<PAGE>

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

                                   FORM 10-QSB

                                   (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, 2006

                                       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)

                 224-S Pegasus Ave., Northvale, New Jersey 07647
                    (Address of Principal Executive Offices)

         Issuer's Telephone Number, including area code: (201) 784-8168

Check 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 the filing requirements for the past 90 days:

                                 YES [X] NO [ ]

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

                                 YES [ ] NO [X]

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date:

9,556,783 shares of Common Stock, no par value, as of February 8, 2007



<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                                      INDEX


Part I.   Financial Information                                      Page Number

Item 1.   Financial Statements:

         Balance Sheet - December 31, 2006 (unaudited)                        3

         Statements of Operations - For the three months and nine
         months ended December 31, 2006 and 2005 (Unaudited)                  4

         Statement of Stockholders' Equity - For the nine months
         ended December 31, 2006 (Unaudited)                                  5

         Statements of Cash Flows - For the nine months ended
         December 31, 2006 and 2005 (Unaudited)                               6

         Notes to Financial Statements (unaudited)                            8

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

Item 3.  Controls and Procedures                                             32

Part II. Other Information                                                   34

Item 1.  Legal Proceedings                                                   34

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds         35

Item 6.  Exhibits                                                            37

Signatures                                                                   38


                                       2


<PAGE>

<TABLE>
<S>     <C>
                                 IVIVI TECHNOLOGIES, INC.
                                       BALANCE SHEET
                                     DECEMBER 31, 2006
                                        (UNAUDITED)


                                          ASSETS

Current assets:
 Cash and cash equivalents                                                   $  9,827,546
 Accounts receivable, net of allowance for doubtful
   accounts of $37,405                                                            313,890
 Inventory, current portion                                                       126,000
 Prepaid expenses                                                                 116,343
                                                                             ------------

                                                                               10,383,779

Property and equipment, net                                                        39,006
Inventory, long term                                                              168,715
Intangible assets, net                                                            162,960
                                                                             ------------


                                                                             $ 10,754,460
                                                                             ============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses                                       $  1,390,336
 Advances payable - affiliate                                                      8,604
                                                                             ------------

                                                                                1,398,940

Deferred revenue                                                                  489,583

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, 9,538,767 shares issued and outstanding                         20,825,127
 Additional paid-in capital                                                    10,330,248
 Accumulated deficit                                                          (22,289,438)
                                                                             ------------

                                                                                8,865,937
                                                                             ------------

                                                                             $ 10,754,460
                                                                             ============

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

                                             3



<PAGE>
                                        IVIVI TECHNOLOGIES, INC.

                                        STATEMENTS OF OPERATIONS
                     FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                              (UNAUDITED)


                                               Three Months Ended               Nine Months Ended
                                                   December 31,                   December 31,
                                              2006            2005            2006            2005
                                           -----------     -----------     -----------     -----------
Revenues:
    Sales                                  $    91,342     $     7,244     $   220,232     $    96,276
    Rentals                                    125,463         212,959         582,525         381,998
    Licensing                                   10,417              --          10,417              --
                                           -----------     -----------     -----------     -----------

                                               227,222         220,203         813,174         478,274
                                           -----------     -----------     -----------     -----------
Expenses:
    Cost of goods sold                          27,851           1,811          58,744          24,405
    Cost of rental revenue                      31,276         105,919          68,650         188,879
    Depreciation and amortization                3,661           2,602          13,415           7,475
    Salaries                                   407,610         276,652         930,764         814,706
    Research and development                   494,447         160,700         945,369         684,614
    Sales and marketing                        179,773         135,384         479,230         788,924
    General and administrative                 480,255         405,030       1,084,669       1,241,294
    Share based compensation                   822,852          40,338       1,798,558          85,951
                                           -----------     -----------     -----------     -----------

                                             2,447,725       1,128,436       5,379,399       3,836,248
                                           -----------     -----------     -----------     -----------

                                            (2,220,503)       (908,233)     (4,566,225)     (3,357,974)
Change in fair value of warrant and
    registration rights liabilities                 --              --         (25,827)             --
Interest and finance costs, net               (159,610)       (253,038)     (1,763,615)       (683,458)
                                           -----------     -----------     -----------     -----------

Loss before provision from income taxes     (2,380,113)     (1,161,271)     (6,355,667)     (4,041,432)
Provision for income taxes                          --              --              --              --
                                           -----------     -----------     -----------     -----------

Net loss                                   $(2,380,113)    $(1,161,271)    $(6,355,667)    $(4,041,432)
                                           ===========     ===========     ===========     ===========

Net loss per share, basic and diluted      $     (0.28)    $     (0.24)    $     (1.06)    $     (0.85)
                                           ===========     ===========     ===========     ===========

Weighted average shares outstanding          8,491,805       4,745,000       5,998,477       4,745,000
                                           ===========     ===========     ===========     ===========

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

                                                   4


<PAGE>

                                                   IVIVI TECHNOLOGIES, INC.

                                               STATEMENT OF STOCKHOLDERS' EQUITY
                                          FOR THE NINE MONTHS ENDED DECEMBER 31, 2006
                                                          (UNAUDITED)


                                                   Common Stock                Additional                            Total
                                           -----------------------------        Paid-In         Accumulated      Stockholders'
                                              Shares           Amount           Capital           Deficit           Equity
                                           ------------     ------------      ------------     ------------      ------------

Balance - April 1, 2006                       4,745,000     $     74,600      $  1,286,914     $(15,933,771)     $(14,572,257)

Issuance of common stock in connection
with initial public offering, net             2,750,000       13,640,241                --               --        13,640,241

Convertible debt converted                    1,584,009        8,087,500                --               --         8,087,500

Unamortized value of convertible debt
discount at time of conversion                       --         (523,484)               --               --          (523,484)

Issuance cost related to convertible
debt conversion                                      --         (568,864)               --               --          (568,864)

Value of share based registration
rights liability at time of conversion          438,380               --         3,450,050               --         3,450,050

Value of warrants and beneficial
conversion feature at time of
conversion                                           --               --         3,697,699               --         3,697,699

Accrued interest paid in stock                   21,378          115,134            97,027               --           212,161

Share based compensation                             --               --         1,798,558               --         1,798,558

Net loss                                             --               --                --       (6,355,667)       (6,355,667)
                                           ------------     ------------      ------------     ------------      ------------

Balance - December 31, 2006                   9,538,767     $ 20,825,127      $ 10,330,248     $(22,289,438)     $  8,865,937
                                           ============     ============      ============     ============      ============

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

                                                              5


<PAGE>

                               IVIVI TECHNOLOGIES, INC.

                               STATEMENTS OF CASH FLOWS
                 FOR THE NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                     (UNAUDITED)


                                                           2006              2005
                                                       ------------      ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                               $ (6,355,667)     $ (4,041,432)
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                            13,415            59,266
    Change in fair value of warrant and
          registration rights liabilities                    25,827                --
    Share based financing penalties                       1,350,278           238,018
    Amortization of loan costs and discount                 173,008           171,624
    Share based compensation                              1,798,558           104,173
    Provision for doubtful accounts                          30,608                --
    Amortization of deferred revenue                        (10,417)               --
    Other                                                        --             4,679
Changes in operating assets and liabilities:
  (Increase) decrease in:
    Inventory                                                56,877           (19,940)
    Accounts receivable                                    (122,367)         (157,863)
    Prepaid expenses                                       (105,757)          291,468
  Increase in:
    Accounts payable and accrued expenses                   543,194           463,421
    Deferred revenue                                        500,000                --
                                                       ------------      ------------
                                                         (2,102,443)       (2,886,586)
                                                       ------------      ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                     (17,952)           (6,595)
    Intangible assets                                      (164,214)               --
                                                       ------------      ------------
                                                           (182,166)           (6,595)
                                                       ------------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock in connection with
  initial public offering                                13,963,898                --
Affiliate advances                                       (2,594,091)           14,820
Proceeds of notes                                           250,000         1,250,000
Repayment of notes                                         (250,000)           (2,400)
Deferred loan costs                                              --           (91,989)
Deferred offering costs                                          --          (145,841)
                                                       ------------      ------------
                                                         11,369,807         1,024,590
                                                       ------------      ------------
Net (decrease) in cash and cash equivalents               9,085,198        (1,868,591)
Cash and cash equivalents, beginning of period              742,348         2,505,645
                                                       ------------      ------------

