##### 



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007.
 COMMISSION FILE NUMBER 00-29266
 CVF TECHNOLOGIES CORPORATION
  NEVADA
    
    87-0429335(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 8604 Main Street, Suite 1WILLIAMSVILLE, NEW YORK
    
    14221(Address of principal executive offices)
    
    (Zip Code)
 
    o
  þ o
  o þ
 o
     o þ




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##### 



ITEM 1.
    
    DESCRIPTION OF BUSINESS
     CVFs PERCENTAGEOWNERSHIP OFVOTING SECURITIESCORPORATION
    
    OF ACTIVE COMPANIES1.
    
    
    Ecoval Corporation
    
    
    85
    %2.
    
    
    G.P. Royalty Distribution Corporation
(formerly Gemprint Corporation)
    
    
    65
    %3.
    
    
    Xylodyne Corporation
    
    
    40
    %4.
    
    
    Petrozyme Technologies Inc.
    
    
    50
    %5.
    
    
    Biorem Inc. (formerly Biorem Technologies Inc.)
    
    
    23
    %
 The Corporations




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tm tm tm




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TM ® TM




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ITEM 2
    
    DESCRIPTION OF PROPERTY
  ITEM 3
    
    LEGAL PROCEEDINGS
  ITEM 4
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   ITEM 5
    
    MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
   LOW
    
    HIGH2007
    
     1st Quarter
    
    
    0.16
    
    
    
    0.20 2nd Quarter
    
    
    0.16
    
    
    
    0.24 3rd Quarter
    
    
    0.12
    
    
    
    0.21 4th Quarter
    
    
    0.08
    
    
    
    0.152006
    
     1st Quarter
    
    
    0.28
    
    
    
    0.39 2nd Quarter
    
    
    0.32
    
    
    
    0.50 3rd Quarter
    
    
    0.22
    
    
    
    0.32 4th Quarter
    
    
    0.16
    
    
    
    0.22




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##### 



Small Business Issuer Purchases of Equity Securities
 Maximum Approximate DollarTotal No. of shares
    
    Value of shares that mayTotal Number
    
    Average
    
    purchased as part of
    
    yet be purchased underof Shares
    
    Price Paid
    
    publicly announced
    
    publicly announced plans orPERIOD
    
    Purchased
    
    per Share
    
    plans or programs
    
    programsJanuary 2006
    
    
    84,100
    
    
    $
    0.33
    
    
    
    84,100
    
    
    $
    470,543.00February 2006
    
    
    49,300
    
    
    $
    0.36
    
    
    
    49,300
    
    
    $
    451,889.50March 2006
    
    
    38,100
    
    
    $
    0.38
    
    
    
    38,100
    
    
    $
    436,875.60April 2006
    
    
    879,961
    
    
    $
    0.40
    
    
    
    879,961
    
    
    $
    82,733.95May 2006
    
    
    89,800
    
    
    $
    0.37
    
    
    
    89,800
    
    
    $
    47,940.14June 2006
    
    
    4,600
    
    
    $
    0.33
    
    
    
    4,600
    
    
    $
    46,445.14September 2006
    
    
    16,800
    
    
    $
    0.23
    
    
    
    16,800
    
    
    $
    42,581.14October 2006
    
    
    4,200
    
    
    $
    0.19
    
    
    
    4,200
    
    
    $
    41,783.14November 2006
    
    
    15,800
    
    
    $
    0.19
    
    
    
    15,800
    
    
    $
    38,781.14December 2006
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14January 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14February 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14March 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14April 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14May 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14June 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14July 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14August 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14September 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14October 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14November 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14December 2007
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    38,781.14TOTAL
    
    
    1,182,661
    
    
    $
    0.38
    
    
    
    1,182,661
    
    
    $
    38,781.14




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##### 



ITEM 6
    
    MANAGEMENTS DISCUSSION AND ANALYSIS
       TM TM TM TM TM TM TM TM




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
    
    general economic and business conditions;
    
    foreign currency fluctuations, particularly involving Canadian dollars;
    
    the Companys ability to find additional suitable investments and the ability of those
investments to generate an acceptable return on invested capital;
    
    the uncertainties and risks involved in investing in early-stage development companies
which can arise because of the lack of a customer base, lack of name recognition and
credibility, the need to bring in experienced management and




---



##### 



the need to develop and refine the business and its operations, among other reasons;
    
    the Companys ability to obtain capital to fund its operations and those of its investees,
if those expenses were to increase significantly.




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CVF Technologies Corporation




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##### 



CVF Technologies Corporation
 INDEX TO FINANCIAL STATEMENTS
 Page numberCONSOLIDATED BALANCE SHEETS
    
    
    F-2CONSOLIDATED STATEMENTS OF OPERATIONS
    
    
    F-4CONSOLIDATED STATEMENTS OF
STOCKHOLDERS EQUITY
    
    
    F-6CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    F-8CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
    
    
    F-9NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    F-10REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
    
    
    F-39




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##### 



CVF Technologies Corporation
 
 CONSOLIDATED BALANCE SHEETS
 As at December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $ASSETSCurrent AssetsCash and cash equivalents
    
    
    735,115
    
    
    
    1,164,736Restricted cash
    
    
    
    
    
    
    1,167,954Trade receivables, net
    
    
    112,452
    
    
    
    401,714Inventory
    
    
    120,223
    
    
    
    62,126Prepaid expenses and other
    
    
    20,399
    
    
    
    37,148Total current assets
    
    
    988,189
    
    
    
    2,833,678Property and equipment, net of accumulated depreciation
    
    
    13,614
    
    
    
