TABLE OF CONTENTS




|                                                   |                                                                   |  |  |  |  |  |  | 
|-------------------------------------------------- | ----------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                    
|                                                   | Item 1. 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                                        
|EX-11--STATEMENT RE COMPUTATION PER SHARE EARNINGS

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 June 30, 2001

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

|                                  |  |                  |  |                    
|--------------------------------- |  | ---------------- |  | -------------------
|NEVADA                            |  | 0-29266          |  | 87-0429335         
|                                 
|                                 
|                                 
|                                 
|(State or other jurisdiction      |  | (Commission File |  | (I.R.S. Employer   
|                                 
|                                 
|                                 
|                                 
|of incorporation or organization) |  | Number)          |  | 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 August 2, 2001, there were 9,325,949 shares of common stock, $0.001
par value per share, of the issuer outstanding.

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





---






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |             |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ----------- | ---------- | ------------ | ---------- | ----------- | ---------- | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            | June 30,    |            | December 31,
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            | 2001        |            | 2000        
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            | (unaudited) |            | (audited)   
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |             
|                                                                                                                                                       |                                                                                                                                                                         | ASSETS                                    
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|CURRENT ASSETS:                                                                                                                                       
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Cash and cash equivalents                                                                                                                                               |                                            | $          | 1,386,481   |            |              | $          | 495,642     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Short-term investments                                                                                                                                                  |                                            |            |            |            |              |            | 261,866     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Restricted cash                                                                                                                                                         |                                            |            | 183,555     |            |              |            | 185,501     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Trade receivables                                                                                                                                                       |                                            |            | 1,470,493   |            |              |            | 2,370,247   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Inventory                                                                                                                                                               |                                            |            | 1,689,358   |            |              |            | 1,488,466   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Prepaid expenses and other                                                                                                                                              |                                            |            | 106,180     |            |              |            | 87,852      |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Income taxes receivable                                                                                                                                                 |                                            |            | 10,419      |            |              |            | 2,532,003   |           
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL CURRENT ASSETS                       |            |             | 4,846,486  |              |            |             | 7,421,577  | 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Property and equipment, net of accumulated depreciation                                                                                                |                                                                                                                                                                         |                                            | 314,267    |             |            |              | 347,533    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Holdings, carried at cost or equity                                                                                                                    |                                                                                                                                                                         |                                            | 342,810    |             |            |              | 491,904    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Holdings (in public companies) available for sale, at market                                                                                           |                                                                                                                                                                         |                                            | 1,569,779  |             |            |              | 4,524,422  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Technology                                                                                                                                             |                                                                                                                                                                         |                                            | 1,692,502  |             |            |              | 1,900,497  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Goodwill, net of accumulated amortization                                                                                                              |                                                                                                                                                                         |                                            | 5,608,466  |             |            |              | 6,134,929  |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL ASSETS                               |            | $           | 14,374,310 |              |            | $           | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | LIABILITIES AND STOCKHOLDERS EQUITY      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|CURRENT LIABILITIES:                                                                                                                                  
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Bank indebtedness (subsidiary)                                                                                                                                          |                                            | $          | 201,470     |            |              | $          | 188,150     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Current portion of long-term debt (subsidiary)                                                                                                                          |                                            |            | 301,606     |            |              |            | 281,259     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Subsidiary loans in breach of covenants                                                                                                                                 |                                            |            | 148,183     |            |              |            | 309,324     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Trade payables                                                                                                                                                          |                                            |            | 3,167,526   |            |              |            | 3,440,854   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accrued liabilities                                                                                                                                                     |                                            |            | 354,299     |            |              |            | 611,726     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Dividends payable on Series A and Series B preferred stock                                                                                                              |                                            |            | 14,592      |            |              |            | 11,384      |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Dividends payable on subsidiarys shares                                                                                                                                |                                            |            | 329,110     |            |              |            | 307,579     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Debt equivalent (subsidiary)                                                                                                                                            |                                            |            | 462,140     |            |              |            | 487,056     |           
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL CURRENT LIABILITIES                  |            |             | 4,978,926  |              |            |             | 5,637,332  | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|Long term debt (subsidiary)                                                                                                                            |                                                                                                                                                                         |                                            | 99,030     |             |            |              | 66,720     |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Deferred income taxes                                                                                                                                  |                                                                                                                                                                         |                                            | 811,302    |             |            |              | 1,917,060  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Minority interest                                                                                                                                      |                                                                                                                                                                         |                                            | 3,376,833  |             |            |              | 3,662,770  |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Pension obligation                                                                                                                                     |                                                                                                                                                                         |                                            | 473,031    |             |            |              | 491,794    |            
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Preferred and other non-voting stock of subsidiaries                                                                                                   |                                                                                                                                                                         |                                            | 225,079    |             |            |              | 245,813    |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            | 4,985,275  |             |            |              | 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     |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            | 10,027,656 |             |            |              | 12,088,010 |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|STOCKHOLDERS EQUITY:                                                                                                                                 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Common stock, $0.001 par value, authorized 50,000,000 shares,
9,801,649 issued and 470,700 in treasury                                                                  |                                            |            | 9,802       |            |              |            | 9,376       |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Series B convertible preferred stock, $0.001 par value,
liquidation preference of 30% of stated value, authorized 350,000 shares,
issued and outstanding 345,000 shares |                                            |            | 345         |            |              |            | 350         |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Warrants                                                                                                                                                                |                                            |            | 629,447     |            |              |            | 629,447     |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Additional paid in capital                                                                                                                                              |                                            |            | 27,003,501  |            |              |            | 26,638,313  |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Treasury stock                                                                                                                                                          |                                            |            | (2,741,192  | )          |              |            | (2,711,889  | )         
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accumulated other comprehensive income                                                                                                                                  |                                            |            | (451,784    | )          |              |            | 1,173,596   |           
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accumulated deficit                                                                                                                                                     |                                            |            | (20,103,465 | )          |              |            | (17,006,341 | )         
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |            
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL STOCKHOLDERS EQUITY                 |            |             | 4,346,654  |              |            |             | 8,732,852  | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |            | $           | 14,374,310 |              |            | $           | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |            |             |            |              |            |            