Cash and cash equivalents, end of period               $  9,827,546      $    637,054
                                                       ============      ============


                                          6


<PAGE>

                                                               2006           2005
                                                            ----------     ----------
Supplemental disclosures of cash flow information:

Cash paid for:
  Interest                                                  $  417,662     $  142,388
  Income taxes                                                      --             --

Non Cash Financing and Investing Activities:
  Debt converted to equity                                  $7,564,016             --
  Warrant and registration rights liabilities
    converted to equity                                     $7,147,749             --
  Accrued interest paid in stock                            $  212,161             --


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


                                          7
</TABLE>


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2006
                                   (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-QSB 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 and
nine months ended December 31, 2006 are not necessarily indicative of the
results that may be expected for the fiscal year ending March 31, 2007. The
accompanying financial statements and the information included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" should be read in conjunction with our audited financial statements
and related notes for the fiscal year ended March 31, 2006 included in our
Registration Statement on Form SB-2 (File No. 333-122768) (the "Registration
Statement"), declared effective by the Securities and Exchange Commission on
October 18, 2006.

RECLASSIFICATIONS

         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.

INTANGIBLE ASSETS

         Intangible assets include patents and trademarks of $107,040 and
deferred distribution agreement costs related to our Allergan distribution
agreement, further discussed in Note 3, of $57,174, net of $1,254 of
amortization recorded during the quarter ended December 31, 2006. Patent and
trademarks are amortized on a straight-line basis over the estimated useful
lives of the specific patent and trademarks once issued. Deferred distribution
agreement costs are being amortized on a straight-line basis over the term of
the aforementioned Allergan agreement. During the quarter ended December 31,
2006, we amortized $1,254 of costs related to the Allergan distribution
agreement.


                                       8


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         At December 31, 2006, accounts payable and accrued expenses consisted
of the following:

                  Research and development     $  568,500
                  Professional fees               467,351
                  Sales commissions               143,039
                  Other                           211,446
                                               ----------
                                               $1,390,336
                                               ==========

LOSS PER SHARE

         Basic and diluted loss per common share for all periods presented is
computed based on the weighted average number of common shares outstanding
during the periods presented as defined by SFAS No. 128, "Earnings Per Share."
The assumed exercise of common stock equivalents was not utilized for the three
and nine month periods ended December 31, 2006 and 2005 since the effect would
be anti-dilutive. There were 4,938,482 common stock equivalents at December 31,
2006 and 4,000,635 at December 31, 2005.

STOCK OPTIONS AND WARRANTS

         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) ("APB 25"). The effect
of this change was to increase our net loss by $7,892 and $23,676 for the three
and nine month periods ended December 31, 2005, respectively. This change had no
effect on our cash flows or basic and diluted net loss per share.

         Pro forma information for options granted prior to our adoption of SFAS
No.123R (April 2006) was computed using the Black-Scholes option pricing model
at the date of grant of the options based on the following assumptions ranges:
risk free interest rate of 3.62% to 5%; dividend yield of 0%; volatility factor
of the expected market price of our common stock of 60% to 67%; and an expected
life of the options of 1.5 to 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


                                       9


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


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 fair value of common share purchase options we have
granted to our employees and directors.

      Pro forma information relating to employee and director common share
purchase options is as follows:

<TABLE>
                                           For the three months  For the nine months
                                                  ended                ended
                                            December 31, 2005     December 31, 2005
                                            -----------------     -----------------
<S>                                          <C>                  <C>
Net loss as reported                         $    (1,161,271)     $    (4,041,432)

Add: share based compensation expense
       calculated under APB 25               $         2,856      $         8,568

Deduct: share based compensation expense
       Calculated under fair value method    $        (5,264)     $       (15,786)
                                             ---------------      ---------------

Pro forma net loss                           $    (1,163,679)     $    (4,048,650)
                                             ===============      ===============

Basic and diluted net loss per share,
       as reported                           $         (0.24)     $         (0.85)
                                             ===============      ===============

Pro forma basic and diluted
       net loss per share                    $         (0.25)     $         (0.85)
                                             ===============      ===============
</TABLE>

NOTE 2 - INITIAL PUBLIC OFFERING

         During October 2006, we completed our initial public offering ("IPO"),
selling 2.5 million shares of our common stock at $6.00 per share raising gross
proceeds of $15.0 million. The underwriters of the offering were granted an
option for a period of 45 days to purchase up to an aggregate of 375,000
additional shares of common stock from us to cover over-allotments, if any. Net
proceeds to us from the IPO were approximately $12.2 million after the payment
of underwriting discounts and commissions and expenses related to the offering.
On November 22, 2006, we received additional net proceeds of approximately $1.4
million, after the payment of underwriting commissions and expenses, from the
underwriters who partially exercised their option to purchase 250,000 of the
available 375,000 shares of our common stock to cover over-allotments.


                                       10


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


         Upon the consummation of the IPO, unsecured convertible notes in the
aggregate principal amount of $6,087,500, issued in our December 2004 and
February 2005 joint private placements with ADM Tronics Unlimited, Inc., the
owner of 34% of our outstanding common stock ("ADM"), automatically converted
into an aggregate of 1,630,232 shares of our common stock. The notes bore
interest at an annual rate of 6%, which interest was payable at the discretion
of the holder in cash, shares of ADM common stock or shares of our common stock.

         Also, upon consummation of the IPO, unsecured convertible notes in the
aggregate principal amount of $2,000,000 issued in connection with our November
2005 and March 2006 private placements to four institutional investors
automatically converted into an aggregate of 392,157 shares of our common stock.
The notes bore interest at an annual rate of 8%, payable in cash. Two of the
institutional investors who purchased notes, Ajax Capital LLC and Kenneth S.
Abramowitz & Co., Inc., are investment funds wholly-owned by Steven Gluckstern
and Kenneth Abramowitz, respectively, each of whom began to serve as a director
of our company upon the effective date of the Registration Statement, waived
their right to receive interest payments on a quarterly basis through the
consummation of the IPO (approximately $25,000 per quarter). We used
approximately $77,000 and $19,000 of the net proceeds to pay Ajax Capital LLC
and Kenneth S. Abramowitz Co., Inc., respectively, and an additional $149,000 of
the proceeds from the IPO to pay the other holders, any and all interest with
respect to such notes then due and payable.

         As a result of the foregoing, we do not have any loans outstanding as
of the date of this filing.

NOTE 3 - DEFERRED REVENUE

         In August, 2006, we sold to Ajax, 15 units of the Roma3 and 5 units of
the SofPulse M-10 at a purchase price of $14,500 per unit, the then published
wholesale unit price for the Roma3 and the SofPulse M-10, for an aggregate
purchase price of $290,000. In connection therewith, we entered into a Revenue
Sharing Agreement (the "Revenue Sharing Agreement") with Ajax, pursuant to which
we agreed to use our commercially reasonable efforts to rent to third parties
all of the units of the Roma3 and the SofPulse M-10 purchased by Ajax.

         On December 22, 2006, our Audit Committee approved the termination of
the Revenue Sharing Agreement with Ajax. In connection with the termination,
Ajax transferred to us all of its rights, title and interest in and to the units
of the Roma3 and the SofPulse M-10 purchased by Ajax on the date of the Revenue
Sharing Agreement, and we paid Ajax $296,136. As a result of the termination, we
are entitled to all revenues generated by the rental and sales of such units and
the related applicators from and after the termination date.