    12,167Loans receivable  related party
    
    
    142,251
    
    
    
    142,251Equity investment in Biorem
    
    
    
    
    
    
    487,546Holdings available for sale, at market
    
    
    1,451
    
    
    
    18,628Security Deposit, long-term
    
    
    1,677
    
    
    
    1,426Note receivable
    
    
    477,843
    
    
    
    406,461Total assets
    
    
    1,625,025
    
    
    
    3,902,157
 See accompanying notes
 F-2




---



##### 



CVF Technologies Corporation
 CONSOLIDATED BALANCE SHEETS contd
 As at December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilitiesAccounts payables and accrued liabilities
    
    
    901,960
    
    
    
    2,322,857IRS audit settlement (note 15, note 18)
    
    
    953,872
    
    
    
    Total current liabilities
    
    
    1,855,832
    
    
    
    2,322,857Long-term liabilitiesDeferred income taxes
    
    
    102,693
    
    
    
    87,195Minority interest
    
    
    905,265
    
    
    
    832,111Pension obligation
    
    
    677,001
    
    
    
    588,540Total long-term liabilities
    
    
    1,684,959
    
    
    
    1,507,846Redeemable Series A preferred stock, $0.001 par value,
redeemable at $18.25 per share, authorized 500,000 shares,
issued and outstanding shares 1,592 [2006; 1,592]
    
    
    29,054
    
    
    
    29,0543,569,845
    
    
    
    3,859,757Commitments and contingenciesStockholders (deficit) equityCommon stock, $0.001 par value, authorized 50,000,000 shares,
outstanding 14,949,866 [2006; 14,297,735]
and in treasury 1,664,361 [2006; 1,664,361]
    
    
    16,614
    
    
    
    15,962Additional paid-in capital
    
    
    29,973,593
    
    
    
    29,754,796Treasury stock
    
    
    (3,208,392
    )
    
    
    (3,208,392
    )Accumulated other comprehensive loss
    
    
    (319,917
    )
    
    
    (271,606
    )Accumulated deficit
    
    
    (28,406,718
    )
    
    
    (26,248,360
    )Total stockholders (deficit) equity
    
    
    (1,944,820
    )
    
    
    42,400Total liabilities and stockholders (deficit) equity
    
    
    1,625,025
    
    
    
    3,902,157
 See accompanying notes
 F-3




---



##### 



CVF Technologies Corporation
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year ended December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $SALES
    
    
    1,952,504
    
    
    
    1,478,454Royalty Income
    
    
    23,235
    
    
    
    33,184Cost of sales
    
    
    1,507,160
    
    
    
    1,214,518Gross margin
    
    
    468,579
    
    
    
    297,120EXPENSESSelling, general and administrative
    
    
    2,164,918
    
    
    
    2,291,670Total expenses
    
    
    2,164,918
    
    
    
    2,291,670Loss from continuing operations
before under noted items
    
    
    (1,696,339
    )
    
    
    (1,994,550
    )Other income (expenses)Interest income, net
    
    
    5,817
    
    
    
    102,042Other income
    
    
    47,992
    
    
    
    Gain on Gemprint Note
    
    
    
    
    
    
    567,712(Loss) from equity investees
    
    
    (575,303
    )
    
    
    (188,077
    )Minority interest  Gemprint
    
    
    67,794
    
    
    
    101,257Realized currency translation (loss)
    
    
    (61,758
    )
    
    
    (417,660
    )Total other income (expenses)
    
    
    (515,458
    )
    
    
    165,274(Loss) from operations before
income taxes
    
    
    (2,211,797
    )
    
    
    (1,829,276
    )Income taxes (recovery)
    
    
    (126,005
    )
    
    
    15,815Net (loss)
    
    
    (2,085,792
    )
    
    
    (1,845,091
    )
 See accompanying notes
 F-4




---



##### 



CVF Technologies Corporation
 CONSOLIDATED STATEMENTS OF OPERATIONS contd
 Year ended December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $Net income (loss) attributable to common
stockholders
    
    
    (2,087,244
    )
    
    
    (1,847,682
    )Basic weighted average number of
shares
    
    
    12,915,659
    
    
    
    12,915,659Diluted weighted average number of
shares
    
    
    12,915,659
    
    
    
    12,915,659Basic earnings (loss) per share
    
    
    (0.16
    )
    
    
    (0.14
    )Diluted earnings (loss) per share
    
    
    (0.16
    )
    
    
    (0.14
    )
 See accompanying notes
 F-5




---



##### 



CVF Technologies Corporation
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY contd
 Year ended December 31
    
    [Expressed in U.S. Currency]
 Series C
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedConvertible
    
    Additional
    
    
    
    
    
    
    
    
    
    other
    
    TotalCommon stock
    
    Preferred
    
    paid-in
    
    Accumulated
    
    Treasury
    
    comprehensive
    
    (deficit)Amount
    
    Stock
    
    capital
    
    deficit
    
    stock
    
    income
    
    equityShares
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  December
31, 2005
    
    
    14,302,096
    
    
    
    14,302
    
    
    
    100
    
    
    
    30,731,272
    
    
    
    (24,400,678
    )
    
    
    (2,747,174
    )
    
    
    (220,190
    )
    
    
    3,377,632Net (Loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,845,091
    )
    
    
    
    
    
    
    
    
    
    
    (1,845,091
    )Dividends on Series
A preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,591
    )
    
    
    
    
    
    
    
    
    
    
    (2,591
    )Treasury shares
purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (461,218
    )
    
    
    
    
    
