<PAGE>

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

                                    FORM 10-Q

                                   (Mark One)

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

                For the quarterly period ended December 31, 2008

                                       OR

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

                For the transition period from _______ to _______

                          COMMISSION FILE NO. 001-33088

                            IVIVI TECHNOLOGIES, INC.
                 (Name of Small Business Issuer in its Charter)

         New Jersey                                            22-2956711
(State or Other Jurisdiction                               (I.R.S. Employer
of Incorporation or organization)                       Identification Number)

               135 Chestnut Ridge Rd., Montvale, New Jersey 07645
                    (Address of Principal Executive Offices)

         Issuer's Telephone Number, including area code: (201) 476-9600

Indicate by check mark whether the Issuer (1) has 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 Issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days:

YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

      Large accelerated filer [ ]                      Accelerated filer [ ]
      Non-accelerated filer [ ]                Smaller reporting company [X]
      (Do not check if a smaller reporting company)


        Indicate by check mark whether the registrant is a shell company
                 (as defined in Rule 12b-2 of the Exchange Act)

                                 YES [ ] NO [X]

  Indicate the number of shares outstanding of each of the issuer's classes of
                common stock, as of the latest practicable date:

     10,116,930 shares of Common Stock, no par value, as of February 5, 2009



<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                                      INDEX


                                                                            Page
Part I. Financial Information                                             Number

   Item 1.     Financial Statements

   Balance Sheets - As of December 31, 2008 (Unaudited) and March 31, 2008    3

   Statements of Operations - For the three and nine months ended
         December 31, 2008 and 2007 (Unaudited)                               4

   Statements of Stockholders' Equity - For the nine months ended
         December 31, 2008 (Unaudited)                                        5

   Statements of Cash Flows - For the nine months ended
         December 31, 2008 and 2007 (Unaudited)                               6

   Notes to Financial Statements (Unaudited)                                  7

   Item 2.     Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                        16

   Item 4T.    Controls and Procedures                                       29

Part II. Other Information                                                   30

   Item 1.     Legal Proceedings                                             30

   Item 1A.    Risk Factors                                                  30

   Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds   30

   Item 6.     Exhibits                                                      34

   Signatures                                                                35


                                       2


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

                               IVIVI TECHNOLOGIES, INC.

                                    BALANCE SHEETS


                                        ASSETS

                                                        DECEMBER 31,
                                                           2008             MARCH 31,
                                                        (UNAUDITED)           2008
                                                        ------------      ------------
Current assets:
 Cash and cash equivalents                              $  1,468,889      $  6,600,154
 Accounts receivable, net of allowance for doubtful
   accounts of $10,696 and $34,750, respectively              37,826           319,007
 Inventory                                                   201,083           111,951
 Deposits with affiliate                                     108,097           241,828
 Prepaid expenses and other current assets                   124,151           141,148
                                                        ------------      ------------

    Total current assets                                   1,940,046         7,414,088

Property and equipment, net                                  337,152           405,793
Equipment in use or under rental agreements, net             123,367           155,834
Inventory long-term, net of reserves of $82,105
 and $0, respectively                                        143,815           115,885
Inventory held by Allergan, net of reserves
 of $305,864 and $0, respectively                            142,062                --
Intangible assets, net of accumulated amortization
 of $80,140 and $44,674, respectively                        718,346           615,064
Restricted cash                                               49,198            48,167
                                                        ------------      ------------

                                                        $  3,453,986      $  8,754,831
                                                        ============      ============

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses                  $  1,158,659      $  1,029,143
                                                        ------------      ------------

Deferred revenue                                              35,640           411,458
                                                        ------------      ------------

Stockholders' equity:
 Preferred stock, no par value, 5,000,000 shares
 authorized, no shares issued and outstanding                     --                --
 Common stock, no par value; 70,000,000 shares
   authorized, 10,116,930 and 10,715.130 shares,
   respectively, issued and outstanding                   26,199,461        26,183,516
 Additional paid-in capital                               13,263,139        12,346,187
 Accumulated deficit                                     (37,105,413)      (31,215,473)
 Treasury stock, 650,000 shares of common stock              (97,500)               --
                                                        ------------      ------------

                                                           2,259,687         7,314,230
                                                        ------------      ------------

                                                        $  3,453,986      $  8,754,831
                                                        ============      ============

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

                                          3


<PAGE>

                                         IVIVI TECHNOLOGIES, INC.

                                         STATEMENTS OF OPERATIONS
                                                (UNAUDITED)


                                              THREE MONTHS ENDED                  NINE MONTHS ENDED
                                        DECEMBER 31,      DECEMBER 31,      DECEMBER 31,      DECEMBER 31,
                                            2008              2007              2008              2007
                                        ------------      ------------      ------------      ------------
Revenue:
 Rentals                                $    112,885      $    196,366      $    445,163      $    531,888
 Direct sales                                168,896            89,733           677,005           409,692
 Sales to licensee and fees                       --           107,517           131,036           138,767
                                        ------------      ------------      ------------      ------------

                                             281,781           393,616         1,253,204         1,080,347
                                        ------------      ------------      ------------      ------------

Costs and expenses:
 Cost of rentals                               4,825            13,145            26,605            42,989
 Cost of direct sales                         11,529            23,471            79,935           105,437
 Cost of sales to licensee and fees               --           117,313            82,813           117,313
 Loss on termination of
  Allergan contract                               --                --           139,380                --
 Research and development                    780,701           562,387         1,816,796         1,661,086
 Sales and marketing                         275,887           582,280         1,650,173         1,734,518
 General and administrative                  988,183         1,232,171         3,692,277         2,925,341
                                        ------------      ------------      ------------      ------------

                                           2,061,125         2,530,767         7,487,979         6,586,684
                                        ------------      ------------      ------------      ------------

Loss from operations                      (1,779,344)       (2,137,151)       (6,234,775)       (5,506,337)
Interest income                               15,600            86,347            90,566           235,860
                                        ------------      ------------      ------------      ------------

Loss before income tax benefit            (1,763,744)       (2,050,804)       (6,144,209)       (5,270,477)
State tax benefit                            254,269                --           254,269                --
                                        ------------      ------------      ------------      ------------

Net loss                                $ (1,509,475)     $ (2,050,804)     $ (5,889,940)     $ (5,270,477)
                                        ============      ============      ============      ============

Net loss per share, basic and
diluted                                 $      (0.15)     $      (0.20)     $      (0.56)     $      (0.53)
                                        ============      ============      ============      ============

Weighted average shares outstanding       10,222,908        10,419,666        10,556,589         9,866,895
                                        ============      ============      ============      ============

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

                                                    4


<PAGE>

                                                    IVIVI TECHNOLOGIES, INC.

                                               STATEMENTS OF STOCKHOLDERS' EQUITY
                                          FOR THE NINE MONTHS ENDED DECEMBER 31, 2008


                                  COMMON STOCK                 ADDITIONAL                                            TOTAL
                          -----------------------------         PAID-IN        ACCUMULATED        TREASURY        STOCKHOLDERS'
                             SHARES            AMOUNT           CAPITAL          DEFICIT           STOCK             EQUITY
                          ------------      ------------     ------------     ------------      ------------      ------------

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

Exercise of stock
  options                       51,800            15,945               --               --                --            15,945

Purchase of
  treasury stock              (650,000)               --               --               --           (97,500)          (97,500)

Share based
  compensation                      --                --          916,952               --                --           916,952

Net loss                            --                --               --       (5,889,940)               --        (5,889,940)
                          ------------      ------------     ------------     ------------      ------------      ------------

Balance
  - December 31, 2008       10,116,930      $ 26,199,461     $ 13,263,139     $(37,105,413)     $    (97,500)     $  2,259,687
                          ============      ============     ============     ============      ============      ============


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

                                                               5


<PAGE>

                                             IVIVI TECHNOLOGIES, INC.

                                             STATEMENTS OF CASH FLOWS
                                      FOR THE NINE MONTHS ENDED DECEMBER 31,
                                                   (UNAUDITED)


                                                                                       2008              2007
                                                                                    -----------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                            $(5,889,940)     $(5,270,477)
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                                                       210,256           63,447
    Share based compensation                                                            916,952        1,347,569
    Provision for doubtful accounts                                                          --          (12,405)
    Loss on disposal of fixed assets                                                      3,056               --
    Amortization of deferred revenue                                                    (31,250)         (46,875)
    Write-off of deferred revenue from termination of Allergan contract                (380,208)              --
    Write-off of deferred licensing costs from termination of Allergan contract          69,588               --
    Other                                                                                  (228)              --
Changes in operating assets and liabilities:
  (Increase)/decrease in:
    Accounts receivable                                                                 281,409         (132,483)
    Inventory                                                                          (117,062)         (39,171)
    Inventory held by Allergan                                                         (142,062)              --
    Prepaid expenses and other current assets                                            16,997           10,529
    Deposits with affiliate                                                             133,731         (323,444)
  Increase in:
    Accounts payable and accrued expenses                                               129,516           61,582
    Deferred revenue                                                                     35,640               --
                                                                                    -----------      -----------
                                                                                     (4,763,605)      (4,341,728)
                                                                                    -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                                                  (7,975)        (401,964)
    Proceeds from disposal of property and equipment                                        750               --
    Increases in equipment in use or under rental agreements                            (48,874)         (94,127)
    Increases in restricted cash                                                         (1,030)         (46,838)
    Increases in intangible assets                                                     (228,976)        (270,884)
                                                                                    -----------      -----------
                                                                                       (286,105)        (813,813)
                                                                                    -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of stock in connection with
   private placement offering                                                                --        4,865,000
Exercise of stock options and warrants                                                   15,945          260,981
Purchase of treasury stock                                                              (97,500)              --
Affiliate advances                                                                           --            3,011
                                                                                    -----------      -----------
                                                                                        (81,555)       5,128,992
                                                                                    -----------      -----------

Decrease in cash and cash equivalents                                                (5,131,265)         (26,549)
Cash and cash equivalents, beginning of period                                        6,600,154        8,310,697
                                                                                    -----------      -----------

Cash and cash equivalents, end of period                                            $ 1,468,889      $ 8,284,148
                                                                                    ===========      ===========

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

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

                                                        6
</TABLE>


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                   (UNAUDITED)


NOTE 1 -- BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF
PRESENTATION

The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and the instructions to Form 10-Q for smaller
reporting companies (as defined in Rule 12b-2 of the Exchange Act) and do not
include all the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation of the results
for the interim periods have been included. Operating results for the three
months and nine months ended December 31, 2008 are not necessarily indicative of
the results that may be expected for the fiscal year ending March 31, 2009. The
accompanying financial statements and related notes and the information included
under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations" should be read in conjunction with our audited
financial statements and related notes thereto included on our Annual Report on
Form 10-KSB for the fiscal year ended March 31, 2008.

GOING CONCERN

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As reflected in
the accompanying financial statements, we had a net loss of $1,509,475 and
$5,889,940 for the three and nine months ended December 31, 2008 and net cash
used in operating activities of $4,763,605 for the nine months ended December
31, 2008. In addition, at December 31, 2008, we had cash balances of
approximately $1.5 million which we estimate will be sufficient to meet our
cash requirements through March 31, 2009. These factors, among others, raise
substantial doubt about our ability to continue as a going concern. Our
ability to continue as a going concern is dependent on our ability to raise
additional funds to finance our operations. The financial statements do not
include any adjustments that might be necessary if we are unable to continue
as a going concern.

ORGANIZATIONAL MATTERS
ORGANIZATION

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

NATURE OF BUSINESS

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

RECLASSIFICATIONS

During the three months and six months ended September 30, 2008 we reported a
loss on the termination of the Allergan contract in the amount of $92,423 which
was disclosed as a net number in our non-operating expenses and was not part of
our operating results on our statements of operations for the three and six
months ended September 30, 2008.