                                       11


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


         On November 9, 2006, we entered into an exclusive worldwide
distribution agreement (the "Agreement") with a wholly-owned subsidiary of
Allergan, Inc. ("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 ("Inamed") 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).

         Under the Agreement, we also granted Inamed the right to rebrand the
Product, with Inamed owning all rights to such brands developed by Inamed for
such purpose. Under the Agreement, we received an initial payment of $500,000
and will receive certain milestone payments of up to $1,000,000 in the aggregate
upon the Product's First Commercial Sale (as defined in the Agreement) in the
United States and Europe. In addition, Inamed will purchase the Product from us
at a pre-determined price and must meet certain minimum order requirements.
Finally, we will receive royalty payments based on Inamed's net sales and number
of units sold of the Product, subject to certain annual minimum royalty payments
to be determined by the parties.

         The Agreement has an eight year initial term beginning at the Product's
First Commercial Sale. The initial term may be extended for two additional years
without further payment at Inamed's option. Inamed may also pay us a $2,000,000
extension fee and extend the term of the Agreement for up to eight additional
years, for a total term of up to 18 years.

         Inamed may only market, sell and distribute the Product under the
Agreement in the "Marketing Territory," which is generally defined in the
Agreement as the United States and such other jurisdictions for which all
requisite regulatory approval has been obtained. If the marketing, sale or
distribution of the Product in a jurisdiction would infringe third-party
intellectual property rights and likely result in a lawsuit against us or
Inamed, Inamed could require us to use reasonable commercial efforts to obtain a
license for, or redesign, the Product to be sold in that jurisdiction.

     In the event we fail to supply Allergan or its subsidiaries certain minimum
amounts of the Product and fail to procure alternate suppliers for such Products
within certain timeframes, Inamed will have the right to use certain of our
intellectual property and/or other proprietary information to manufacture the
Product until such time as we demonstrate to Inamed's reasonable satisfaction
that we are fully able to resume our supply obligations. During such time as
Inamed controls Product manufacturing, our royalty rate would be significantly
reduced.


                                       12


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


         In the event Inamed is required to discontinue the marketing, sale or
distribution of the Product in the United States and/or any country in the
European Union because of problems with regulatory approvals and/or other
reasons related to the Product, we will be required to repay Inamed portions of
the milestone payments up to $1,000,000.

         Inamed may terminate the Agreement by giving 90 to 180 days' prior
written notice to us. We may terminate the Agreement by giving 12 months' prior
written notice if Inamed fails to timely pay us minimum royalty amounts for any
applicable year or fails to meet the minimum sales requirements set forth in the
Agreement. A non-breaching party may terminate the Agreement following a
material breach of the Agreement and the breaching party's failure to cure such
breach during the applicable cure period by giving the breaching party proper
prior written notice. If we are in material breach, and fail to cure, Inamed may
have the right to use certain of our intellectual property and/or other
proprietary information to manufacture the Product. Our royalty rate would
subsequently be significantly reduced.

         Neither party may assign or otherwise transfer its right and
obligations under the Agreement, including upon a change of control of such
party (as defined in the agreement), without the prior written consent of the
other party, which consent shall not be unreasonably withheld, except that
Inamed may assign its rights and obligations without the prior written consent
of the Company to Inamed's affiliates and upon a sale of all or substantially
all of the assets or equity of the business entity, division or unit, as
applicable, that markets, distributes or sells the Product.

         The Agreement includes other terms and conditions, including provisions
regarding regulatory responsibilities, audit rights, insurance, indemnification
and confidentiality.

         In November 2006, we received $500,000 under the terms of this
Agreement which was recorded as deferred revenue and is being amortized over the
initial term of the agreement. During the three month period ended December 31,
2006, we have recognized $10,417 in revenue from this agreement.

NOTE 4 -- RELATED PARTY TRANSACTIONS

         As discussed in Note 2, we used approximately $77,000 and $19,000 of
the net proceeds from our IPO to pay Ajax Capital LLC and Kenneth S. Abramowitz
Co., Inc., respectively, any and all interest with respect to the November 2005
and March 2006 private placement notes.

         In connection with the IPO, we repaid approximately $2.6 million to
ADM, representing the balance in our inter-company accounts at October 24, 2006
due to ADM from us for product manufacturing and allocations of support services
provided by ADM to us for the period from March 1989 to October 2006.


                                       13


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


         In addition, we repaid our note payable to Ajax with a payment of
$257,123, which represented the outstanding principal and interest under the
unsecured subordinated loan. The note bore interest at an annual rate of 8%.

         As discussed in Note 3, on December 22, 2006, our Audit Committee
approved the termination of the Revenue Sharing Agreement with Ajax dated,
August 28, 2006. In connection with the termination, Ajax transferred to us all
of its rights, title and interest in and to the units of the Roma3 and the
SofPulse M-10 purchased by Ajax on the date of the Revenue Sharing Agreement and
we paid Ajax $296,136.

         Pursuant to a management services agreement, dated as of August 15,
2001, ADM provides us with administrative, technical, engineering and regulatory
services and allocates portions of its real property facilities for use by us.
In addition, ADM serves as the exclusive manufacturer of medical and other
devices or products to be distributed by us.

         The amount included in cost of rental revenue on our Statements of
Operations relating to these services provided by ADM was $26,743 and $15,872
for the three months ended December 31, 2006 and 2005 and $74,245 and $39,709
for the nine months ended December 31, 2006 and 2005.

         The amount included in salaries expenses on our Statements of
Operations relating to these services provided by ADM was $33,471 and $33,062
for the three months ended December 31, 2006 and 2005 and $116,184 and $99,187
for the nine months ended December 31, 2006 and 2005.

         The amount included in general and administrative expenses on our
Statements of Operations relating to these services provided by ADM was $25,467
and $22,453 for the three months ended December 31, 2006 and 2005 and $67,651
and $67,360 for the nine months ended December 31, 2006 and 2005.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

         On July 13, 2006, FASB released its final interpretation on uncertain
tax positions, FIN 48, "Account for Uncertainty in Income Taxes." FIN 48
addresses the recognition and measurement of uncertain income tax positions
using a "more-likely-than-not" threshold and introduces a number of new
disclosure requirements. The guidance will become effective as of the beginning
of a company's fiscal year beginning after December 15, 2006, for both public
and non-public companies. We believe this new pronouncement will have an
immaterial impact on our financial statements in future periods.


                                       14


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                                DECEMBER 31, 2006
                                   (UNAUDITED)


         In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157 ("FAS 157"), Fair Value
Measurements, which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles ("GAAP"), and expands
disclosures about fair value measurements. FAS 157 applies under other
accounting pronouncements that require or permit fair value measurements. Prior
to FAS 157, there were different definitions of fair value and limited guidance
for applying those definitions in GAAP. Moreover, that guidance was dispersed
among the many accounting pronouncements that require fair value measurements.
Differences in that guidance created inconsistencies that added to the
complexity in applying GAAP. The changes to current practice resulting from the
application of FAS 157 relate to the definition of fair value, the methods used
to measure fair value, and the expanded disclosures about fair value
measurements. FAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years. The Company does not expect the adoption of FAS 157 to have an effect on
its financial statements.


                                       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-QSB.

Forward-Looking Statements

This Quarterly Report on Form 10-QSB 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 Registration Statement on
Form SB-2, declared effective by the Securities and Exchange Commission on
October 18, 2006 (the "Registration Statement") 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-KSB and
10-QSB 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.


                                       16


<PAGE>

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 pulsed
electromagnetic field, or PEMF technology. This technology utilizes a magnetic
field that is turned on and off rapidly 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 are
currently marketing products utilizing our PEMF technology to the chronic wound
and plastic and reconstructive surgery markets. We are developing proprietary
technology for other therapeutic medical markets.

