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 4. Submission of Matters to a Vote of Securities Holders    
|                                                   | Item 6. Exhibits and Reports on Form 8-K                         
|SIGNATURES                                        
|EX-11 - Stmnt re Computation of Per Share Earnings



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##### Table of Contents



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

FORM 10-QSB

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

For the quarterly period ended September 30, 2001

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

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

916 CENTER STREET
LEWISTON, NEW YORK 14092
(716) 754-7883
(Address, including zip code, and telephone number,
including area code, of issuers principal executive offices)

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

As of October 30, 2001, there were 9,427,949 shares of common stock, $0.001
par value per share, of the issuer outstanding.

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





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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |              |            |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ----------- | ---------- | ------------- | ---------- | ------------ | ---------- |  |  | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            | September 30, |            | December 31,
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            | 2001          |            | 2000        
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            | (unaudited)   |            | (audited)   
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            | [Note 2]      |            |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      | ASSETS      |            |               |            |              |            |  |  | 
|                                                                                                                                                      
|CURRENT ASSETS:                                                                                                                                        |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       | Cash and cash equivalents                                                                                                                                               |                                            | $                                    | 621,432     |            |               | $          | 495,642      |           
|                                                                                                                                                       | Short-term investments                                                                                                                                                  |                                            |                                      |            |            |               |            | 261,866      |           
|                                                                                                                                                       | Restricted cash                                                                                                                                                         |                                            |                                      | 176,048     |            |               |            | 185,501      |           
|                                                                                                                                                       | Trade receivables                                                                                                                                                       |                                            |                                      | 1,512,049   |            |               |            | 2,370,247    |           
|                                                                                                                                                       | Inventory [Note 5]                                                                                                                                                      |                                            |                                      | 1,518,029   |            |               |            | 1,488,466    |           
|                                                                                                                                                       | Prepaid expenses and other                                                                                                                                              |                                            |                                      | 108,135     |            |               |            | 87,852       |           
|                                                                                                                                                       | Income taxes receivable                                                                                                                                                 |                                            |                                      | 9,993       |            |               |            | 2,532,003    |           
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL CURRENT ASSETS                       |                                      |             | 3,945,686  |               |            |              | 7,421,577  | 
|Property and equipment, net of accumulated depreciation                                                                                                |                                                                                                                                                                         |                                            | 257,065                              |             |            |               | 347,533    |             
|Holdings, carried at cost or equity                                                                                                                    |                                                                                                                                                                         |                                            | 267,657                              |             |            |               | 491,904    |             
|Holdings (in public companies) available for sale, at market                                                                                           |                                                                                                                                                                         |                                            | 1,239,235                            |             |            |               | 4,524,422  |             
|Technology                                                                                                                                             |                                                                                                                                                                         |                                            | 1,533,634                            |             |            |               | 1,900,497  |             
|Goodwill, net of accumulated amortization [Note 3]                                                                                                     |                                                                                                                                                                         |                                            | 4,671,668                            |             |            |               | 6,134,929  |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL ASSETS                               |                                      | $           | 11,914,945 |               |            | $            | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            | LIABILITIES
AND STOCKHOLDERS EQUITY |             |            |               |            |              |            |  | 
|                                                                                                                                                      
|CURRENT LIABILITIES:                                                                                                                                   |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       | Bank indebtedness (subsidiary)                                                                                                                                          |                                            | $                                    | 278,388     |            |               | $          | 188,150      |           
|                                                                                                                                                       | Current portion of long-term debt (subsidiary)                                                                                                                          |                                            |                                      | 308,268     |            |               |            | 281,259      |           