See notes to consolidated financial statements





---



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |           |           |  
|--------------------------------------------- | ---------------------------------------- | --------------------------------- | ---------- | --------------------------- | --------- | ------------------------- | ---------- | --------- | --------- | ---- | ---------- | --------- | --------- | - | ---------- | --------- | --------- | -
|                                              |                                          |                                   |            | Three months ended June 30, |           | Six months ended June 30,
|                                              |                                          |                                   |            | 2001                        |           | 2000                      |            | 2001      |           | 2000
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |     
|SALES                                         |                                          | $                                 | 3,430,742  |                             |           | $                         | 4,414,146  |           |           | $    | 6,993,066  |           |           | $ | 8,336,117  |          
|                                             
|                                             
|                                             
|                                             
|COST OF SALES                                 |                                          |                                   | 2,944,730  |                             |           |                           | 3,841,525  |           |           |      | 6,372,527  |           |           |   | 7,378,715  |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|GROSS MARGIN                                  |                                          |                                   | 486,012    |                             |           |                           | 572,621    |           |           |      | 620,539    |           |           |   | 957,402    |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|EXPENSES:                                    
|                                             
|                                             
|                                             
|                                             
|                                              | Selling, general and administrative      |                                   |            | 1,860,879                   |           |                           |            | 1,812,249 |           |      |            | 3,621,207 |           |   |            | 3,814,779 |          
|                                             
|                                             
|                                             
|                                             
|                                              | Research and development                 |                                   |            | 219,272                     |           |                           |            | 148,450   |           |      |            | 489,342   |           |   |            | 286,857   |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|                                              |                                          | TOTAL EXPENSES                    |            |                             | 2,080,151 |                           |            |           | 1,960,699 |      |            |           | 4,110,549 |   |            |           | 4,101,636 |  
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM OPERATIONS                        |                                          |                                   | (1,594,139 | )                           |           |                           | (1,388,078 | )         |           |      | (3,490,010 | )         |           |   | (3,144,234 | )        
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|OTHER INCOME AND (EXPENSES):                 
|                                             
|                                             
|                                             
|                                             
|                                              | Interest income (expense), net           |                                   |            | (20,695                     | )         |                           |            | 1,413     |           |      |            | (45,277   | )         |   |            | 6,145     |          
|                                             
|                                             
|                                             
|                                             
|                                              | Other income (expense), net              |                                   |            | (22,477                     | )         |                           |            | 95,272    |           |      |            | 27,733    |           |   |            | 97,339    |          
|                                             
|                                             
|                                             
|                                             
|                                              | (Loss) from equity investees             |                                   |            | (94,204                     | )         |                           |            | (283,138  | )         |      |            | (146,732  | )         |   |            | (534,228  | )        
|                                             
|                                             
|                                             
|                                             
|                                              | Gain on sale of holdings                 |                                   |            | 22,200                      |           |                           |            |          |           |      |            | 300,140   |           |   |            |          |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|                                              |                                          | TOTAL OTHER INCOME AND (EXPENSES) |            |                             | (115,176  | )                         |            |           | (186,453  | )    |            |           | 135,864   |   |            |           | (430,744  | )
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|(LOSS) BEFORE PROVISION FOR INCOME TAXES AND 
|                                             
|                                             
|                                             
|                                             
|MINORITY INTEREST                             |                                          |                                   | (1,709,315 | )                           |           |                           | (1,574,531 | )         |           |      | (3,354,146 | )         |           |   | (3,574,978 | )        
|                                             
|                                             
|                                             
|                                             
|                                              | (Recovery of) provision for income taxes |                                   |            | 1,252                       |           |                           |            | 945       |           |      |            | (27,195   | )         |   |            | 1,427     |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|(LOSS) BEFORE MINORITY INTEREST               |                                          |                                   | (1,710,567 | )                           |           |                           | (1,575,476 | )         |           |      | (3,326,951 | )         |           |   | (3,576,405 | )        
|                                             
|                                             
|                                             
|                                             
|MINORITY INTEREST IN LOSS                     |                                          |                                   | 144,812    |                             |           |                           | 100,312    |           |           |      | 336,195    |           |           |   | 337,761    |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|NET (LOSS)                                    |                                          |                                   | (1,565,755 | )                           |           |                           | (1,475,164 | )         |           |      | (2,990,756 | )         |           |   | (3,238,644 | )        
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|BASIC (LOSS) PER SHARE                        |                                          | $                                 | (0.18      | )                           |           | $                         | (0.21      | )         |           |      | (0.34      | )         |           |   | (0.47      | )        
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|DILUTED (LOSS) PER SHARE                      |                                          |                                   | (0.18      | )                           |           |                           | (0.21      | )         |           |      | (0.34      | )         |           |   | (0.47      | )        
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|WEIGHTED SHARES USED IN COMPUTATION  BASIC   |                                          |                                   | 9,195,435  |                             |           |                           | 7,339,177  |           |           |      | 9,093,531  |           |           |   | 7,114,522  |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          
|WEIGHTED SHARES USED IN COMPUTATION  DILUTED |                                          |                                   | 9,195,435  |                             |           |                           | 7,339,177  |           |           |      | 9,093,531  |           |           |   | 7,114,522  |          
|                                              |                                          |                                   |            |                             |           |                           |            |           |           |      |            |           |           |   |            |          