         While we have conducted research and development and performed sales
and marketing activities, we have generated limited revenues to date and have
incurred significant losses since our inception. At December 31, 2006, we had an
accumulated deficit of approximately $22.3 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
PEMF technology. We are focusing our research and development activities on
optimizing the signal parameters of our PEMF technology, enabling us to produce
improved clinical outcomes and produce a smaller more efficient product
utilizing less power.

         Our revenues to date have been primarily generated through monthly or
daily rental programs and through the direct sale of our products. During the
nine months ended December 31, 2006, we began to sell certain of our units,
through distributors, in certain additional markets. We expect future revenues
to be generated through monthly or daily rental programs with, and the sale of
our products and related disposable products to long-term care nursing
facilities, long-term acute care hospitals, rehabilitation hospitals, acute care
facilities, home health users and individual patients. In addition, we expect
revenues also to be generated through the sale of certain of our products to
plastic surgery patients and physicians.

         On October 24, 2006, we completed our initial public offering ("the
IPO"), selling 2.5 million shares of our common stock at $6.00 per share raising
gross proceeds of $15.0 million. The underwriters of the IPO were granted an
option for a period of 45 days to purchase up to an aggregate of 375,000
additional shares of common stock from us to cover over-allotments, if any. Net
proceeds to us were approximately $12.2 million from the IPO after the payment
of underwriting discounts and commissions and expenses related to the IPO. On
November 22, 2006, we received additional net proceeds of approximately $1.4
million, after the payment of underwriting commissions and expenses, from the
partial exercise of the over-allotment option to purchase 250,000 of the
available 375,000 shares of our common stock.


                                       17


<PAGE>

         On November 9, 2006, we entered into an exclusive worldwide
distribution agreement with a wholly-owned subsidiary of Allergan, Inc., 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 the exclusive worldwide right to market, sell and distribute
certain of our products, including all improvements, line extensions and future
generations thereof in conjunction with any aesthetic or bariatric medical
procedures in the Marketing Territory. In November 2006, we received $500,000
under the terms of this Agreement which has been recorded as deferred revenue in
our balance sheet and is being amortized over 8 years. We anticipate receiving
additional revenues under this agreement.

         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 increase market penetration of our current
products, our ability to enter into marketing and distribution agreements in our
target markets with companies such as Allergan 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. We are nearing full
enrollment of our cardiac study at The Cleveland Clinic Florida where we are
utilizing PEMF to treat patients with ischemic cardiomyopathy. We have completed
over three-quarters of full enrollment and hope to fill the remaining spots over
the next several months. We believe that PEMF's effects of improving blood flow
and regeneration of new blood vessels could prove useful for these patients for
which there are no alternatives. Given the length of the trial, as well as the
post-trial review period, the earliest data could be analyzed and available is
four months after the final patient is enrolled. As a result, we would
anticipate results likely being available in the fourth calendar quarter of
2007, however, we cannot assure when full enrollment will be completed and
results of the study will be available.

         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


                                       18


<PAGE>

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 payors' approval of use for our products and technologies
in development may be an important factor in establishing market acceptance.

         While commercial insurance companies make their own decisions regarding
which medical procedures, technologies and services to cover, commercial payors
often apply standards similar to those adopted by the Centers for Medicare and
Medicaid Services, or CMS in determining Medicare coverage. The Medicare statute
prohibits payment for any medical procedures, technologies or services that are
not reasonable and necessary for the diagnosis or treatment of illness or
injury. In 1997, CMS, which is responsible for administering the Medicare
program, had interpreted this provision to deny Medicare coverage of procedures
that, among other things, are not deemed safe and effective treatments for the
conditions for which they are being used, or which are still investigational.
However, in July 2004, CMS reinstated Medicare reimbursement for the use of the
technology used in our products in the treatment of non-healing wounds under
certain conditions.

         CMS has established a variety of conditions for Medicare coverage of
the technology used in our products. These conditions depend, in part, on the
setting in which the service is provided. For example, in 2004, CMS added
electromagnetic therapy as a type of service payable in the home health setting,
but subject to Medicare's consolidated home health billing provisions. Thus,
Medicare will not pay separately for electromagnetic therapy services if the
service is billed under a home health plan of care provided by a home health
agency. Rather, the home health agency must pay for the electromagnetic therapy
as part of the consolidated payment made to the home health agency for the
entire range of home health services under the patient's care plan.

         In December 2005, we retained a consulting company specializing in CMS
reimbursement and coverage matters to assist us in arranging and preparing for a
meeting with CMS to request that CMS cover electromagnetic therapy for wound
treatment separately in the home health setting. In May 2006, with the
assistance of this consulting company, we held a meeting with CMS and made a
presentation in support of reimbursement for the home health use of the
technology used in our products. As of the date of this filing, we have not
received any feedback from CMS as to whether CMS intends to reimburse for the
use of the technology used in our products separately in the home health
setting. Even if CMS were to approve separate reimbursement of electromagnetic
therapy in the home health setting, the regulatory environment could change and
CMS might deny all coverage for electromagnetic therapy as treatment of chronic
wounds, whether for home health use or otherwise, which could limit the amount
of coverage patients or providers are entitled to receive. Either of these
events would materially and adversely affect our revenues and operating results.


                                       19


<PAGE>

         We cannot predict when, if ever, CMS will allow for reimbursement for
the use of the technology in our products in the home, or what additional
legislation or regulations, if any, may be enacted or adopted in the future
relating to our business or the healthcare industry, including third-party
coverage and reimbursement, or what effect any such legislation or regulations
may have on us. Furthermore, significant uncertainty exists as to the coverage
status of newly approved healthcare products, and there can be no assurance that
adequate third-party coverage will be available with respect to any of our
future products or new applications for our present products. In currently
non-capitated markets, failure by physicians, hospitals, nursing homes and other
users of our products to obtain sufficient reimbursement for treatments using
our technologies would materially and adversely affect our revenues and
operating results. Alternatively, as the U.S. medical system moves to more
fixed-cost models, such as payment based on diagnosis related groups,
prospective payment systems or expanded forms of capitation, the market
landscape may be altered, and the amount we can charge for our products may be
limited and cause our revenues and operating results to be materially and
adversely affected.

         We may be required to undertake time-consuming and costly development
activities and seek regulatory clearance or approval for new products or
technologies. Although the FDA has cleared the use of our products for the
treatment of edema and pain in soft tissue, we may not be able to obtain
regulatory clearance or approval of 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 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;

         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.

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,


                                       20


<PAGE>

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 to a lesser extent
from the sale of our products. 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 30-day 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.

         Sales are 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 and sales returns have been
immaterial.

         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". At December 31, 2006, we also had 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. The units are depreciated
over seven years commencing on the date placed in service.

         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).


                                       21


<PAGE>

         o We use the fair value method for equity instruments granted
to non-employees and use the Black Scholes option value model or 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.

          o For share based instruments carried at fair value in the
financial statements, we used the Black Scholes option pricing model to value
our stock purchase warrants. As of December 31, 2006, we have used the following
assumptions in the Black Scholes option pricing model: (i) dividend yield of 0%;
(ii) expected volatility of 60%; (iii) risk free interest rate of 4.75% and (iv)
expected life of 1.5 years.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2006 COMPARED TO THE THREE MONTHS ENDED DECEMBER
31, 2005

         Net loss increased $1,218,842, or 105%, to $2,380,113, or $0.28 per
share, for the three months ended December 31, 2006 compared to a net loss of
$1,161,271, or $0.24 per share, for the three months ended December 31, 2005.
The increase in net loss primarily resulted from (i) decreases in rental
revenues of $87,496, or 41%, (ii) increases in share based compensation of
$782,514, or 1940%, (iii)increases in research and development of $333,747 or
208%, (iv)increases in selling and marketing expenses of $44,389, or 33%, (v)
increases in salaries of $130,958, or 47%,(vi)increases in general and
administrative expenses of $75,225, or 19% and (vii) increases in cost of goods
sold of $26,640, or 1438%, partially offset by increases in sales of $84,098,
1,161%, decreases in cost of rental revenues of $74,643, or 70%, and decreases
in interest and finance costs of $93,428, or 37%, for the three months ended
December 31, 2006 as compared to the three months ended December 31, 2005.