|                                                                                                                                                       | Subsidiary loans in breach of covenants                                                                                                                                 |                                            |                                      |            |            |               |            | 309,324      |           
|                                                                                                                                                       | Trade payables                                                                                                                                                          |                                            |                                      | 2,930,575   |            |               |            | 3,440,854    |           
|                                                                                                                                                       | Accrued liabilities                                                                                                                                                     |                                            |                                      | 433,895     |            |               |            | 611,726      |           
|                                                                                                                                                       | Dividends payable on Series A and Series B preferred stock                                                                                                              |                                            |                                      | 66,955      |            |               |            | 11,384       |           
|                                                                                                                                                       | Dividends payable on subsidiarys shares                                                                                                                                |                                            |                                      | 327,523     |            |               |            | 307,579      |           
|                                                                                                                                                       | Debt equivalent (subsidiary)                                                                                                                                            |                                            |                                      | 443,240     |            |               |            | 487,056      |           
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL CURRENT LIABILITIES                  |                                      |             | 4,788,844  |               |            |              | 5,637,332  | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|Long term debt (subsidiary)                                                                                                                            |                                                                                                                                                                         |                                            | 94,980                               |             |            |               | 66,720     |             
|Deferred income taxes                                                                                                                                  |                                                                                                                                                                         |                                            | 656,301                              |             |            |               | 1,917,060  |             
|Minority interest                                                                                                                                      |                                                                                                                                                                         |                                            | 3,103,869                            |             |            |               | 3,662,770  |             
|Pension obligation                                                                                                                                     |                                                                                                                                                                         |                                            | 448,834                              |             |            |               | 491,794    |             
|Preferred and other non-voting stock of subsidiaries                                                                                                   |                                                                                                                                                                         |                                            | 206,376                              |             |            |               | 245,813    |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            | 4,510,360                            |             |            |               | 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     |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            | 9,362,659                            |             |            |               | 12,088,010 |             
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|STOCKHOLDERS EQUITY:                                                                                                                                  |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       | Common stock, $0.001 par value, authorized 50,000,000 shares,
9,904,649 issued and 476,700 in treasury                                                                  |                                            |                                      | 9,905       |            |               |            | 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                                                                                                                                              |                                            |                                      | 27,037,388  |            |               |            | 26,638,313   |           
|                                                                                                                                                       | Treasury stock                                                                                                                                                          |                                            |                                      | (2,746,129  | )          |               |            | (2,711,889   | )         
|                                                                                                                                                       | Accumulated other comprehensive (loss) income                                                                                                                           |                                            |                                      | (879,054    | )          |               |            | 1,173,596    |           
|                                                                                                                                                       | Accumulated deficit                                                                                                                                                     |                                            |                                      | (21,499,616 | )          |               |            | (17,006,341  | )         
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL STOCKHOLDERS EQUITY                 |                                      |             | 2,552,286  |               |            |              | 8,732,852  | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             
|                                                                                                                                                       |                                                                                                                                                                         | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                      | $           | 11,914,945 |               |            | $            | 20,820,862 | 
|                                                                                                                                                       |                                                                                                                                                                         |                                            |                                      |             |            |               |            |             

