<PAGE>

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

                                    FORM 10-Q

                                   (Mark One)

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

                For the quarterly period ended September 30, 2008

                                       OR

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

                For the transition period from _______ to _______

                          COMMISSION FILE NO. 001-33088

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

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

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

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

Indicate by check mark whether the Issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the Issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days:

YES [X] NO [ ]

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

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

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

YES [ ] NO [X]

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

10,116,930 shares of Common Stock, no par value, as of November 5, 2008




<PAGE>
<TABLE>
<S>            <C>
                                                IVIVI TECHNOLOGIES, INC.
 INDEX

Part I. Financial Information                                                                                            Page Number

         Item 1.    Financial Statements

         Balance Sheets - As of September 30, 2008 (Unaudited) and March 31, 2008                                              3

         Statements of Operations - For the three and six months ended September 30, 2008 and 2007 (Unaudited)                 4

         Statements of Stockholders' Equity - For the six months ended September 30, 2008 (Unaudited)                          5

         Statements of Cash Flows - For the six months ended September 30, 2008 and 2007 (Unaudited)                           6

         Notes to Financial Statements (Unaudited)                                                                             7

         Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations                      19

         Item 4T.   Controls and Procedures                                                                                    32

Part II. Other Information                                                                                                     34

         Item 1.    Legal Proceedings                                                                                          34

         Item 1A.   Risk Factors                                                                                               34

         Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds                                                37

         Item 5.    Other Information                                                                                          38

         Item 6.    Exhibits                                                                                                   39

         Signatures                                                                                                            40


<PAGE>
                               IVIVI TECHNOLOGIES, INC.
                                    BALANCE SHEETS

                                        ASSETS

                                                     September 30, 2008   March 31,
                                                       (UNAUDITED)           2008
                                                       ------------      ------------
Current assets:
   Cash and cash equivalents                           $  2,910,993      $  6,600,154
   Accounts receivable, net of allowance for
     doubtful accounts of $10,696 and $34,750, respectively                           437,198           319,007
   Inventory                                                223,226           111,951
   Deposits with affiliate                                  108,697           241,828
   Prepaid expenses and other current assets                 46,882           141,148
                                                       ------------      ------------

     Total current assets                                3,726,996         7,414,088

Property and equipment, net                                 365,175           405,793
Equipment in use or under rental agreements, net            149,063           155,834
Inventory long-term                                         143,843           115,885
Inventory held by Allergan, Inc.                            142,062                --
Intangible assets, net of accumulated
   amortization of $80,140 and $44,674, respectively                                  646,836           615,064
Restricted cash                                              48,963            48,167
                                                       ------------      ------------

                                                       $  5,222,938      $  8,754,831
                                                       ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses               $  1,178,158      $  1,029,143
   Due to Allergan, Inc.                                    450,000                --
                                                       ------------      ------------
     Total current liabilities                         $  1,628,158      $  1,029,143

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

Stockholders' equity:
   Preferred stock, no par value, 5,000,000 shares
   authorized, no shares issued and outstanding                  --                --
   Common stock, no par value; 70,000,000 shares
     authorized, 10,766,930 shares issued
     and outstanding                                     26,199,461        26,183,516
   Additional paid-in capital                            12,955,617        12,346,187
   Accumulated deficit                                  (35,595,938)      (31,215,473)
                                                       ------------      ------------

                                                          3,559,140         7,314,230
                                                       ------------      ------------

                                                       $  5,222,938      $  8,754,831
                                                       ============      ============


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

                                          3


<PAGE>
                                            IVIVI TECHNOLOGIES, INC.
                                            STATEMENTS OF OPERATIONS
                                                  (UNAUDITED)

                                                  Three months ended                   Six months ended
                                            September 30,     September 30,     September 30,     September 30,
                                                2008              2007              2008              2007
                                            ------------      ------------      ------------      ------------
Revenue:
   Rentals                                  $    163,542      $    176,548      $    332,278      $    335,522
   Licensing sales and fees                       15,625            15,625           131,036            31,250
   Direct sales                                  409,060            33,559           508,109           319,959
                                            ------------      ------------      ------------      ------------

                                                 588,227           225,732           971,423           686,731
                                            ------------      ------------      ------------      ------------

Costs and expenses:
   Cost of rentals                                11,566             6,698            21,780            29,844
   Cost of licensing sales                            --                --           129,770                --
   Cost of direct sales                           56,146             9,036            68,406            81,966
   Research and development                      505,027           609,947         1,036,095         1,098,699
   Sales and marketing                           697,064           640,331         1,374,286         1,152,238
   General and administrative                  1,433,957           834,913         2,704,094         1,693,170
                                            ------------      ------------      ------------      ------------

                                               2,703,760         2,100,925         5,334,431         4,055,917
                                            ------------      ------------      ------------      ------------

Loss from operations                          (2,115,533)       (1,875,193)       (4,363,008)       (3,369,186)
Loss on settlement of Allergan contract          (92,423)               --           (92,423)               --
Interest income                                   29,806            68,128            74,966           149,513
                                            ------------      ------------      ------------      ------------

Loss before provision for income taxes        (2,178,150)       (1,807,065)       (4,380,465)       (3,219,673)
Provision for income taxes                            --                --                --                --
                                            ------------      ------------      ------------      ------------

Net loss                                    $ (2,178,150)     $ (1,807,065)     $ (4,380,465)     $ (3,219,673)
                                            ============      ============      ============      ============

Net loss per share, basic and diluted       $      (0.20)     $      (0.19)     $      (0.41)     $      (0.34)
                                            ============      ============      ============      ============

Weighted average shares outstanding           10,733,453         9,597,701        10,724,341         9,589,218
                                            ============      ============      ============      ============

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

                                                       4


<PAGE>
                                                    IVIVI TECHNOLOGIES, INC.

                                               STATEMENTS OF STOCKHOLDERS' EQUITY
                                          FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2008
                                                          (UNAUDITED)


                                                      Common Stock              Additional                            Total
                                             -----------------------------       Paid-In        Accumulated       Stockholders'
                                                Shares           Amount          Capital          Deficit            Equity
                                             ------------     ------------     ------------     ------------      ------------
Balance - March 31, 2008 (Audited)             10,715,130     $ 26,183,516     $ 12,346,187     $(31,215,473)     $  7,314,230

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

Share based compensation                               --               --          609,430               --           609,430

Net loss                                               --               --               --       (4,380,465)       (4,380,465)
                                             ------------     ------------     ------------     ------------      ------------

Balance - September 30, 2008 (Unaudited)       10,766,930     $ 26,199,461     $ 12,955,617     $(35,595,938)     $  3,559,140
                                             ============     ============     ============     ============      ============

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

                                                               5


<PAGE>
                                   IVIVI TECHNOLOGIES, INC.

                                   STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                          (UNAUDITED)

                                                                    2008              2007
                                                                 -----------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                         $(4,380,465)     $(3,219,673)
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                                    161,639           41,380
    Share based compensation                                         609,430          795,525
    Provision for doubtful accounts                                       --            9,687
    Amortization of deferred revenue                                 (31,250)         (31,250)
    Write-off of deferred revenue from Allergan, Inc. settlement    (310,620)              --

        Other                                                               (228)              --
Changes in operating assets and liabilities:
  (Increase)/decrease in:
    Accounts receivable                                             (117,963)          12,516
    Inventory                                                       (139,233)          23,718
    Inventory held by third parties                                 (142,062)              --
    Prepaid expenses and other current assets                         94,265          (10,180)
    Deposits with affiliate                                          133,131         (135,628)
  Increase in:
    Accounts payable and accrued expenses                            149,016           83,190
    Due to Allergan, Inc.                                            450,000
    Deferred revenue                                                  35,640               --
                                                                 -----------      -----------
                                                                  (3,488,700)      (2,430,715)
                                                                 -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                               (7,975)        (302,560)
    Increases in equipment in use or under rental agreements         (50,169)         (83,654)
    Increases in restricted cash                                        (796)         (46,838)
    Increases in intangible assets                                  (157,466)        (208,588)
                                                                 -----------      -----------
                                                                    (216,406)        (641,640)
                                                                 -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options and warrants                                15,945           32,141
                                                                 -----------      -----------
                                                                      15,945           32,141
                                                                 -----------      -----------

Decrease in cash and cash equivalents                             (3,689,161)      (3,040,214)
Cash and cash equivalents, beginning of period                     6,600,154        8,310,697
                                                                 -----------      -----------

Cash and cash equivalents, end of period                         $ 2,910,993      $ 5,270,483
                                                                 ===========      ===========

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

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

                                              6
</TABLE>



<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)


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

The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and the instructions to Form 10-Q for smaller
reporting companies (as defined in Rule 12b-2 of the Exchange Act) and do not
include all the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation of the results
for the interim periods have been included. Operating results for the three
months and six months ended September 30, 2008 are not necessarily indicative of
the results that may be expected for the fiscal year ending March 31, 2009. The
accompanying financial statements and related notes and the information included
under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations" should be read in conjunction with our audited
financial statements and related notes thereto included on our Annual Report on
Form 10-KSB for the fiscal year ended March 31, 2008.