                                       7


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


Our statement of operations for the nine months ended December 31, 2008 has been
reclassified to present the components of the $92,423 on the termination of the
Allergan contract in operating revenues and expenses as follows:

<TABLE>
<S>     <C>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             RECLASSIFIED FOR REPORTING PURPOSES IN
        AS REPORTED IN OUR FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED                        OUR FORM 10-Q FOR THE NINE MONTHS
                               SEPTEMBER 30, 2008                                                 ENDED DECEMEMBER 31, 2008
------------------------------------------------------------------------------------------- ----------------------------------------
                                                                                                                 COST OF REVENUE
------------------------------------------------------------------------------------------- ----------------------------------------
                                                                                                 Loss on
                                                                                             termination of       Cost of licensing
                                                                                            Allergan contract,    sales and fees -
     Line item description of loss on termination of Allergan contract           Amount        incr./(decr.)         incr./(decr.)
------------------------------------------------------------------------------------------- ----------------------------------------

Inventory value of goods to be returned from Allergan                        $    (447,926)                --       $    (447,926)
Termination payment to repurchase inventory from Allergan                          450,000      $     450,000                  --
Reserve for repackaging and relabeling of Single unit inventory
    held by Allergan (1)                                                            37,500                 --              37,500
Write down of Double unit inventory held by Allergan (2)                           268,364                 --             268,364
Write down of Double unit inventory on hand (3)                                     53,805                 --              53,805
Reserve for repackaging and relabeling of single unit inventory
    on hand (4)                                                                     28,300                 --              28,300
Estimated freight, warehousing and other related costs                              13,000                 --              13,000
Deferred revenue balance at 9/30/08 relating to Allergan contract                 (380,208)          (380,208)                 --
Deferred licensing cost balance at 9/30/08 relating to Allergan contract            69,588             69,588                  --

                                                                             -------------      ----------------------------------
Loss on termination of the Allergan contract                                 $      92,423      $     139,380       $     (46,957)
                                                                             =============      ==================================
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The inventory was comprised of single units and double units. The single
units were valued at Lower of Cost or Market at $179,562 less an allowance for
$37,500 representing a cost to repackage and re-label the inventory to be
available for sale to customers other than Allergan and in different markets. We
determined these single units could be sold into our existing markets once the
units are repackaged and relabeled.

(2) The double units, currently used only in the plastic surgery marketplace,
were valued at Lower of Cost or Market at $268,364 less an allowance for
$268,364 representing the write down of these units to $0. Under our agreement
with Allergan, we are prohibited from entering into an agreement in the U.S.
with a distributor in the plastic surgery market for a period of six months from
the effective date of the termination agreement. As of the current date we are
exploring market possibilities in the U.S. and internationally. We are uncertain
of our ability to sell or, enter into a distribution agreement to sell, these
double units in the plastic surgery market at the end of the six month period
allotted under the Allergan termination agreement.

(3) As a result of the termination of the Allergan Agreement, we recorded an
allowance for the double units in inventory at our warehouse of $53,805
representing the full value of double units on hand at September 30, 2008. These
units are not inclusive of the units located in Allergan's warehouse at
September 30, 2008.

(4) We had $139,050 of single units in inventory at September 30, 2008 packaged
and labeled for sale to Allergan and, consequently, we set up an allowance for
inventory on hand of $28,300 for relabeling and repackaging of this inventory.

If the above reclassifications were made as of September 30, 2008, the effect on
costs and expenses would have been as follows:

<TABLE>
<S>                        <C>
                                      Three months ended                                        Six months ended
                       September 30, September 30,                           September 30, September 30,
                           2008          2008                                   2008          2008
                       ---------------------------------------------------   --------------------------------------------------
                       Reclassified  As Reported     Change $     Change %   Reclassified  As Reported     Change $    Change %
                       ------------  ------------  ----------   ----------   ------------  ------------  ----------  ----------
Costs and expenses        2,796,183     2,703,760      92,423         3.4%      5,426,854     5,334,431      92,423        1.7%
Loss from operations     (2,207,956)   (2,115,533)    (92,423)        4.4%     (4,455,431)   (5,334,431)    (92,423)       1.7%
Loss on settlement of
  Allergan contract              --       (92,423)     92,423      -100.0%             --       (92,423)     92,423       -100%
Loss before provision
  for income taxes       (2,178,150)   (2,178,150)         --         0.0%     (4,380,465)   (5,426,854)         --       0.00%
</TABLE>

Our revenues for the three and six months ended September 30, 2008 remains the
same. Our net losses and our net losses per share for the three and six months
ended September 30, 2008 remains the same. Our Balance Sheet at September 30,
2008 was not affected by this reclassification.

Certain items in the prior period financial statements have been reclassified to
conform to the current period presentation. Such reclassifications have had no
impact on previously reported total assets, equity, revenues and net loss.

                                       8

<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


FDA MATTERS

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products marketed in the United States; the SofPulse M-10, Roma and
Torino PEMF products. On December 15, 2008, we received FDA 510(k) clearance for
our currently marketed targeted pulsed electromagnetic field ("tPEMF")
therapeutic products. The 510(k) substantial equivalence determination
specifically covers the Company's SofPulse models 912-M10, Roma3 and Torino II
products which are indicated for the palliative treatment of post operative pain
and edema in superficial soft tissue.

On April 3, 2008, we filed a 510(k) submission with the FDA for a small, compact
product utilizing our tPEMF therapy technology for the symptomatic relief and
management of chronic, intractable pain, for relief of pain associated with
arthritis and for the adjunctive treatment of post-surgical and post-trauma
acute pain. The FDA requested additional information from us in a letter dated
April 25, 2008. During October 2008, we requested a voluntary withdrawal of this
510(k). We are currently working on a new 510(k) for this indication and we
requested a meeting with the FDA to discuss our future submission.

FAIR VALUE OF FINANCIAL INSTRUMENTS

In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (Statement No. 157), which defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. Statement No. 157 applies to other accounting
pronouncements that require or permit fair value measurements and does not
require any new fair value measurements.

Effective April 1, 2008, we adopted the provisions of Statement No. 157 for
financial assets and liabilities, as well as for any other assets and
liabilities that are carried at fair value on a recurring basis. The adoption of
the provisions of Statement No. 157 related to financial assets and liabilities
and other assets and liabilities that are carried at fair value on a recurring
basis did not materially impact the company's financial position and results of
operations.

In February 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 159 ("FAS 159"), The Fair Value Option for
Financial Assets and Financial Liabilities, which permits entities to choose to
measure many financial instruments and certain other items at fair value which
are not currently required to be measured at fair value.

Effective April 1, 2008, we adopted the provisions of Statement No. 159 for
financial assets and liabilities. The adoption of the provisions of Statement
No. 159 related to financial assets and liabilities that are carried at fair
value on a recurring basis did not materially impact the company's financial
position and results of operations.

For certain of our financial instruments, including accounts receivable,
inventories, accounts payable and accrued expenses, the carrying amounts
approximate fair value due to their relatively short maturities.

INTANGIBLE ASSETS

Intangible assets consist of patents and trademarks of $718,346, net of $80,140
of accumulated amortization as of December 31, 2008. Patents and trademarks are
amortized over their legal life, if issued, or the life of the related Revenue
Sharing Agreement (see Note 2), whichever is less, on a straight-line basis.
Amortization expense totaled $0 and $56,106 for the three and nine month periods
ended December 31, 2008, respectively, and $14,061 and $19,582 for the three and
nine month periods ended December 31, 2007, respectively. In the current quarter
we mutually decided with Allergan to terminate our Allergan agreement. We
continue to utilize these patents and obtain new patents for the sale of our
products throughout the world.


                                       9


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


As of December 31, 2008, we had two issued U.S. patents, one petition pending
for one issued U.S. patent and eleven non-provisional pending U.S. patent
applications covering various embodiments and end use indications for tPEMF and
related signals and configurations. We have seven issued international patents
and one hundred pending patent applications in various foreign countries.
Although the majority of foreign pending patents applications were required
under our Allergan contract; we believe the uses we have applied for in our
patents are for our technology and therefore we believe our patents can be used
for a variety of our products and are not limited to the Allergan product.
Therefore we do not believe there is impairment in the value of these patents as
a result of the termination of the agreement with Allergan. Due to our limited
cash on hand, we may not be able to continue to pursue our currently filed
international patents. We intend, however, to continue to pursue all our filed
domestic patents.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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

         Research and development             $  433,621
         Professional fees                       265,264
         Compensation & employee benefits        296,308
         Insurances                               90,314
         Other                                    73,152
                                              ----------
                                              $1,158,659
                                              ==========

LOSS PER SHARE

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

Per share basic and diluted net loss amounted to $0.15 and $0.56 for the three
and nine months ended December 31, 2008 and $0.20 and $0.53 for the three and
nine months ended December 31, 2007, respectively. There were 6,392,860
potential shares and 5,381,908 potential shares at December 31, 2008 and 2007,
respectively, which were excluded from the shares used to calculate diluted
earnings per share, as their inclusion would reduce net loss per share.

On October 15, 2008, we repurchased an aggregate of 650,000 shares of our common
stock, without par value, for an aggregate purchase price of $97,500, or $0.15
per share in a private transaction. The repurchased shares represented
approximately 6% of our outstanding shares of common stock on the date
purchased. The repurchased shares were recorded as shares held in treasury on
our balance sheet.

COMMON SHARE OPTIONS AND WARRANTS ISSUED SHARE BASED COMPENSATION

We follow the provisions of SFAS 123(R) "SHARE-BASED PAYMENT," using the
modified prospective method. Under this method, we recognized compensation cost
based on the grant date fair value, using the Black Scholes option value model,
for all share-based payments granted on or after April 1, 2006 plus any awards
granted to employees prior to April 1, 2006 that remained unvested at that time.
We use the fair value method for equity instruments granted to non-employees and
use the Black Scholes option value model for measuring the fair value of
warrants and options. The share-based fair value compensation is determined as
of the date of the grant or the date at which the performance of the services is
completed (measurement date) and is recognized over the periods in which the
related services are rendered.


                                       10


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


Fair value is computed using the Black Scholes method at the date of grant of
the options based on the following assumption ranges: (1) risk free interest
rate of 1.78% to 5.03%; (2) dividend yield of 0%; (3) volatility factor of the
expected market price of our common stock of 44% to 262.5%; and (4) an expected
life of the options of 1 to 6.5 years. The foregoing option valuation model
requires input of highly subjective assumptions. Because common share purchase
options granted to employees and directors have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value of estimates, the
existing model does not in the opinion of our management necessarily provide a
reliable single measure of the fair value of common share purchase options we
have granted to our employees and directors.

Share based compensation expense consists of the following components which are
included in our statements of operations under the following captions:

<TABLE>
<S>     <C>
                                            Three months ended            Nine months ended
                                       ---------------------------   ---------------------------
                                       December 31,   December 31,   December 31,   December 31,
                                           2008           2007           2008           2007
                                        ----------     ----------     ----------     ----------

         Cost of rentals                $       11     $       11     $       32     $       32
         Research and development           90,762         23,941        106,582        300,039
         Sales and marketing                27,863         34,884        106,100        100,691
         General and administrative        188,887        493,209        704,238        946,807
                                        ----------     ----------     ----------     ----------

                                        $  307,523     $  552,045     $  916,952     $1,347,569
                                        ==========     ==========     ==========     ==========
</TABLE>

On September 29, 2008, we agreed to the exercise price of warrants to be issued
to a consultant to us. Upon issuance, the warrants will have an initial exercise
price equal to $0.45 per share, and shall be exercisable for up to such number
of shares of our common stock equal to 4% of the outstanding shares of our
common stock, which shall be determined as follows: (i) after the completion of
a successful financing, to be defined in the warrant agreement, the warrant
shall become exercisable as to 2% of the shares of our common stock outstanding
immediately after the completion of such financing and (ii) after the clearance
of our currently marketed products with the U.S. Food & Drug Administration, 2%
of the shares of our common stock outstanding immediately after such resolution.
On December 15, 2008, we announced we received 510(k) clearance for our
currently marketed products and, therefore warrants to purchase our common stock
will be issued to such consultant upon final negotiation of the final terms of
the warrant. The warrant will have a term of ten years. During the three and
nine months ended December 31, 2008, we recorded and expense in the amount of
$87,363 related to these warrants.

