            |            | 20,313   |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Increase in trade payables and accrued liabilities |           |                              | 149,561   |      |            |            | 570,887  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Decrease) in income taxes payable                 |           |                              | (1,911    | )    |            |            |         |  
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|                                                     |                                                                    |                                                    | 3,066,087 |                              |           |      | 382,752    |           
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES      |                                                                    |                                                    | 1,641,086 |                              |           |      | (1,380,728 | )         
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|CASH FLOWS FROM INVESTING ACTIVITIES:               
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of property and equipment                                 |                                                    |           | (5,522                       | )         |      |            | (71,523    | )       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Investments in and advances to equity investees                    |                                                    |           | (4,577                       | )         |      |            | (406,557   | )       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from sale of holdings                                     |                                                    |           | 516,254                      |           |      |            |           |         
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      |                                                                    |                                                    | 506,155   |                              |           |      | (478,080   | )         
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|CASH FLOWS FROM FINANCING ACTIVITIES:               
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Borrowings of debt                                                 |                                                    |           | 60,663                       |           |      |            | 106,954    |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Decrease in restricted cash                                        |                                                    |           |                             |           |      |            | 672        |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of common stock                                           |                                                    |           |                             |           |      |            | 1,750,000  |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of shares in stock of subsidiaries                      |                                                    |           | (19,617                      | )         |      |            |           |         
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|CASH PROVIDED BY FINANCING ACTIVITIES                |                                                                    |                                                    | 41,046    |                              |           |      | 1,857,626  |           
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | CASH EQUIVALENTS                                                   |                                                    |           | (71,579                      | )         |      |            | (730       | )       
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                    |                                                    | 2,116,708 |                              |           |      | (1,912     | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|CASH AND CASH EQUIVALENTS  beginning of period      |                                                                    |                                                    | 757,508   |                              |           |      | 3,557,706  |           
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           
|                                                    
|CASH AND CASH EQUIVALENTS  end of period            |                                                                    | $                                                  | 2,874,216 |                              |           | $    | 3,555,794  |           
|                                                     |                                                                    |                                                    |           |                              |           |      |            |           

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES




STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |           |   | 
|--------------------------------------- | --------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---------------------------- | - | ---- | ---------- | --------- | - | 
|                                        |                                                                 |                                                                                                                                                               |            | Three months ended March 31,
|                                        |                                                                 |                                                                                                                                                               |            |                             
|                                        |                                                                 |                                                                                                                                                               |            | 2001                         |   | 2000
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |     
|Net (loss)                              |                                                                 | $                                                                                                                                                             | (1,425,001 | )                            |   | $    | (1,763,480 | )        
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |          
|Other comprehensive income, net of tax:
|                                       
|                                       
|                                       
|                                       
|                                        | Foreign currency translation adjustments                        |                                                                                                                                                               |            | (362,614                     | ) |      |            | (32,047   | )
|                                       
|                                       
|                                       
|                                       
|                                        | Unrealized holding gains:                                      
|                                       
|                                       
|                                       
|                                       
|                                        | Unrealized holding gains arising during period (see note below) |                                                                                                                                                               |            | (1,402,945                   | ) |      |            | 2,119,943 |  
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |          
|                                        | Net unrealized holding gains                                    |                                                                                                                                                               |            | (1,402,945                   | ) |      |            | 2,119,943 |  
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |          
|                                        | Total other comprehensive income (loss)                         |                                                                                                                                                               |            | (1,765,559                   | ) |      |            | 2,087,896 |  
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |          
|                                        | Comprehensive income (loss) during period                       |                                                                                                                                                               | $          | (3,190,560                   | ) |      | $          | 324,416   |  
|                                        |                                                                 |                                                                                                                                                               |            |                              |   |      |            |          
|                                        |                                                                 | Note: Unrealized holding gains are net of tax expense (benefit) of ($935,297)
and $1,413,295) for the three months ended March 31, 2001 and 2000
respectively

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 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 year.



| | 2. |  | INCOME (LOSS) PER SHARE
| | -- |  | -----------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Basic earnings (loss) per share is computed by dividing net
income (loss) available to common stockholders by the weighted average
number of common shares outstanding during the period. The net income
(loss) available to common stockholders consists of net income (loss)
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.