GOING CONCERN

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As reflected in
the accompanying financial statements, we had a net loss of $2,178,150 and
$4,380,465 for the three and six months ended September 30, 2008 and net cash
used in operating activities of $3,488,700 for the six months ended September
30, 2008. These factors, among others, raise substantial doubt about our ability
to continue as a going concern. Our ability to continue as a going concern is
dependent on our ability to raise additional funds to finance our operations.
The financial statements do not include any adjustments that might be necessary
if we are unable to continue as a going concern.

ORGANIZATIONAL MATTERS
ORGANIZATION

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

NATURE OF BUSINESS

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


                                       7


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

FDA MATTERS

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products marketed in the United States, the SofPulse M-10, Roma and
Torino PEMF products. We had discussions with the FDA regarding our 510(k)
application and we received various requests from the FDA for additional
information, which information was delivered to the FDA. Following the delivery
of such information, we received a letter from the FDA regarding our voluntarily
submitted 510(k) for our current products marketed in the United States. The
letter stated that the FDA determined that such products were Not Substantially
Equivalent (NSE) to other devices cleared for marketing through the 510(k)
process or otherwise legally marketed prior to May 28, 1976. We believe the FDA
made an incorrect assessment of the data, and we, first informally and then
formally appealed the determination. For the informal appeal, we discussed our
position with the FDA in a meeting conducted in early June 2008 and sent the FDA
further information subsequent to the meeting as requested by the FDA. The
informal process did not result in a change in FDA's determination. In July
2008, we filed a formal appeal under FDA regulations. During October 2008, the
FDA reopened our submission for an additional round of review in response to the
formal appeal. We believe the reopening of the 510(k) overrides and supersedes
the prior NSE decision. In addition to the information previously submitted to
the FDA, we have submitted additional animal and other supplemental data to the
FDA as requested by them as part of reopening the 510(k) submission. We cannot,
at this time, determine when a decision will be made by the FDA on the reopened
510(k) submission. We believe, based upon regulations and guidance published by
the FDA, as well as discussions with our independent expert consultants,
including former FDA officials, that all of our current products are covered by
the FDA clearance provided in 1991. Based upon the safety and efficacy of our
products, we do not believe the FDA will require us to cease marketing and/or
recall current products which have been already sold or rented. However, if we
are unsuccessful in our efforts to have the FDA clear our reopened 510(k)
submission, the FDA may require us to do so until another submission is cleared.
Our financial statements for the three and six months ended September 30, 2008,
do not include reserves for any product recall as a result of FDA action or
action by any of our customers, other than Allergan ("Allergan"), because we do
not believe such actions are reasonably likely to occur as of the date of this
filing. If we do not receive clearance from the FDA, we may be required to cease
marketing and/or recall our products and may be subject to fines and penalties
with the FDA. We have incurred significant legal and regulatory expenses related
to this matter with the FDA. In the event we are required to recall our product,
we could incur significant costs and expenses associated with such recall and
could be subject to claims, including indemnification claims, by our third party
distributors for costs incurred by them in connection with such recall. In
addition, we could be subject to claims, including product liability claims, by
our customers. We may not have sufficient cash resources to satisfy such
obligations.

On April 3, 2008, we filed a 510(k) submission with the FDA for a small, compact
product utilizing our targeted pulsed electromagnetic field ("tPEMF") therapy
technology for the symptomatic relief and management of chronic, intractable
pain, for relief of pain associated with arthritis and for the adjunctive
treatment of post-surgical and post-trauma acute pain. The FDA requested
additional information from us in a letter dated April 25, 2008. During October
2008, we requested a withdrawal of this 510(k) in order to concentrate our
efforts on our reopened 510(k) for our currently marketed products in the United
States. If we decide at a later date to refile a 510(k) submission for this
device, the FDA will consider this to be a new 510(k) submission. We continue to
be engaged in research and development activities for additional medical
applications of our technology and we expect to file 510(k) submissions or other
marketing applications for such additional uses in the future.


                                       8


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

In February 2008, the FASB issued FASB Staff Position 157-2, which provides for
a one-year deferral of the provisions of Statement No. 157 for non-financial
assets and liabilities that are recognized or disclosed at fair value in the
financial statements on a non-recurring basis. We are currently evaluating the
impact of adopting the provisions of Statement No. 157 for non-financial assets
and liabilities that are recognized or disclosed on a non-recurring basis.

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

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

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 consist of patents and trademarks of $646,836, net of $80,140
of accumulated amortization as of September 30, 2008. Patents and trademarks are
amortized over their legal life or the life of the related Revenue Sharing
Agreement (see Note 2), whichever is less, on a straight-line basis.
Amortization expense totaled $30,204 and $56,106 for the three and six month
periods ended September 30, 2008 and 2007, respectively. In November, 2008, we
mutually decided with Allergan to terminate our Allergan agreement. We continue
to utilize these patents and obtain new patents for the sale of our products
throughout the world.

As of November 19, 2008 we had two issued U.S. patents, one petition pending for
one issued U.S. patent and eleven non-provisional pending U.S. patent
applications covering various embodiments and end use indications for tPEMF and
related signals and configurations. We have seven issued international patents
and one hundred pending patent applications in various foreign countries.
Although the majority of foreign pending patents applications were required
under our Allergan contract; we believe the uses we have applied for in our
patents are for our technology and therefore we believe our patents can be used
for a variety of our products and are not limited to the Allergan product.
Therefore we do not believe there is impairment in the value of these patents as
a result of the Allergan termination.


                                       9


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

At September 30, 2008, accounts payable and accrued expenses consisted of the
following:

          Research and development                         $   277,758
          Professional fees                                    517,205
          Compensation & employee benefits                     213,150

          Purchases                                                937
          Other                                                169,108
                                                           -----------
                                                           $ 1,178,158
                                                           ===========


LOSS PER SHARE

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

Per share basic and diluted net loss amounted to $0.20 and $0.41 for the three
and six months ended September 30, 2008 and $0.19 and $0.34 for the three and
six months ended September 30, 2007, respectively. There were 6,390,855
potential shares and 5,255,666 potential shares at September 30, 2008 and 2007,
respectively that were excluded from the shares used to calculate diluted
earnings per share, as their inclusion would reduce net loss per share.


                                       10


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

COMMON SHARE OPTIONS AND WARRANTS ISSUED SHARE BASED COMPENSATION

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

Fair value is computed using the Black Scholes method at the date of grant of
the options based on the following assumption ranges: (1) risk free interest
rate of 3.01% to 5.03%; (2) dividend yield of 0%; (3) volatility factor of the
expected market price of our common stock of 44% to 165.7%; and (4) an expected
life of the options of 1 to 6.5 years. The foregoing option valuation model
requires input of highly subjective assumptions. Because common share purchase
options granted to employees and directors have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value of estimates, the
existing model does not in the opinion of our management necessarily provide a
reliable single measure of the fair value of common share purchase options we
have granted to our employees and directors.