NOTE 2 - DEFERRED REVENUE AND DISTRIBUTION AGREEMENTS

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

In November 2006, we received $500,000 which is a non-refundable payment under
the terms of this Agreement and was recorded as deferred revenue and is being
amortized over the initial term of the Agreement. We have recognized $0 and
$15,625 in three month periods ended December 31, 2008 and 2007, respectively,
and we have recognized $31,250 and $46,875, in nine month periods ended December
31, 2008 and 2007, respectively, as revenue from this agreement.

We began shipping our products to Allergan during the quarter ended December 31,
2007. During the three months ended December 31, 2007, we recorded sales of
$91,892 to Allergan. There were no sales to or revenues from Allergan during the
three months ended December 31, 2008. During the nine months ended December 31,
2008, we recorded sales of $94,277 to Allergan. In addition, we recorded $5,509
in royalties received from Allergan during the nine months ended December 31,
2008 for sales made by Allergan. No royalties received from Allergan were
recorded during the nine months ended December 31, 2007.

                                       11

<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


On August 6, 2008, we received a letter from Allergan notifying us of its
determination to cease distribution of our products under this Agreement. On
November 19, 2008, Ivivi and Allergan entered into a mutual termination
agreement (the "Termination Agreement") pursuant to which, among other things,
the parties terminated the Agreement. Pursuant to the Termination Agreement,
Ivivi has paid Allergan $450,000, in exchange for the return of all Ivivi's
product sold to Allergan under the Agreement that was held in inventory by
Allergan and we accrued $13,000 for estimated shipping costs to be paid to
a third party carrier. Notwithstanding such termination, the parties have
agreed that certain provisions of the Agreement relating to technical support,
product warranties and indemnification with respect to products sold by
Allergan under the Agreement shall survive the termination thereof. Ivivi
also agreed that during the period commencing on November 19, 2008 and
ending on the 180th day immediately thereafter, Ivivi will not enter into a
distribution agreement with any third-party distributor for the distribution
by such distributor of the product in the United States, directly or
indirectly, to or through any third party who may use, sell or purchase
certain of Ivivi's products in conjunction with any aesthetic or bariatric
procedure.

As a result of our Termination Agreement with Allergan, which we believe is a
one-time event with a distributor and licensee and should not reoccur, our
Statement of Operations for the nine months ended December 31, 2008, includes a
loss on the termination of the Allergan contract in the amount of $139,380 which
is comprised of the settlement payment of $450,000 and a charge in the amount of
$69,588 representing the remaining balance of deferred licensing costs at
September 30, 2008, less a credit in the amount of $380,208 representing the
remaining deferred revenue balance as of September 30, 2008 from the
non-refundable payment of $500,000 we received from Allergan in November 2006.
In addition, as a result of our Termination Agreement with Allergan, our
Statement of Operations for the nine months ended December 31, 2008, we recorded
a net credit to our cost of sales to licensee and fees in the amount of $46,957,
which is comprised of (i) a credit of $447,926 for the value of the inventory
returned by Allergan, (ii) a charge in the amount of $268,364 for the write down
of double SofPulse units returned by Allergan to $0, (iii) a charge in the
amount of $53,805 for the write down of double SofPulse units in stock to $0,
(iv) a charge in the amount of $37,500 to reserve for repackaging and relabeling
costs of the single SofPulse units returned by Allergan, (v) a charge in the
amount of $28,300 to reserve for repackaging and relabeling costs of the single
SofPulse units in stock, and, (vi) a charge in the amount of $13,000 for
freight, warehousing and other related costs associated with the return of the
double and single SofPulse units from Allergan.

On December 18, 2008, we signed a distribution agreement with RecoverCare to
exclusively sell or rent our products into long term acute care hospitals
(LTACHS) in the United States and the non-exclusive right to sell or rent our
products into acute care facilities and Veterans Administration long term care
facilities in the Unites States.

Effective January 1, 2009, we assigned our agreement with current customers in
these markets to RecoverCare and therefore a significant portion of our ongoing
revenue in these markets will remain with RecoverCare. We will receive certain
minimum payments from RecoverCare as well as a specified revenue share for
existing and new business handled by RecoverCare. The definitive agreement has a
three year term and the distribution and revenue share portion of the agreement
is effective January 1, 2009, with an upfront fee to RecoverCare of $26,000 for
certain expenses incurred by them on our behalf. Our revenues for the three and
nine months ended December 31, 2008 were unaffected by this agreement.

At December 31, 2008, our deferred revenue account balance of $35,640 represents
funds received from a customer in September 2008 for an extended one year
service contract fee beginning October 1, 2009. Beginning October 1, 2009, we
will amortize this amount over 12 months on a straight-line basis.


                                       12


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


NOTE 3 -- RELATED PARTY TRANSACTIONS

Pursuant to a management services agreement, dated as of August 15, 2001, as
amended, ADM Tronics Unlimited, Inc. ("ADM"), a significant stockholder of the
company, provides us with administrative, technical, engineering and regulatory
services and allocates portions of its real property facilities for use by our
research and development employees. Since January 2008, ADM has provided us with
very limited administrative, technical, engineering and regulatory services as a
result of our move to our own facilities which concluded as of the end of
December 2007. In addition, effective April 1, 2007, we purchase finished goods
along with certain components from ADM which, in some cases, we are required to
pay ADM deposits.

At December 31, 2008 and March 31, 2008, we advanced ADM $108,097 and $241,828,
respectively, for future purchases of finished goods.

Pursuant to an IT Services agreement, we share certain costs related to
hardware, software and employees. We have not billed ADM nor has ADM billed us
for any charges, which were de minimus, under this agreement for the three and
nine month periods ended December 31, 2008.

ADM serves as the exclusive manufacturer of medical and other devices or
products to be distributed by us.

The amounts included in cost of rental revenue in our Statements of Operations
relating to services provided by ADM were $0 and $0 for the three months ended
December 31, 2008 and 2007, respectively, and $0 and $3,807 for the nine months
ended December 31, 2008 and 2007, respectively.

The amounts included in general and administrative expense, representing ADM's
allocations consisting of amounts payable under our management services
agreement with ADM, were $10,809 and $55,781 for the three months ended December
31, 2008 and 2007, and $36,695 and $171,646 for the nine months ended December
31, 2008 and 2007, respectively. Included in the general and administrative
expense representing ADM's allocations were salary allocations from ADM of
$38,932 and $115,351 for the three and nine months ended December 31, 2007.
Salary allocations from ADM during the three and nine months ended December 31,
2008 were $0 and $2,690, respectively.


                                       13


<PAGE>

                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


We purchased $2,896 and $247,799 of finished goods and certain components from
ADM at contracted rates during the three months ended December 31, 2008 and
2007, respectively, and $517,823 and $459,701 during the nine months ended
December 31, 2008 and 2007, respectively.

Our activity with ADM is summarized as follows:

<TABLE>
<S>     <C>
                                      Three months ended            Nine months ended
                                ---------------------------   ---------------------------
                                December 31,   December 31,   December 31,   December 31,
                                    2008           2007           2008           2007
                                 ---------      ---------      ---------      ---------


         Balance - beginning     $ 108,697      $  98,971      $ 241,828      $ (36,657)

         Advances                       --        297,780        160,055        421,435
         Purchases                  (2,896)      (247,799)      (517,823)      (459,701)
         Charges                   (13,126)       (57,443)       (54,020)      (176,878)
         Payments                   15,422        192,267        278,057        535,577
                                 ---------      ---------      ---------      ---------

         Balance - end           $ 108,097      $ 283,776      $ 108,097      $ 283,776
                                 =========      =========      =========      =========
</TABLE>

NOTE 4 - INCOME TAXES

During December 2008, we received approval from the New Jersey Economic
Development Authority ("NJEDA") to sell $279,417 of tax benefits generated from
net operating losses related to our 2007 tax year. Under the terms of this NJEDA
program the proceeds received from the New Jersey Emerging Technology and
Biotechnology Financial Assistance Program must be used to fund expenses
incurred in connection with our operations in New Jersey. During December 2008,
we sold the tax benefits of $279,417, pursuant to the New Jersey State Tax
Credit Transfer Program and on December 18, 2008, we received $254,269 in
exchange, net of fees charged by ADP, Inc., pursuant to this program.

As of December 31, 2008, we had net operating losses for Federal tax purposes
available for carryover of approximately $22,692,000 and approximately
$19,587,000 of net operating losses available for carryover for state purposes.
As of December 31, 2008, we had deferred tax assets of approximately $8,766,000
for Federal tax purposes and approximately $7,524,000 of deferred tax assets for
state purposes. Our net operating losses will expire from 2010 through 2028. We
have provided a 100% valuation allowance for the deferred tax benefit resulting
from the net operating loss carryover due to our limited operating history. In
addressing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences are deductible.

NOTE 5 - CONCENTRATIONS

We maintain cash balances which at times, exceed federally insured limits.
During the nine months ended December 31, 2008, two customers accounted for 82%
of our direct sales revenue, one customer accounted for 44% of our rental
revenue and one customer accounted for 100% of our licensing sales and fees
revenue (See NOTE 2 - DEFERRED REVENUE AND DISTRIBUTION AGREEMENTS). During the
nine months ended December 31, 2007, three customers accounted for 78% of our
direct sales revenue, one customer accounted for 38% of our rental revenue and
one customer accounted for 100% of our licensing sales and fees revenue. As of
December 31, 2008, three customers accounted for 62% of our accounts receivable
and as of December 31, 2007, three customers accounted for 64% for our accounts
receivable. The loss of these major customers could have a material adverse
impact on our operations and cash flow.


                                       14


<PAGE>


                            IVIVI TECHNOLOGIES, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2008
                                   (UNAUDITED)


NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS

On May 9, 2008, the FASB issued Staff Position ("FSP") APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlements), which clarifies that convertible debt
instruments that may be settled in cash upon conversion (including partial cash
settlement) are not addressed by paragraph 12 of APB Opinion No. 14, Accounting
for Convertible Debt and Debt Issued with Stock Purchase Warrants. The FSP
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity's
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years. The Company has not completed its evaluation of the impact
of the effect, if any, the adoption of FSP APB 14-1 would have.

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

NOTE 7 - LEGAL PROCEEDINGS

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004. On April 30, 2008, during a conference before the Hon.
Brian R. Martinotti J.S.C. all claims were settled and the terms of the
settlement were placed on the record. The settlement calls for the defendants to
dismiss with prejudice all counterclaims filed against us and to pay us the sum
of $120,000 in installments. The terms provide for an initial payment of $15,000
and the balance to be paid in equal monthly installments of $5,000. In the event
of default defendants shall be liable for an additional payment of $30,000,
interest at the rate of 8% per annum as well as costs and attorney's fees. The
settlement was documented in a written agreement executed by the parties and the
initial payment of $15,000 was paid on June 18, 2008. The defendants defaulted
on the payment due July 2008 and we were advised that the defendants filed for
protection under Chapter 11 of the United States Bankruptcy Code on July 21,
2008. As of December 31, 2008, we have only recognized the cash received. We
have filed our proof of claim with the Bankruptcy Court.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount which Ivivi has refuted. We responded to Stonefield Josephson's demand
for arbitration, which we believe was procedurally defective and premature due
to Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,
2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No.BER-l-872-08 on January 31, 2008. A commencement of arbitration notice
initiated by Stonefield Josephson was received by us on March 11, 2008. In March
and April motions were filed by us and Stonefield Josephson which sought various
forms of relief including the forum for resolution of the claims. On June 3,
2008, the court determined that the language in the engagement agreement
constituted a forum selection clause and the claims should be decided in
California. On June 19, 2008, we filed a complaint against Stonefield Josephson
in the Superior Court of California, Los Angeles County. On July 18, 2008, the
court denied our request for reconsideration of his order dated June 3, 2008.
The arbitration hearing commenced on November 17, 2008. On January 19, 2009, the
arbitrator rendered the award and found in our favor and determined that no
additional fees were owed by Ivivi to Stonefield. The arbitrator further found
Ivivi to be the prevailing party. The award is final. The issue of attorney's
fees and costs is reserved for Phase II of the arbitration. As a result, at
December 31, 2008, we reversed $105,707 which we previously included in
professional fees and accrued expenses for invoices received by us during the
quarters ended March 2006 and December 2005.