    
    (461,218
    )Unrealized loss on
securities
available
for sale, net of
reclassification
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    (58
    )Redemption of
Series C
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    (1,130,667
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,130,767
    )Restricted Shares
issued
    
    
    1,660,000
    
    
    
    1,660
    
    
    
    
    
    
    
    160,190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161,850Warrants expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,999
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,999
    )Translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51,358
    )
    
    
    (51,358
    )Balance  December
31, 2006
    
    
    15,962,096
    
    
    
    15,962
    
    
    
    0
    
    
    
    29,754,796
    
    
    
    (26,248,360
    )
    
    
    (3,208,392
    )
    
    
    (271,606
    )
    
    
    42,400
 See accompanying notes
 F-6




---



##### 



CVF Technologies Corporation
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY contd
 Year ended December 31
    
    [Expressed in U.S. Currency]
 Series C
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedConvertible
    
    Additional
    
    
    
    
    
    
    
    
    
    other
    
    TotalCommon stock
    
    Preferred
    
    paid-in
    
    Accumulated
    
    Treasury
    
    comprehensive
    
    equityAmount
    
    Stock
    
    capital
    
    deficit
    
    stock
    
    income
    
    (deficit)Shares
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  December 31, 2006
    
    
    15,962,096
    
    
    
    15,962
    
    
    
    0
    
    
    
    29,754,796
    
    
    
    (26,248,360
    )
    
    
    (3,208,392
    )
    
    
    (271,606
    )
    
    
    42,400Net (Loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,156,906
    )
    
    
    
    
    
    
    
    
    
    
    (2,156,906
    )Dividends on Series A preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,452
    )
    
    
    
    
    
    
    
    
    
    
    (1,452
    )Unrealized loss on securities available
for sale, net of reclassification
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,164
    )
    
    
    (2,164
    )Restricted Shares issued
    
    
    652,131
    
    
    
    652
    
    
    
    
    
    
    
    218,797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    219,449Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46,147
    )
    
    
    (46,147
    )Balance  December 31, 2007
    
    
    16,614,227
    
    
    
    16,614
    
    
    
    0
    
    
    
    29,973,593
    
    
    
    (28,406,718
    )
    
    
    (3,208,392
    )
    
    
    (319,917
    )
    
    
    (1,944,820
    )
 See accompanying notes
 F-7




---



##### 



CVF Technologies Corporation
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year ended December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $OPERATING ACTIVITIESNet (loss) to cash used in operating activities
    
    
    (2,085,792
    )
    
    
    (1,845,091
    )Adjustments to reconcile net loss from continuing operationsDepreciation and amortization
    
    
    4,253
    
    
    
    3,315Loss from equity investees
    
    
    575,303
    
    
    
    188,077Minority interest in income
    
    
    (67,794
    )
    
    
    (101,257
    )Gain on Gemprint note
    
    
    
    
    
    
    (406,461
    )Deferred income tax expense
    
    
    15,498
    
    
    
    (229
    )Amortization of shares issued for services
    
    
    
    
    
    
    161,843Changes in operating assets and liabilitiesDecrease (increase) in trade receivables
    
    
    289,262
    
    
    
    (390,709
    )Decrease (increase) in inventory and other
    
    
    (58,097
    )
    
    
    (52,194
    )Prepaid expenses
    
    
    16,749
    
    
    
    (5,488
    )Increase (decrease) in accounts payable and accrued liabilities
    
    
    (467,025
    )
    
    
    62,704Security Deposit
    
    
    
    
    
    
    (1,426
    )Pension expense
    
    
    88,461
    
    
    
    (26,358
    )Cash provided by (applied to) operating activities
    
    
    (1,689,182
    )
    
    
    (2,413,274
    )INVESTING ACTIVITIESProceeds from sale of holdings
    
    
    19,877
    
    
    
    Investment in investee companies
    
    
    
    
    
    
    (60,369
    )Cash provided by (applied to) investing activities
    
    
    19,877
    
    
    
    (60,369
    )FINANCING ACTIVITIESRepayment of debt
    
    
    
    
    
    
    (25,000
    )Redemption of Series A preferred shares
    
    
    
    
    
    
    (34,401
    )Redemption of Series C preferred shares
    
    
    
    
    
    
    (1,130,767
    )Purchase of treasury stock
    
    
    
    
    
    
    (461,218
    )Cash provided by ( applied to ) financing activities
    
    
    
    
    
    
    (1,651,386
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    71,730
    
    
    
    (60,174
    )Cash and cash equivalents (applied) during year
    
    
    (1,597,575
    )
    
    
    (4,185,203
    )Cash and cash equivalents, beginning of year
    
    
    2,332,690
    
    
    
    6,517,893Cash and cash equivalents, end of year
    
    
    735,115
    
    
    
    2,332,690Cash paid during the year for interest
    
    
    1,508
    
    
    
    655Cash paid during the year for income taxes
    
    
    2,346
    
    
    
    5,071
 See accompanying notes
 F-8




---



##### 



CVF Technologies Corporation
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 Year ended December 31
    
    [Expressed in U.S. Currency]
 2007
    
    2006$
    
    $Net (loss)
    
    
    (2,085,792
    )
    
    
    (1,845,091
    )Other comprehensive (loss),
net of taxForeign currency translation adjustments
[net of tax effect]
    
    
    (46,147
    )
    
    
    (51,358
    )Unrealized holding (losses) gains:Reclassification adjustments for previously
recognized unrealized holding (gains)
[net of taxes of ( $1,443) and ( $39)
for the years ended December 31, 2007
and 2006]
    
    
    (2,164
    )
    