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

<TABLE>
<S>            <C>
                                    Three months ended                  Six months ended
                               ------------------------------     -----------------------------
                               September 30,     September 30,    September 30,    September 30,
                                   2008              2007             2008             2007
                               ------------      ------------     ------------     ------------

Cost of rentals                $         11      $         11     $         22     $         22
Research and development             (1,039)          170,050           15,819          276,099
Sales and marketing                  57,359            45,776           78,237           65,807
General and administrative          243,564           248,156          515,352          453,598
                               ------------      ------------     ------------     ------------

                               $    299,895      $    463,993     $    609,430     $    795,526
                               ============      ============     ============     ============
</TABLE>

One September 29, 2008, we agreed to issue to a consultant to us, in exchange
for services provided to us, a warrant to purchase, at an initial exercise price
equal to $0.45 per share, up to such number of shares of our common stock equal
to 4% of the outstanding shares of our common stock, which shall be determined
as follows: (i) after the completion of a successful financing, the warrant
shall become exercisable as to 2% of the shares of our common stock outstanding
immediately after the completion of such financing, and (ii) after the
successful resolution of our current formal appeal with the U.S. Food & Drug
Administration, 2% of the shares of our common stock outstanding immediately
after such resolution. The terms of the warrant have not been finalized and are
subject to negotiation and execution of a warrant agreement between us and the
consultant.



                                       11


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)



NOTE 2 - DEFERRED REVENUE AND DISTRIBUTION AGREEMENT

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

In November 2006, we received $500,000 which is a non-refundable payment under
the terms of this Agreement and was recorded as deferred revenue and is being
amortized over the initial term of the Agreement. In each three and six month
periods ended September 30, 2008 and 2007, we have recognized $15,625 and
$31,250, respectively as revenue from this agreement.

We began shipping our products to Allergan during the quarter ended December 31,
2007. There were no sales to or revenues from Allergan during the three months
ended September 30, 2008 and 2007, respectively. During the six months ended
September 30, 2008 we recorded sales of $94,277 to Allergan. In addition, we
recorded $5,509 in royalties received from Allergan during the six months ended
September 30, 2008 for sales made by Allergan. No royalties received from
Allergan were recorded during the six months ended September 30, 2007.

The Agreement has an eight year initial term beginning at the Product's First
Commercial Sale as defined in the agreement which has not occurred as of
September 30, 2008. The initial term may be extended for two additional years
without further payment at Allergan's option. Allergan 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.

Under the Agreement, we also granted Allergan the right to rebrand the Product,
with Allergan owning all rights to such brands developed by Allergan for such
purpose. Under the Agreement, we received an initial non-refundable payment of
$500,000 and may 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. We have not received these additional milestone
payments as of the date of this filing. In addition, Allergan 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 Allergan's net
sales and number of units sold of the Product, subject to certain annual minimum
royalty payments to be determined by the parties. Allergan 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 or clearance 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 Allergan, Allergan 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, Allergan 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 Allergan's reasonable satisfaction
that we are fully able to resume our supply obligations. During such time as
Allergan controls Product manufacturing, our royalty rate would be significantly
reduced.

In the event Allergan 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 approval or clearance and/or
other reasons related to the Product, we will be required to repay Allergan
portions of the milestone payments up to $1,000,000.




                                       12


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)


Allergan 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 Allergan 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, Allergan
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 Allergan may assign its
rights and obligations without the prior written consent of the Company to
Allergan'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.

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

As a result of our Termination Agreement Allergan, our Statement of Operations
for the quarter ended September 30, 2008, includes a charge for the loss on the
settlement of the Allergan contract in the amount of $92,423, which is comprised
of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
               Loss on settlement of Allergan contract                $  92,423
                                                                      =========

                                       13



<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)




The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

At September 30, 2008, our deferred revenue account balance of $35,640
represents funds received from a customer in September 2008 for an extended one
year service contract fee beginning October 1, 2009. Beginning October 1, 2009
we will amortize this amount over 12 months on a straight-line basis.

NOTE 3 -- RELATED PARTY TRANSACTIONS

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

At September 30, 2008 and March 31, 2008, we advanced ADM $108,697 and $241,828,
respectively, for deposits on future purchases.

Pursuant to an IT Services agreement, we share certain costs related to
hardware, software and employees. We have not billed ADM nor has ADM billed us
for any charges, which were de minimus, under this agreement for the three and
six month periods ended September 30, 2008.

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

The amounts included in cost of rental revenue on our Statements of Operations
relating to services provided by ADM were $0 and $228 for the three months ended
September 30, 2008 and 2007, respectively, and $0 and $3,807 for the six months
ended September 30, 2008 and 2007, respectively.

The amounts included in general and administrative expense representing ADM's
allocations consisting of amounts payable under our management services
agreement with ADM were $7,339 and $56,125 for the three months ended September
30, 2008 and 2007, and $25,886 and $115,865 for the six months ended September
30, 2008 and 2007, respectively. Included in the general and administrative
expense representing ADM's allocations were salary allocations from ADM of
$38,343 and $76,419 for the three and six months ended September 30, 2007.
Salary allocations from ADM during the three and six months ended September 30,
2008 was $0 and $2,690, respectively.


                                       14


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

We purchased $190,313 and $151,860 of finished goods and certain components from
ADM at contracted rates during the three months ended September 30, 2008 and
2007, respectively, and $514,927 and $211,903 during the six months ended
September 30, 2008 and 2007, respectively.

Our activity with ADM is summarized as follows:

<TABLE>
<S>     <C>
                            Three months ended                Six months ended
                      ------------------------------    ------------------------------
                      September 30,    September 30,    September 30,    September 30,
                           2008            2007             2008              2007
                      -------------    -------------    -------------    -------------

Balance - beginning   $     145,164    $     (35,385)   $     241,828    $     (36,657)

Advances                     68,404          123,655          160,055          123,655
Purchases                  (190,313)        (151,860)        (514,927)        (211,903)
Charges                      (9,472)         (56,016)         (40,894)        (119,435)
Payments                     94,914          218,577          262,635          343,311
                      -------------    -------------    -------------    -------------

Balance - end         $     108,697    $      98,971    $     108,697    $      98,971
                      =============    =============    =============    =============
</TABLE>


NOTE 4 - CONCENTRATIONS

We maintain cash balances which at times, exceed federally insured limits.
During the six months ended September 30, 2008, two customers accounted for 81%
of our direct sales revenue, one customer accounted for 45% of our rental
revenue and one customer accounted for 100% of our licensing sales and fees
revenue (See NOTE 2 - DEFERRED REVENUE AND DISTRIBUTION AGREEMENT). During the
six months ended September 30, 2007, one customer accounted for 71% of our
direct sales revenue, one customer accounted for 32% of our rental revenue and
one customer accounted for 100% of our licensing sales and fees revenue. As of
September 30, 2008, one customer accounted for 83% of our accounts receivable
and as of September 30, 2007, three customers accounted for 57% for our accounts
receivable. The loss of these major customers could have a material adverse
impact on our operations and cash flow.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

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

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




                                       16


<PAGE>


                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

NOTE 6 - LEGAL PROCEEDINGS

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004. On April 30, 2008, during a conference before the Hon.
Brian R. Martinotti J.S.C. all claims were settled and the terms of the
settlement were placed on the record. The settlement calls for the defendants to
dismiss with prejudice all counterclaims filed against us and to pay us the sum
of $120,000.00 in installments. The terms provide for an initial payment of
$15,000.00 and the balance to be paid in equal monthly installments of
$5,000.00. In the event of default defendants shall be liable for an additional
payment of $30,000.00, interest at the rate of 8% per annum as well as costs and
attorney's fees. The settlement was documented in a written agreement executed
by the parties and the initial payment of $15,000 was paid on June 18, 2008. The
defendants defaulted on the payment due July 2008 and we were advised that the
defendants filed for protection under Chapter 11 of the United States Bankruptcy
Code on July 21, 2008. As of September 30, 2008, we have only recognized the
cash received.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount which Ivivi has refuted. We responded to Stonefield Josephson's demand
for arbitration, which we believe was procedurally defective and premature due
to Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,
2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No.BER-l-872-08 on January 31, 2008. A commencement of arbitration notice
initiated by Stonefield Josephson was received by us on March 11, 2008. In March
and April motions were filed by us and Stonefield Josephson which sought various
forms of relief including the forum for resolution of the claims. On June 3,
2008, the Hon. Menelaos W. Toskos J.S.C. determined that the language in the
engagement agreement constituted a forum selection clause and the claims should
be decided in California. On June 19, 2008, we filed a complaint against
Stonefield Josephson in the Superior Court of California, Los Angeles County. On
July 18, 2008 the Hon. Menelaos W. Toskos, J.S.C. denied our request for
reconsideration of his order dated June 3, 2008. The arbitration hearing
commenced on November 17, 2008.