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

                                       15


<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion of our operations and financial condition should be
read in conjunction with the Financial Statements and notes thereto included
elsewhere in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the "safe harbor" provisions under section 21E of the Securities
and Exchange Act of 1934 and the Private Securities Litigation Reform Act of
1995 under Section 27A of the Securities Act of 1933, as amended. We use
forward-looking statements in our description of our plans and objectives for
future operations and assumptions underlying these plans and objectives.
Forward-looking terminology includes the words "may", "expects", "believes",
"anticipates", "intends", "forecasts", "projects", or similar terms, variations
of such terms or the negative of such terms. These forward- looking statements
are based on management's current expectations and are subject to factors and
uncertainties which could cause actual results to differ materially from those
described in such forward-looking statements. We expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this report to reflect any change in our
expectations or any changes in events, conditions or circumstances on which any
forward-looking statement is based. Factors which could cause such results to
differ materially from those described in the forward- looking statements
include those set forth under "Risk Factors" in our Annual Report on Form 10-KSB
for the fiscal year ended March 31, 2008 and our other filings with the
Securities and Exchange Commission.

SUPERVISION AND REGULATION -- SECURITIES AND EXCHANGE COMMISSION

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

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

OVERVIEW

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

We have conducted research and development activities and performed sales and
marketing but we have generated limited revenues to date and have incurred
significant losses since our inception. At December 31, 2008, we had an
accumulated deficit of approximately $37.1 million. We expect to incur
additional operating losses, as well as negative cash flow from operations for
the foreseeable future as we continue our research and development efforts for
the development of existing and new applications for our tPEMF technology. We
are focusing our research and development activities on optimizing the signal
parameters of our tPEMF technology, enabling us to produce improved clinical
outcomes in the field of wound care, pain and edema, osteoarthritis and
cardiovascular disease.

We recognize revenues from the rental and direct sale of our products and the
sale of our products through distributors.

                                       16


<PAGE>

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

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

On August 6, 2008, we received a letter from Allergan notifying us of its
determination to cease distribution of our products under this Agreement. On
November 19, 2008, Ivivi and Allergan entered into a mutual termination
agreement (the "Termination Agreement") pursuant to which, among other things,
the parties terminated the Agreement. Pursuant to the Termination Agreement,
Ivivi has paid Allergan $450,000, in exchange for the return of all Ivivi's
product sold to Allergan under the Agreement that was held in inventory by
Allergan. Notwithstanding such termination, the parties have agreed that certain
provisions of the Agreement relating to technical support, product warranties
and indemnification with respect to products sold by Allergan under the
Agreement shall survive the termination thereof. Ivivi also agreed that during
the period commencing on November 19, 2008 and ending on the 180th day
immediately thereafter, Ivivi will not enter into a distribution agreement with
any third-party distributor for the distribution by such distributor of the
product in the United States, directly or indirectly, to or through any third
party who may use, sell or purchase certain of Ivivi's products in conjunction
with any aesthetic or bariatric procedure.

As a result of our Termination Agreement with Allergan, which we believe is a
one-time event with a distributor and licensee and should not reoccur, our
Statement of Operations for the nine months ended December 31, 2008, includes a
loss on the termination of the Allergan contract in the amount of $139,380 which
is comprised of the settlement payment of $450,000 and a charge in the amount of
$69,588 representing the remaining balance of deferred licensing costs At
September 30, 2008, less a credit in the amount of $380,208 representing the
remaining deferred revenue balance as of September 30, 2008 from the
non-refundable payment of $500,000 we received from Allergan in November 2006.
In addition, as a result of our Termination Agreement with Allergan, our
Statement of Operations for the nine months ended December 31, 2008, we recorded
a net credit to our cost of sales to licensee and fees in the amount of $46,957,
which is comprised of (i) a credit of $447,926 for the value of the inventory
returned by Allergan, (ii) a charge in the amount of $268,364 for the write down
of double SofPulse units returned by Allergan to $0, (iii) a charge in the
amount of $53,805 for the write down of double SofPulse units in stock to $0,
(iv) a charge in the amount of $37,500 to reserve for repackaging and relabeling
costs of the single SofPulse units returned by Allergan, (v) a charge in the
amount of $28,300 to reserve for repackaging and relabeling costs of the single
SofPulse units in stock, and, (vi) a charge in the amount of $13,000 for
freight, warehousing and other related costs associated with the return of the
double and single SofPulse units from Allergan.

On December 18, 2008, we signed a distribution agreement with RecoverCare to
exclusively sell or rent our products into long term acute care hospitals
(LTACHS) in the United States and the non-exclusive right to sell or rent our
products into acute care facilities and Veterans Administration long term care
facilities in the Unites States.

Effective January 1, 2009, we assigned our agreement with current customers in
these markets to RecoverCare and therefore a significant portion of our ongoing
revenue in these markets will remain with RecoverCare. We will receive certain
minimum payments from RecoverCare as well as a specified revenue share for
existing and new business handled by RecoverCare. The definitive agreement has a
three year term and the distribution and revenue share portion of the agreement
is effective January 1, 2009, with an upfront fee to RecoverCare of $26,000 for
certain expenses incurred by them on our behalf. Our revenues for the three and
nine months ended December 31, 2008 were unaffected by this agreement.

At December 31, 2008, our deferred revenue account balance of $35,640 represents
funds received from a customer in September 2008 for an extended one year
service contract fee beginning October 1, 2009. Beginning October 1, 2009, we
will amortize this amount over 12 months on a straight-line basis.

                                       17

<PAGE>

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

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

We have been, and in the future may be, required to undertake time-consuming and
costly development activities and seek regulatory approval or clearance for new
products or technologies. We may not be able to obtain regulatory approval or
clearance for new products or technologies or new treatments through existing
products. The completion of the development of any new products or technologies
or new uses of existing products will remain subject to all the risks associated
with the commercialization of new products based on innovative technologies,
including:

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

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

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

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

o        the ability of ADM Tronics Unlimited, Inc. ("ADM") or other
         manufacturers utilized by us to effectively and efficiently manufacture
         such new products; and

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

RECENT DEVELOPMENTS

FDA MATTERS

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products marketed in the United States, the SofPulse M-10, Roma and
Torino PEMF products. On December 15, 2008, we received FDA 510(k) clearance for
our currently marketed targeted pulsed electromagnetic field (tPEMF) therapeutic
products. The 510(k) substantial equivalence determination specifically covers
our SofPulse models 912-M10, Roma3 and Torino II products which are indicated
for the palliative treatment of post operative pain and edema in superficial
soft tissue.

                                       18

<PAGE>

On April 3, 2008, we filed a 510(k) submission with the FDA for a small, compact
product utilizing our targeted pulsed electromagnetic field ("tPEMF") therapy
technology for the symptomatic relief and management of chronic, intractable
pain, for relief of pain associated with arthritis and for the adjunctive
treatment of post-surgical and post-trauma acute pain. The FDA requested
additional information from us in a letter dated April 25, 2008. During October
2008, we requested a voluntary withdrawal of this 510(k). We are currently
working on a new 510(k) for this indication. We requested a meeting with the FDA
to discuss this filing.

We continue to be engaged in research and development activities for additional
medical applications of our technology and we expect to file 510(k) submissions
or other marketing applications for such additional uses in the future.

RESULTS OF OUR STUDY AT CLEVELAND CLINIC FLORIDA

We announced data from our cardiac trial during June 2008. The objectives of
this trial with our tPEMF(tm) technology in this patient population were to
evaluate safety: measure tPEMF(tm) effects on myocardial perfusion, ventricular
function, clinical symptoms of angina and physical limitations, and lastly,
assess the sustainability of any effects 2 months after treatment was completed.
The patients administered treatment to themselves for 30 minutes, twice a day
for 3 months. This consisted of placing a lightweight vest over the chest, which
held a circular applicator over the left breast. Patients were evaluated at
baseline, 1, 3 and 5 month intervals, with patients receiving the active
treatment showing significant reductions in anginal pain and frequency. As the
improvements at the 5 month point demonstrated the highest significance, these
improvements persisted even after the therapy had been stopped for 2 months.
While there were dramatic findings in cardiac perfusion for some patients, the
short study duration and limited number of subjects did not allow statistical
significance to be seen at this time. The device used in this trial was not the
device currently marketed by us for treatment of postoperative edema and pain.
There would be no expectation of getting similar results with the currently
marketed device. FDA marketing approval or clearance for the device used in the
Cleveland Clinic trial would be necessary for us to market such device. Such
clearance will require additional research studies which would be costly and we
will need additional capital to complete such studies. If we do not receive the
requisite FDA clearance to market products utilizing our tPEMF technology for
those uses, we will not be able to enter the angiogenesis and vascularization
market.

COMMENCEMENT OF CLINICAL TRIAL TO EXAMINE EFFICACY OF IVIVI'S TPEMF TECHNOLOGY
TO RELIEVE PAIN FROM KNEE OSTEOARTHRITIS AT HENRY FORD HOSPITAL

On August 25, 2008, we announced initiation of patient enrollment at Henry Ford
Hospital, Detroit Michigan, for a randomized, double-blinded, placebo-controlled
clinical trial on the efficacy of Ivivi's targeted proprietary pulsed
electromagnetic field technology for the treatment of knee osteoarthritis. The
IRB approved study is designed to determine if Ivivi's tPEMF technology is
effective in reducing pain and improving function in individuals who have early
to moderate knee osteoarthritis. The clinical trial may include up to 100
patients. The specific aim of the clinical trial is to evaluate the effects of
tPEMF treatment, two 15 minute application daily, on pain and function over two,
six eight and 12 week intervals. The first patient began treatment during
August, 2008 and the study is anticipated to continue for up to 18 months.

IVIVI REDUCTION IN FORCE

We have reduced our headcount from 28 full time employees to 15 full time
employees in order to reduce costs and expenses. The reductions occurred
throughout all departments with the majority of the employees reduced in the
sales and marketing departments. We feel confident that we can continue
operating our business efficiently with our current employees.

On December 18, 2008, we signed a distribution agreement with RecoverCare to
exclusively sell or rent our products into long term acute care hospitals
(LTACHS) in the United States and the non-exclusive right to sell or rent our
products into acute care facilities and Veterans Administration long term care
facilities in the Unites States.

Effective January 1, 2009, we assigned our agreement with current customers in
these markets to RecoverCare and therefore a significant portion of our ongoing
revenue in these markets will remain with RecoverCare. We will receive certain
minimum payments from RecoverCare as well as a specified revenue share for
existing and new business handled by RecoverCare. The definitive agreement has a
three year term and the distribution and revenue share portion of the agreement
is effective January 1, 2009, with an upfront fee to RecoverCare of $26,000 for
certain expenses incurred by them on our behalf. Our revenues for the three and
nine months ended December 31, 2008 were unaffected by this agreement.