See notes to consolidated financial statements





---



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

|                                                     |                                                                    |                                                               |           |                           |           |      |            |            |            |  
|---------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------- | --------- | ------------------------- | --------- | ---- | ---------- | ---------- | ---------- | -
|                                                     |                                                                    |                                                               |           | Six Months Ended June 30,
|                                                     |                                                                    |                                                               |           |                          
|                                                     |                                                                    |                                                               |           | 2001                      |           | 2000
|                                                     |                                                                    |                                                               |           |                           |           |     
|CASH FLOW FROM OPERATING ACTIVITIES:                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net (loss)                                                         |                                                               | $         | (2,990,756                | )         |      | $          | (3,238,644 | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net (loss)
from operating activities:    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Depreciation and amortization                                 |           |                           | 755,904   |      |            |            | 658,061    |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Loss from equity investees                                    |           |                           | 146,732   |      |            |            | 534,228    |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Gain on sale of holdings                                      |           |                           | (300,140  | )    |            |            |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Common stock issued in lieu of cash                           |           |                           | 57,074    |      |            |            | 262,395    |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Minority interest in (losses) of subsidiaries                 |           |                           | (336,195  | )    |            |            | (337,761   | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Pension expense                                               |           |                           | 10,039    |      |            |            | 14,828     |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Loss from sale of subsidiaries shares                         |           |                           | 50,769    |      |            |            |           |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Changes in operating assets and liabilities (net of acquisitions):
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Decrease (increase) in trade receivables                      |           |                           | 864,152   |      |            |            | (1,028,584 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Increase) in inventory                                       |           |                           | (213,852  | )    |            |            | (193,293   | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Increase) in prepaid expenses and other                      |           |                           | (19,013   | )    |            |            | (127,549   | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Decrease in income taxes receivable                           |           |                           | 2,464,408 |      |            |            | 42,561     |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | Increase (decrease) in trade payables and accrued liabilities |           |                           | (480,340  | )    |            |            | 1,085,159  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                    | (Decrease) in income taxes payable                            |           |                           | (1,906    | )    |            |            |           |  
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                     |                                                                    |                                                               | 2,997,632 |                           |           |      | 910,045    |           
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES      |                                                                    |                                                               | 6,876     |                           |           |      | (2,328,599 | )         
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                    
|CASH FLOWS FROM INVESTING ACTIVITIES:               
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of property and equipment                                 |                                                               |           | (27,463                   | )         |      |            | (108,943   | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Investments in and advances to equity investees                    |                                                               |           | (4,577                    | )         |      |            | (1,626,495 | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from sale of holdings                                     |                                                               |           | 584,078                   |           |      |            |           |           
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of holdings available for sale                            |                                                               |           | (18,177                   | )         |      |            | (51,203    | )         
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      |                                                                    |                                                               | 533,861   |                           |           |      | (1,786,641 | )         
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                    
|CASH FLOWS FROM FINANCING ACTIVITIES:               
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Borrowings of debt                                                 |                                                               |           | 82,963                    |           |      |            | 197,869    |           