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.

NOTE 7 - SUBSEQUENT EVENTS

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

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

                                       17


<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                               SEPTEMBER 30, 2008
                                   (UNAUDITED)

As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
               Loss on settlement of Allergan contract                $  92,423
                                                                      =========

The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).





                                       18


<PAGE>

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

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

FORWARD-LOOKING STATEMENTS

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

SUPERVISION AND REGULATION -- SECURITIES AND EXCHANGE COMMISSION

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

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

OVERVIEW

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

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 September 30, 2008, we had an
accumulated deficit of approximately $35.6 million. We expect to incur
additional operating losses, as well as negative cash flow from operations for
the foreseeable future as we continue our research and development efforts for
development of existing and new applications for our tPEMF technology. We are
focusing our research and development activities on optimizing the signal
parameters of our tPEMF technology, enabling us to produce improved clinical
outcomes.

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

                                       19


<PAGE>

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

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

Licensing sales are sales to companies that are licensed to distribute our
products in specific markets. Licensing sales revenue is recognized when our
products are received and accepted by the distributor. Further, and to a lesser
extent, we recognized revenue from the amortization of licensing fees under the
aforementioned Allergan exclusive worldwide distribution agreement.

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

As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
               Loss on settlement of Allergan contract                $  92,423
                                                                      =========

The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

                                       20


<PAGE>

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

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

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

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

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

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

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

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

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

Recent Developments

FDA Matters

Our medical devices are subject to extensive and rigorous regulation by the FDA,
as well as other federal and state regulatory bodies. In February 2007, in
response to inquiries from the FDA, we voluntarily submitted a 510(k) for our
current products marketed in the United States, the SofPulse M-10, Roma and
Torino PEMF products. We had discussions with the FDA regarding our 510(k)
application and we received various requests from the FDA for additional
information, which information was delivered to the FDA. Following the delivery
of such information, we received a letter from the FDA regarding our voluntarily
submitted 510(k) for our current products marketed in the United States. The
letter stated that the FDA determined that such products were Not Substantially
Equivalent (NSE) to other devices cleared for marketing through the 510(k)
process or otherwise legally marketed prior to May 28, 1976. We believe the FDA
made an incorrect assessment of the data, and we, first informally and then
formally appealed the determination. For the informal appeal, we discussed our
position with the FDA in a meeting conducted in early June 2008 and sent the FDA



                                       21


<PAGE>

further information subsequent to the meeting as requested by the FDA. The
informal process did not result in a change in FDA's determination. In July
2008, we filed a formal appeal under FDA regulations. During October 2008, the
FDA reopened our submission for an additional round of review in response to the
formal appeal. We believe the reopening of the 510(k) overrides and supersedes
the prior NSE decision. In addition to the information previously submitted to
the FDA, we have submitted additional animal and other supplemental data to the
FDA as requested by them as part of reopening the 510(k) submission. We cannot,
at this time, determine when a decision will be made by the FDA on the reopened
510(k) submission. We believe, based upon regulations and guidance published by
the FDA, as well as discussions with our independent expert consultants,
including former FDA officials, that all of our current products are covered by
the FDA clearance provided in 1991. Based upon the safety and efficacy of our
products, we do not believe the FDA will require us to cease marketing and/or
recall current products which have been already sold or rented. However, if we
are unsuccessful in our efforts to have the FDA clear our reopened 510(k)
submission, the FDA may require us to do so until another submission is cleared.
Our financial statements for the three months ended September 30, 2008 do not
include reserves for any product recall as a result of FDA action or action by
any of our customers, other than Allergan, because we do not believe such
actions are reasonably likely to occur as of the date of this filing. If we do
not receive clearance from the FDA, we may be required to cease marketing and/or
recall our products and may be subject to fines and penalties with the FDA. We
have incurred significant legal and regulatory expenses related to this matter
with the FDA.

On April 3, 2008, we filed a 510(k) submission with the FDA for a small, compact
product utilizing our targeted pulsed electromagnetic field ("tPEMF") therapy
technology for the symptomatic relief and management of chronic, intractable
pain, for relief of pain associated with arthritis and for the adjunctive
treatment of post-surgical and post-trauma acute pain. The FDA requested
additional information from us in a letter dated April 25, 2008. During October
2008, we requested a withdrawal of this 510(k) in order to concentrate our
efforts on our reopened 510(k) for our currently marketed products in the United
States. If we decide at a later date to refile a 510(k) submission for this
device, the FDA will consider this to be a new 510(k) submission. We continue to
be engaged in research and development activities for additional medical
applications of our technology and we expect to file 510(k) submissions or other
marketing applications for such additional uses in the future.

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

Distribution Agreement with Allergan

On November 9, 2006, we entered into an exclusive worldwide distribution
agreement (the "Agreement") with a wholly-owned subsidiary of Allergan, a global
healthcare company that discovers, develops and commercializes pharmaceutical
and medical device products in specialty markets. Pursuant to the Agreement, we
granted Allergan's subsidiary, Inamed Medical Products Corporation (currently
known as Allergan USA, Inc. "Allergan") 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 which is a non-refundable
payment 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 may receive
additional revenues under this Agreement of up to $1 million when
commercialization of our product begins with Allergan into certain geographic
markets. During September, 2007, we received an initial order from Allergan for
20,000 SofPulse Torino units which were delivered to Allergan.

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


                                       22


<PAGE>



As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
               Loss on settlement of Allergan contract                $  92,423
                                                                      =========


The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

Results of our Study at Cleveland Clinic Florida

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

Commencement of Clinical Trial to Examine Efficacy of Ivivi's tPEMF Technology
to Relieve Pain From Knee Osteoarthritis at Henry Ford Hospital

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

                                       23


<PAGE>

NASDAQ Deficiency Notice

On September 29, 2008, we received a deficiency notice from the Nasdaq Stock
Market notifying us that we are not in compliance with Nasdaq Marketplace Rule
4310C(4) because our common stock closed below the minimum bid price of $1.00
per share for at least 30 consecutive business days. In accordance with
Marketplace Rule 4310C(8)(D) and the temporary suspension of this Rule by Nasdaq
on October 16, 2008, we have until July 2, 2009 to be in compliance with Nasdaq
Marketplace Rule 4310C(4). If at any time before July 2, 2009, the bid price of
our common stock closes at $1.00 per share or more for a minimum of 10
consecutive business days, Nasdaq will notify us that we have achieved
compliance with Nasdaq's Marketplace Rule 4310C(4), although Nasdaq has the
discretion to require compliance for a period in excess of 10 consecutive
business days but generally no more than 20 consecutive business days, under
certain circumstances.

Ivivi Reduction in Force and Negotiations with RecoverCare LLC

We have reduced our headcount from 28 employees to 16 employees in order to
reduce costs and expenses. The reductions occurred throughout all departments
with the majority of the employees reduced in the sales and marketing
departments. We feel confident that we can continue operating our business
efficiently with our current employees. We have executed a non-binding term
sheet with RecoverCare, LLC for the exclusive right to distribute, sell and rent
our tPEMF products into long term acute care hospitals (LTACH's) and VA long
term care facilities in the United States. The non-binding term sheet is subject
to negotiation and execution of definitive agreements. We may not be able to
finalize agreements on the terms set forth in the non-binding term sheet or at
all. We continue to seek additional partners in our existing and future
distribution channels.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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

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

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

o    Our products held for sale are included in the balance sheet under
     "Inventory - Current and Long Term Inventory". At September 30, 2008, we
     also have fully depreciated equipment held for rental, which are our
     products that are rented to third parties, used internally and loaned out
     for marketing and testing.

                                       24


<PAGE>

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

o    In April 2006, we adopted the fair value recognition provisions of SFAS No.
     123(R), Accounting for Stock-based Compensation, to account for
     compensation costs under our stock option plans. We previously utilized the
     intrinsic value method under Accounting Principles Board Opinion No. 25,
     Accounting for Stock Issued to Employees (as amended). As of September 30,
     2008, we have used the following assumptions in the Black Scholes option
     pricing model: (i) dividend yield of 0%; (ii) expected volatility of
     44%-165.7%; (iii) average risk free interest rate of 3.01%-5.03%; (iv)
     expected life of 1 to 6.5 years; and (v) estimated forfeiture rate of 5%.