See notes to consolidated financial statements



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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |           |           |  
|----------------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------- | ---------- | -------------------------------- | --------- | ------------------------------- | ---------- | --------- | --------- | ---- | ---------- | --------- | --------- | - | ---------- | --------- | --------- | -
|                                                                                          |                                          |                                   |            | Three months ended September 30, |           | Nine months ended September 30,
|                                                                                          |                                          |                                   |            |                                  |           |                                
|                                                                                          |                                          |                                   |            | 2001                             |           | 2000                            |            | 2001      |           | 2000
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |     
|                                                                                          |                                          |                                   |            | [Note 2]                         |           |                                 |            | [Note 2]  |           |     
|                                                                                         
|SALES                                                                                     |                                          | $                                 | 3,049,932  |                                  |           | $                               | 4,066,702  |           |           | $    | 9,875,872  |           |           | $ | 12,032,906 |          
|COST OF SALES                                                                             |                                          |                                   | 2,404,916  |                                  |           |                                 | 3,354,379  |           |           |      | 8,651,610  |           |           |   | 10,475,489 |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|GROSS MARGIN                                                                              |                                          |                                   | 645,016    |                                  |           |                                 | 712,323    |           |           |      | 1,224,262  |           |           |   | 1,557,417  |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|EXPENSES:                                                                                 |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|                                                                                          | Selling, general and administrative      |                                   |            | 1,648,431                        |           |                                 |            | 1,490,019 |           |      |            | 5,100,119 |           |   |            | 4,755,909 |          
|                                                                                          | Research and development                 |                                   |            | 216,179                          |           |                                 |            | 151,956   |           |      |            | 705,521   |           |   |            | 438,813   |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|                                                                                          |                                          | TOTAL EXPENSES                    |            |                                  | 1,864,610 |                                 |            |           | 1,641,975 |      |            |           | 5,805,640 |   |            |           | 5,194,722 |  
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM CONTINUING OPERATIONS BEFORE UNDER NOTED
ITEMS                                |                                          |                                   | (1,219,594 | )                                |           |                                 | (929,652   | )         |           |      | (4,581,378 | )         |           |   | (3,637,305 | )        
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|OTHER INCOME AND (EXPENSES):                                                              |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|                                                                                          | Interest (expense), net                  |                                   |            | (23,238                          | )         |                                 |            | (26,408   | )         |      |            | (68,515   | )         |   |            | (20,263   | )        
|                                                                                          | Other income, net                        |                                   |            | 22,192                           |           |                                 |            | 16,805    |           |      |            | 49,925    |           |   |            | 114,144   |          
|                                                                                          | (Loss) from equity investees             |                                   |            | (98,144                          | )         |                                 |            | (356,588  | )         |      |            | (244,876  | )         |   |            | (890,816  | )        
|                                                                                          | Gain on sale of holdings                 |                                   |            | 69,646                           |           |                                 |            | 58,843    |           |      |            | 369,786   |           |   |            | 58,843    |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|                                                                                          |                                          | TOTAL OTHER INCOME AND (EXPENSES) |            |                                  | (29,544   | )                               |            |           | (307,348  | )    |            |           | 106,320   |   |            |           | (738,092  | )
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM CONTINUING OPERATIONS BEFORE PROVISION
FOR INCOME TAXES AND MINORITY INTEREST |                                          |                                   | (1,249,138 | )                                |           |                                 | (1,237,000 | )         |           |      | (4,475,058 | )         |           |   | (4,375,397 | )        
|                                                                                          | (Recovery of) provision for income taxes |                                   |            | (55,467                          | )         |                                 |            | 231       |           |      |            | (82,662   | )         |   |            | 1,658     |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST                                |                                          |                                   | (1,193,671 | )                                |           |                                 | (1,237,231 | )         |           |      | (4,392,396 | )         |           |   | (4,377,055 | )        
|MINORITY INTEREST IN LOSS (INCOME)                                                        |                                          |                                   | 20,903     |                                  |           |                                 | (23,802    | )         |           |      | 299,364    |           |           |   | 157,933    |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM CONTINUING OPERATIONS                                                         |                                          |                                   | (1,172,768 | )                                |           |                                 | (1,261,033 | )         |           |      | (4,093,032 | )         |           |   | (4,219,122 | )        
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|(LOSS) FROM OPERATIONS OF DISCONTINUED SEGMENT LESS
APPLICABLE INCOME TAXES  Note 3      |                                          |                                   | (68,060    | )                                |           |                                 | (84,473    | )         |           |      | (138,552   | )         |           |   | (365,028   | )        
|(LOSS) ON CLOSING OF DISCONTINUED SEGMENT LESS
APPLICABLE INCOME TAXES  Note 3           |                                          |                                   | (102,367   | )                                |           |                                 |           |           |           |      | (102,367   | )         |           |   |           |          
|NET (LOSS)                                                                                |                                          |                                   | (1,343,195 | )                                |           |                                 | (1,345,506 | )         |           |      | (4,333,951 | )         |           |   | (4,584,150 | )        
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|BASIC (LOSS) PER SHARE FROM CONTINUING OPERATIONS                                         |                                          | $                                 | (0.13      | )                                |           |                                 | (0.17      | )         |           |      | (0.46      | )         |           |   | (0.60      | )        
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|DILUTED (LOSS) PER SHARE FROM CONTINUING OPERATIONS                                       |                                          |                                   | (0.13      | )                                |           |                                 | (0.17      | )         |           |      | (0.46      | )         |           |   | (0.60      | )        
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|WEIGHTED SHARES USED IN COMPUTATION  BASIC                                               |                                          |                                   | 9,326,558  |                                  |           |                                 | 7,760,508  |           |           |      | 9,172,060  |           |           |   | 7,331,423  |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          
|WEIGHTED SHARES USED IN COMPUTATION  DILUTED                                             |                                          |                                   | 9,326,558  |                                  |           |                                 | 7,760,508  |           |           |      | 9,172,060  |           |           |   | 7,331,423  |          
|                                                                                          |                                          |                                   |            |                                  |           |                                 |            |           |           |      |            |           |           |   |            |          