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of common stock                                           |                                                               |           |                          |           |      |            | 1,806,760  |           
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of treasury stock                                         |                                                               |           | (29,303                   | )         |      |            | (2,931     | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of shares in stock of subsidiaries                      |                                                               |           | (19,563                   | )         |      |            | (27,308    | )         
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|CASH PROVIDED BY FINANCING ACTIVITIES                |                                                                    |                                                               | 34,097    |                           |           |      | 1,974,390  |           
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                    
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND         
|                                                    
|                                                    
|                                                    
|                                                    
|CASH EQUIVALENTS                                     |                                                                    |                                                               | 54,139    |                           |           |      | (117,926   | )         
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                    
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                    |                                                               | 628,973   |                           |           |      | (2,258,776 | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|CASH AND CASH EQUIVALENTS  beginning of period      |                                                                    |                                                               | 757,508   |                           |           |      | 3,557,706  |           
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           
|                                                    
|CASH AND CASH EQUIVALENTS  end of period            |                                                                    | $                                                             | 1,386,481 |                           |           | $    | 1,298,930  |           
|                                                     |                                                                    |                                                               |           |                           |           |      |            |           

See notes to consolidated financial statements





---



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)

|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |           |  
|--------------------------------------- | --------------------------------------------------------------- | - | --------------------------- | ---------- | ------------------------- | - | ---------- | -------- | ---- | - | ---------- | ---------- | - | - | ---------- | --------- | -
|                                        |                                                                 |   | Three months ended June 30, |            | Six months ended June 30,
|                                        |                                                                 |   | 2001                        |            | 2000                      |   | 2001       |          | 2000
|                                        |                                                                 |   |                             |            |                           |   |            |          |     
|Net (loss)                              |                                                                 | $ | (1,565,755                  | )          |                           | $ | (1,475,164 | )        |      | $ | (2,990,756 | )          |   | $ | (3,238,644 | )        
|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |          
|                                       
|Other comprehensive income, net of tax:
|                                       
|                                       
|                                       
|                                       
|                                       
|                                        | Foreign currency translation adjustments                        |   |                             | 294,940    |                           |   |            | (114,301 | )    |   |            | (67,674    | ) |   |            | (146,348  | )
|                                       
|                                       
|                                       
|                                       
|                                       
|                                        | Unrealized holding gains:                                      
|                                       
|                                       
|                                       
|                                       
|                                       
|                                        | Unrealized holding gains arising during period (see note below) |   |                             | (154,761   | )                         |   |            | 944,800  |      |   |            | (1,557,706 | ) |   |            | 3,064,743 |  
|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |          
|                                       
|                                        | Net unrealized holding gains                                    |   |                             | (154,761   | )                         |   |            | 944,800  |      |   |            | (1,557,706 | ) |   |            | 3,064,743 |  
|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |          
|                                       
|                                        | Total other comprehensive income (loss)                         |   |                             | 140,179    |                           |   |            | 830,499  |      |   |            | (1,625,380 | ) |   |            | 2,918,395 |  
|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |          
|                                       
|                                        | Comprehensive income (loss) during period                       |   | $                           | (1,425,576 | )                         |   | $          | (644,665 | )    |   | $          | (4,616,136 | ) |   | $          | (320,249  | )
|                                        |                                                                 |   |                             |            |                           |   |            |          |      |   |            |            |   |   |            |          