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

RECENT ACCOUNTING PRONOUNCEMENTS

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

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2007

Net loss increased $371,085, or 21%, to $2,178,150, or $0.20 per share, for the
three months ended September 30, 2008 compared to a net loss of $1,807,065, or
$0.19 per share, for the three months ended September 30, 2007. The increase in
net loss primarily resulted from (i) an increase in cost of rentals of $4,868,
or 73%, (ii) an increase in cost of direct sales of $47,110, or 521%, (iii) an
increase in sales and marketing expenses of $56,733, or 9%, (iv) an increase
in general and administrative expenses of $599,044, or 72%, (v) the loss on the
settlement of the Allergan contract of $92,423, or 100%, and (vi) decreases in
interest income of $38,322, or 56% partially offset by an increase in revenue of
$362,495 or 161%, a decrease in research and development expenses of $104,920,
or 17% for the three months ended September 30, 2008 as compared to the three
months ended September 30, 2007.

Total revenue increased $362,495, or 161%, to $588,227 for the three months
ended September 30, 2008 as compared to $225,732 for the three months ended
September 30, 2007. The increase in revenue was due to an increase in our direct
sales of $375,501, or 1119%, to $409,060 for the three months ended September
30, 2008 as compared to $33,559 for the three months ended September 30, 2007
offset by a decrease in our rental revenue of $13,006, or 7%, to $163,542 for
the three months ended September 30, 2008 as compared to $176,548 for the three
months ended September 30, 2007.

We recognize revenue from rentals, direct sales utilizing our sales force and
sales and fees from our licensing partner. Revenue from licensing sales and fees
includes:
1) sales of our products to our licensee;
2) amortizing milestone payments from our licensee over the remaining useful
   life of our agreements; and
3) royalties received from our licensee from the sale of our products by such
   licensee.

                                       25


<PAGE>

During September 2007, we received an opening order from Allergan of initial
SofPulse units. We recorded $15,625 in each of the three month periods ended
September 30, 2008 and 2007, which represents the amortized portion of the
initial milestone payment of $500,000 that was received from Allergan in
November 2006 and is included in licensing sales and fees on our statements of
operations. Royalties relating to these sales to Allergan are received by us up
to 60 days after the quarter in which Allergan makes their sale of our products.
Royalties received from Allergan during the three and six months ended September
30, 2008 were $0 and $5,509, respectively, as compared to $0 and $0,
respectively, during the same periods in the prior fiscal year.

We recorded no licensing sales and fee revenue for the three months ended
September 30, 2008 and 2007, respectively.

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

As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
               Loss on settlement of Allergan contract                $  92,423
                                                                      =========

The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

Cost of rentals increased $4,868, or 73%, to $11,566 for the three months ended
September 30, 2008 from $6,698 for the three months ended September 30, 2007,
due to an increase in the purchase of shipping materials of $4,100 offset by a
decrease in freight of $1,824 during the three months ended September 30, 2008
as compared to the three months ended September 30, 2007. Cost of rentals
includes depreciation on our Roma units under rental agreements of $5,074 and
$2,190 for the three month periods ended September 30, 2008 and 2007,
respectively.

                                       26


<PAGE>

Cost of direct sales increased $47,110 or 521%, to $56,146 for the three months
ended September 30, 2008 from $9,036 for the three months ended September 30,
2007 due to an increase in direct sales volume and the mix of units sold during
the three months ended September 30, 2008 versus the prior year period.

Purchases of finished goods and certain components from ADM were $190,313 and
$151,860 for the three month periods ended September 30, 2008 and September 30,
2007, respectively.

Research and development expenses decreased $104,920 or 17%, to $505,027 for the
three months ended September 30, 2008 from $609,947 for the three months ended
September 30, 2007. The decrease resulted primarily from reductions in share
based compensation of $169,864 and decreases in travel costs of $11,637,
partially offset by increases in research and development costs for supplies and
materials of $22,576, an increase of patent amortization expense of $27,329, an
increase in depreciation expense of $14,725. We expect that our research and
development expenses will increase as we expand our efforts in the
cardiovascular (and other) areas.

Sales and marketing expenses increased $56,733, or 9%, to $697,064, for the
three months ended September 30, 2008 as compared to $640,331 for the three
months ended September 30, 2007. The increase resulted primarily from increased
salary and salary related costs of $138,887, relating to severance expense of
$184,023 and vacation pay of $12,284 due to a reduction in our sales force of
seven sales and sales related administrative personnel which occurred on August
31, 2008, offset by a reduction in salary expense of $54,788; an increase in
consulting and travel related expenses of $32,046, offset by a decrease in share
based compensation of $10,930, a decrease in marketing expenses of $32,860, a
decrease in commission expenses of $21,692 and a decrease in recruitment fees of
$48,740.

General and administrative expenses increased $599,044 or 72%, to $1,433,957 for
the three months ended September 30, 2008 as compared to $834,913, for the three
months ended September 30, 2007. The increase resulted primarily from increases
in salary and salary related costs of $68,960, increased rent and occupancy
costs of $48,698, increased legal fees of $253,627, increased consulting
expenses of $65,355, increased computer expenses of $16,413, an accrued
commitment to Stanford University in the amount of $200,000 as a contribution
for studies relating to their cardiovascular research program and increased
share based compensation of $16,697, offset by a decrease in the overhead
allocation charges billed by ADM of $38,343, a decrease in public relations fees
of $22,404, and a reduction in insurance expense of $9,888.

Interest income decreased $38,322 to $29,806 from $68,128 as a result of lower
cash balances in our money market accounts during the three months ended
September 30, 2008 as compared to the three months ended September 30, 2007.

SIX MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE SIX MONTHS ENDED SEPTEMBER
30, 2007

Net loss increased $1,160,792, or 36%, to $4,380,465, or $0.41 per share, for
the six months ended September 30, 2008 compared to a net loss of $3,219,673, or
$0.34 per share, for the six months ended September 30, 2007. The increase in
net loss resulted primarily from (i) an increase in cost of licensing sales of
$129,770 or 100%, (ii) an increase in sales and marketing expenses of $222,048,
or 19%, (iii) an increase in general and administrative expenses of $1,010,924,
or 60%, (iv) the loss on the settlement of the Allergan contract of $92,423, or
100% and (v) a decrease in interest income of $74,547, or 50%, partially offset
by an increase in revenue of $284,692 or 41%, a decrease in cost of rentals of
$8,064 or 27% and a decrease in cost of direct sales of $13,560, or 17%, a
decrease in research and development expenses of $62,604, or 6% for the six
months ended September 30, 2008 as compared to the six months ended September
30, 2007.

Total revenue increased $284,692, or 41%, to $971,423 for the six months ended
September 30, 2008 as compared to $686,731 for the six months ended September
30, 2007. The increase in revenue was due to an increase in our direct sales of
$188,150, or 59%, an increase in revenues from our sales of our products to
Allergan of $94,277, or 100%, an increase in royalties received from Allergan of
$5,509, or 100%, partially offset by a decrease in our rental revenue of $3,244,
or 1%, to $332,278.

We recognize revenue from rentals, direct sales utilizing our sales force and
sales and fees from our licensing partner. Revenue from licensing sales and fees
includes: 1) sales of our products to our licensee; 2) amortizing milestone
payments from our licensee over the remaining useful life of our agreements; and
3) royalties received from our licensee from the sale of our products by such
licensee.

                                       27


<PAGE>

During September 2007, we received an opening order from Allergan of initial
SofPulse units. We recorded $31,250 in each of the six month periods ended
September 30, 2008 and 2007, which represented the amortized portion of the
initial milestone payment of $500,000 that was received from Allergan in
November 2006 and is included in licensing sales and fees on our statements of
operations. Royalties relating to these sales to Allergan are received by us up
to 60 days after the quarter in which Allergan makes their sale of our products.