    
    (58
    )(2,164
    )
    
    
    (58
    )Total other comprehensive (loss)
    
    
    (48,311
    )
    
    
    (51,416
    )Comprehensive (loss) during year
    
    
    (2,134,103
    )
    
    
    (1,896,507
    )
 See accompanying notes
 F-9




---



##### 



CVF Technologies Corporation
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 1. ORGANIZATION AND BUSINESS DESCRIPTION
    Ecoval
Corporation [Ecoval]
 G.P.
Royalty Distribution Corporation (formerly Gemprint Corporation)
[Gemprint]
    F-10




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 1. ORGANIZATION AND BUSINESS DESCRIPTION contd
  Xylodyne Corporation (Xylodyne),
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  [a]
    
    Principles of consolidationThe consolidated financial statements include the accounts of the Company and its
majority-owned subsidiaries. All material intercompany accounts and transactions have been
eliminated on consolidation.Holdings in which the Company has a 20-50% ownership position and significant influence are
accounted for under the equity method of accounting (with the exception of Xylodyne as
described above), such that the Company records losses to the extent of the Companys total
holdings in the investee, comprising its equity interest, advances and loans and guarantees.The Company accounts for holdings of less than 20% ownership position as available for sale.
These holdings are revalued to quoted market prices at each period end with the unrealized gain
or loss, net of tax effect, recorded in accumulated other comprehensive income, an element of
stockholders equity. The available for sale classification includes debt and equity
securities which are carried at fair value. The Company accounts for holdings of less than 20%
ownership for which market value is not readily available at cost less provisions for declines
in value which are considered other than temporary. Such provisions are charged to earnings
when recognized.Gains or losses on sales of securities are recognized by the specific identification method.
 F-11




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 [a] Principles of consolidation  contd
 Xylodyne was capitalized with cdn $18,000 from the two individuals and own 60% of Xylodyne,
while CVF contributed cdn $12,000 to capital for a 40% ownership of Xylodyne. CVF also loaned
another cdn $313,000 in the form of a debenture to Xylodyne. Certain officers of CVF also have
two of the four voting board member seats on Xylodyne. The cdn $313,000 debenture is secured
by the assets of Xylodyne only with no personal guarantees from the majority owners of
Xylodyne.CVF evaluated the consolidation of Xylodyne pursuant to paragraph 5 of FIN 46, which states an
entity shall be subject to consolidation if either of the following conditions exists:A.) The total equity investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated financial support from other parties. The total
equity investment at risk: (1) Includes only equity investments in the entity that participate
significantly in profits and losses, (2) Does not include equity interest that the entity
issued in exchange for subordinated interests in other variable interest entities, (3) Does not
include amounts provided to the equity investor directly or indirectly by the entity or by
other parties, (4) Does not include amounts financed for equity investor ( for example by loans
or guarantees of loans ) directly by the entity or by other parties involved with the entity,
unless that party is a parent, subsidiary or affiliate of the investor that is required to be
included in the same set of consolidated financial statements as the investor.B.) As a group the holders of the equity investment at risk lack anyone of the following three
characteristics of controlling financial interest: (1) The direct or indirect ability to make
decisions about an entitys activities through voting rights or similar rights, (2) The
obligation to absorb the expected losses of the entity if they occur. The investor or
investors do not have that obligation if they are directly or indirectly protected from the
expected losses or are guaranteed a return by the entity itself or by other parties involved
with the entity, (3) The right to receive the expected residual returns of the entity if they
occur. The investors do not have that right if their return is capped by the entitys governing
documents or arrangements with other variable interest holders or with the entity.CVFs evaluation of including Xylodyne as a variable interest enterprise for consolidation
purposes is based on the following evaluation of both paragraphs 5(a) and 5(b) even though only
meeting the conditions in one paragraph alone required the consolidation of Xylodyne as a
variable interest entity;A) At inception of Xylodyne CVF believed that the cdn $30,000 capital investment was
insufficient to operate Xylodyne effectively, based on its intended goals and purpose, hence
 F-12




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [a]
    
    Principles of consolidation  contdthe need for an additional amount of debt from CVF (ie: the cdn $313,000 debt). As further
support for the initial evaluation is at December 31, 2006, Xylodyne had cdn $566,000 in assets
and had losses of $161,200 in 2006 and $22,200 in 2007. The assets are largely receivables
from US based companies, while Xylodyne is a Canadian based entity, hence traditional banking
relationships are difficult to obtain for a start up enterprise with a business located in one
country and the receivables are from companies in another country, hence the need for the
additional cdn $313,000 debt. In addition it is also possible, but not required, that CVF will
extend further credit to Xylodyne as the majority shareholders may not have additional funds
for possible future expansion. Based on the conditions elaborated in paragraph 5 (a) and
paragraph 9 of FIN 46, CVF believes that it is required to consolidate Xylodyne as a variable
interest entity.B) At inception under the conditions elaborated under paragraph 5(b) of FIN 46, (a) CVF has two
of the four voting board of director seats for making decisions, (b) the cdn $313,000 debenture
is secured by the assets and business of Xylodyne only, hence if Xylodyne fails and ceases to
operate, CVF is not protected against additional losses above its cdn $12,000 investment as
there is no other subordinated creditor, nor does CVF have any outside guarantees or collateral
for the Companys $313,000 cdn debt outstanding, (c) should Xylodyne perform beyond
expectations as a result of CVFs equity ownership, CVF can enjoy their ratable amount
residual returns. Based on the conditions elaborated in paragraph 5(b), CVF believes that it is
required to consolidate Xylodyne as a variable interest entity.
 [b]
    