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

|                                                             |                                                                    |                                                               |           |                                 |           |      |            |            |            |  
|------------------------------------------------------------ | ------------------------------------------------------------------ | ------------------------------------------------------------- | --------- | ------------------------------- | --------- | ---- | ---------- | ---------- | ---------- | -
|                                                             |                                                                    |                                                               |           | Nine Months Ended September 30,
|                                                             |                                                                    |                                                               |           |                                
|                                                             |                                                                    |                                                               |           | 2001                            |           | 2000
|                                                             |                                                                    |                                                               |           |                                 |           |     
|                                                             |                                                                    | [Note 2]                                                      |           |                                 |           |     
|                                                            
|CASH FLOW FROM OPERATING ACTIVITIES:                         |                                                                    |                                                               |           |                                 |           |      |            |           
|                                                             | Net (loss)                                                         |                                                               | $         | (4,333,951                      | )         |      | $          | (4,584,150 | )         
|                                                             | Adjustments to reconcile net (loss)
from operating activities:     |                                                               |           |                                 |           |      |            |            |           
|                                                             |                                                                    | Depreciation and amortization                                 |           |                                 | 1,601,514 |      |            |            | 983,187    |  
|                                                             |                                                                    | Loss from equity investees                                    |           |                                 | 244,876   |      |            |            | 890,816    |  
|                                                             |                                                                    | Gain on sale of holdings                                      |           |                                 | (369,786  | )    |            |            |           |  
|                                                             |                                                                    | Common stock issued in lieu of cash                           |           |                                 | 91,064    |      |            |            | 339,063    |  
|                                                             |                                                                    | Minority interest in (losses) of subsidiaries                 |           |                                 | (386,172  | )    |            |            | (383,445   | )
|                                                             |                                                                    | Pension expense                                               |           |                                 | 16,734    |      |            |            | 21,899     |  
|                                                             |                                                                    | Loss from sale of subsidiaries shares                         |           |                                 | 50,628    |      |            |            |           |  
|                                                             | Changes in operating assets and liabilities (net of acquisitions): |                                                               |           |                                 |           |      |            |            |           
|                                                             |                                                                    | Decrease (increase) in trade receivables                      |           |                                 | 757,326   |      |            |            | (1,171,806 | )
|                                                             |                                                                    | (Increase) in inventory                                       |           |                                 | (108,261  | )    |            |            | (70,765    | )
|                                                             |                                                                    | (Increase) in prepaid expenses and other                      |           |                                 | (25,429   | )    |            |            | (115,334   | )
|                                                             |                                                                    | Decrease in income taxes receivable                           |           |                                 | 2,457,606 |      |            |            | 1,151,751  |  
|                                                             |                                                                    | (Decrease) increase in trade payables and accrued liabilities |           |                                 | (716,767  | )    |            |            | 918,594    |  
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|                                                             |                                                                    |                                                               | 3,613,333 |                                 |           |      | 2,563,960  |           
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH USED IN OPERATING ACTIVITIES                            |                                                                    |                                                               | (720,618  | )                               |           |      | (2,020,190 | )         
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                        |                                                                    |                                                               |           |                                 |           |      |            |           
|                                                             | Purchase of property and equipment                                 |                                                               |           | (9,563                          | )         |      |            | (142,638   | )         
|                                                             | Investments in and advances to equity investees                    |                                                               |           | (40,319                         | )         |      |            | (1,835,196 | )         
|                                                             | Proceeds from sale of holdings                                     |                                                               |           | 689,970                         |           |      |            | 67,794     |           
|                                                             | Purchase of holdings available for sale                            |                                                               |           | (18,177                         | )         |      |            | (293,448   | )         
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES              |                                                                    |                                                               | 621,911   |                                 |           |      | (2,203,488 | )         
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                        |                                                                    |                                                               |           |                                 |           |      |            |           
|                                                             | Borrowings of debt                                                 |                                                               |           | 54,120                          |           |      |            | 36,181     |           
|                                                             | Issuance of common stock                                           |                                                               |           |                                |           |      |            | 1,806,760  |           
|                                                             | Purchase of treasury stock                                         |                                                               |           | (34,240                         | )         |      |            | (10,024    | )         
|                                                             | Redemption of shares in stock of subsidiaries                      |                                                               |           | (19,509                         | )         |      |            | (40,782    | )         
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH PROVIDED BY FINANCING ACTIVITIES                        |                                                                    |                                                               | 371       |                                 |           |      | 1,792,135  |           
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS |                                                                    |                                                               | (37,740   | )                               |           |      | 141,793    |           
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|NET DECREASE IN CASH AND CASH EQUIVALENTS                    |                                                                    |                                                               | (136,076  | )                               |           |      | (2,289,750 | )         
|CASH AND CASH EQUIVALENTS  beginning of period              |                                                                    |                                                               | 757,508   |                                 |           |      | 3,557,706  |           
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           
|CASH AND CASH EQUIVALENTS  end of period                    |                                                                    | $                                                             | 621,432   |                                 |           | $    | 1,267,956  |           
|                                                             |                                                                    |                                                               |           |                                 |           |      |            |           

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)