We recorded $129,770 and $0 as cost of licensing sales for the six months ended
September 30, 2008 and 2007, respectively. The negative gross margin on the sale
of our SofPulse units to Allergan was $35,493 for the six months ended September
30, 2008 as a result of the initial production of the Allergan products.

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

As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
                      Loss on settlement of Allergan contract         $  92,423
                                                                      =========

The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

Cost of rentals decreased $8,064, or 27%, to $21,780 for the six months ended
September 30, 2008 from $29,844 for the six months ended September 30, 2007,
primarily due to a decrease in freight of $7,821. In addition, cost of rentals
includes depreciation on our Roma units under rental agreements of $11,284 and
$8,805 for the six months ended September 30, 2008 and 2007, respectively.

Cost of licensing sales increased to $129,770, or 100%, for the six months ended
September 30, 2008 from $0 for the six months ended September 30, 2007 due to
initial sales of our products to Allergan at negative gross margins of $35,493
for the six months ended September 30, 2008.

Cost of direct sales decreased $13,560 or 17%, to $68,406 for the six months
ended September 30, 2008 from $81,966 for the six months ended September 30,
2007 due to the mix of sales and unit costs of these products.

                                       28


<PAGE>

Purchases of finished goods and certain components from ADM, including units
sold by us to Allergan, were $514,927 and $211,903 for the six month periods
ended September 30, 2008 and September 30, 2007, respectively.

Research and development expense decreased $62,604 or 6%, to $1,036,095 for the
six months ended September 30, 2008 from $1,098,699 for the six months ended
September 30, 2007. The decrease resulted primarily from a reduction in share
based compensation of $248,957 and travel costs of $14,232, offset by increases
in research and development costs for supplies and materials of $38,489,
increases in salary and salary related expenses of $36,844, increases in
consulting expenses of $39,990, an increase of patent amortization expense of
$50,356, an increase in expenses for conferences of $5,000, and an increase in
depreciation expense of $29,016. We expect that our research and development
expenses will increase as we expand our efforts in the cardiovascular (and
other) areas.

Sales and marketing expenses increased $222,048, or 19%, to $1,374,286, for the
six months ended September 30, 2008 as compared to $1,152,238 for the six months
ended September 30, 2007. The increase resulted primarily from increased salary
and salary related costs of $237,673 which includes (i) severance and vacation
pay expense of $196,307 due to a reduction in our sales force of seven sales and
sales related administrative personnel which occurred on August 31, 2008, (ii)
increased payroll taxes of $2,700, and (iii) increased employee benefit
insurances of $17,232. In addition to the increases in salary and related costs,
the increased selling and marketing expenses of $222,048 for the six months
ended September 30, 2008, is also attributable to an increase in travel related
costs of $59,365, an increase in consulting expenses of $35,722, an increase in
marketing costs of $3,377, and an increase in depreciation expense of $6,518,
offset by a decrease in recruitment fees of $79,115, a decrease in advertising
costs of $20,097 and a decrease in commission expense of $20,132.

General and administrative expenses increased $1,010,924, or 60%, to $2,704,094
for the six months ended September 30, 2008 as compared to $1,693,170, for the
six months ended September 30, 2007. The increase resulted primarily from
increases in salary and salary related costs of $151,189, increased rent and
occupancy expenses of $94,913, increased consulting expenses of $75,126,
increased accounting fees of $44,583, increased legal fees of $447,396,
increased share based compensation of $64,714, increased investor relations
expenses of $5,628, increased telephone expenses of $8,415, increased expense
for temporary help of $8,288, increased computer expenses of $21,649, an
increase in recruitment fees of $4,500, an increase in depreciation expense of
$8,158, and an accrued commitment to Stanford University in the amount of
$200,000, as a contribution for studies relating to their cardiovascular
research program, offset by a decrease in the overhead allocation charges billed
by ADM of $73,730, a decrease in public relations fees of $29,787, and a
decrease in travel related expenses of $23,002.

Interest income decreased $74,547, or 50%, to $74,966 from $149,513 as a result
of lower cash balances in our money market accounts during the six months ended
September 30, 2008 as compared to the six months ended September 30, 2007.

LIQUIDITY AND CAPITAL RESOURCES

We have had significant operating losses for the fiscal years ended March 31,
2008 and 2007, as well as for the three and six month periods ended September
30, 2008 and 2007. At September 30, 2008, we had an accumulated deficit of
approximately $35.6 million. Our continuing operating losses have been funded
principally through the proceeds of our private placement financings, our
initial public offering and other arrangements. We have generated limited
revenues of $1.6 million and $1.2 million for the years ended March 31, 2008 and
2007, respectively, and $588,227 and $225,732 for the three months ended
September 30, 2008 and 2007, respectively and $971,423 and $686,731 for the six
months ended September 30, 2008 and 2007, respectively, primarily from the
rental and sale of our products, and we expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our research and development of additional
applications for our tPEMF technology and other technologies that we may develop
in the future. On October 15, 2008, we repurchased 650,000 shares of our common
stock at $.15 per share, or $97,500, from an investor in a private transaction.

We estimate that we presently have sufficient sources of funds to meet our cash
requirements through January 31, 2009. Previously we estimated that we had
sufficient sources of funds to meet our cash requirements through March 31,
2009. The change in our estimate is primarily the result of additional accrued
settlement fee and other costs relating to the termination of our Allergan
Agreement of approximately $450,000, $97,500 to purchase our common stock in a
private transaction with an investor and increased legal and regulatory expenses
relating to our 510(k) submission with the FDA and legal representation in our
litigation with Stonefield Josephson, as discussed under PART II. OTHER
INFORMATION, ITEM 1. LEGAL PROCEEDINGS. We will need to obtain additional
capital through issuance of our equity securities, debt financings, licensing

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<PAGE>

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

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

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

As a result of our Termination Agreement with Allergan, our Statement of
Operations for the quarter ended September 30, 2008, includes a charge for the
loss on the settlement of the Allergan contract in the amount of $92,423, which
is comprised of the following:

               Accrued settlement payment                             $ 450,000
               Inventory value                                         (447,926)
               Markdown of double SofPulse units                        322,169
               Reserve for repacking and relabeling                      65,800
               Freight and other costs                                   13,000
               Deferred revenue, net                                   (310,620)
                                                                      ---------
                      Loss on settlement of Allergan contract         $  92,423
                                                                      =========

The loss on the settlement of the Allergan contract in the amount of $92,423,
has been reduced by the unamortized balance of Deferred Revenue at September 30,
2008 in the amount of $380,208 (non-refundable payment of $500,000 we received
from Allergan in November 2006) and the unamortized balance of Deferred
Licensing Costs at September 30, 2008 in the amount of $69,588 (legal and other
deferred costs we incurred which in association with the execution of the
Allergan Agreement).

                                       30


<PAGE>

As of September 30, 2008, we had cash and cash equivalents of approximately $2.9
million as compared to cash and cash equivalents of approximately $5.3 million
at September 30, 2007 and approximately $6.6 million at March 31, 2008.

Our net cash used by operating activities was approximately $3.5 million during
the six months ended September 30, 2008 compared to the net cash used by
operating activities of approximately $2.4 million during the six months ended
September 30, 2007. This increase was due to increases in research and
development, sales and marketing and general and administrative expenses as
previously noted partially offset by non-cash charges for share based
compensation, deferred revenue and depreciation.

Our net cash used by investing activities was $216,406 during the six months
ended September 30, 2008 compared to $641,640 for investing activities during
the six months ended September 30, 2007. The decrease was due to a decrease in
the purchases of production and computer equipment of $294,585, a decrease in
intangible assets acquired of $51,122, a decrease in equipment acquired for use
or under rental agreement of $33,485 and a decrease in cash used for restricted
cash of $46,042.

In January 2006, we entered into a Master Clinical Trial Agreement with
Cleveland Clinic Florida, a not-for-profit multispecialty medical group
practice, to set forth the basic terms and conditions with respect to studies to
be conducted by Cleveland Clinic Florida from time to time during the term of
the agreement, which is from January 9, 2006 to January 9, 2009. The total cost
of the trials was approximately $239,000, all of which was paid by us as of
September 30, 2008.