    Foreign currency translationThe Company uses the U.S. dollar as the reporting currency of its consolidated financial
statements. However, the functional currency of the Company and its Canadian subsidiaries is
the Canadian dollar. Accordingly, all balance sheet amounts of the Company and its Canadian
subsidiaries are translated to U.S. dollars using the exchange rates in effect at the
applicable year-end. Income statement amounts of the Company and its Canadian subsidiaries are
translated to U.S. dollars at the average exchange rate for the applicable year. The gains and
losses resulting from the translation of the Companys financial statements into U.S. currency
are recorded in accumulated other comprehensive loss.Transactions and balances denominated in currencies other than the functional currency of the
Company or its subsidiaries are re-measured in the Companys functional currency using the
 F-13




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [b]
    
    Foreign currency translation  contdexchange rate in effect on the date of the transaction. Translation adjustments arising on
such re-measurement are included in the determination of net (loss) income.[c]
    
    Cash and cash equivalentsThe Company considers all highly liquid temporary cash investments, with a maturity of three
months or less when purchased, to be cash equivalents. Occasionally, the Company may have cash
balances in its bank accounts which exceed $100,000, the federal insured limit.[d]
    
    Trade receivablesTrade receivables are presented net of allowance for doubtful accounts. The allowance was
$89,820 at December 31, 2007 [$79,802 at December 31, 2006]. Bad debt expense was $752 during
the year ended December 31, 2007 [$nil in 2006].The allowance for doubtful accounts is determined at the subsidiary company level, and includes
specifically identified accounts where there is doubt as to collection.Accounts deemed uncollectible are applied against the allowance for doubtful accounts.[e]
    
    InventoryFinished goods are stated at the lower of cost or net realizable value using the first-in,
first-out method of costing. Raw materials are stated at the lower of cost or replacement
value, using the first-in, first-out method.[f]
    
    Property and equipmentProperty and equipment are recorded at cost. Depreciation is calculated using the
straight-line and declining balance methods over the estimated useful lives of the assets as
follows:Property 5-10 years
Equipment 5-10 yearsAccumulated depreciation at December 31, 2007 was $191,723 [$158,971 at December 31, 2006].
Depreciation expense was $4,253 [$3,315 in 2006].
 F-14




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [g]
    
    Financial instrumentsThe fair values of cash and cash equivalents, restricted cash, trade receivables, income taxes
receivable, bank indebtedness, trade payables and accrued liabilities, and preferred and other
non-voting stock of subsidiaries approximate their carrying values due to the short-term
maturity of these instruments. The fair value of the Companys pension obligation
approximates the carrying value, as the debt bears interest at rates approximating current
market rates.Holdings available for sale at market are valued at the published stock market values. Those
values are subject to market value risks, as stock prices may fluctuate from day to day. Those
holdings carried at cost or equity and the non-voting stock of subsidiaries are related to
private companies, whose fair market value is not readily determinable.Financial instruments, which are denominated in currencies other than U.S. dollars, are subject
to exchange rate risk. At December 31, the Company had the following Canadian dollar
denominated financial instruments [converted to the U.S. dollar equivalents]:
 2007
    
    2006$
    
    $Cash and cash equivalents
    
    
    68,366
    
    
    
    121,925Trade payables
    
    
    369,581
    
    
    
    345,850Pension obligation
    
    
    677,001
    
    
    
    588,540
 [h]
    
    Impairment of Long-Lived AssetsThe Company reviews long-lived assets, certain identifiable assets and goodwill related to
those assets on a quarterly basis for impairment whenever circumstances and situations change
such that there is an indication that the carrying amounts may not be recovered. Any impairment
losses, if so determined have been recorded in the statement of operations.
 F-15




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [i]
    
    Minority interestMinority common equity interests are charged (credited) with their proportionate share of
subsidiary losses (net income). When minority interests are reduced to zero by the allocable
share of investee losses, any additional losses from such investee are charged entirely to the
Company. Where excess losses are recorded by the Company, they will be charged against minority
interests in the event future income becomes available or minority interests contribute
additional equity.[j]
    
    Income (Loss) per shareBasic income (loss) per share is computed by dividing net income (loss) attributable to common
stockholders by the weighted average number of common shares outstanding during the year. The
net income (loss) attributable to common stockholders consists of net income (loss) increased
by the dividends on the Companys Series A and B preferred stock. Diluted earnings per share
would be calculated as the per share amount that would have resulted if dilutive potential
stock had been converted to common stock, as prescribed by SFAS 128.The common stock equivalents at December 31, 2007 and 2006 were 722,131 and 722,131
respectively.[k]
    
    Revenue recognitionRevenue from the sale of manufactured products is recognized when the goods are shipped and
accepted by the customer. Shipping and handling costs are included in cost of goods sold.The Company recognizes revenue on long-term contracts on the percentage of completion basis,
based on costs incurred relative to the estimated total contract costs. Losses on such
contracts are accrued when the estimate of total costs indicates that a loss will be realized.
Contract billings in excess of costs and accrued profit margins are recorded as deferred
revenue and included in current liabilities. Contract costs and margins earned in excess of
progress billings are carried in accounts receivable.Service revenue is recognized when the services are performed.
 F-16




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [l]
    