| |  |                                                                                                                                                                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Note: Unrealized holding gains are net of tax expense (benefit) of
($100,474)
     and $667,926 for the three months ended June 30,
2001 and 2000
     respectively and ($1,038,471) and $2,081,221 for
the six months ended
     June 30, 2001 and 2000 respectively.

See notes to consolidated financial statements





---



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 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. These financial statements have
been prepared on a going concern basis, which presumes that assets
will be realized and liabilities discharged in the normal course of
business over the foreseeable future. The company's current
liabilities exceed its current assets and the company has incurred
losses over the quarter and for the past several quarters, which have
reduced the company's cash reserves. The company is actively
exploring the possibility of selling its interests in certain of its
investee companies in order to realize value and focus its efforts
and resources. The proceeds of any such sales will be used to
increase cash reserves. The company also plans to raise additional
funding through private placement or public offering in 2001. In
addition, the company will continue to assist its investee companies
in their efforts to obtain outside financing in order to fund the
growth and development of their respective businesses. The company's
ability to continue to realize assets and discharge liabilities in
the normal course is dependent on these and other initiatives. These
financial statements do not include any of the adjustments that might
be necessary should the company be unable to continue its business in
the normal course.
|  
|  
|  
|  
|  
|   |  | 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. |  | INVENTORY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|  
|  
|  
|  
|   |  | Inventory consists of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|               |  |               |           |                  |  |   |           | 
|-------------- |  | ------------- | --------- | ---------------- |  | - | --------- | 
|               |  | June 30, 2001 |           | December 31,2000
|               |  |               |           |                 
|Raw Material   |  | $             | 1,345,340 |                  |  | $ | 1,110,156 | 
|              
|              
|              
|              
|Finished goods |  |               | 344,018   |                  |  |   | 378,310   | 
|               |  |               |           |                  |  |   |           | 
|               |  | $             | 1,689,358 |                  |  | $ | 1,488,466 | 





---



|   |  |                                                                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------------------
|4. |  | INVESTMENTS                                                                                                                 
|  
|  
|  
|  
|  
|   |  | The following table gives certain summarized unaudited financial
information related to the Companys equity basis holdings:

|                                  |  |                  |          |      |  |   |          |  
|--------------------------------- |  | ---------------- | -------- | ---- |  | - | -------- | -
|                                  |  | Six Months Ended
|                                  |  | June 30,        
|                                  |  |                 
|                                  |  | 2001             |          | 2000
|                                  |  |                  |          |     
|Net Sales                         |  | $                | 68,012   |      |  | $ | 117,757  |  
|                                 
|                                 
|                                 
|                                 
|Gross profit (loss) on sales      |  |                  | 67,155   |      |  |   | 5,488    |  
|                                 
|                                 
|                                 
|                                 
|(Loss) from continuing operations |  |                  | (166,650 | )    |  |   | (542,629 | )
|                                 
|                                 
|                                 
|                                 
|Net (loss)                        |  |                  | (166,650 | )    |  |   | (542,629 | )

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | 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.
|  
|  
|  
|  
|  
|6. |  | 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.                                                                                                                                                                                     
|  
|  
|  
|  
|  
|7. |  | INCREASE OF INTEREST IN GEMPRINT CORPORATION                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|  
|  
|  
|  
|   |  | During April 2001, CVFs subsidiary Gemprint converted a portion of
its indebtedness to CVF into new common shares of Gemprint. This
conversion of debt to shares resulted in CVFs equity interest in
Gemprint increasing from 56.1% to 64.9%.                                                                                                                                                                                                                                          