Now that we have concluded our cardiovascular trials at the Cleveland Clinic,
Florida, we expect to fund additional studies in cardiovascular ischemia with
established research facilities, to establish clear dose and response curves as
well as dosing regimens for the use of our tPEMF device in cardiovascular
ischemia, in standard cardiovascular models. We currently expect to fund
approximately $410,000 for cardiovascular studies that we are currently
considering to undertake. We have accrued $200,000 for the quarter ended
September 30, 2008 for a contribution for studies relating to the cardiovascular
research program at Stanford University. However, such amounts may be increased
if we expand our current studies or if we pursue additional studies and we will
need to raise additional capital in such circumstances.

We fund research in the field of neurosurgery at Montefiore Medical Center's
Department of Neurosurgery. The purpose of the research is to examine the
effects of pulsed magnetic fields on neurons and vessels in cell culture and
intact brain and neural transplants, as well as to explore the potential of this
modality to lessen neurodegeneration (progressive damage or death of neurons
leading to a gradual deterioration of the bodily functions controlled by the
affected part of the nervous system) and increase vascular plasticity (the
lifelong ability of the brain to reorganize neural pathways based on new
experiences). We believe this modality could have applications in the treatment
of chronic and acute vascular and neurodegenerative diseases, including
Parkinson's disease. The estimated total cost of the research with Montefiore
Medical Center's Department of Neurosurgery is approximately $317,500, of which
approximately $158,500 has been incurred by the Montefiore Medical Center and
paid by us through September 30, 2008. This trial may not be completed within
our projected cost and our available funds may limit the amount of research to
be performed in the future.

In June, 2007, we entered into a Research Agreement with Indiana State
University to conduct randomized, double-blind animal wound studies to assist us
in determining optimal signal configurations and dosing regimens. Indiana State
University reported, at the Bioelectromagnetics Society (BEMS) 30th annual
meeting in June 2008, the results of the first phase of this study in which a
carrageenan injection model in rats treated with our targeted tPEMF signals had
significantly less pain and edema than rats treated with inactive units. The
estimated total cost of the research with Indiana State University is
approximately $160,000, of which approximately $121,000 has been incurred by the
institution through September 30, 2008. As of September 30, 2008 we have paid
$74,000 towards this research and we accrued $47,000 for additional research
performed through September 30, 2008. This trial may not be completed within our
projected cost and our available funds may limit the amount of research to be
performed in the future.

On May 1, 2008, we signed a research agreement with the Henry Ford Health
System. The principal investigator, Dr. Fred Nelson in the Department of
Orthopedics will study our prototype device using targeted tPEMF signal
configurations on human patients with established osteoarthritis of the knee
that are active at least part of the day. The trial is expected to recruit up to
100 patients receiving active or sham treatment for up to three 15 minute
applications daily, on pain and fracture over two, six, eight and twelve week
intervals. We received IRB approval at The Henry Ford Health System to begin the


                                       31


<PAGE>

double blind randomized controlled study and the institution began enrolling
patients during August 2008. The study is anticipated to continue for up to
eighteen months. The estimated total cost of the research with the Henry Ford
Health System is approximately $108,000, of which approximately $19,000 has been
incurred by the institution through September 30, 2008. As of September 30,
2008, we have paid $27,000 towards this research. This trial may not be
completed within our projected cost and our available funds may limit the amount
of research to be performed in the future.

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

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

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

We incurred $25,886 for management services and the use of real property
provided to us by ADM pursuant to the management services agreement during the
six months ended September 30, 2008.

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

Purchases of finished goods and certain components from ADM for the six months
ended September 30, 2008 and 2007 were $514,927 and $211,903, respectively.
Deposits to ADM at September 30, 2008 as reflected on our Balance Sheet for
products being manufactured for us were $108,697 and $98,971 at September 30,
2008 and September 30, 2007, respectively.

OFF-BALANCE SHEET ARRANGEMENTS

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

ITEM 4T. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROL AND PROCEDURES

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

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

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

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



                                       33


<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On August 17, 2005, we filed a complaint against Conva-Aids, Inc. t/a New York
Home Health Care Equipment, or NYHHC, and Harry Ruddy in the Superior Court of
New Jersey, Law Division, Docket No. BER-L-5792-05, alleging breach of contract
with respect to a distributor agreement that we and NYHHC entered into on or
about August 1, 2004. On April 30, 2008, during a conference before the Hon.
Brian R. Martinotti J.S.C. all claims were settled and the terms of the
settlement were placed on the record. The settlement calls for the defendants to
dismiss with prejudice all counterclaims filed against us and to pay us the sum
of $120,000.00 in installments. The terms provide for an initial payment of
$15,000.00 and the balance to be paid in equal monthly installments of
$5,000.00. In the event of default defendants shall be liable for an additional
payment of $30,000.00, interest at the rate of 8% per annum as well as costs and
attorney's fees. The settlement was documented in a written agreement executed
by the parties and the initial payment of $15,000 was paid on June 18, 2008. The
defendants defaulted on the payment due July 2008 and we were advised that the
defendants filed for protection under Chapter 11 of the United States Bankruptcy
Code on July 21, 1008.

On October 10, 2006, we received a demand for arbitration by Stonefield
Josephson, Inc. with respect to a claim for fees for accounting services in the
amount of approximately $106,000, plus interest and attorney's fees. Stonefield
Josephson had previously invoiced Ivivi for fees for accounting services in an
amount which Ivivi has refuted. We responded to Stonefield Josephson's demand
for arbitration, which we believe was procedurally defective and premature due
to Stonefield Josephson's failure to participate in required mediation, and we
continue to defend against the claim vigorously, although provision has been
made for the amount of the claim in the financial statements. Moreover, we are
pursuing claims against Stonefield Josephson. On October 26, 2006, we sent a
letter requesting the required mediation before arbitration. On December 4,
2006, we received notification from the arbitration forum that the arbitration
was placed on hold until the mediation phase is completed. By letter dated
November 8, 2007 legal counsel for Stonefield Josephson withdrew from
participation in mediation and requested arbitration. We filed a complaint
against Stonefield Josephson in the Superior Court of New Jersey Law Division
Docket No.BER-l-872-08 on January 31, 2008. A commencement of arbitration notice
initiated by Stonefield Josephson was received by us on March 11, 2008. In March
and April motions were filed by us and Stonefield Josephson which sought various
forms of relief including the forum for resolution of the claims. On June 3,
2008, the Hon. Menelaos W. Toskos J.S.C. determined that the language in the
engagement agreement constituted a forum selection clause and the claims should
be decided in California. On June 19, 2008, we filed a complaint against
Stonefield Josephson in the Superior Court of California, Los Angeles County. On
July 18, 2008 the Hon. Menelaos W. Toskos, J.S.C. denied our request for
reconsideration of his order dated June 3, 2008. The arbitration hearing
commenced on November 17, 2008.

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

ITEM 1A. RISK FACTORS

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

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

In order for our common stock to continue to be listed on the NASDAQ Capital
Market, we must meet the current NASDAQ Capital Market listing requirements. One
of these requirements is the maintenance of a $1.00 bid price. On September 29,
2008, we received a letter from the staff of the NASDAQ Stock Market, LLC, or
NASDAQ, pursuant to which the staff notified us that for 30 consecutive business
days, the bid price of our common stock, had closed below the minimum $1.00 per
share requirement for continued inclusion under NASDAQ Marketplace Rule
4310(c)(4). In accordance with NASDAQ Marketplace Rule 4310(c)(8)(D), we were
provided with a period of 180 calendar days, or until March 30, 2009, to regain
compliance with the Rule, which compliance date was extended until July 2, 2009
as a result of NASDAQ's implementation of a temporary suspension of the $1.00
minimum bid price requirement until January 19, 2009.