|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |            |  
|--------------------------------------- | ------------------------------------------------------------------------ | -------- | -------------------------------- | ---------- | ------------------------------- | -------- | ---------- | ---------- | ---- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                        |                                                                          |          | Three months ended September 30, |            | Nine months ended September 30,
|                                        |                                                                          |          |                                  |            |                                
|                                        |                                                                          |          | 2001                             |            | 2000                            |          | 2001       |            | 2000
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |     
|                                        |                                                                          | [Note 2] |                                  |            |                                 | [Note 2] |            |            |      |  
|                                       
|Net (loss)                              |                                                                          | $        | (1,343,195                       | )          |                                 | $        | (1,345,506 | )          |      | $ | (4,333,951 | )          |   | $ | (4,584,150 | )         
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           
|Other comprehensive income, net of tax: |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           
|                                        | Foreign currency translation adjustments                                 |          |                                  | (279,524   | )                               |          |            | (118,332   | )    |   |            | (347,198   | ) |   |            | (264,680   | )
|                                        | Unrealized holding gains:                                                |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |            |  
|                                        | Unrealized holding (losses) gains arising during period (see note below) |          |                                  | (147,746   | )                               |          |            | 345,919    |      |   |            | (1,705,452 | ) |   |            | 3,410,743  |  
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           
|                                        | Net unrealized holding (losses) gains                                    |          |                                  | (147,746   | )                               |          |            | 345,919    |      |   |            | (1,705,452 | ) |   |            | 3,410,743  |  
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           
|                                        | Total other comprehensive income (loss)                                  |          |                                  | (427,270   | )                               |          |            | 227,587    |      |   |            | (2,052,650 | ) |   |            | 3,146,063  |  
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           
|                                        | Comprehensive (loss) during period                                       |          | $                                | (1,770,465 | )                               |          | $          | (1,117,919 | )    |   | $          | (6,386,601 | ) |   | $          | (1,438,087 | )
|                                        |                                                                          |          |                                  |            |                                 |          |            |            |      |   |            |            |   |   |            |           

|      |  |                                                                                                                                                                                                                                                            
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: |  | Unrealized holding gains are net of tax expense (benefit) of ($98,497) and
$192,566 for the three months ended September 30, 2001 and 2000
respectively and ($1,136,968) and $2,273,787 for the nine months ended
September 30, 2001 and 2000 respectively.

See notes to consolidated financial statements





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##### Table of Contents



CVF TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2001 and 2000
(UNAUDITED)

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  | The accompanying financial statements are unaudited, but reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of financial position and the results of operations for the
interim periods presented. All such adjustments are of normal and recurring
nature. The results of operations for any interim period are not
necessarily indicative of the results attainable for a full fiscal
year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  | The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those
estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  | Certain of the comparative figures have been reclassified to conform
with the presentation adopted in the current year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. |  | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  | These consolidated financial statements have been prepared on a going
concern basis, which presumes that assets will be realized and liabilities
discharged in the normal course of business over the foreseeable future.
The consolidated companys current liabilities exceed its current assets
(which do not include its publicly traded marketable securities) and the
consolidated company has incurred losses over the quarter and for the past
several quarters, which have reduced the companys cash reserves. These
conditions raise substantial doubt about the consolidated companys ability
to continue in the normal course of business as a going concern as
the companys primary need for cash is to maintain its ability to support the
operations of some of its companies and ultimately the carrying values, of its individual investee
companies. The company is actively pursuing the sale of its interests in
five of its investee companies and has retained investment bankers in order
to realize value and focus its efforts and resources. In addition, the
company is using its marketable securities (which had a market value of
$1,239,235 as of September 30, 2001) as a source of liquidity. The proceeds
of any such sales will be used to increase cash reserves. In addition, the
company will continue to assist its investee companies in their efforts to
obtain outside financing in order to fund the growth and development of
their respective businesses. The companys ability to continue to realize
assets and discharge liabilities in the normal course is uncertain and
dependent on these and other initiatives. These financial statements do not
include any of the adjustments to the amounts or classification of assets
and liabilities that might be necessary should the company be unable to
continue its business in the normal course.





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##### Table of Contents



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. |  | DISCONTINUED OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | In September 2001, Elements (Retail Products), a subsidiary company
of which CVF has a 61% interest, decided to discontinue its operations. The
retail store and internet site were closed but will not be sold and the
discontinuance is complete. Sales of the segment for the nine month periods
ended September 2001 and 2000 were $220,813 and $511,345 respectively. At
September 30, 2001, the remaining liabilities in Elements consist of small
business loans amounting to $50,000. Due to the closing of the operations,
CVFs goodwill in Elements of $470,398 has been written off.                                                            
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. |  | INCOME (LOSS) PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Basic earnings (loss) per share is computed by dividing net income
(loss) from continuing operations available to common stockholders from
continuing operations by the weighted average number of common shares
outstanding during the period. The net income (loss) from continuing
operations available to common stockholders consists of net income (loss)
from continuing operations reduced by the dividends on the Companys Series
A and B preferred stock. Diluted earnings (loss) per share reflects the per
share amount that would have resulted if diluted potential common stock had
been converted to common stock, as prescribed by SFAS 128.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. |  | INVENTORY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Inventory consists of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|               |  |                    |           |                   |  |   |           | 
|-------------- |  | ------------------ | --------- | ----------------- |  | - | --------- | 
|               |  | September 30, 2001 |           | December 31, 2000
|               |  |                    |           |                  
|Raw Material   |  | $                  | 1,274,917 |                   |  | $ | 1,110,156 | 
|Finished goods |  |                    | 243,112   |                   |  |   | 378,310   | 
|               |  |                    |           |                   |  |   |           | 
|               |  | $                  | 1,518,029 |                   |  | $ | 1,488,466 | 