---



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8. |  | 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 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. 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 Six Months Ended June 30, 2001 and 2000

|                           |  |             |          |          |  |                |           |          |  |                |          |       |  |       |          |   |  |  |            |   |  |  |             |   |  |  |            |  
|-------------------------- |  | ----------- | -------- | -------- |  | -------------- | --------- | -------- |  | -------------- | -------- | ----- |  | ----- | -------- | - |  |  | ---------- | - |  |  | ----------- | - |  |  | ---------- | -
|                           |  | Bio-        |          | Machine  |  | Identification |           | Retail   |  | Corporate      |          | All  
|                           |  | remediation |          | Controls |  | Systems        |           | Products |  | Administration |          | Other |  | Total
|                           |  |             |          |          |  |                |           |          |  |                |          |       |  |      
|2001                       |  |             | $        |          |  |                | $         |          |  |                | $        |       |  |       | $        |   |  |  | $          |   |  |  | $           |   |  |  | $          |  
|                           |  |             |          |          |  |                |           |          |  |                |          |       |  |       |          |   |  |  |            |   |  |  |             |   |  |  |            |  
|Sales                      |  |             | 610,639  |          |  |                | 5,432,102 |          |  |                | 216,090  |       |  |       | 167,588  |   |  |  |           |   |  |  | 566,647     |   |  |  | 6,993,066  |  
|                          
|                          
|                          
|                          
|(Loss) from operations     |  |             | (119,997 | )        |  |                | (376,370  | )        |  |                | (402,595 | )     |  |       | (128,581 | ) |  |  | (1,087,523 | ) |  |  | (1,374,944) | ) |  |  | (3,490,010 | )
|                          
|                          
|                          
|                          
|Other income (expense)     |  |             | 8,798    |          |  |                | 115,334   |          |  |                | (379,111 | )     |  |       | 55,517   |   |  |  | 476,433    |   |  |  | 195,088     |   |  |  | 472,059    |  
|                          
|                          
|                          
|                          
|(Loss) before income taxes |  |             | (111,199 | )        |  |                | (261,036  | )        |  |                | (781,706 | )     |  |       | (73,064  | ) |  |  | (611,090   | ) |  |  | (1,179,856  | ) |  |  | (3,017,951 | )
|                          
|                          
|                          
|                          
|                          
|2000                      
|Sales                      |  |             | 878,593  |          |  |                | 6,322,387 |          |  |                | 86,965   |       |  |       | 371,546  |   |  |  |           |   |  |  | 676,626     |   |  |  | 8,336,117  |  
|                          
|                          
|                          
|                          
|(Loss) from operations     |  |             | (32,133  | )        |  |                | (429,256  | )        |  |                | (418,936 | )     |  |       | (438,508 | ) |  |  | (1,331,429 | ) |  |  | (493,972    | ) |  |  | (3,144,234 | )
|                          
|                          
|                          
|                          
|Other income (expense)     |  |             | 2,047    |          |  |                | 108,967   |          |  |                | (38,391  | )     |  |       | 146,951  |   |  |  | (435,556   | ) |  |  | 122,999     |   |  |  | (92,983    | )
|                          
|                          
|                          
|                          
|(Loss) before income taxes |  |             | (30,086  | )        |  |                | (320,289  | )        |  |                | (457,327 | )     |  |       | (291,557 | ) |  |  | (1,766,985 | ) |  |  | (370,973    | ) |  |  | (3,237,217 | )





---



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|  
|  
|  
|  
|   |  | In August 2001 CVF optioned 450,000 of its 1,337,977 shares it
currently owns in TurboSonic Technologies, Inc. as part of an Investment
Agreement that TurboSonic has with Hamon Research-Cottrell, Inc. The
options give Hamon Research-Cottrell the right to acquire control of
TurboSonic at prices ranging from $1.80 to $2.50 per share. The options
are exercisable only in the event that Hamon Research-Cottrell initiates
a tender offer for TurboSonics common stock. The options expire August
31, 2003 or earlier if the TurboSonic shares trade at a price of $3.00 or
higher for a consecutive 30 day period.





---






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

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THE
THREE MONTHS ENDED JUNE 30, 2000:

Consolidated sales of CVF Technologies Corporation (CVF or the Company) for
the three months ended June 30, 2001 amounted to $3,430,742, representing a
decrease of $983,404 (22.3%) compared to sales of $4,414,146 for the same
period in 2000.