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<PAGE>

According to the NASDAQ letter, the staff of NASDAQ will provide written
notification of our compliance with NASDAQ Marketplace Rule 4310(c)(4) if, at
anytime before July 2, 2009, the bid price of our common stock closes at $1.00
per share or more for a minimum of 10 consecutive business days; however, in
accordance with NASDAQ Marketplace Rule 4310(c)(8)(E), NASDAQ may, in its
discretion, require us to maintain a bid price of at least $1.00 per share for a
period in excess of 10 consecutive business days, but generally no more than 20
consecutive business days, before determining that we have demonstrated an
ability to maintain long-term compliance with NASDAQ Marketplace Rule
4310(c)(4). If compliance with NASDAQ Marketplace Rule 4310(c)(4) cannot be
demonstrated by July 2, 2009, the staff will determine whether we meet the
NASDAQ Capital Market initial listing criteria as set forth in NASDAQ
Marketplace Rule 4310(c), except for the bid price requirement. If we meet the
initial listing criteria, the staff will notify us that we have been granted an
additional 180 calendar day compliance period. If we are not eligible for an
additional compliance period, the staff will provide written notification that
our securities will be delisted, at which time, we may appeal the staff's
determination to delist our securities to a NASDAQ Listing Qualifications Panel.
The bid price of our common stock may not close at $1.00 per share or more for a
minimum of 10 consecutive business days or, if applicable, 20, consecutive
business days, prior to July 2, 2009; that the staff will not determine to
delist our securities; or that we would prevail on any appeal of any
determination by the staff to delist our securities.

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

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

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

In the United States, medical devices must be:

o    manufactured in establishments subject to FDA inspection to assess
     compliance with the FDA Quality Systems Regulation, or QSR; and

o    produced in accordance with the QSR for medical devices.

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

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

o    is subject to inspection by the FDA.

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<PAGE>

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

We have made modifications to our devices and may make additional modifications
in the future that we believe do not or will not require additional clearances
or approvals. Although we believe that our current products are covered by the
FDA clearance provided in 1991 with respect to the original SofPulse product, in
February, 2007, in response to inquiries from the FDA, we voluntarily submitted
a 510(k) for our current products marketed in the United States, the SofPulse
M-10, Roma and Torino PEMF products. We had discussions with the FDA regarding
our 510(k) application and we received various requests from the FDA for
additional information, which information was delivered to the FDA. Following
the delivery of such information, we received a letter from the FDA regarding
our voluntarily submitted 510(k) for our current products marketed in the United
States. The letter stated that the FDA determined that such products are not
substantially equivalent to other devices cleared for marketing through the
510(k) process or otherwise legally marketed prior to May 28, 1976. We believed
the FDA made an incorrect assessment of the data, and we first informally and
then formally appealed the determination. For the informal appeal, we discussed
our position with the FDA in a meeting conducted in early June 2008 and sent the
FDA further information subsequent to the meeting as requested by the FDA. The
informal process did not result in a change in FDA's determination. In July
2008, we filed a formal appeal under FDA regulations. During October 2008 the
FDA reopened our submission for an additional round of review in response to the
formal appeal. We believe reopening of the 510(k) overrides and supersedes the
prior NSE decision. In addition to the information previously submitted to the
FDA, we have submitted additional animal and other supplemental data to the FDA
as requested by them. We cannot, at this time, determine when a decision will be
made by the FDA on the reopened 510(k) submission. We believe, based upon
regulations and guidance published by the FDA, as well discussions with our
independent expert consultants, including former FDA officials, that all of our
current products are covered by the FDA clearance provided in 1991.

Based upon the safety and efficacy of our products, we do not believe the FDA
will require us to cease marketing and/or recall products which have been
already sold or rented. However, if we are unsuccessful in our efforts to have
the FDA clear our 510(k) submission the FDA may require us to do so until
another submission is cleared. If the FDA does not grant the 510(k) clearance
for our current products, the FDA may require us to cease marketing and/or
recall current products already sold or rented until FDA clearance or approval
is obtained. In addition, the FDA could subject us to the other sanctions
described in our Form 10-KSB under "Pervasive and Continuing Regulation". In the
event we are required to recall our product, we could incur significant costs
and expenses associated with such recall and could be subject to claims,
including indemnification claims, by our third party distributors for costs
incurred by them in connection with such recall. In addition, we could be
subject to claims, including product liability claims, by our customers. We may
not have sufficient cash resources to satisfy such obligations.

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

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

o    warning letters, fines, injunctions and civil penalties;

o    repair, replacement, refunds, recall or seizure of our products;

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o    operating restrictions or partial suspension or total shutdown of
     production;

o    refusing our requests for 510(k) clearance or premarket approval of new
     products, new intended uses, or modifications to existing products;

o    withdrawing 510(k) clearance or premarket approvals that have already been
     granted; and

o    criminal prosecution.

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

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

We have generated only limited revenues from product sales and have incurred net
losses of approximately $7.5 and $7.8 million for the fiscal years ended March
31, 2008 and 2007, respectively. At September 30, 2008, we had an accumulated
deficit of approximately $35.6 million. We expect to incur additional operating
losses, as well as negative cash flow from operations, for the foreseeable
future, as we continue to expand our marketing efforts with respect to our
products and to continue our research and development of additional applications
for our products as well as new products utilizing our tPEMF technology and
other technologies that we may develop in the future.

We estimate that we presently have sufficient sources of funds to meet our cash
requirements through January 31, 2009. Previously we estimated that we had
sufficient sources of funds to meet our cash requirements through March 31,
2009. The change in our estimate is primarily the result of additional accrued
settlement fee and other costs relating to the termination of our Allergan
Agreement of approximately $450,000, $97,500 to purchase our common stock in a
private transaction with an investor and increased legal and regulatory expenses
relating to our 510(k) submission with the FDA and legal representation in our
litigation with Stonefield Josephson, as discussed under PART II. OTHER
INFORMATION, ITEM 1. LEGAL PROCEEDINGS. We will need to obtain additional
capital through issuance of our equity securities, debt financings, licensing
agreements, joint ventures or other transactions to satisfy our operational
requirements. Management also believes it could reduce or delay certain variable
or discretionary costs, including delaying the timing of some of our research
and development projects, to help meet our working capital needs. However, we
may not be successful in our efforts. In light of the foregoing, substantial
doubt is raised as to our ability to continue as a going concern.

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

One September 29, 2008, we agreed to issue to a consultant to us, in exchange
for services provided to us, a warrant to purchase, at an initial exercise price
equal to $0.45 per share, up to such number of shares of our common stock equal
to 4% of the outstanding shares of our common stock, which shall be determined
as follows: (i) after the completion of a successful financing, the warrant
shall become exercisable as to 2% of the shares of our common stock outstanding
immediately after the completion of such financing, and (ii) after the
successful resolution of our current formal appeal with the U.S. Food & Drug
Administration, 2% of the shares of our common stock outstanding immediately
after such resolution. The terms of the warrant have not been finalized and are
subject negotiation and execution of a warrant agreement between us and the
consultant.

The issuance of the warrant upon finalization of the terms thereof is considered
to be exempt from registration under the Securities Act of 1933, as amended, in
reliance on Section 4(2) of the Securities Act, or Regulation D promulgated
thereunder, as a transaction by an issuer not involving a public offering. Upon
issuance of the warrant, the warrant will be restricted and may not be resold
unless it is subsequently registered under the Securities Act or resold pursuant
to an applicable exemption therefrom.

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ITEM 5. OTHER INFORMATION.

On November 19, 2008, Ivivi and Allergan entered into a termination agreement
(the "Termination Agreement") pursuant to which, among other things, the parties
terminated the Agreement. Pursuant to the Termination Agreement, Ivivi has
agreed to pay Allergan $450,000, plus reasonable shipping costs, in exchange for
the return of all Ivivi's product sold to Allergan under the Agreement that are
held in inventory by Allergan. Notwithstanding such termination, the parties
have agreed that certain provisions of the Agreement relating to technical
support, product warranties and indemnification with respect to products sold by
Allergan under the Agreement shall survive the termination thereof. Ivivi also
agreed that during the period commencing on November 19, 2008 and ending on the
180th day immediately thereafter, Ivivi will not enter into a distribution
agreement with any third-party distributor for the distribution by suc h
distributor of the product in the United States, directly or indirectly, to or
through any third party who may use, sell or purchase certain of Ivivi's
products in conjunction with any aesthetic or bariatric procedure. The
description of the Termination Agreement set forth herein does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Termination Agreement, a copy of which will is filed as an exhibit to the this
Quarterly Report on Form 10-Q




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ITEM 6. EXHIBITS.

(a) Exhibit No.

10.1 Termination Agreement, dated November 19, 2008, by and between Ivivi
     Technologies, Inc. and Allergan sales, LLC and Allergan USA, Inc.

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

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

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


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