|   |  |                                                                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------------------
|6. |  | INVESTMENTS                                                                                                                 
|   |  |                                                                                                                             
|   |  | The following table gives certain summarized unaudited financial
information related to the Companys equity basis holdings:

|                      |  |                   |          |      |  |   |          |  
|--------------------- |  | ----------------- | -------- | ---- |  | - | -------- | -
|                      |  | Nine Months Ended
|                      |  | September 30,    
|                      |  |                  
|                      |  | 2001              |          | 2000
|                      |  |                   |          |     
|Net Sales             |  | $                 | 70,165   |      |  | $ | 156,893  |  
|Gross profit on sales |  |                   | 69,315   |      |  |   | 850      |  
|Net (loss)            |  |                   | (270,884 | )    |  |   | (786,891 | )





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##### Table of Contents



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7.  |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8.  |  | 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%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|9.  |  | IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  | In June 2001, the Financial Accounting Standards Board [FASB]
issued Statements of Accounting Standard [SFAS]
No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets,
effective for fiscals beginning after December 15, 2001. In accordance
with these pronouncements, goodwill will no longer be amortized but
will be subject to annual impairment tests. Other intangible assets
will continue to be amortized over their useful lives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  | The Company will apply the new rules on accounting for goodwill
and other intangible assets beginning in the first quarter of 2002.
The company has not yet determined what the effect of these new rules
will be on the earnings and financial position of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10. |  | 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 four reportable
segments: bioremediation, machine controls, precious gem
identification and general corporate. The bioremediation segment
consists of one company that applies bioconversion and
biotransformation technology to municipal and industrial environmental
applications. The machine controls division designs, manufactures and
sells electric motor controls to machine manufacturers. The gem
identification segment consists of one company that has developed
identification and database systems, and markets its products and
services to the companies in the precious gem business, including
producers, cutters, distributors and retailers. The Companys general
corporate segment includes one company which provides funding and
management overview services to the holdings. This





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| |  |                                                                                                                                                                                                                                                                                                        
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 Nine Months Ended September 30, 2001 and 2000

|                           |  |             |           |          |  |                |           |                |  |       |          |       |  |  |            |   |  |  |             |   |  |  |            |  
|-------------------------- |  | ----------- | --------- | -------- |  | -------------- | --------- | -------------- |  | ----- | -------- | ----- |  |  | ---------- | - |  |  | ----------- | - |  |  | ---------- | -
|                           |  | Bio-        |           | Machine  |  | Identification |           | Corporate      |  | All   |          |       |  | 
|                           |  | remediation |           | Controls |  | Systems        |           | Administration |  | Other |          | Total
|2001                       |  | $           |           | $        |  | $              |           | $              |  | $     |          | $    
|Sales                      |  |             | 776,351   |          |  |                | 7,553,099 |                |  |       | 362,589  |       |  |  |           |   |  |  | 1,183,833   |   |  |  | 9,875,872  |  
|(Loss) from operations     |  |             | (154,140  | )        |  |                | (590,011  | )              |  |       | (511,694 | )     |  |  | (1,726,952 | ) |  |  | (1,598,581) | ) |  |  | (4,581,378 | )
|Other income (expense)     |  |             | 15,090    |          |  |                | 176,784   |                |  |       | (395,671 | )     |  |  | 451,303    |   |  |  | 161,055     |   |  |  | 408,561    |  
|(Loss) before income taxes |  |             | (139,050  | )        |  |                | (413,227  | )              |  |       | (907,365 | )     |  |  | (1,275,649 | ) |  |  | (1,437,526  | ) |  |  | (4,172,817 | )
|                          
|2000                       |  |             |           |          |  |                |           |                |  |       |          |      
|Sales                      |  |             | 1,493,098 |          |  |                | 9,070,374 |                |  |       | 137,366  |       |  |  |           |   |  |  | 1,332,068   |   |  |  | 12,032,906 |  
|(Loss) from operations     |  |             | (122,418  | )        |  |                | (642,683  | )              |  |       | (573,565 | )     |  |  | (1,827,533 | ) |  |  | (471,106    | ) |  |  | (3,637,305 | )
|Other income (expense)     |  |             | 9,646     |          |  |                | 160,275   |                |  |       | (62,208  | )     |  |  | (719,095   | ) |  |  | 47,408      |   |  |  | (563,974   | )
|(Loss) before income taxes |  |             | (112,772  | )        |  |                | (482,408  | )              |  |       | (635,773 | )     |  |  | (2,546,628 | ) |  |  | (423,698    | ) |  |  | (4,201,279 | )