                                       19

<PAGE>

At December 31, 2008, our deferred revenue account balance of $35,640 represents
funds received from a customer in September 2008 for an extended one year
service contract fee beginning October 1, 2009. Beginning October 1, 2009, we
will amortize this amount over 12 months on a straight-line basis.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

o        We recognize revenue primarily from the rental and sales of our
         products and sales and rentals through our distributors. Rental revenue
         is recognized as earned on either a monthly or pay-per-use basis in
         accordance with individual customer agreements. In most cases, we allow
         the rental end-user to evaluate our equipment on a trial basis, during
         which time we provide any demonstration or education necessary for the
         use of our equipment. Rental revenue recognition commences after the
         end of the trial period. All of our rentals are terminable by either
         party at any time. When we use a third party to bill insurance
         companies, we still recognize revenue as our products are used. When
         certain of our distributors bill end users, we recognize rental revenue
         when we are paid by the distributor. When the amount we earn is fixed,
         we recognize revenue net of commissions paid to distributors. Milestone
         payments received from licensing partners are amortized over the
         remaining useful life of the specified licensing agreement.

o        Sales are recognized when our products are shipped to end-users (either
         FOB shipping point or FOB destination point), including medical
         facilities and distributors. Shipping and handling charges and costs
         are immaterial. We have no post shipment obligations other than
         warranties provided with our products and sales returns have been
         immaterial.

o        We provide an allowance for doubtful accounts determined primarily
         through specific identification and evaluation of significant past due
         accounts, supplemented by an estimate applied to the remaining balance
         of past due accounts.

o        Our products held for sale are included in the Balance Sheet under
         "Inventory - Current and Long Term Inventory". At December 31, 2008, we
         also have fully depreciated equipment held for rental, which are our
         products that are rented to third parties, used internally and loaned
         out for marketing and testing.

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

o        In April 2006, we adopted the fair value recognition provisions of SFAS
         No. 123(R), Accounting for Stock-based Compensation, to account for
         compensation costs under our stock option plans. We previously utilized
         the intrinsic value method under Accounting Principles Board Opinion
         No. 25, Accounting for Stock Issued to Employees (as amended). As of
         December 31, 2008, we have used the following assumptions in the Black
         Scholes option pricing model: (i) dividend yield of 0%; (ii) expected
         volatility of 44%-262.5%; (iii) average risk free interest rate of
         1.78%-5.03%; (iv) expected life of 1 to 6.5 years; and (v) estimated
         forfeiture rate of 5%.

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

                                       20

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

On May 9, 2008, the FASB issued Staff Position ("FSP") APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlements), which clarifies that convertible debt
instruments that may be settled in cash upon conversion (including partial cash
settlement) are not addressed by paragraph 12 of APB Opinion No. 14, Accounting
for Convertible Debt and Debt Issued with Stock Purchase Warrants. The FSP
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity's
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years. We have completed our evaluation of the impact of the
effect, if any, the adoption of FSP APB 14-1 would have.

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2008 COMPARED TO THE THREE MONTHS ENDED DECEMBER
31, 2007

Net loss decreased $541,329, or 26%, to $1,509,475, or $0.15 per share, for the
three months ended December 31, 2008 compared to a net loss of $2,050,804, or
$0.20 per share, for the three months ended December 31, 2007. The decrease in
net loss primarily resulted from (i) a decrease in revenues of $111,835, or 28%,
(ii) an increase in research and development expenses of $218,314, or 39%, and
(iii) a decrease in interest income of $70,747, or 82%, partially offset by a
decrease in cost of rentals of $8,320, or 63%, a decrease in cost of sales to
licensee and fees of $117,313, or 100%, a decrease in cost of direct sales of
$11,942, or 51%, a decrease in sales and marketing expenses of $306,393, or 53%,
a decrease in general and administrative expenses of $243,988, or 20%, and the
proceeds from the sale of net operating losses $254,269, or 100%, for the three
months ended December 31, 2008 as compared to the three months ended December
31, 2007.

Total revenue decreased $111,835, or 28%, to $281,781 for the three months ended
December 31, 2008 as compared to $393,616 for the three months ended December
31, 2007. The decrease in revenue was due to an increase in our direct sales of
$79,163, or 88%, to $168,896 for the three months ended December 31, 2008 as
compared to $89,733 for the three months ended December 31, 2007 offset by a
decrease in our rental revenue of $83,481, or 43%, to $112,885 for the three
months ended December 31, 2008 as compared to $196,366 for the three months
ended December 31, 2007 and a decrease in our sales to licensee and fees of
$107,517, or 100%, to $0 for the three months ended December 31, 2008 as
compared to $107,517 for the three months ended December 31, 2007.

Cost of rentals decreased $8,320, or 63%, to $4,825 for the three months ended
December 31, 2008 from $13,145 for the three months ended December 31, 2007, due
to an decrease in the purchase of shipping materials of $3,453 and a decrease in
freight costs of $1,801 during the three months ended December 31, 2008 as
compared to the three months ended December 31, 2007. Cost of rentals includes
depreciation on our Roma units under rental agreements of $3,200 and $6,579 for
the three month periods ended December 31, 2008 and 2007, respectively.

Cost of direct sales decreased $11,942, or 51%, to $11,529 for the three months
ended December 31, 2008 from $23,471 for the three months ended December 31,
2007 as a result of the mix of products sold and the unit cost of these products
during the three months ended December 31, 2008 versus the prior year period.

Cost of sales to licensee and fees decreased to $0 for the three months ended
December 31, 2008 from $117,313 for the three months ended December 31, 2007, or
100%, as a result of the termination of the Allergan contract.

Purchases of finished goods and certain components from ADM amounted to $2,896
and $247,799 for the three months ended December 31, 2008 and December 31, 2007,
respectively.

Research and development expenses increased $218,314, or 39%, to $780,701 for
the three months ended December 31, 2008 from $562,387 for the three months
ended December 31, 2007. The increase resulted primarily from follow-up research
on our cardiovascular research and development trials of approximately $100,000,
an increase in share based compensation of $68,540, and increase in salary and
salary related expenses of $50,487 and an increase in consulting costs of
$26,857, partially offset by decreases in travel costs of $15,547 and a decrease
in patent amortization expense of $11,137. We expect that our research and
development expenses will increase, subject to our cash availability, as we
expand our efforts in the cardiovascular and osteoarthritis areas.

                                       21

<PAGE>

Sales and marketing expenses decreased $306,393, or 53%, to $275,887, for the
three months ended December 31, 2008 as compared to $582,280 for the three
months ended December 31, 2007. The decrease resulted primarily from decreased
salary and salary related costs of $164,031 due to a reduction in our sales
force, a decrease in travel related expenses of $65,055, a decrease in
commission expense of $31,905, a decrease in advertising and promotion expenses
of $27,041, a decrease in marketing expenses of $10,299, a decrease in
depreciation and amortization of $4,617, and a decrease in share based
compensation of $2,900.

General and administrative expenses decreased $243,988, or 20%, to $988,183 for
the three months ended December 31, 2008 as compared to $1,232,171, for the
three months ended December 31, 2007. The decrease resulted primarily from
decreases in rent and occupancy costs of $15,863, a decrease in accounting fees
of $158,324, including a decrease of $105,707 due to the reversal of a prior
period accrual resulting from the company receiving a favorable arbitration
award against a previous auditing firm, a decrease in public relations expenses
of $32,640 and a decrease in share based compensation of $310,130, a decrease in
the overhead allocation charges billed by ADM of $38,932 and reduced insurance
expenses of $7,549, partially offset by an increase in salary and salary related
costs of $74,915, increased legal fees of $164,775, and an increase in
consulting expenses of $66,610.

Interest income decreased $70,747, or 82%, to $15,600 from $86,347 as a result
of lower cash balances in our money market accounts during the three months
ended December 31, 2008 as compared to the three months ended December 31, 2007.

State income tax benefit increased $254,269, or 100%, for the three months ended
December 31, 2008 as compared to the three months ended December 31, 2007 as a
result of our receiving approval from the New Jersey Economic Development
Authority to sell $279,417 of tax benefits generated from net operating losses.
During December 2008 we sold the tax benefits of $279,417, pursuant to the New
Jersey State Tax Credit Transfer Program and, on December 18, 2008, we received
$254,269, net of fees, pursuant to this program.

NINE MONTHS ENDED DECEMBER 31, 2008 COMPARED TO THE NINE MONTHS ENDED DECEMBER
31, 2007

Net loss increased $619,463, or 12%, to $5,889,940, or $0.56 per share, for the
nine months ended December 31, 2008 as compared to a net loss of $5,270,477, or
$0.53 per share, for the nine months ended December 31, 2007. The increase in
net loss resulted primarily from (i) the loss on the termination of the Allergan
contract in the amount of $139,380, or 100%, (ii) an increase in research and
development expenses of $155,710, or 9%, (iii) an increase in general and
administrative expenses of $766,936, or 26%, and (iv) a decrease in interest
income of $145,294, or 62%, partially offset by an increase in revenue of
$172,857, or 16%, a decrease in cost of rentals of $16,384, or 38%, a decrease
in cost of direct sales of $25,502, or 24%, a decrease in cost of sales to
licensee and fees of $34,500, or 29% ($46,957 of this decrease is attributable
to the termination of the Allergan contract), a decrease in sales and marketing
expenses of $84,345, or 5%, and the proceeds from the sale of net operating
losses $254,269, or 100%, for the nine months ended December 31, 2008 as
compared to the nine months ended December 31, 2007.

Total revenue increased $172,857, or 16%, to $1,253,204 for the nine months
ended December 31, 2008 as compared to $1,080,347 for the nine months ended
December 31, 2007. The increase in revenue was due to an increase in our direct
sales of $267,313, or 65%, partially offset by a decrease in sales to licensee
and fees of $7,731, or 6%, and a decrease in our rental revenue of $86,725, or
16%.

During September 2007, we received an opening order from Allergan of initial
SofPulse units. We recorded $94,277 and $91,892 in the nine months ended
December 31, 2008 and 2007, respectively, which represented sales of SofPulse
units to Allergan and we recorded $31,250 and $46,875 in the nine months ended
December 31, 2008 and 2007, respectively, which represents the amortized portion
of the initial milestone payment of $500,000 that was received from Allergan in
November 2006 and is included in sales to licensee and fees on our Statements of
Operations. Royalties relating to these sales to Allergan are received by us up
to 60 days after the quarter in which Allergan makes their sale of our products.
Royalties received from Allergan during the nine months ended December 31, 2008
were $5,509, as compared to $0 during the same periods in the prior fiscal year.

We recorded $129,770 and $117,313 as cost of sales to licensee and fees for the
nine months ended December 31, 2008 and 2007, respectively, before recording of
the effect of the loss on the termination of the Allergan contract. The negative
gross margin on the sale of our SofPulse units to Allergan was $35,493 and
$25,421 for the nine months ended December 31, 2008 and 2007 as a result of the
initial production of the Allergan products.

                                       22

<PAGE>

As previously disclosed, on August 6, 2008, we received a letter from Allergan
notifying us of its determination to cease distribution of our products under
this Agreement until such time as the FDA clears for U.S. distribution the
products that we have sold to Allergan. On November 19, 2008, Ivivi and Allergan
entered into a mutual termination agreement (the "Termination Agreement")
pursuant to which, among other things, the parties terminated the Agreement.
Pursuant to the Termination Agreement, we paid Allergan $450,000 in exchange for
the return of all Ivivi's product sold to Allergan under the Agreement that are
held in inventory by Allergan and we accrued $13,000 for estimated shipping
costs to be paid to a third party carrier. Notwithstanding such termination, the
Parties have agreed that certain provisions of the Agreement relating to
technical support, product warranties and indemnification with respect to
products sold by Allergan under the Agreement shall survive the termination
thereof. Ivivi also agreed that during the period commencing on November 19,
2008 and ending on the 180th day immediately thereafter, Ivivi will not enter
into a distribution agreement with any third-party distributor for the
distribution by such distributor of the product in the United States, directly
or indirectly, to or through any third party who may use, sell or purchase
certain of Ivivi's products in conjunction with any aesthetic or bariatric
procedure.