| | 3. |  | INVESTMENTS
| | -- |  | -----------



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





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##### Table of Contents



|                                  |  |  |  |  |  |                    |         |      |  |   |          |  
|--------------------------------- |  |  |  |  |  | ------------------ | ------- | ---- |  | - | -------- | -
|                                  |  |  |  |  |  | Three Months Ended
|                                  |  |  |  |  |  | March 31,         
|                                  |  |  |  |  |  |                   
|                                  |  |  |  |  |  | 2001               |         | 2000
|                                  |  |  |  |  |  |                    |         |     
|                                  |  |  |  |  |  | $                  | 40,779  |      |  | $ | 24,787   |  
|                                 
|                                 
|                                 
|                                 
|Net Sales                        
|                                 
|                                 
|                                 
|                                 
|Gross profit (loss) on sales     
|                                 
|                                 
|                                 
|                                 
|                                  |  |  |  |  |  |                    | 40,283  |      |  |   | (9,730   | )
|                                 
|                                 
|                                 
|                                 
|(Loss) from continuing operations |  |  |  |  |  |                    | (55,802 | )    |  |   | (249,645 | )
|                                 
|                                 
|                                 
|                                 
|Net (loss)                        |  |  |  |  |  |                    | (55,802 | )    |  |   | (249,645 | )



| | 4. |  | INTERIM FINANCIAL STATEMENT DISCLOSURES
| | -- |  | ---------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain information and footnote disclosures normally included
in 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, 2000 included in the Companys Annual Report on Form
10-KSB filed with the Securities and Exchange Commission on April 2,
2001.



| | 5. |  | SUBSIDIARY LOAN IN BREACH OF COVENANTS
| | -- |  | --------------------------------------



| |                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The full amount of the Elements small business loans have
been included in current liabilities, as Elements did not comply with
certain financial ratios included in the related loan agreements,
giving the lender the right to demand repayment. Elements is current
with payments on these loans.



| | 6. |  | SEGMENTED INFORMATION
| | -- |  | ---------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2000, as a result of changes in the scope of activities
of investee companies, the Company reallocated business units to
business segments to more appropriately group units for chief operating
decision purposes and reporting in accordance with FAS 131. This change
was applied on a retroactive basis. The Company has five reportable
segments: bioremediation, machine controls, precious gem
identification, retail products, 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
retail segment consists of one company that sources and sells natural
health services and products to consumers.





---



##### Table of Contents





| |                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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, 2001 and 2000