CVF has no sales from operations on a stand-alone basis. Sales and gross profit
from sales reflect the operations of CVFs consolidated subsidiaries only. The
consolidated subsidiaries are Biorem Technologies Inc. (Biorem), Dantec
Corporation (Dantec), Grand Island Marketing Inc. (Elements),
Gemprint Corporation (Gemprint), SRE Controls Inc. (SRE), Ecoval
Inc. (in 2000) and Ecoval Corporation (in 2001) (together, Ecoval) (Ecoval is
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.

The decrease in consolidated sales in the second quarter of 2001 compared to
the same quarter of 2000 is mainly due to a decrease of $705,395 (23%) in SREs
sales in respect of a strategic relationship contract with a major original
equipment manufacturer (OEM) in the most recent period compared to the earlier
period. Gemprints sales increased by $48,245 (134%) during the second 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 $176,796 in the second quarter
of 2001. Dantecs sales in the second quarter of 2001 decreased by $269,056
(57%) compared to the same quarter of 2000. Biorems sales decreased by
$118,965 (20%) compared to sales booked in the first quarter of 2000.
Elements sales in the second quarter of 2001, during which it operated only
one store, decreased by $115,029 (61%) from the same quarter of 2000, during
which it operated three stores.

CVFs gross margin of $486,012 for the second quarter of 2001 represents a
decrease of $86,609 (15%) from the same period last year. Gross margin as a
percentage of sales increased to 14.2% for the second quarter of 2001 from
13.0% for the second quarter of 2000. This increase in the more recent quarter
is mainly due to Ecoval attaining higher gross margins than in the same quarter
of the previous year due to higher sales volumes.

Selling, general and administrative expenses on a consolidated basis amounted
to $1,860,879 for the second quarter of 2001. This represents an increase of
$48,630 or 3% compared to the second quarter of 2000. Of this increase, $92,619
is due to increased amortization expense due to the Ecoval restructuring.
Management continues to undertake a concerted effort to effect an overall
reduction in administrative costs.

Research and development expenses for the second quarter of 2001 amounted to
$219,272 compared to $148,450 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 $20,695 for the second quarter of 2001
compared to net interest income of $1,413 for the second quarter of 2000. This
increase in expense is due to lower average cash balances invested during the
2001 period.

Other expense incurred by CVF in the second quarter of 2001 amounted to
$22,477, representing a loss of $50,769 on the sale of some shares held in
Gemprint. During the earlier period CVF earned a fee for assisting one of its
investee companies to secure funding.





---



Losses of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) decreased to $94,204 in the 2001 period from $283,138 in the 2000
period. This decrease is attributable to the inclusion of Ecovals results in
consolidated operations effective December 2000.

Gain on sale of holdings amounted to $22,200 in the 2001 period compared to no
gains in the 2000 period. The gain in the most recent period resulted from the
sale of a portion of CVFs holdings in RDM.

Minority interest portion of the loss increased to $144,812 in the second
quarter of 2001 from $100,312 in the comparable 2000 period due to the
attribution to minority interest of the larger losses incurred by Dantec and
partially offset by a lower loss at Elements.

CVF recorded a net loss of $1,565,755 for the three months ended June 30, 2001
resulting from the operations described above. This compares to a net loss of
$1,475,164 incurred in the corresponding period of 2000.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO THE
SIX MONTHS ENDED JUNE 30, 2000:

Consolidated sales of CVF for the six months ended June 30, 2001 amounted to
$6,993,066, representing a decrease of $1,343,051 (16.1%) compared to sales of
$8,336,117 for the same period in 2000. This decrease is mainly due to SREs
sales for the first six months of 2001 decreasing by $890,285 (14.1%) over the
same period in 2000. During both periods SRE maintained full production on a
strategic relationship contract with a major original equipment manufacturer
(OEM). Gemprint achieved an increase in sales of $129,125 (148%) 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 $311,695 in the 2001 period. Dantecs sales in the 2001
period decreased by $421,674 (62%) compared to the same period of 2000.
Biorems sales decreased by $267,954 (31%) compared to sales booked in the 2000
period. Elements sales in the 2001 period, during which it operated only one
store, decreased by $203,958 (55%) from the same period of 2000, during which
it operated three stores.