As a result of our Termination Agreement with Allergan, which we believe is a
one-time event with a distributor and licensee and should not re-occur, our
Statement of Operations for the nine months ended December 31, 2008, includes a
loss on the termination of the Allergan contract in the amount of $139,380 which
is comprised of the settlement payment of $450,000 and a charge in the amount of
$69,588 representing the remaining balance of deferred licensing costs at
September 30, 2008, less a credit in the amount of $380,208 representing the
remaining deferred revenue balance as of September 30, 2008 from the
non-refundable payment of $500,000 we received from Allergan in November 2006.
Additionally, as a result of our Termination Agreement with Allergan, we
recorded in our Statement of Operations for the nine months ended December 31,
2008, a net credit to our cost of sales to licensee and fees in the amount of
$46,957, which is comprised of (i) a credit of $447,926 for the value of the
inventory returned by Allergan, (ii) a charge in the amount of $268,364 for the
write down of double SofPulse units returned by Allergan to $0, (iii) a charge
in the amount of $53,805 for the write down of double SofPulse units in stock to
$0, (iv) a charge in the amount of $37,500 to reserve for repackaging and
relabeling costs of the single SofPulse units returned by Allergan, (v) a charge
in the amount of $28,300 to reserve for repackaging and relabeling costs of the
single SofPulse units in stock, and, (vi) a charge in the amount of $13,000 for
freight, warehousing and other related costs associated with the return of the
double and single SofPulse units from Allergan.

Our statement of operations for the nine months ended December 31, 2008 has been
reclassified to present the components of the $92,423 on the termination of the
Allergan contract in operating revenues and expenses as follows:

<TABLE>
<S>     <C>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             RECLASSIFIED FOR REPORTING PURPOSES IN
        AS REPORTED IN OUR FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED                        OUR FORM 10-Q FOR THE NINE MONTHS
                               SEPTEMBER 30, 2008                                                 ENDED DECEMEMBER 31, 2008
------------------------------------------------------------------------------------------- ----------------------------------------
                                                                                                                   COST OF REVENUE
------------------------------------------------------------------------------------------- ----------------------------------------
                                                                                                 Loss on
                                                                                             termination of       Cost of licensing
                                                                                            Allergan contract,    sales and fees -
     Line item description of loss on termination of Allergan contract           Amount        incr./(decr.)         incr./(decr.)
------------------------------------------------------------------------------------------- ----------------------------------------

Inventory value of goods to be returned from Allergan                        $    (447,926)                --       $    (447,926)
Termination payment to repurchase inventory from Allergan                          450,000      $     450,000                  --
Reserve for repackaging and relabeling of Single unit inventory
    held by Allergan (1)                                                            37,500                 --              37,500
Write down of Double unit inventory held by Allergan (2)                           268,364                 --             268,364
Write down of Double unit inventory on hand (3)                                     53,805                 --              53,805
Reserve for repackaging and relabeling of single unit inventory
    on hand (4)                                                                     28,300                 --              28,300
Estimated freight, warehousing and other related costs                              13,000                 --              13,000
Deferred revenue balance at 9/30/08 relating to Allergan contract                 (380,208)          (380,208)                 --
Deferred licensing cost balance at 9/30/08 relating to Allergan contract            69,588             69,588                  --

                                                                             -------------      ----------------------------------
Loss on termination of the Allergan contract                                 $      92,423      $     139,380       $     (46,957)
                                                                             =============      ==================================
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       23

<PAGE>

(1) The inventory was comprised of single units and double units. The single
units were valued at Lower of Cost or Market at $179,562 less an allowance for
$37,500 representing a cost to repackage and re-label the inventory to be
available for sale to customers other than Allergan and in different markets. We
determined these single units could be sold into our existing markets once the
units are repackaged and relabeled.

(2) The double units, currently used only in the plastic surgery marketplace,
were valued at Lower of Cost or Market at $268,364 less an allowance for
$268,364 representing the write down of these units to $0. Under our agreement
with Allergan, we are prohibited from entering into an agreement in the U.S.
with a distributor in the plastic surgery market for a period of six months from
the effective date of the termination agreement. As of the current date we are
exploring market possibilities in the U.S. and internationally. We are uncertain
of our ability to sell or, enter into a distribution agreement to sell, these
double units in the plastic surgery market at the end of the six month period
allotted under the Allergan termination agreement.

(3) As a result of the termination of the Allergan Agreement, we recorded an
allowance for the double units in inventory at our warehouse of $53,805
representing the full value of double units on hand at September 30, 2008. These
units are not inclusive of the units located in Allergan's warehouse at
September 30, 2008.

(4) We had $139,050 of single units in inventory at September 30, 2008 packaged
and labeled for sale to Allergan and, consequently, we set up an allowance for
inventory on hand of $28,300 for relabeling and repackaging of this inventory.

If the above reclassifications were made as of September 30, 2008, the effect on
costs and expenses would have been as follows:

<TABLE>
<S>                        <C>
                                      Three months ended                                        Six months ended
                       September 30, September 30,                           September 30, September 30,
                           2008          2008                                   2008          2008
                       ---------------------------------------------------   --------------------------------------------------
                       Reclassified  As Reported     Change $     Change %   Reclassified  As Reported     Change $    Change %
                       ------------  ------------  ----------   ----------   ------------  ------------  ----------  ----------
Costs and expenses        2,796,183     2,703,760      92,423         3.4%      5,426,854     5,334,431      92,423        1.7%
Loss from operations     (2,207,956)   (2,115,533)    (92,423)        4.4%     (4,455,431)   (5,334,431)    (92,423)       1.7%
Loss on settlement of
  Allergan contract              --       (92,423)     92,423      -100.0%             --       (92,423)     92,423       -100%
Loss before provision
  for income taxes       (2,178,150)   (2,178,150)         --         0.0%     (4,380,465)   (5,426,854)         --       0.00%
</TABLE>


Our revenues for the three and six months ended September 30, 2008 remains the
same. Our net losses and our net losses per share for the three and six months
ended September 30, 2008 remains the same. Our Balance Sheet at September 30,
2008 was not affected by this reclassification.

Cost of rentals decreased $16,384, or 38%, to $26,605 for the nine months ended
December 31, 2008 from $42,989 for the nine months ended December 31, 2007,
primarily due to a decrease in freight costs of $8,010, a decrease in the cost
of shipping materials of $4,271 and a decrease in the allocation of
manufacturing charges billed by ADM of $3,807. In addition, cost of rentals
includes depreciation on our Roma units under rental agreements of $14,484 and
$15,385 for the nine months ended December 31, 2008 and 2007, respectively.

Cost of direct sales decreased $25,502, or 24%, to $79,935 for the nine months
ended December 31, 2008 from $105,437 for the nine months ended December 31,
2007 as a result of the mix of products sold and the unit cost of these products
during the nine months ended December 31, 2008 versus the prior year period.

Purchases of finished goods and certain components from ADM, including units
sold by us to Allergan, were $517,823 and $459,702 for the nine months ended
December 31, 2008 and December 31, 2007, respectively.

Research and development expense increased $155,710, or 9%, to $1,816,796 for
the nine months ended December 31, 2008 from $1,661,086 for the nine months
ended December 31, 2007. The increase resulted primarily from increases in
research and development costs which resulted primarily from follow-up research
on our cardiovascular research and development trials of approximately $100,000,
increases in research and development costs for supplies and materials of
$16,761, increases in salary and salary related expenses of $87,331, increases
in consulting expenses of $66,848, an increase of patent amortization expense of
$39,219, an increase in patent maintenance expenses of $7,500, and an increase
in conference expenses of $5,000 and an increase in depreciation expense of
$41,343, partially offset by a reduction in share based compensation of $180,417
and travel costs of $29,779. We expect that our research and development
expenses will increase, subject to our cash availability, as we expand our
efforts in the cardiovascular and osteoarthritis areas.

                                       24

<PAGE>

Sales and marketing expenses decreased $84,345, or 5%, to $1,650,173, for the
nine months ended December 31, 2008 as compared to $1,734,518 for the nine
months ended December 31, 2007. The decrease resulted primarily from decreased
recruitment fee expense of $79,115, a decrease in commission expense of $52,037,
a decrease in advertising costs of $47,138, decreased marketing costs of $6,923,
a decrease in travel related costs of $5,690, and a decrease in share based
compensation of $4,752, partially offset by increased salary and salary related
costs of $73,642 which includes (i) an increase in severance and vacation pay
expense of $196,307 due to a reduction in our sales force of seven sales and
sales related administrative personnel which occurred on August 31, 2008 and
(ii) a decrease in salary and payroll tax expenses of $162,537. In addition to
the increases in salary and related costs, the decrease of selling and marketing
expenses of $84,345 for the nine months ended December 31, 2008, was also
partially offset by an increase in consulting expenses of $31,366, an increase
in conference expenses of $5,857, and an increase in depreciation and
amortization expense of $1,901.

General and administrative expenses increased $766,936, or 26%, to $3,692,277
for the nine months ended December 31, 2008 as compared to $2,925,341, for the
nine months ended December 31, 2007. The increase resulted primarily from
increases in salary and salary related costs of $226,104, increased rent and
occupancy expenses of $79,049, increased consulting expenses of $142,722,
increased legal fees of $612,171, increased investor relations expenses of
$3,033, increased telephone expenses of $5,495, increased expense for temporary
help of $8,232, increased computer expenses of $20,689, an increase in
recruitment fees of $4,500, an increase in depreciation expense of $11,256, and
a commitment to Stanford University in the amount of $200,000, of which $50,000
was paid through December 31, 2008, as a contribution for studies relating to
their cardiovascular research program, partially offset by a decrease in the
overhead allocation charges billed by ADM of $112,662, a decrease in public
relations fees of $62,427, and a decrease in travel related expenses of $20,346,
a decreased of accounting fee expense of $113,741 and a decrease in share based
compensation expense of $245,416.

Interest income decreased $145,294, or 62%, to $90,566 from $235,860 as a result
of lower cash balances in our money market accounts during the nine months ended
December 31, 2008 as compared to the nine months ended December 31, 2007.

State income tax benefit increased $254,269, or 100%, for the nine months ended
December 31, 2008 as compared to the nine months ended December 31, 2007 as a
result of our receiving approval from the New Jersey Economic Development
Authority to sell $279,417 of tax benefits generated from net operating losses.
During December 2008 we sold tax benefits of $279,417, pursuant to the New
Jersey State Tax Credit Transfer Program and, on December 18, 2008, we received
$254,269, net of fees, pursuant to this program.

LIQUIDITY AND CAPITAL RESOURCES

We have had significant operating losses for the fiscal years ended March 31,
2008 and 2007, as well as for the three and nine month periods ended December
31, 2008 and 2007. As of December 31, 2008, we had cash and cash equivalents of
approximately $1.5 million as compared to cash and cash equivalents of
approximately $8.3 million at December 31, 2007 and approximately $6.6 million
at March 31, 2008. At December 31, 2008, we had an accumulated deficit of
approximately $37.1 million. Our continuing operating losses have been funded
principally through the proceeds of our private placement financings, our
initial public offering and other arrangements. We have generated limited
revenues of $1.6 million and $1.2 million for the fiscal years ended March 31,
2008 and 2007, respectively, and $281,781 and $393,616 for the three months
ended December 31, 2008 and 2007, respectively and $1,253,204 and $1,080,347 for
the nine months ended December 31, 2008 and 2007, respectively, primarily from
the rental and sale of our products, and we expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our research and development of additional
applications for our tPEMF technology and other technologies that we may develop
in the future.

On October 15, 2008, we repurchased 650,000 shares of our common stock at $.15
per share, or $97,500, from an investor in a private transaction.

On November 19, 2008 we paid Allergan $450,000 in exchange for the return of all
of our product sold to Allergan under the Agreement that was held in inventory
by Allergan. As of December 31, 2008 we accrued an estimated $13,000 for
shipping costs to be paid to a third party carrier for the return of our product
from Allergan and we accrued and estimated $65,800 to repackage and relabel the
returned inventory that is saleable.