|                           |  |             |          |          |  |                |           |          |  |                |          |       |  |       |          |   |  |  |          |   |  |  |          |   |  |  |            |  
|-------------------------- |  | ----------- | -------- | -------- |  | -------------- | --------- | -------- |  | -------------- | -------- | ----- |  | ----- | -------- | - |  |  | -------- | - |  |  | -------- | - |  |  | ---------- | -
|                           |  | Bio-        |          | Machine  |  | Identification |           | Retail   |  | Corporate      |          | All  
|                           |  | remediation |          | Controls |  | Systems        |           | Products |  | Administration |          | Other |  | Total
|                           |  |             |          |          |  |                |           |          |  |                |          |       |  |      
|2001                       |  |             | $        |          |  |                | $         |          |  |                | $        |       |  |       | $        |   |  |  | $        |   |  |  | $        |   |  |  | $          |  
|                          
|                          
|                          
|                          
|Sales                      |  |             | 124,958  |          |  |                | 3,025,113 |          |  |                | 131,882  |       |  |       | 93,410   |   |  |  |         |   |  |  | 186,961  |   |  |  | 3,562,324  |  
|                          
|                          
|                          
|                          
|(Loss) from operations     |  |             | (152,506 | )        |  |                | (153,090  | )        |  |                | (165,298 | )     |  |       | (64,259  | ) |  |  | (633,639 | ) |  |  | (727,079 | ) |  |  | (1,895,871 | )
|                          
|                          
|                          
|                          
|Other income (expense)     |  |             | 7,640    |          |  |                | 51,574    |          |  |                | 949      |       |  |       | 29,511   |   |  |  | 225,478  |   |  |  | 127,271  |   |  |  | 442,423    |  
|                          
|                          
|                          
|                          
|(Loss) before income taxes |  |             | (144,866 | )        |  |                | (101,516  | )        |  |                | (164,349 | )     |  |       | (34,748  | ) |  |  | (408,161 | ) |  |  | (599,808 | ) |  |  | (1,453,448 | )
|                          
|2000                      
|                          
|                          
|                          
|                          
|Sales                      |  |             | 273,947  |          |  |                | 3,210,003 |          |  |                | 51,002   |       |  |       | 182,338  |   |  |  |         |   |  |  | 204,681  |   |  |  | 3,921,971  |  
|                          
|                          
|                          
|                          
|(Loss) from operations     |  |             | (74,585  | )        |  |                | (156,999  | )        |  |                | (206,749 | )     |  |       | (247,035 | ) |  |  | (718,550 | ) |  |  | (352,238 | ) |  |  | (1,756,156 | )
|                          
|                          
|                          
|                          
|Other income (expense)     |  |             | 1,745    |          |  |                | 52,083    |          |  |                | (24,326  | )     |  |       | 95,868   |   |  |  | (231,551 | ) |  |  | 99,339   |   |  |  | (6,842     | )
|                          
|                          
|                          
|                          
|(Loss) before income taxes |  |             | (72,840  | )        |  |                | (104,916  | )        |  |                | (231,075 | )     |  |       | (151,167 | ) |  |  | (950,101 | ) |  |  | (252,899 | ) |  |  | (1,762,998 | )





---



##### Table of Contents






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

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2000:

Consolidated sales of CVF Technologies Corporation (CVF or the Company) for
the three months ended March 31, 2001 amounted to $3,562,324, representing a
decrease of $359,647 (9.2%) compared to sales of $3,921,971 for the same period
in 2000. 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(TM) Corporation (Gemprint), SRE Controls Inc. (SRE),
Ecoval Inc. (in 2000) and Ecoval Corporation (in 2001) (together, Ecoval)
(consolidated beginning in December, 2000), CVF Capital Management Corporation
(CVF Capital Management), Eastview Marketing One LLC, and Grand Island
Marketing Two LLC. CVF consolidates profit and loss only (equity method) for
companies in which CVF holds 50% to 20% ownership. These companies are Ecoval
(prior to December, 2000), 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.

Gemprints sales increased by $80,880 (159%) during the first quarter of 2001
compared to the same period in 2000 due to increased Gemprint registrations by
new customers. Ecoval, whose results are consolidated beginning in December,
2000, achieved sales of $134,898 in the first quarter of 2001. During the first
quarter of 2001, SRE continued full production on a strategic relationship
contract (which began in the third quarter of 1998) with a major original
equipment manufacturer (OEM). SREs sales in respect of this OEM contract for
the first quarter of 2001 decreased by $184,889 (6%) from the same period in
2000. Biorems sales decreased by $148,989 or 54%, compared to unusually high
sales booked in the first quarter of 2000. Dantecs sales in the first quarter
of 2001 decreased by $152,618 (75%) compared to the same quarter of 2000.
Elements sales in the first quarter of 2001, during which it operated only one
store, decreased by $88,928 (49%) from the same quarter of 2000, during which it
operated three stores. Sales in the quarter ended March 31, 2001
for companies in which CVF has less than 20% ownership and therefore
not consolidated increased as follows: RDM increased $156,504 (18%)
and TurboSonic increased $3,454,610 (180%).

CVFs gross margin of $134,527 for the first quarter of 2001 represents a
decrease of $250,254 (65%) from the same period last year. Gross margin as a
percentage of sales decreased to 3.8% for the first quarter of 2001 from 9.8%
for the first quarter of 2000. This decrease in the more recent quarter is
mainly due to Biorem and Dantec attaining lower gross margins than in the
previous year due to lower sales volumes. Also, Ecoval (consolidated only from
December 2000) had a negative gross margin in the first quarter of 2001.