    Share Based PaymentsThe Company adopted SFAS No. 123R, Share Based Payments. SFAS No. 123R requires companies to
expense the value of employee stock options and similar awards and applies to all outstanding
and vested stock-based awards.In computing the impact, the fair value of each option is estimated on the date of grant based
on the Black-Scholes options-pricing model utilizing certain assumptions for a risk free
interest rate; volatility; and expected remaining lives of the awards. The assumptions used in
calculating the fair value of share-based payment awards represent managements best estimates,
but these estimates involve inherent uncertainties and the application of management judgment.
As a result, if factors change and the Company uses different
assumptions, the Companys stock-based compensation expense could be materially different in
the future. In addition, the Company is required to estimate the expected forfeiture rate and
only recognize expense for those shares expected to vest. In estimating the Companys
forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of
unvested options, and the amount of vested options as a percentage of total options
outstanding. If the Companys actual forfeiture rate is materially different from its estimate,
or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation
expense could be significantly different from what we have recorded in the current period. The
impact of applying SFAS No. 123R approximated $219,441 and $161,850 in additional compensation
expense during the year ended December 31, 2007 and 2006. The expense represents the portion
of restricted stock that was vested. Such amount is included in general and administrative
expenses on the statement of operations.[m]
    
    Income taxesThe Company accounts for income taxes using the liability method under which a deferred tax
asset or liability is recognized based upon the tax effect of the differences between the
financial statement and tax basis of assets and liabilities, as measured at the enacted rates
which will be in effect when these differences are expected to reverse. Provision is made for
all applicable U.S. and foreign income taxes pursuant to this standard.[n]
    
    Use of estimatesThe preparation of financial statements in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the
 F-17




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 [n]
    
    Use of estimates  contdreporting year. Management has recorded its estimate of costs attributed to the tax audit.
Actual results could differ from those estimates.[o]
    
    Credit riskThe Company performs ongoing credit evaluations of its customers financial condition and
generally does not require collateral. The Company maintains allowances for potential losses,
and such losses have been within managements expectations.[p]
    
    Impact of recently issued accounting standards
 FASB 157  Fair Value Measures
  FASB 160  Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB
No. 51
   F-18




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 FASB 160  Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB
No. 51  contd
     F-19




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  contd
 FASB 141(revised 2007)  Business Combinations
     F-20




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 3. INVENTORY
  2007
    
    2006$
    
    $Finished goods
    
    
    120,223
    
    
    
    62,126Less reserve for obsolescence
    
    
    
    
    
    
    120,223
    
    
    
    62,126
 4. HOLDINGS
  [a]
    
    Petrozyme Technologies, Inc. [Petrozyme], a Guelph, Canada, private company in the business of developing and marketing processes for the
degradation of petroleum waste products.[b]
    
    Biorem Technologies Inc. [Biorem], a Guelph, Canada, public company at December 31, 2007 and December 31, 2006 (private company at December
31, 2004), which went public in January 2005, is an industrial biotech company engaged in the business of applying industrial air pollution
control applications.
 
    
    In addition, the Company has other holdings available for sale, other notes and other holdings which are not individually significant.
  HoldingsHoldings
    
    available forat cost
    
    for sale atPercentage
    
    or equity
    
    fair valueownership
    
    $
    
    $Petrozyme50
    
    
    common shares
    
    
    50
    %
    
    
    
    
    
    
    250,000
    
    
    Class C non-voting shares notes and advances [net of equity
in losses] [i]
    
    
    100
    %
    
    
    
    
    
    
    Biorem2,819,100
    
    
    effective common shares [ii]
    
    
    23.5
    %
    
    
    
    
    
    
    Other notes and holdings
    
    
    
    
    
    
    
    
    
    
    1,451Total
    
    
    
    
    
    
    
    
    
    
    
    
    1,451
 F-21




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 4. HOLDINGS  contd
  HoldingsHoldings
    
    available forat cost
    
    for sale atPercentage
    
    or equity
    
    fair valueownership
    
    $
    
    $Petrozyme50
    
    
    common shares
    
    
    50
    %
    
    
    
    
    
    
    250,000
    
    
    Class C non-voting shares
notes and advances [net of equity
in losses] [i]
    
    
    100
    %
    
    
    
    
    
    
    Biorem2,819,100
    
    
    effective common shares [ii]
    
    
    23.5
    %
    
    
    487,546
    
    
    
    Other notes and holdings
    
    
    
    
    
    
    
    
    
    
    18,628Total
    
    
    
    
    
    
    
    
    487,546
    
    
    
    18,628
 
 [i]
    
    The notes and advances to Petrozyme bear interest at prime plus 2%, are unsecured, payable
on demand, some are denominated in Canadian currency and others in U.S. currency. On December
21, 2005 the Company demanded repayment of these notes and notified Petrozyme that it intended
to enforce its security. The carrying value of these assets has been reduced to zero by the
Companys share of losses of Petrozyme.  2007
    
    2006Income Statement Data (Unaudited)
    
    $
    
    $Net sales
    
    
    73,188
    
    
    
    135,528Gross profit (loss) on sales
    
    
    73,188
    
    
    
    111,365Net (loss)
    
    
    (336,268
    )
    
    
    (222,432
    )CVFs share of net (loss)
    
    
    (168,134
    )
    
    
    (111,216
    )
 F-22




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 4. HOLDINGS  contd
 Balance Sheet DataCurrent assets
    
    
    269
    
    
    
    26,801Total assets
    
    
    269
    
    
    
    26,801Current liabilities
    
    
    25,310
    
    
    
    28,165Non-current liabilities
    
    
    4,042,936
    
    
    
    3,150,997(Deficit)
    
    
    (4,067,977
    )
    
    
    (3,152,361
    )Total liabilities and equity
    
    
    269
    
    
    
    26,801CVFs share of (accumulated deficit)
    
    
    (2,033,988
    )
    