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##### Table of Contents






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

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

Consolidated sales of CVF Technologies Corporation (CVF or the Company) for
the three months ended September 30, 2001 amounted to $3,049,932, representing a
decrease of $1,016,770 (25.0%) compared to sales of $4,066,702 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)(as indicated in
Note 3 of the Financial Statements, Elements discontinued its operations in
September 2001 and therefore Elements results are shown as Operations of
Discontinued Segment), 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 of $1,016,770 (25.0%) in consolidated sales in the third quarter of
2001 compared to the same quarter of 2000 is mainly due to a decrease of
$626,990 (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. Also, Biorems sales decreased by $448,793 (73%)
in the most recent quarter as Biorem experienced an unusually high level of
sales in the comparable quarter of the previous year. Gemprints sales increased
by $96,098 (191%) during the third quarter of 2001 compared to the same period
in 2000 due to increased Gemprint registrations by new customers.

CVFs gross margin of $645,016 for the third quarter of 2001 represents a
decrease of $67,307 (9%) from the same period last year. Gross margin as a
percentage of sales increased to 21.1% for the third quarter of 2001 from 17.5%
for the third quarter of 2000. This increase in the more recent quarter is
mainly due to the decrease in SREs sales, which carry lower gross margins than
the other consolidated subsidiaries.

Selling, general and administrative expenses on a consolidated basis amounted to
$1,648,431 for the third quarter of 2001. This represents an increase of
$158,412 or 11% compared to the third quarter of 2000. Of this increase $267,134
relates to Ecoval which was consolidated in the results beginning December 2000.
Management continues to undertake a concerted effort to effect an overall
reduction in administrative costs.

Research and development expenses for the third quarter of 2001 amounted to
$216,179 compared to $151,956 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 decreased to $23,238 for the third quarter of 2001 compared
to net interest expense of $26,408 for the third quarter of 2000.

Other income recognized by CVF in the third quarter of 2001 amounted to $22,192
compared to $16,805 received in the third quarter 2000.

Losses of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) decreased to $98,144 in the 2001 period from $356,588 in the 2000
period. This decrease is mainly attributable to the inclusion of Ecovals
results in consolidated operations effective December 2000.





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##### Table of Contents



Gain on sale of holdings amounted to $69,646 in the 2001 period compared to
$58,843 in the 2000 period. The gain in the most recent period resulted from the
sale of a portion of CVFs holdings in TurboSonic. The gain in the 2000 period
resulted from a sale of a portion of CVFs holdings in RDM.

Minority interest portion of the loss increased to $20,903 in the third quarter
of 2001 from income of $23,802 in the comparable 2000 period due to the
attribution to minority interest of the smaller income recognized by Dantec.

Loss from Operations of Discontinued Segment decreased to $68,060 from $84,473
in the comparable 2000 period. This decrease is due to the fact that Elements
operated fewer retail stores in the 2001 period compared to the 2000 period.

Loss on Closing of Discontinued Segment is $102,367, which loss occurred in the
2001 period when Elements discontinued operations.

CVF recorded a net loss of $1,343,195 for the three months ended September 30,
2001 resulting from the operations described above. This compares to a net loss
of $1,345,506 incurred in the corresponding period of 2000.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2000:

Consolidated sales of CVF for the nine months ended September 30, 2001 amounted
to $9,875,872, representing a decrease of $2,157,034 (17.9%) compared to sales
of $12,032,906 for the same period in 2000. This decrease is mainly due to SREs
sales for the first nine months of 2001 decreasing by $1,517,275 (17%) 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). Biorems sales decreased by $716,747 (48%) compared to sales booked in
the 2000 period. Dantecs sales in the 2001 period decreased by $482,847 (36%)
compared to the same period of 2000. Gemprint achieved an increase in sales of
$225,223 (164%) compared to the same period in 2000 due to increased Gemprint
registrations by new customers.

CVFs gross margin of $1,224,262 for the first nine months of 2001 represents a
decrease of $333,155 (21%) from the same period last year. Gross margin as a
percentage of sales decreased to 12.4% for the first nine months of 2001 from
12.9% for the first nine months of 2000. This decrease in the more recent period
is mainly due to Ecoval (consolidated only from December 2000) which had an
overall gross margin percentage of 5.7% in the first nine months of 2001.

Selling, general and administrative expenses on a consolidated basis amounted to
$5,100,119 for the first nine months of 2001. This represents an increase of
$344,210 or 7% over the first nine months of 2000. Of this increase $823,465
relates to Ecoval which was consolidated in the results beginning December 2000.
Partially offsetting this increase was a $241,204 decrease in investor
relations expense. Management continues to undertake a concerted effort to
effect an overall reduction in administrative costs.