         Total revenue increased $7,019, or 3%, to $227,222 for the three months
ended December 31, 2006 as compared to $220,203 for the three months ended
December 31, 2005. The increase in revenue was due to an increase of unit sales
and the recognition of licensing revenue from our Allergen agreement, offset by
a reduction in the number of units out on rental and a reduction in the price
per unit for certain rental customers. Rental revenues during the three months
ended December 31, 2006 were negatively impacted by management's significant
time commitment related to the completion of the IPO, the successful negotiation
and execution of our agreement with Allergan and marketing for new license
agreements.

         Cost of goods sold increased $26,040, or 1437%, to $27,851 for the
three months ended December 31, 2006 from $1,811 for the three months ended
December 31, 2005 due to the increase in unit sales.

         Cost of rental revenue decreased $74,643, or 70%, to $31,276 for the
three months ended December 31, 2006 from $105,919 for the three months ended
December 31, 2005 due to an inventory write-off of obsolete inventory during the
third quarter ended December 31, 2005. Cost of rental revenue consists primarily
of the cost of electronics and other components and wages relating to the


                                       22


<PAGE>

manufacture of our products by third parties, including ADM. Cost of rental
revenue for the three months ended December 31, 2006 and 2005 included
inter-company allocations of $26,743 and $15,872, respectively. Inter-company
allocations for the three months ended December 31, 2006 and 2005 consisted of
amounts payable to ADM under our management services agreement.

         Depreciation and amortization increased $1,059, or 41%, to $3,661 for
the three months ended December 31, 2006 from $2,602 for the three months ended
December 31, 2005. The increase was attributable to purchases of fixed assets
during the quarter ended December 31, 2006 as well as amortizing deferred costs
relating to our distribution agreement with Allergan.

         Salaries increased $130,958, or 47%, to $407,610 for the three months
ended December 31, 2006 from $276,652 for the three months ended December 31,
2005. The increase in salaries was due primarily to salary cost reduction
initiatives commencing in November 2005 and ending in October 2006. Reduced
amounts for the period July 1, 2006 through October 18, 2006 were repaid during
October 2006. In addition, we hired a Chief Financial Officer and a Controller
as well as additional sales and sales support staff during the quarter ended
December 31, 2006. The salaries for each of the three months ended December 31,
2006 and 2005 included inter-company allocations of salaries of $33,471 and
$33,062, respectively. Inter-company allocation for the three months ended
December 31, 2006 and 2005 consisted of amounts payable to ADM under our
management services agreement.

         Research and development costs increased $333,747, or 208%, to $494,447
for the three months ended December 31, 2006 from $160,700 for the three months
ended December 31, 2005. The increase was due to existing clinical trials which
are ongoing by us.

         Net interest and financing costs decreased $93,428, or 37%, to $159,610
for the three months ended December 31, 2006 from $253,038 during the three
months ended December 31, 2005 due to (i) a decrease in interest expense on the
convertible notes issued by us and converted upon the effectiveness of our IPO,
(ii) a decrease in borrowings under promissory notes issued by us, (iii) a
decrease of additional shares issuable under the convertible notes for failure
to register the underlying securities, which were issued during the quarter
ended December 31, 2006, partially offset by interest earned from amounts
invested in money market funds.

         Selling and marketing expenses increased $44,389, or 33%, to $179,773
for the three months ended December 31, 2006 as compared to $135,384 for the
three months ended December 31, 2005. The increase resulted from increases in
consulting expenses of $47,020, and advertising expenses of $20,731, partially
offset by decreases in royalties and commissions of $23,362.

         General and administrative expenses increased $75,225, or 19%, to
$480,255 for the three months ended December 31, 2006 as compared to $405,030
for the three months ended December 31, 2005. The increase resulted primarily
from increases in professional fees of $40,043, travel expenses of $12,068 and
insurance of $29,486. General and administrative expenses for the three months


                                       23


<PAGE>

ended December 31, 2006 and 2005 reflects inter-company allocations of $25,467
and $22,453, respectively. Inter-company allocation for the three months ended
December 31, 2006 and 2005 consisted of amounts payable to ADM under our
management services agreement.

         Share based compensation increased $782,514, or 1940%, to $822,852 for
the three months ended December 31, 2006 from $40,338 during the three months
ended December 31, 2005 due to expenses under FAS 123(R) for common stock
options issued by us.


NINE MONTHS ENDED DECEMBER 31, 2006 COMPARED TO THE NINE MONTHS ENDED DECEMBER
31, 2005

         Net loss increased $2,314,235 to $6,355,667, or $1.06 per share, for
the nine months ended December 31, 2006 compared to $4,041,432, or $0.85 per
share, for the nine months ended December 31, 2005. The increase in net loss
primarily resulted from (i) increases in cost of goods sold of $34,339, or 141%,
(ii) increases in share based compensation of $1,712,607, or 1993%, (iii)
increases in interest and finance costs of $1,080,157, or 158%, (iv) increases
in research and development of $260,755, or 38%, (v) increase in the change in
the fair value of warrant and registration rights liabilities of $25,827, with
no amount in the corresponding prior year period, and (vi) increases in salaries
of $116,058, or 14%, offset by increases in revenues of $334,900 or 70%,
decreases in cost of rental revenues of $120,229, or 64%, decreases in selling
and marketing expenses of $309,694, or 39%, and decreases in general and
administrative expenses of $156,635, or 13%, for the nine months ended December
31, 2006 as compared to the nine months ended December 31, 2005.

         Total revenue increased $334,900, or 70%, to $813,174 for the nine
months ended December 31, 2006 as compared to $478,274 for the nine months ended
December 31, 2005. The increase in revenue was primarily the result of increased
unit sales, increased marketing efforts and, to a lesser extent, the recognition
of licensing revenue from our Allergan agreement.

         Cost of good sold increased $34,339 or 141%, to $58,744 for the nine
months ended December 31, 2006 from $24,405 for the nine months ended December
31, 2005 due to the increase in unit sales.

         Cost of rental revenue decreased $120,229, or 64%, to $68,650 for the
nine months ended December 31, 2006 from $188,879 for the nine months ended
December 31, 2005 due an inventory write-off of obsolete inventory during the
third quarter ended December 31, 2005. Cost of rental revenue consists primarily
of the cost of electronics and other components including depreciation, and
wages relating to the manufacture of our products by third parties, including
ADM. Cost of rental revenue for the nine months ended December 31, 2006 and 2005
included depreciation of $0 and $51,791 and inter-company allocations of $74,245
and $39,709, respectively. Inter-company allocations for the three months ended
December 31, 2006 and 2005 consisted of amounts payable to ADM under our
management services agreement.


                                       24


<PAGE>

         Depreciation and amortization increased $5,940, or 79%, to $13,415 for
the nine months ended December 31, 2006 from $7,475 for the nine months ended
December 31, 2005. The increase was attributable to amortizing deferred costs
relating to our distribution agreement with Allergan and depreciating newly
acquired fixed assets.