    
    (1,576,180
    )CVFs share of non-current liabilities
    
    
    4,042,936
    
    
    
    3,150,997
   Year ended December 31, 2007
    
    BioremIncome Statement Data (Unaudited)
    
    $Net sales
    
    
    8,874,295Gross profit on sales
    
    
    3,134,040Net (loss)
    
    
    (2,812,633
    )CVFs share of net (loss)
    
    
    (714,569
    )Balance Sheet DataCurrent assets
    
    
    6,927,386Total assets
    
    
    11,623,245Current liabilities
    
    
    3,029,779Equity
    
    
    8,593,466Total liabilities and equity
    
    
    11,623,245CVFs share of equity
    
    
    2,028,058
 F-23




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 4. HOLDINGS  contd
 Year ended December 31, 2006
    
    BioremIncome Statement Data (Unaudited)
    
    $Net sales
    
    
    10,597,336Gross profit on sales
    
    
    3,646,252Net (loss)
    
    
    (679,237
    )CVFs share of net (loss)
    
    
    (188,077
    )Balance Sheet DataCurrent assets
    
    
    7,798,695Total assets
    
    
    12,529,672Current liabilities
    
    
    2,806,735Equity
    
    
    9,722,937Total liabilities and equity
    
    
    12,529,672CVFs share of equity
    
    
    2,591,163
     F-24




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 4. HOLDINGS  contd
     5. CONCENTRATION OF CREDIT RISK
  6. DEPENDENCY ON SUPPLIER
  7. PENSION OBLIGATION
  F-25




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 8. INCOME TAXES
  2007
    
    2006$
    
    $Current:U.S.Income taxes on interest income from subsidiary
    
    
    
    
    
    
    ForeignTaxes (net of recovery) on operations of subsidiaries
    
    
    
    
    
    
    15,815Total current taxes
    
    
    
    
    
    
    15,815Deferred:U.S.
    
    
    (126,005
    )
    
    
    Total deferred taxes
    
    
    (126,005
    )
    
    
    15,815Income tax (recovery)
    
    
    (126,005
    )
    
    
    15,815Income (loss) before (recovery of) income taxes:U.S.
    
    
    (2,023,970
    )
    
    
    1,281,157Foreign
    
    
    (187,827
    )
    
    
    (548,119
    )Income (loss) before (recovery of) income taxes
    
    
    (2,211,797
    )
    
    
    (1,829,276
    )
   2007
    
    2006%
    
    %U.S. statutory income tax rate
    
    
    (35.0
    )
    
    
    (35.0
    )(Decrease) increase in income tax resulting from:Non-deductible equity compensation
    
    
    3.69
    
    
    
    Loss in subsidiaries not recognized for tax purposes
    
    
    .37
    
    
    
    3.30Change in allowance
    
    
    25.24
    
    
    
    14.92Net operating loss carryforward utilized for foreign distributions
    
    
    
    
    
    
    16.78Effective income tax rate
    
    
    (5.7
    )
    
    
    
 F-26




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 8. INCOME TAXES  contd
  2007
    
    2006$
    
    $Change in:Operating Tax loss carryforward, CVF Corporation
    
    
    (584,590
    )
    
    
    (384,610
    )Operating tax loss carryforward, subsidiaries
    
    
    (234,514
    )
    
    
    (218,547
    )Capital tax loss carryforward, CVF Corporation
    
    
    (200,365
    )
    
    
    (142,082
    )Difference in basis in subsidiary
    
    
    (121,377
    )
    
    
    (224,721
    )Pension obligation
    
    
    (30,068
    )
    
    
    8,994Other
    
    
    (126,005
    )
    
    
    Change in valuation allowance
    
    
    1,170,914
    
    
    
    960,966(126,005
    )
    
    
    
  2007
    
    2006$
    
    $Deferred tax assets:U.S.Operating tax loss carryforward
    
    
    1,824,787
    
    
    
    1,240,197Capital loss carry-forward
    
    
    1,679,579
    
    
    
    1,479,214Difference in basis in subsidiary
    
    
    1,514,470
    
    
    
    1,393,093Related to pension obligation
    
    
    230,111
    
    
    
    200,043Less: Valuation allowance
    
    
    (5,248,947
    )
    
    
    (4,312,547
    )
    
    
    
    Deferred tax liabilities:U.S.Investment & notes in investees
    
    
    102,693
    
    
    
    87,195Net deferred tax (liability)
    
    
    (102,693
    )
    
    
    (87,195
    )Deferred tax assets:ForeignIncome tax losses available for carryforward in subsidiaries
    
    
    579,652
    
    
    
    345,138Less: Valuation allowance
    
    
    (579,652
    )
    
    
    (345,138
    )Net deferred tax asset  foreign
    
    
    
    
    
    
    
 F-27




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 8. INCOME TAXES  contd
   9. STOCKHOLDERS EQUITY
 [a] Common shares
   [b] Preferred stock
  Redeemable Series A preferred stock
  F-28




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 9. STOCKHOLDERS EQUITY
 [b] Preferred stock  Redeemable Series A preferred stock  contd
    Series B & C convertible preferred stock
   [c] Warrants
  F-29




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 9. STOCKHOLDERS EQUITY
 [d] Comprehensive income (loss)
   Unrealized
    
    
    
    
    
    Accumulatedgains (losses)
    
    Foreign
    
    otheron securities
    
    currency
    
    comprehensive[net of tax]
    
    translation
    
    income (losses)$
    
    $
    
    $Balance  December 31, 2005
    
    
    4,235
    
    
    
    (224,425
    )
    