                                       25

<PAGE>

We estimate that we presently have sufficient sources of funds to meet our cash
requirements through March 31, 2009. Previously we estimated that we had
sufficient sources of funds to meet our cash requirements through January 31,
2009. The change in our estimate is primarily the result of the proceeds
received from the sale of net operating losses pursuant to the New Jersey State
Tax Credit Transfer Program in the amount of $254,269, proceeds from sales and
rentals and reducing our expenses.

As of December 31, 2008 we have net operating losses for Federal tax purposes
available for carryover of approximately $22,692,000 and approximately
$19,587,000 of net operating losses available for carryover for state purposes.
We will attempt to sell additional net operating losses, if allowed, however
there can be no assurance that we will be successful.

We have retained an investment banking firm to assist us with pursuing
strategies and financings and we are currently in discussions to secure a $2.5
million bridge loan financing with a party affiliated with an officer and
director of ours. There is no assurance we will be successful in these
negotiations and discussions with respect to any financing or the terms of
any financing.

We will need to obtain additional capital through issuance of our equity
securities, debt financings, licensing agreements, joint ventures or other
transactions to satisfy our operational requirements. Management also believes
it could reduce or delay certain variable or discretionary costs, including
delaying the timing of some of our research and development projects, to help
meet our working capital needs. However, we may not be successful in our
efforts. In light of the foregoing, substantial doubt is raised as to our
ability to continue as a going concern.

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

Our net cash used by operating activities was approximately $4.8 million during
the nine months ended December 31, 2008 compared to the net cash used by
operating activities of approximately $4.3 million during the nine months ended
December 31, 2007. This increase was due to increases in research and
development and general and administrative expenses and the $450,000 payment to
Allergan as previously noted partially offset by decreases in sales and
marketing expenses as previously noted and by non-cash charges for share based
compensation and depreciation.

Our net cash used by investing activities was $286,105 during the nine months
ended December 31, 2008 compared to $813,813 for investing activities during the
nine months ended December 31, 2007. The decrease was due to a decrease in the
purchases of production and computer equipment of $393,989, proceeds from the
disposal of property and equipment in the amount of $750, a decrease in
intangible assets acquired of $41,908, a decrease in equipment acquired for use
or under rental agreement of $45,253 and a decrease in cash used for restricted
cash of $45,808.

Our net cash used by financing activities was $81,555 during the nine months
ended December 31, 2008 compared to net cash provided from financing activities
of $5,128,992 during the nine months ended December 31, 2007. The decrease was
due to a decrease in the net proceeds received from the issuance of stock in
connection with a private placement offering of $4,865,000, a decrease in the
proceeds received from the exercise of stock options and warrants of $245,036, a
decrease in the proceeds received from the repayment of advances to an affiliate
of $3,011 and the purchase of treasury stock of $97,500.

In January 2006, we entered into a Master Clinical Trial Agreement with
Cleveland Clinic Florida, a not-for-profit multispecialty medical group
practice, to set forth the basic terms and conditions with respect to studies to
be conducted by Cleveland Clinic Florida from time to time during the term of
the agreement, which is from January 9, 2006 to January 9, 2009. The total cost
of the trials was approximately $239,000, all of which was paid by us as of
December 31, 2008.

                                       26

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We are funding approximately $410,000 for additional cardiovascular studies.
Toward this, we have, during the three and nine months ended December 31, 2008,
paid $100,000 to MD Imaging Network for a Cardiovascular EFFECT trial and image
storage. In addition, we paid $50,000 to Stanford University during the three
months ended December 31, 2008 and we have accrued an additional $150,000 as of
December 31, 2008 for a contribution for studies relating to the cardiovascular
research program at Stanford University. These amounts may be increased if we
expand our current studies or if we pursue additional studies and we will need
to raise additional capital in such circumstances.

We fund research in the field of neurosurgery at Montefiore Medical Center's
Department of Neurosurgery. The purpose of the research is to examine the
effects of pulsed magnetic fields on neurons and vessels in cell culture and
intact brain and neural transplants, as well as to explore the potential of this
modality to lessen neurodegeneration (progressive damage or death of neurons
leading to a gradual deterioration of the bodily functions controlled by the
affected part of the nervous system) and increase vascular plasticity (the
lifelong ability of the brain to reorganize neural pathways based on new
experiences). We believe this modality could have applications in the treatment
of chronic and acute vascular and neurodegenerative diseases, including
Parkinson's disease. The estimated total cost of the research with Montefiore
Medical Center's Department of Neurosurgery is approximately $317,000, of which
approximately $237,750 has been incurred by the Montefiore Medical Center
through December 31, 2008 and $158,500 has been paid by us through December 31,
2008. The balance of $79,250 has been accrued by us at December 31, 2008. This
trial may not be completed within our projected cost and our available funds may
limit the amount of research to be performed in the future.

In June, 2007, we entered into a Research Agreement with Indiana State
University to conduct randomized, double-blind animal wound studies to assist us
in determining optimal signal configurations and dosing regimens. In June 2008,
the results of the first phase of this study in which a carrageenan injection
model in rats treated with our targeted tPEMF signals had significantly less
pain and edema than rats treated with inactive units. The estimated total cost
of the research with Indiana State University is approximately $160,000, of
which approximately $121,000 has been incurred by the institution through
December 31, 2008. As of December 31, 2008 we have paid $74,000 towards this
research and we accrued $47,000 as of December 31, 2008 for additional research
to be performed. This trial may not be completed within our projected cost and
our available funds may limit the amount of research to be performed in the
future.

On May 1, 2008, we signed a research agreement with the Henry Ford Health
System. The principal investigator, Dr. Fred Nelson in the Department of
Orthopedics will study our prototype device using targeted tPEMF signal
configurations on human patients with established osteoarthritis of the knee
that are active at least part of the day. The trial is expected to recruit up to
100 patients receiving active or sham treatment for up to three 15 minute
applications daily, on pain and fracture over two, six, eight and twelve week
intervals. We received IRB approval at The Henry Ford Health System to begin the
double blind randomized controlled study and the institution began enrolling
patients during August 2008. The study is anticipated to continue for up to
eighteen months. The estimated total cost of the research with the Henry Ford
Health System is approximately $112,000, of which approximately $42,000 has been
incurred by the institution through December 31, 2008. As of December 31, 2008,
we have paid $27,000 towards this research and we accrued $15,000 as of December
31, 2008 for additional research to be performed. This trial may not be
completed within our projected cost and our available funds may limit the amount
of research to be performed in the future.

On December 22, 2008, we received notification from DSI Renal, Inc. ("DSI") that
DSI has terminated the collaboration agreement (the "Agreement"), dated February
11, 2008, between us and DSI. In its letter, DSI notified us that it has ceased
the operation of its clinical research division and is no longer sponsoring or
engaging in clinical research activities. It is our understanding that DSI had
not conducted any of the Clinical Trials or Multi-Site Trials and had not
introduced our products into any of its clinics as was contemplated under the
Agreement. We are currently exploring our options as DSI has not terminated the
Agreement in accordance with the terms thereof. The term of the Agreement
commenced on February 11, 2008 and was for a period of seven and one-half years.

On December 18, 2008, we signed a distribution agreement with RecoverCare to
exclusively sell or rent our products into long term acute care hospitals
(LTACHS) in the United States and the non-exclusive right to sell or rent our
products into acute care facilities and Veterans Administration long term care
facilities in the Unites States.

                                       27

<PAGE>

Effective January 1, 2009, we assigned our agreement with current customers in
these markets to RecoverCare and therefore a significant portion of our ongoing
revenue in these markets will remain with RecoverCare. We will receive certain
minimum payments from RecoverCare as well as a specified revenue share for
existing and new business handled by RecoverCare. The definitive agreement has a
three year term and the distribution and revenue share portion of the agreement
is effective January 1, 2009, with an upfront fee to RecoverCare of $26,000 for
certain expenses incurred by them on our behalf. Our revenues for the three and
nine months ended December 31, 2008 were unaffected by this agreement.

At December 31, 2008, our deferred revenue account balance of $35,640 represents
funds received from a customer in September 2008 for an extended one year
service contract fee beginning October 1, 2009. Beginning October 1, 2009, we
will amortize this amount over 12 months on a straight-line basis.

In order to keep our operating expenses manageable, we entered into a management
services agreement, dated as of August 15, 2001, as amended, with ADM under
which ADM provided us and its other subsidiaries, with management services and
allocated portions of its real property facilities for use by us and the other
subsidiaries for the conduct of our respective businesses.

The management services provided by ADM under the management services agreement
include administrative, technical, engineering and regulatory services with
respect to our products. We pay ADM for such services on a monthly basis
pursuant to an allocation determined by ADM and us, based on a portion of its
applicable costs plus any invoices it receives from third parties specific to
us. We have reduced reliance on the use of the management services of ADM
significantly as we hired more employees and moved into our own corporate
offices during October 2007.

We also use office, manufacturing and storage space in a building located in
Northvale, New Jersey, currently leased by ADM, pursuant to the terms of the
management services agreement. ADM determines the portion of space allocated to
us and each other subsidiary on a monthly basis, and we and the other
subsidiaries are required to reimburse ADM for our respective portions of the
lease costs, real property taxes and related costs.

We incurred $36,695 for management services and the use of real property
provided to us by ADM pursuant to the management services agreement during the
nine months ended December 31, 2008.

In addition, we are a party to a manufacturing agreement with ADM, dated as of
August 15, 2001, and as amended and restated in May 2006, under which we utilize
ADM as our exclusive manufacturer of all of our current and future medical and
non-medical electronic and other devices or products. For each product that ADM
manufactures for us, we pay ADM deposits and invoices equal to 120% of the sum
of (i) the actual, invoiced cost for raw materials, parts, components or other
physical items that are used in the manufacture of the product and actually
purchased for us by, if any, plus (ii) a labor charge based on ADM's standard
hourly manufacturing labor rate, which we believe is more favorable than could
be attained from unaffiliated third-parties.

Purchases of finished goods and certain components from ADM for the nine months
ended December 31, 2008 and 2007 were $517,823 and $459,702, respectively.
Deposits to ADM as reflected on our Balance Sheet for products being
manufactured for us were $108,097 and $323,444 at December 31, 2008 and December
31, 2007, respectively.

OFF-BALANCE SHEET ARRANGEMENTS

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

                                       28

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ITEM 4T. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROL AND PROCEDURES

We maintain disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) that are designed to ensure that information required to
be disclosed in our Exchange Act reports are recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Due to the inherent limitations of control systems, not all
misstatements may be detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of a simple error or mistake. Additionally, controls can be circumvented
by the individual acts of some persons; by collusion of two or more people, or
by management override of the control. Our controls and procedures can only
provide reasonable, not absolute, assurance that the above objectives have been
met.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we
carried out an evaluation, with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Securities Exchange
Act Rule 13a-15. Based upon that evaluation as of the end of the period covered
by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of
the end of the period covered by this Quarterly Report on Form 10-Q, are
effective to reasonably ensure that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms and that such information
is accumulated and communicated to our management including our Chief Executive
Officer and Chief Financial Officer to allow timely discussions regarding
disclosures.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

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


                                       29

<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004. On April 30, 2008, during a conference before the Hon.
Brian R. Martinotti J.S.C. all claims were settled and the terms of the
settlement were placed on the record. The settlement calls for the defendants to
dismiss with prejudice all counterclaims filed against us and to pay us the sum
of $120,000 in installments. The terms provide for an initial payment of $15,000
and the balance to be paid in equal monthly installments of $5,000. In the event
of default defendants shall be liable for an additional payment of $30,000,
interest at the rate of 8% per annum as well as costs and attorney's fees. The
settlement was documented in a written agreement executed by the parties and the
initial payment of $15,000 was paid on June 18, 2008. The defendants defaulted
on the payment due July 2008 and we were advised that the defendants filed for
protection under Chapter 11 of the United States Bankruptcy Code on July 21,
2008. As of December 31, 2008, we have only recognized the cash received. We
have filed our proof of claim with the Bankruptcy Court.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount which Ivivi has refuted. We responded to Stonefield Josephson's demand
for arbitration, which we believe was procedurally defective and premature due
to Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,
2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No.BER-l-872-08 on January 31, 2008. A commencement of arbitration notice
initiated by Stonefield Josephson was received by us on March 11, 2008. In March
and April motions were filed by us and Stonefield Josephson which sought various
forms of relief including the forum for resolution of the claims. On June 3,
2008, the court determined that the language in the engagement agreement
constituted a forum selection clause and the claims should be decided in
California. On June 19, 2008, we filed a complaint against Stonefield Josephson
in the Superior Court of California, Los Angeles County. On July 18, 2008, the
court denied our request for reconsideration of his order dated June 3, 2008.
The arbitration hearing commenced on November 17, 2008. On January 19, 2009, the
arbitrator rendered the award and found in our favor and determined that no
additional fees were owed by Ivivi to Stonefield. The arbitrator further found
us to be the prevailing party. The award is final. The issue of attorney's fees
and costs is reserved for Phase II of the arbitration. As a result, at December
31, 2008, we reversed $105,707 which we previously included in professional fees
and accrued expenses for invoices received by us during the quarters ended March
2006 and December 2005.