         Salaries increased $116,058, or 14%, to $930,764 for the nine months
ended December 31, 2006 from $814,706 for the nine months ended December 31,
2005. The increase was due primarily to salary cost reduction initiatives
commencing in November 2005 and ending in October 2006. Reduced amounts for the
period July 1, 2006 through October 18, 2006 were repaid during October 2006. In
addition, we hired a Chief Financial Officer and a Controller as well as
additional sales and sales support staff during the quarter ended December 31,
2006. Inter-company allocations increased by $16,997 or 17% to $116,184 for the
nine months ended December 31, 2006 from $99,187 for the nine months ended
December 31, 2005. Inter-company allocations for the three and nine months ended
December 31, 2006 and 2005 consisted of amounts payable to ADM under our
management services agreement.

         Research and development costs increased $260,755, or 38%, to $945,369
for the nine months ended December 31, 2006 from $684,614 for the nine months
ended December 31, 2005. The increase was due to existing clinical trials which
are ongoing by us.

         Net interest and financing costs increased $1,080,157, or 158%, to
$1,763,615 for the nine months ended December 31, 2006 from $683,458 for the
nine months ended December 31, 2005 due to (i) the increase in interest expense
on the convertible notes issued by us, (ii) increased borrowing under a
promissory note issued by us and (iii) additional shares issued under the
convertible notes for failure to register the underlying securities, partially
offset by interest earned from amounts invested in money market funds.

         Selling and marketing expenses decreased $309,694, or 39%, to $479,230
for the nine months ended December 31, 2006 as compared to $788,924 for the nine
months ended December 31, 2005. The decrease resulted primarily from decreases
in advertising costs of $259,904 and consulting fees of $148,757, partially
offset by increases in royalties and commissions of $90,537.

         General and administrative expenses decreased $156,635, or 13%, to
$1,084,659 for the nine months ended December 31, 2006 as compared to $1,241,294
for the nine months ended December 31, 2005. The decrease resulted primarily
from decreases in (i) office expenses of $88,137, (ii) professional fees of
$36,572, (iii) travel expenses of $19,694, and (iv) consulting fees expense of
$47,118, partially offset by an increase in insurance expense of $34,077.
General and administrative expenses for the nine months ended December 31, 2006
and 2005 reflect inter-company allocations of $67,651 and $67,360, respectively.
Inter-company allocations for the nine months ended December 31, 2006 and 2005
consisted of amounts payable to ADM under our management services agreement.

         Share based compensation increased $1,712,607, or 1993%, to $1,798,558
for the nine months ended December 31, 2006 as compared to $85,951 for the nine
months ended December 31, 2005 due to expenses under FASB 123(R) for common
stock options issued by the Company for the nine months ended December 31, 2006.


                                       25


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         We have had significant operating losses for the fiscal years ended
March 31, 2006 and 2005, as well as for the nine months ended December 31, 2006.
As of December 31, 2006, we had an accumulated deficit of approximately $22.3
million. Our continuing operating losses have been funded principally through
the proceeds of our private placement financings, our IPO and other
arrangements. We have only generated limited revenues of $786,512 and $328,996
for the fiscal years ended March 31, 2006 and 2005, respectively, and $813,174
and $478,274 for the nine months ended December 31, 2006 and 2005, 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 marketing efforts with
respect to our products and continue our research and development of additional
applications for our technology and other technologies that we may develop in
the future. We do not expect to be able to generate sufficient cash flow from
our operations during the next twelve-month period; however, we believe that the
proceeds from our IPO, combined with our expected revenues, will be sufficient
to fund our operations for a minimum of 12 months.

         As of December 31, 2006, we had cash and cash equivalents of $9.8
million as compared to cash and cash equivalents of $742,348 at March 31, 2006.
The increase in cash and cash equivalents during the nine month period ended
December 31, 2006 was due to funds received in connection with our IPO during
October 2006 and partial exercise of the underwriters' over-allotment option in
November 2006 as well as $500,000 received under our distribution agreement with
Allergan.

         Net cash used by operating activities was approximately $2.1 million
during the nine months ended December 31, 2006 compared to the net cash used by
operating activities of approximately $2.9 million during the nine months ended
December 31, 2005.

         Net cash used in operating activities for the nine months ended
December 31, 2006 resulted primarily from increased net loss of approximately
$6.4 million during the period, partially offset by non-cash charges of
approximately $3.4 million and an increase in accounts payable and accrued
expenses of approximately $400,000 during the period as well as $500,000
received under our distribution agreement with Allergan.

         Net cash used by investing activities was $182,166 during the nine
months ended December 31, 2006 compared to $6,595 during the nine months ended
December 31, 2005, the increase of which was due to purchases of computers and
computer equipment of $17,952 and payments related to our patents and trademarks
of $164,214 during the nine month period ended December 31, 2006.


                                       26


<PAGE>

         Net cash provided by financing activities was approximately $11.4
million during the nine months ended December 31, 2006 compared to net cash
provided by financing activities of approximately $1.0 million during the nine
months ended December 31, 2005. The increase in cash provided by financing
activities for the nine months ended December 31, 2006 was primarily related to
the proceeds of our IPO and the partial exercise of the underwriters'
over-allotment option of approximately $14.0 million, partially offset by
repayments of advances from affiliates of $2.6 million.

         In June 2006, Ajax, an investment fund wholly-owned by Steven
Gluckstern, who began to serve as our Chairman of the Board upon the
effectiveness of the IPO, loaned us $250,000, pursuant to an unsecured
subordinated promissory note. The proceeds of this note were being used for
working capital purposes. On October 24, 2006, we used a portion of the proceeds
of our IPO to repay all amounts payable to Ajax under this note.

         In August 2006, we sold to Ajax, an investment fund wholly-owned by
Steven Gluckstern, 15 units of the Roma3 and five units of the SofPulse M-10 at
a purchase price of $14,500 per unit, the then published wholesale unit price
for the Roma3 and the SofPulse M-10, for an aggregate purchase price of
$290,000. In connection therewith, we entered into a revenue sharing agreement
with Ajax, pursuant to which we agreed to use our commercially reasonable
efforts to rent to third parties all of the units of the Roma3 and the SofPulse
M-10 purchased by Ajax. Ajax will be entitled to receive revenues with respect
to rentals of the Roma3 units purchased by it in an amount equal to 50% of the
aggregate of the gross proceeds from such rentals received by us during each
month of the term. In addition, Ajax also will be entitled to receive revenues
with respect to rentals of the SofPulse M-10 units purchased by it in an amount
equal to the net proceeds from such rentals received by us during each month of
the term, reduced by (i) 11.5% of the gross proceeds for services related to
marketing, billing, collections and account maintenance to be performed by us
with respect to such units, received by us during such month, and (ii) in the
case of each of the first three months during the term, a set up fee of $2,000.
In addition, Ajax will be entitled to receive 50% of any and all gross proceeds
we receive from our sale of applicators for use in connection with the foregoing
units of the Roma3 rented to third parties during the term of the agreement. The
term of the agreement expires on August 28, 2011.

         On December 22, 2006, our Audit Committee approved the termination of
the Revenue Sharing Agreement dated August 28, 2006. In connection with the
termination, Ajax transferred to us all of its rights, title and interest in and
to the units of the Roma3 and the SofPulse M-10 purchased by Ajax on the date of
the Revenue Sharing Agreement, and we paid Ajax $296,136. As a result of the
termination, we are entitled to all revenues generated by the rental and sales
of such units and the related applicators from and after the termination date.

         Our business is capital intensive and we will likely require additional
financing in order to:

         o        fund research and development;


                                       27


<PAGE>

         o        expand sales and marketing activities;

         o        develop new or enhanced technologies or products;

         o        maintain and establish regulatory compliance;

         o        respond to competitive pressures; and

         o        acquire complementary technologies or take advantage of
                  unanticipated opportunities.