CVFs gross margin of $620,539 for the first six months of 2001 represents a
decrease of $336,863 (35%) from the same period last year. Gross margin as a
percentage of sales decreased to 8.9% for the first six months of 2001 from
11.5% for the first six months of 2000. This decrease in the more recent period
is mainly due to Dantec and Biorem attaining lower gross margins than in the
previous year due to lower sales volumes. Also, Ecoval (consolidated only from
December 2000) had an overall gross margin percentage of 9.8% in the first six
months of 2001.

Selling, general and administrative expenses on a consolidated basis amounted
to $3,621,207 for the first six months of 2001. This represents a decrease of
$193,572 or 5% over the first six months of 2000. Of this decrease $183,386
relates to investor relations expense. Management continues to undertake a
concerted effort to effect an overall reduction in administrative costs.

Research and development expenses for the six months ended June 30, 2001 were
$489,342 compared to $286,857 in the 2000 period. Most of this increase in the
most recent period derives from the consolidation of Ecoval in CVFs financial
results beginning in December, 2000.

Net interest expense for the first six months of 2001 increased to interest
expense of $45,277 from interest income of $6,145 earned during the six months
ended June 30, 2000. This increase in expense is due to lower average cash
balances invested during the 2001 period.

Other income of $27,733 earned in the first six months of 2001 represents a
decrease of $69,606 compared to the same period of 2000. During the earlier
period CVF earned a fee for assisting one of its investee companies to secure
funding.





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Losses of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) decreased to $146,732 in the 2001 period from $534,228 in the 2000
period. This decrease is attributable to the inclusion of Ecoval in
consolidated operations effective from December 2000.

Gain on sale of holdings amounted to $300,140 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 $336,195 in the first six
months of 2001 from $337,761 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.

As a result of the operations described above, CVF recorded a net loss of
$2,990,756 in the first six months of 2001, as compared to a net loss of
$3,238,644 recorded in the corresponding period of 2000.

LIQUIDITY AND CAPITAL RESOURCES

Stockholders equity as of June 30, 2001 amounted to $4,346,654 compared to
$8,732,852 at December 31, 2000. This net decrease of $4,386,198 is primarily
attributable to the net loss of $2,990,756 incurred in the first six months of
2001 and a decrease of $1,557,706 in unrealized gains on investment holdings
which was recognized in the same period.

The current ratio of CVF as at June 30, 2001 is .97 to 1. The decline in the
current ratio during the first six months of 2001 is attributable to the use of
cash and cash equivalents to fund CVFs ongoing operations.

During the first six months of 2001, the cash requirements of CVFs
consolidated investee companies were at unusually high levels. In particular,
beginning in December, 2000 when CVF acquired control, the cash needs of Ecoval
were increased significantly due to the restructuring of Ecoval which CVF
implemented at that time, the hiring of a new management team, the expansion of
sales efforts and the effect of the cyclical nature of Ecovals sales, the bulk
of which typically occur in the late fall, winter and early spring months. It
is anticipated that cash requirements of Ecoval and CVFs other investee
companies will be significantly reduced over the twelve month period commencing
July 1, 2001.

At present, CVFs management is actively exploring the possibility of selling
its interests in certain of its investee companies in order to realize value
and focus CVFs efforts and resources on Ecoval, SRE and Gemprint, the three
investee companies which management believes have the greatest growth potential
over the next year. The proceeds of any such sales will be used to increase
cash reserves.

CVF also plans to raise additional funding through private placement or public
offering in 2001, as it did in 2000. These funds will be also be used to
finance current operations and to augment cash reserves. CVF will continue to
assist its investee companies in their efforts to obtain outside financing in
order to fund the growth and development of their respective businesses.

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 CVFs actual results, performance or achievements to vary
materially from its expected results, performance or achievements. These
factors include, among others, the following:



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





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| |  | bring in experienced management and the need to develop and refine
the business and its operations, among other reasons.
| |  | ------------------------------------------------------------------------------------------------------------------------

CVF will not update any forward-looking information to reflect actual results
or changes in the factors affecting the forward-looking information.





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PART II  OTHER INFORMATION




Item 2. Changes in Securities

In April 2001, the Company issued 10,333 shares of its common stock to The
Equity Group Inc. as compensation under a consulting agreement with the
Company. In April 2001, the Company issued 26,899 shares of its common stock to
Chatsworth Securities LLC under a consulting agreement with the Company. In
April 2001, the registrant issued 27,000 shares of its common stock to Leo
Hirsch under a consulting agreement with the Company. 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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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:     August 14, 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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EXHIBIT INDEX





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