Selling, general and administrative expenses on a consolidated basis amounted to
$1,760,328 for the first quarter of 2001. This represents a decrease of $242,202
or 12% compared to the first quarter of 2000. Of this decrease, $103,090 is due
to reduced investor relations expense. 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.

Research and development expenses for the first quarter of 2001 amounted to
$270,070 compared to $138,407 incurred in the comparable 2000 period. Most of
this increase derives from the consolidation of Ecoval in CVFs financial
results beginning in December, 2000.

Net interest expense increased to $24,582 for the first quarter of 2001 compared
to net interest income of $4,732 for the first quarter of 2000. This increase is
due to lower average cash balances invested during the 2001 period.

Other income earned by CVF in the first quarter of 2001 amounted to $50,210,
representing an increase of $48,143 over the comparable amount for the 2000
period. This increase is mainly due to the settlement of an outstanding account
payable of Gemprint for less than the recorded amount.





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##### Table of Contents



Losses of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) decreased to $52,528 in the 2001 period from $251,090 in the 2000
period. This decrease is attributable to the inclusion of Ecoval in consolidated
operations effective December, 2000.

Gain on sale of holdings amounted to $277,940 in the 2001 period compared to no
gains in the 2000 period. The gain in the 2001 period resulted from the sale of
a portion of CVFs holdings in RDM.

Minority interest portion of the loss decreased to $191,383 in the first quarter
of 2001 from $237,449 in the comparable 2000 period due to the attribution to
minority interest of the smaller losses incurred by Elements and SRE in the more
recent period.

CVF recorded a net loss of $1,425,001 for the three months ended March 31, 2001
resulting from the operations described above. This compares to a net loss of
$1,763,480 incurred in the corresponding period of 2000.

LIQUIDITY AND CAPITAL RESOURCES:

Stockholders equity as of March 31, 2001 amounted to $5,664,517 compared to
$8,732,852 at December 31, 2000. This net decrease of $3,068,335 is primarily
attributable to the net loss of $1,425,001 and a decrease of $1,402,945 in
unrealized gains on investment holdings which was recognized in the same period.

The current ratio of CVF at March 31, 2001 is 1.1 to 1. Although the current
ratio declined from a ratio of 1.3 to 1 at December 31, 2000 it still remains
strong. 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
2001.

In order to further augment the growth of its investee companies, CVF plans to
raise additional funds in 2001, as it did in 2000. These funds, to be derived
from private placement or public offering, will be used to acquire additional
positions in its existing companies or to acquire companies that are synergistic
to the current portfolio. Also, CVF will endeavor to assist its companies to
obtain financing in order to position them for future growth.

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s ability to find additional suitable investments and the ability of those investments to
generate an acceptable return on invested capital;                                                                                                                                                                     
| 
| |  | the uncertainties and risks involved in investing in early-stage
development companies which can arise because of the lack of a customer
base, lack of name recognition and credibility, the need to bring in
experienced management and the need to develop and refine the business
and its operations, among other reasons.

The Company will not update any Forward-looking information to reflect actual
results or changes in the Factors affecting the Forward-looking information.





---



##### Table of Contents






PART II  OTHER INFORMATION




Item 2.    Changes in Securities



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January 2001, the registrant issued 1,906 shares of its common stock to certain holders of
the registrants Series A Preferred Stock in exchange for 168 shares of Series A
Preferred Stock. In February 2001, the registrant issued 18,034 shares of its
common stock to Meighen Demers LLP in consideration of legal services rendered
to Gemprint. In March 2001, the registrant issued 31,000 shares of its common
stock to The Equity Group Inc. in consideration of The Equity Group Inc.s
entering into a consulting agreement with the registrant. In March 2001, the
registrant issued 25,000 shares of its common stock to IBM Canada Limited in
consideration of the registrants taking an assignment of certain claims of ISM
Information Systems Management Corporation against Gemprint. All of the above
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.                                         





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##### Table of Contents






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 17, 2001

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





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##### Table of Contents






EXHIBIT INDEX



| |                                                    
| | ---------------------------------------------------
| | (11) Statement re computation of per share earnings