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

ITEM 1A. RISK FACTORS

The following are additional risk factors that should be considered in
conjunction with risk factors previously disclosed in our Annual Report on Form
10-KSB for the fiscal year ended March 31, 2008 and other filings we have made
with the Securities and Exchange Commission.

WE HAVE A HISTORY OF SIGNIFICANT AND CONTINUED OPERATING LOSSES AND A
SUBSTANTIAL ACCUMULATED EARNINGS DEFICIT, AND THERE IS SUBSTANTIAL DOUBT AS TO
OUR ABILITY TO CONTINUE AS A GOING CONCERN.

We have generated only limited revenues from product sales and have incurred net
losses of approximately $7.5 and $7.8 million for the fiscal years ended March
31, 2008 and 2007, respectively. As of December 31, 2008, we had cash and cash
equivalents of approximately $1.5 million as compared to cash and cash
equivalents of approximately $8.3 million at December 31, 2007 and approximately
$6.6 million at March 31, 2008. At December 31, 2008, we had an accumulated
deficit of approximately $37.1 million. We expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our marketing efforts with respect to our
products and to continue our research and development of additional applications
for our products as well as new products utilizing our tPEMF technology and
other technologies that we may develop in the future.

                                       30

<PAGE>

We estimate that we presently have sufficient sources of funds to meet our cash
requirements through March 31, 2009. Previously we estimated that we had
sufficient sources of funds to meet our cash requirements through January 31,
2009. The change in our estimate is primarily the result of the proceeds
received from the sale of net operating losses pursuant to the New Jersey State
Tax Credit Transfer Program in the amount of $254,269 proceeds from our sales
and rentals and reducing our expenses.

We will need to obtain additional capital through issuance of our equity
securities, debt financings, licensing agreements, joint ventures or other
transactions to satisfy our operational requirements. Management also believes
it could reduce or delay certain variable or discretionary costs, including
delaying the timing of some of our research and development projects, to help
meet our working capital needs. However, we may not be successful in our
efforts. In light of the foregoing, substantial doubt is raised as to our
ability to continue as a going concern. We are currently in discussions with a
group of investors to secure a bridge loan financing with a party affilitated
with an officer and director of ours. There is no assurance we will be
successful in these negotiations and discussions with respect to this financing.

Our cash requirements may vary materially from those currently anticipated due
to changes in our operations, including our marketing and distribution
activities, product development, research and development, regulatory
requirements and the timing of our receipt of revenues and contingencies. Our
ability to obtain additional financing will depend in part upon the prevailing
capital market conditions as well as our business performance. We may not be
successful in our efforts to arrange additional financing on terms satisfactory
to us if at all. If additional financing is raised by the issuance of common
stock you may suffer additional dilution and if additional financing is raised
through debt financing, it may involve significant restrictive covenants which
could affect our ability to operate our business. If adequate funds are not
available, or are not available on acceptable terms, we may not be able to
continue our operations, grow our business or take advantage of opportunities or
otherwise respond to competitive pressures and remain in business. In addition,
we may incur significant costs in connection with any potential financing,
whether or not we are successful in raising additional capital.

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

In order for our common stock to continue to be listed on the NASDAQ Capital
Market, we must meet the current NASDAQ Capital Market continued listing
requirements. One of these requirements is the maintenance of a $1.00 bid price.
On September 29, 2008, we received a letter from the staff of the NASDAQ Stock
Market, LLC, or NASDAQ, pursuant to which the staff notified us that for 30
consecutive business days, the bid price of our common stock, had closed below
the minimum $1.00 per share requirement for continued inclusion under NASDAQ
Marketplace Rule 4310(c)(4). In accordance with NASDAQ Marketplace Rule
4310(c)(8)(D), we were provided with a period of 180 calendar days to regain
compliance with the Rule, which compliance date was extended until September 29,
2009 as a result of NASDAQ's implementation of a temporary suspension of the
$1.00 minimum bid price requirement.

According to the NASDAQ letter, the staff of NASDAQ will provide written
notification of our compliance with NASDAQ Marketplace Rule 4310(c)(4) if, at
anytime before September 29, 2009, the bid price of our common stock closes at
$1.00 per share or more for a minimum of 10 consecutive business days; however,
in accordance with NASDAQ Marketplace Rule 4310(c)(8)(E), NASDAQ may, in its
discretion, require us to maintain a bid price of at least $1.00 per share for a
period in excess of 10 consecutive business days, but generally no more than 20
consecutive business days, before determining that we have demonstrated an
ability to maintain long-term compliance with NASDAQ Marketplace Rule
4310(c)(4). If compliance with NASDAQ Marketplace Rule 4310(c)(4) cannot be
demonstrated by September 29, 2009, the staff will determine whether we meet the
NASDAQ Capital Market initial listing criteria as set forth in NASDAQ
Marketplace Rule 4310(c), except for the bid price requirement. If we meet the
initial listing criteria, the staff will notify us that we have been granted an
additional 180 calendar day compliance period. If we are not eligible for an
additional compliance period, the staff will provide written notification that
our securities will be delisted, at which time, we may appeal the staff's
determination to delist our securities to a NASDAQ Listing Qualifications Panel.
In addition, another requirement for continued listing on the Nasdaq Capital
Market is that we maintain a stockholders' equity of at least $2.5 million. As
of December 31, 2008, our stockholders' equity was below $2.5 million. As a
result, we may receive a delisting letter from Nasdaq for failing to maintain
such threshold and if we are unable to regain compliance, our common stock could
be delisted from Nasdaq.

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<PAGE>

If our common stock were to be delisted from the NASDAQ Capital Market, our
common stock could continue to trade on the NASD's over-the-counter bulletin
board following any delisting from the NASDAQ Capital Market, or on the Pink
Sheets, as the case may be. Any such delisting of our common stock, however,
could have an adverse effect on the market price of, and the efficiency of the
trading market for, our common stock, not only in terms of the number of shares
that can be bought and sold at a given price, but also through delays in the
timing of transactions and less coverage of us by securities analysts, if any.
Also, any such delisting of our common stock likely would have an adverse effect
on our ability to raise capital in the public or private equity markets in the
future.

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

The development, testing, production and marketing of our current products is,
and other products developed by us may be, subject to regulation by the FDA as
devices under the 1976 Medical Device Amendments to the Federal Food, Drug and
Cosmetic Act. Although the FDA has cleared our SofPulse M-10, Roma and Torino
currently marketed products for the adjunctive use in the palliative treatment
of post-operative pain and edema in superficial tissue, use of any new products
developed by us will be subject to FDA regulation as well. Before a new medical
device, or a new use of, or claim for, an existing product can be marketed in
the United States, it must first receive either 510(k) clearance or pre-market
approval from the FDA, unless an exemption applies. Either process can be
expensive and lengthy. The FDA's 510(k) clearance process usually takes from
three to twelve months, but it can take longer and is unpredictable. The process
of obtaining pre-market approval is much more costly and uncertain than the
510(k) clearance process and it generally takes from one to three years, or even
longer, from the time the application is filed with the FDA.

In the United States, medical devices must be:

o        manufactured in establishments subject to FDA inspection to assess
         compliance with the FDA Quality Systems Regulation, or QSR; and
o        produced in accordance with the QSR for medical devices.

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

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

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

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products marketed in the United States; the SofPulse M-10, Roma and
Torino PEMF products. On December 15, 2008, we received FDA 510(k) clearance for
our currently marketed targeted pulsed electromagnetic field ("tPEMF")
therapeutic products. The 510(k) substantial equivalence determination
specifically covers the Company's SofPulse models 912-M10, Roma3 and Torino II
products which are indicated for the palliative treatment of post operative pain
and edema in superficial soft tissue. On April 3, 2008, we filed a 510(k)
submission with the FDA for a small, compact product utilizing our tPEMF therapy
technology for the symptomatic relief and management of chronic, intractable
pain, for relief of pain associated with arthritis and for the adjunctive
treatment of post-surgical and post-trauma acute pain. The FDA requested
additional information from us in a letter dated April 25, 2008. During October
2008, we requested a withdrawal of this 510(k). We are currently working on a
new 510(k) for this indication which we have requested a meeting with the FDA to
discuss our future submission.

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

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<PAGE>

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

o        warning letters, fines, injunctions and civil penalties;
o        repair, replacement, refunds, recall or seizure of our products;
o        operating restrictions or partial suspension or total shutdown of
         production;
o        refusing our requests for 510(k) clearance or premarket approval of new
         products, new intended uses, or modifications to existing products;
o        withdrawing 510(k) clearance or premarket approvals that have already
         been granted; and
o        criminal prosecution.

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

THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL OR CONSULTANTS MAY
MATERIALLY AND ADVERSELY AFFECT OUR OPERATIONS AND OUR ABILITY TO EXECUTE OUR
GROWTH STRATEGY AND COULD RESULT IN SUBSTANTIAL PAYMENT OBLIGATIONS UNDER THESE
EMPLOYMENT AGREEMENTS.

Our ability to execute our business plan depends upon the continued services of
Steven Gluckstern our Chairman, President and Chief Executive Officer, Andre'
DiMino, our Vice Chairman and Executive Vice President, Manufacturing and
Technology and David Saloff, our Executive Vice President, Sales and Marketing,
as well as our key technology, marketing, sales, support and consulting
personnel, including Dr. Arthur Pilla, one of our consultants. Although we have
entered into employment or consulting agreements containing non-compete
agreements with Messrs. Gluckstern, DiMino and Saloff and certain of our key
personnel, including Dr. Pilla, we may not be able to retain these individuals
or enforce such non-compete agreements under applicable law. If we lost the
services of these executive officers or our key personnel, our business may be
materially and adversely affected and our stock price may decline. In addition,
our ability to execute our business plan is dependent on our ability to attract
and retain additional highly skilled personnel. We do not maintain key person
life insurance for any of our other executive officers or key employees. In
addition, under the terms of our employment agreements, we could be obligated to
make substantial severance payments in the event of a termination by such
executives for "good reason" or by us without cause and by Mr. DiMino for any
reason or no reason until July 31, 2010. In the event such termination events
occur, we may not have the ability to satisfy such obligations.

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<PAGE>

ITEM 6. EXHIBITS.

(a)      Exhibit No.

31.1     Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

31.2     Certification of Chief Financial Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.



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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                             IVIVI TECHNOLOGIES INC.
                                  (Registrant)


         Dated: February 23, 2009     By: /s/ Steven Gluckstern
                                          -------------------------------------
                                          Steven Gluckstern President and Chief
                                          Executive Officer
                                          (Principal Executive Officer)


         Dated: February 23, 2009     By: /s/ Alan Gallantar
                                          -------------------------------------
                                          Alan Gallantar, Senior Vice President
                                          and Chief Financial Officer
                                          (Principal Financial Officer and
                                          Principal Accounting Officer)




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