Research and development expenses for the nine months ended September 30, 2001
were $705,521 compared to $438,813 in the 2000 period. Most of this increase in
the most recent period results from the consolidation of Ecoval in CVFs
financial results beginning in December 2000.

Net interest expense for the first nine months of 2001 increased to $68,515
compared to interest expense of $20,263 incurred during the nine months ended
September 30, 2000. This increase in expense is due to lower average cash
balances invested during the 2001 period.

Other income of $49,925 earned in the first nine months of 2001 represents a
decrease of $64,219 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 $244,876 in the 2001 period from $890,816 in the 2000
period. This decrease is mainly attributable to the inclusion of Ecoval in
consolidated operations effective from December 2000.

Gain on sale of holdings amounted to $369,786 in the 2001 period compared to
$58,843 in the 2000 period. The gain in the 2001 period resulted from the sale
of a portion of CVFs holdings in RDM and TurboSonic.

Minority interest portion of the loss increased to $299,364 in the first nine
months of 2001 from $157,933 in the comparable 2000 period. This change is due
to the larger losses incurred at Dantec in the more recent period.

Loss from Operations of Discontinued Segment decreased to $138,552 from $365,028
in the comparable 2000 period. This decrease in the most recent period is due to
the fact that Elements operated fewer retail stores and closed its office in the
more recent period.

Loss on Closing of Discontinued Segment is $102,367, which loss occurred in the
2001 period when Elements discontinued operations.

As a result of the operations described above, CVF recorded a net loss of
$4,333,951 in the first nine months of 2001, as compared to a net loss of
$4,584,150 recorded in the corresponding period of 2000.

LIQUIDITY AND CAPITAL RESOURCES

Stockholders equity as of September 30, 2001 amounted to $2,552,286 compared to
$8,732,852 at December 31, 2000. This net decrease of $6,180,566 is primarily
attributable to the net loss of $4,333,951 incurred in the first nine months of
2001 and a decrease of $1,705,452 in unrealized gains on investment holdings
which was recognized in the same period.

The current ratio of CVF as at September 30, 2001 is .82 to 1. The decline in
the current ratio during the first nine months of 2001 is attributable to the
use of cash and cash equivalents to fund CVFs ongoing operations.

During the first nine 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 of Ecoval, the cash needs
of Ecoval were increased significantly due to the restructuring 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 that commenced
October 1, 2001.

CVF management is actively pursuing the sale of its interests in five of its
investee companies and has retained investment bankers in order to maximize
value. The proceeds of any such sales will be used to increase cash reserves.
Furthermore, by selling some or all of these investee companies, CVF will be
able to focus its efforts and resources primarily on Ecoval, Gemprint and SRE,
the three investee companies which management believes have the greatest growth
potential over the next year. In addition, CVF is using its publicly traded
marketable securities (which are not included in its current assets but which
had a market value of $1,239,235 as of September 30, 2001) as a source of
liquidity.

Also, having due regard for market conditions and other factors, CVF will
continue pursue, in the coming months, the possibility of raising additional
funding on suitable terms, through private placement or public offering, as it
did in 2000. Any funds raised by such efforts 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.





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##### Table of Contents



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 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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##### Table of Contents






PART II  OTHER INFORMATION




Item 4. Submission of Matters
to a Vote of Securities Holders

| |  |                                                                                                                                                                                                        
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On August 23, 2001, the Company held its Annual Meeting of
Shareholders. The matter voted upon at the Annual Meeting was the
election of four (4) directors. The results of the voting were as
follows:

|               |  |           |           |                |  |  |        | 
|-------------- |  | --------- | --------- | -------------- |  |  | ------ | 
|Name           |  | Votes For |           | Votes Withheld
|               |  |           |           |               
|Jeffrey Dreben |  |           | 5,896,576 |                |  |  | 34,627 | 
|Robert Nally   |  |           | 5,896,576 |                |  |  | 34,627 | 
|George Khouri  |  |           | 5,896,576 |                |  |  | 34,627 | 
|Robert Glazier |  |           | 5,896,576 |                |  |  | 34,627 | 




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:   November 14, 2001 |  |                                                                                                                                      
|                          
|                           |  | CVF TECHNOLOGIES CORPORATION                                                                                                         
|                          
|                           |  |                                                                                                                                      
|                          
|                           |  | By:    /s/ Jeffrey I. DrebenName:  Jeffrey I. Dreben
Title: Chairman of the Board, President
             and Chief Executive Officer
|                          
|                           |  |                                                                                                                                      
|                          
|                           |  | By:   /s/ Robert L. MillerName:  Robert L. Miller
Title: Chief Financial Officer                                                     





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##### Table of Contents



EXHIBIT INDEX

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