         Our need for additional capital will depend on:

         o        the costs and progress of our research and development
                  efforts;

         o        the preparation of pre-market application submissions to the
                  FDA for our new products and technologies;

         o        the number and types of product development programs
                  undertaken;

         o        the number of products to be manufactured for sale or rental;

         o        the costs and timing of expansion of sales and marketing
                  activities;

         o        the amount of revenues from sales of our existing and
                  potentially new products;

         o        the cost of obtaining, maintaining, enforcing and defending
                  patents and other intellectual property rights;

         o        competing technological and market developments; and

         o        developments related to regulatory and third-party coverage
                  matters.

         In order to keep our operating expenses manageable, we entered into a
management services agreement, dated as of August 15, 2001, 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. As we intend to add employees to our administrative staff, we expect our
reliance on the use of the management services of ADM to be reduced
significantly.


                                       28


<PAGE>

         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 $183,835 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, 2006.

         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 an amount 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. We generally purchase
and provide ADM with all of the raw materials, parts and components necessary to
manufacture our products and, as a result, the manufacturing fee paid to ADM is
generally 120% of the labor rate charged by ADM.

         We have incurred $74,245 for ADMs' manufacture of our products pursuant
to the manufacturing agreement during the nine months ended December 31, 2006.

         During October 2006, we completed our IPO, selling 2.5 million shares
of our common stock at $6.00 per share raising gross proceeds of $15.0 million.
Net proceeds to us were approximately $12.2 million from the offering after the
payment of underwriting discounts and commissions and expenses related to the
offering. On November 22, 2006, we received additional net proceeds of
approximately $1.4 million, after the payment of underwriting commissions and
expenses, from the partial exercise of the underwriters' over-allotment option
to purchase 250,000 of the 375,000 available shares of our common stock.

         In addition, at the closing of our IPO, we paid approximately $2.6
million to ADM representing the balance in inter-company accounts at October 24,
2006 due to ADM from us, for product manufacturing and services provided by ADM
to us under our management services agreement for the period from March 1989 to
October 2006.

         Further, at the closing of our IPO, we repaid in full our notes payable
to Ajax on October 24, 2006 with a payment of $257,123, which represented the
outstanding principal and interest under the unsecured subordinated loan.

         Upon the consummation of the IPO, unsecured convertible notes in the
aggregate principal amount of $6.1 million issued in our December 2004 and
February 2005 joint private placement with ADM automatically converted into an
aggregate of 1,630,232 shares of our common stock. The notes bore interest at an


                                       29


<PAGE>

annual rate of 6%, which interest was payable at the direction of the holder in
cash, shares of ADM common stock or shares of our common stock. We issued 21,378
shares and 18,016 shares of common stock on December 27, 2006 and January 17,
2007, respectively, in lieu of cash for interest payments on the notes, which
concluded our obligation to such holders.

         On the effective date of the Registration Statement, unsecured
convertible notes in the aggregate principal amount of $2,000,000 issued in
connection with our November 2005 and March 2006 private placements to four
institutional investors automatically converted into an aggregate of 392,157
shares of our common stock. The notes bore interest at an annual rate of 8%,
payable in cash. Two of the institutional investors who purchased notes, Ajax
Capital LLC and Kenneth S. Abramowitz & Co., Inc., are investment funds
wholly-owned by Steven Gluckstern and Kenneth Abramowitz, respectively, each of
whom began to serve as a director of our company in connection with our IPO,
waived their right to receive interest payments on a quarterly basis through the
consummation of the IPO (approximately $25,000 per quarter). We used
approximately $77,000 and $19,000 of the net proceeds from our IPO to pay Ajax
Capital LLC and Kenneth S. Abramowitz, Co. Inc., respectively, and approximately
$149,000 of the net proceeds from the IPO to pay to the remaining such holders'
any and all interest with respect to such notes then due and payable.

         As a result of the foregoing, we do not have any loans outstanding as
of the date of this filing.

         In November 2006, we received $500,000 under the terms of our agreement
with Allergan and its subsidiary, Inamed, and we anticipate receiving additional
revenues under this agreement.

         Although we expect that the net proceeds of the IPO, together with our
available funds and funds generated from our operations, will be sufficient to
meet our anticipated needs for a minimum of 12 months, we may need to obtain
additional capital to continue to operate and grow our business. Our cash
requirements may vary materially from those currently anticipated due to changes
in our operations, including our marketing and distribution activities, product
development, expansion of our personnel 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.

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.


                                       30


<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS - SEE NOTE 5 TO OUR FINANCIAL STATEMENTS

         On July 13, 2006, FASB released its final interpretation on uncertain
tax positions, FIN 48, "Account for Uncertainty in Income Taxes." FIN 48
addresses the recognition and measurement of uncertain income tax positions
using a "more-likely-than-not" threshold and introduces a number of new
disclosure requirements. The guidance will become effective as of the beginning
of a company's fiscal year beginning after December 15, 2006, for both public
and non-public companies. We believe this new pronouncement will have an
immaterial impact on our financial statements in future periods.

         In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157 ("FAS 157"), Fair Value
Measurements, which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles ("GAAP"), and expands
disclosures about fair value measurements. FAS 157 applies under other
accounting pronouncements that require or permit fair value measurements. Prior
to FAS 157, there were different definitions of fair value and limited guidance
for applying those definitions in GAAP. Moreover, that guidance was dispersed
among the many accounting pronouncements that require fair value measurements.
Differences in that guidance created inconsistencies that added to the
complexity in applying GAAP. The changes to current practice resulting from the
application of FAS 157 relate to the definition of fair value, the methods used
to measure fair value, and the expanded disclosures about fair value
measurements. FAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years. The Company does not expect the adoption of FAS 157 to have an effect on
its financial statements.


                                       31


<PAGE>

Item 3. 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 Co-Chief Executive Officers 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-QSB, we carried out an evaluation, with the participation of our management,
including our Co-Chief Executive Officers and Chief Financial Officer, of the
effectiveness of our disclosure controls and procedures pursuant to Securities
Exchange Act Rule 13a-15. Based upon that evaluation as of December 31, 2006,
our Co-Chief Executive Officers and Chief Financial Officer concluded that our
disclosure controls and procedures 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 accumulated and communicated to our management
including our Co-Chief Executive Officers and Chief Financial Officer, to ensure
that such information is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

         In March 2006, our former auditors identified the following areas of
deficiencies in our internal control over financial reporting in connection with
our financial statements as of March 31, 2005 and for the year then ended: (i)
lack of staff with technical accounting expertise to independently apply our
accounting policies in accordance with accounting principles generally accepted
in the United States, (ii) improper cut off procedures for the periods presented
and (iii) lack of adequate back-up and documentation procedures with respect to
our inventory prior to March 31, 2005 and with respect to stock options
previously granted by us. Our management has determined that, due to the reasons
described above, we had not consistently followed established internal control
over financial reporting procedures related to the analysis, documentation and
review of selection of the appropriate accounting treatment for certain
transactions.

         We have assigned the highest priority to the improvement in our
internal control over financial reporting and have taken, and will continue to
take, action in furtherance of such improvement. Our management is committed to


                                       32


<PAGE>

instilling strong control policies and procedures and ensuring that our
financial reporting is accurate and complete. We have undertaken the following
initiatives with respect to our internal control and procedures that we believe
are reasonably likely to improve our internal control over financial reporting:
(i) we hired Joseph E. Rolston, a certified public accountant with prior public
company experience to begin to serve as our controller on October 31, 2006; (ii)
we hired Alan V. Gallantar, a certified public accountant with prior public
company experience, to begin to serve as our Chief Financial Officer in
connection with our IPO in October 2006; (iii) in July 2005, we retained a
certified public accountant as a consultant to assist with our financial
reporting obligations and improvement of our internal controls over financial
reporting and retained the services of this certified public accountant until
Mr. Gallantar commenced his service as our Chief Financial Officer; and (iv)
since August 2005, we have utilized a certified public accountant as a
consultant to assist management with internal control, financial reporting and
closing our books and records.

         We anticipate that remediation efforts relating to our internal
financial controls will continue throughout fiscal 2007, during such time we
expect to continue pursuing, with the advice and experience of our independent
auditors, appropriate additional corrective actions, including the following:

         o        hiring additional accounting staff as necessary, as determined
                  from time to time by management;

         o        preparing appropriate written documentation of financial
                  control procedures;

         o        scheduling training for accounting staff to heighten awareness
                  of generally accepted accounting principles applicable to
                  complex transactions; and

         o        strengthening our internal review procedures in conjunction
                  with our ongoing work to enhance our internal controls so as
                  to enable us to identify and adjust items proactively.

         Our management, including our Chief Financial Officer, together with
our Audit Committee, will closely monitor the implementation of our accounting
remediation plan. The effectiveness of the steps we intend to implement is
subject to continued management review, and we may make additional changes to
our internal control over financial reporting.

         There can be no assurance that the above-mentioned areas will be fully
remedied, if ever. Moreover, we cannot assure you that we will not, in the
future, identify further areas requiring improvement in our internal control
over financial reporting. We presently anticipate that the need for improvement
in these areas will continue to exist until we have fully implemented our
remediation plan.

         Except as set forth above, 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-QSB relates that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.


                                       33


<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

         On May 25, 2005, we filed a complaint against Regenesis Biomedical,
Inc., Virginia Rybski, Vice President of Sales and Marketing of Regenesis,
Terrence Kennedy, Regional Sales Manager for the South Eastern Territories of
Regenesis, Mary Ritz, President of Regenesis, and Frank George, Chief Science
and Technology Officer of Regenesis, in the Superior Court of New Jersey - Law
Division - Bergen County, Docket 3724-05, alleging breach of contract, tortuous
interference and conversion. We sought money damages and an injunction, based
upon breach of a confidentiality agreement signed by Ms. Rybski. On July 5,
2005, the defendants filed a motion to dismiss for lack of personal jurisdiction
for failure to state a claim upon which relief could be granted. The Court
denied the defendants' motion and permitted a period of discovery to determine
jurisdiction as to defendants, Terrence Kennedy, Mary C. Ritz and Frank R.
George. In July 2006, Regensis filed counterclaims against us claiming unfair
competition, tortuous interference, employee piracy and tortuous interference
for allegedly falsely advising customers with regard to Regensis, and Ms. Rybski
and Mr. Kennedy filed counterclaims against us alleging tortuous interference
with their prospective economic advantage. By agreement and stipulation, dated
October 13, 2006, signed by all parties to the litigation and their legal
counsel, the parties agreed to dismiss with prejudice the complaint and
counterclaim subject to the terms as set forth therein. The stipulation of
dismissal and order was filed with the court on October 17, 2006.

         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, pursuant to which: (i) we appointed NYHHC as
exclusive distributor of our products in a defined market place for so long as
NYHHC secured a minimum number of placements of our products and (ii) NYHHC
agreed to pay us $2,500 per month for each product shipped to NYHHC. By letter,
dated August 9, 2005, we terminated the agreement due to NYHHC's failure to make
the payments required under the agreement and failure to achieve the minimum
number of placements required under the agreement. We are seeking various forms
of relief, including: (i) money damages, including amounts due under unpaid
invoices in an aggregate amount of $236,560, (ii) an accounting and (iii) the
return of our products. The defendants filed a motion to dismiss alleging lack
of jurisdiction and failure to state a claim with regard to Harry Ruddy. We
opposed the defendant's motion to dismiss. On November 18, 2005, the Court
denied the defendant's motion to dismiss, without prejudice, based upon lack of
jurisdiction. The complaint was dismissed against Harry Ruddy, individually. The
Court permitted a period of discovery to determine the jurisdiction issue, which
discovery is substantially complete. The defendants filed another motion to
dismiss based upon a claim of lack of jurisdiction, which was heard and denied
by the Court on June 9, 2006. On or about July 10, 2006, the defendants filed an
answer and NYHHC filed counterclaims against us for breach of contract, breach
of the implied covenant of good faith and fair dealing, restitution, unjust
enrichment


                                       34


<PAGE>

and fraudulent inducement. An answer to the counterclaim was filed on August 9,
2006. Discovery is now continuing on the merits of the claims in the complaint
and counterclaim.

         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.

         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 2. Unregistered Sales of Equity and Use of Proceeds.

         The 2,500,000 shares of common stock issued in our IPO which was
consummated on October 24, 2006 were registered under a Registration Statement
on Form SB-2 (File No. 333-122768) which was declared effective by the
Securities and Exchange Commission on October 18, 2006. Maxim Group LLC acted as
representative of the underwriters of the offering and Brean Murray, Carret &
Co., LLC acted as co-manager of the offering. The shares of common stock sold in
the IPO were sold at $6.00 per share raising gross proceeds of $15.0 million. On
November 22, 2006, the underwriters partially exercised their over-allotment
option for 250,000 shares of our common stock for additional gross proceeds of
$1.5 million. The offering of the securities did not terminate prior to the sale
of all of the registered securities, other than that portion of the
over-allotment option that was not exercised.

         The aggregate gross proceeds from the IPO, including the
over-allotment, were $16.5 million. We paid the underwriters of the IPO
$1,485,000 in underwriting discounts and commissions and $360,000 for
non-accountable expenses. We incurred additional expenses related to the IPO,
including the over-allotment, of approximately $1,015,000 and the net proceeds
to us from the IPO were approximately $13,640,000.


                                       35


<PAGE>

<TABLE>
<S>     <C>
Use of the net proceeds from the IPO through December 31, 2006 was as follows:


Repayment of indebtedness due to ADM (1)                                   $2,607,266

Repayment of loan plus interest due to AJAX Capital LLC (2)                   257,123

Repayment of interest on convertible loan due to AJAX Capital LLC (2)          76,712

Repayment of interest on convertible loan due to Kenneth S. Abramowitz
& Co., Inc. (3)                                                                18,740

Repayment of interest on all remaining convertible loans issued in our
private placement                                                             148,913

Research and development                                                      125,000

Sales and marketing                                                           163,918

General corporate purposes, including working capital                         963,547

Termination of revenue sharing agreement with AJAX Capital LLC (2)            296,136
                                                                           ----------

Total                                                                      $4,657,355
                                                                           ==========
</TABLE>

         (1) As of the date of this filing, ADM is the beneficial owner of
approximately 34% of our outstanding common stock.
         (2) Ajax Capital LLC is an investment fund wholly-owned by Steven
Gluckstern, our Chairman of the Board.
         (3) Kenneth S. Abramowitz & Co, Inc. is an investment fund wholly-owned
by Kenneth Abramowitz, one of our directors.

         The remaining portion of the net proceeds from the IPO in the amount of
approximately $9.0 million has been invested in short-term, interest-bearing
money market accounts.


                                       36


<PAGE>

Item 6. Exhibits.

(a) Exhibit No.

10.1 Exclusive Distribution Agreement, dated as of November 9, 2006, between
IVIVI Technologies, Inc. and Inamed Medical Products Corporation* (incorporated
by reference to Exhibit of the Company's Form 10-QSB filed with the Securities
and Exchange Commission on December 4, 2006)

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

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

31.3 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.

           * Portions of this document have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
confidential treatment in accordance with Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.


                                       37


<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 14, 2007         By: /s/ Andre' DiMino
                                     ------------------------------------------
                                     Andre' DiMino, Co-Chief Executive Officer
                                     (Principal Executive Officer)


Dated: February 14, 2007         By: /s/ David Saloff
                                     ------------------------------------------
                                     David Saloff, Co-Chief Executive Officer
                                     (Principal Executive Officer)


Dated: February 14, 2007         By: /s/ Alan Gallantar
                                     ------------------------------------------
                                     Alan Gallantar, Chief Financial Officer
                                     (Principal Financial Officer and Principal
                                     Accounting Officer)


                                       38