    
    (220,190
    )Current year other comprehensive (loss)
    
    
    (58
    )
    
    
    (51,358
    )
    
    
    (51,416
    )Balance  December 31, 2006
    
    
    4,177
    
    
    
    (275,783
    )
    
    
    (271,606
    )Current year other comprehensive (loss)
    
    
    (2,164
    )
    
    
    (46,147
    )
    
    
    (48,311
    )Balance  December 31, 2007
    
    
    2,013
    
    
    
    (321,930
    )
    
    
    (319,917
    )
  Gains
    
    (Losses)
    
    Taxes
    
    Net$
    
    $
    
    $
    
    $2006
    
    
    (97
    )
    
    
    
    
    
    
    39
    
    
    
    (58
    )2007
    
    
    (3,607
    )
    
    
    
    
    
    
    1,443
    
    
    
    (2,164
    )
 F-30




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 10. INCOME (LOSS) PER SHARE
  2007
    
    2006$
    
    $Numerator:Net income (loss)
    
    
    (2,085,792
    )
    
    
    (1,845,091
    )Dividends on Series A preferred stock
    
    
    (1,452
    )
    
    
    (2,591
    )Numerator for basic and diluted earnings
(loss) per share (loss) attributable to common
stockholders
    
    
    (2,087,244
    )
    
    
    (1,847,682
    )Denominator:Denominator for basic earnings or loss per
share  weighted average shares outstanding
    
    
    12,915,659
    
    
    
    12,915,659Effect of dilutive securities
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    Dilutive potential common shares denominator
for diluted earnings per share adjusted
weighted-average shares and assumed conversion
    
    
    12,915,659
    
    
    
    12,915,659Basic earnings (loss) per share
    
    
    (0.16
    )
    
    
    (0.14
    )Diluted earnings (loss) per share
    
    
    (0.16
    )
    
    
    (0.14
    )
 11. BUSINESS AQUISITION AND SUPPLEMENTARY
SUBSIDIARY INFORMATION
 [a] G.P. Royalty Distribution Corporation  Gemprint
  F-31




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 11. BUSINESS AQUISITION AND SUPPLEMENTARY
SUBSIDIARY INFORMATION
 [a] G.P. Royalty Distribution Corporation  Gemprint  contd
 Staff Accounting Bulletin Topic 5E
 12. STOCK BASED COMPENSATION
   WeightedaverageexerciseShares
    
    price$Outstanding December 31, 2005
    
    
    345,000
    
    
    
    0.27Granted during the year
    
    
    
    
    
    
    Expired during the year
    
    
    
    
    
    
    Exercised during the year
    
    
    
    
    
    
    Outstanding December 31, 2006
    
    
    345,000
    
    
    
    0.27Granted during the year
    
    
    180,000
    
    
    
    Cancelled during the year
    
    
    (525,000
    )
    
    
    Exercised during the year
    
    
    
    
    
    
    Outstanding December 31, 2007
    
    
    
    
    
    
    
 
 F-32




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 13. SEGMENTED INFORMATION
       
 F-33




---



##### 



CVF Technologies Corporation
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 Year ended December 31
    
    [Expressed in U.S. Currency]
 13. SEGMENTED INFORMATION  contd
 Electric
    
    Identification
    
    Natural
    
    Corporatevehicle
    
    systems
    
    fertilizer
    
    administration
    
    Total2007
    
    $
    
    $
    
    $
    
    $
    
    $Sales
    
    
    1,799,706
    
    
    
    
    
    
    
    176,033
    
    
    
    
    
    
    
    1,975,739Income (loss) from operations before depreciation
    
    
    (69,862
    )
    
    
    (40,291
    )
    
    
    (349,000
    )
    
    
    (1,232,932
    )
    
    
    (1,692,085
    )Depreciation
    
    
    2,220
    
    
    
    
    
    
    
    
    
    
    
    2,034
    
    
    
    4,254(Loss) from operations before other income (expenses)
    
    
    (72,082
    )
    
    
    (40,291
    )
    
    
    (349,000
    )
    
    
    (1,234,966
    )
    
    
    (1,696,339
    )Interest income
    
    
    
    
    
    
    37,477
    
    
    
    
    
    
    
    5,412
    
    
    
    42,889Interest (expense)
    
    
    (651
    )
    
    
    
    
    
    
    
    
    
    
    (36,421
    )
    
    
    (37,072
    )Other income (expense)
    
    
    47,992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,992(Loss) from equity investees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (575,303
    )
    
    
    (575,303
    )Minority interest
    
    
    
    
    
    
    67,794
    
    
    
    
    
    
    
    
    
    
    
    67,794Realized currency translation income (loss)
    
    
    (2,766
    )
    
    
    (178,619
    )
    
    
    293,108
    
    
    
    (173,481
    )
    
    
    (61,758
    )Segment income (loss) before (recovery) of income taxes
    
    
    (27,507
    )
    
    
    (113,639
    )
    
    
    (55,892
    )
    
    
    (2,014,759
    )
    
    
    (2,211,797
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    1,469
    
    
    
    (127,474
    )
    
    
    (126,005
    )Net income (loss)
    
    
    (27,507
    )
    
    
    (113,639
    )
    
    
    (57,361
    )
    
    
    (1,887,285
    )
    
    
    (2,085,792
    )Depreciation and amortization
    
    
    2,220
    
    
    
    
    
    
    
    
    
    
    
    2,034
    
    
    
    4,253Capital expenditures
    
    
    3,132
    
    
    
    
    
    
    
    1,012
    
    
    
    
    
    
    
    4,144Segment assets
    
    
    9,671
    
    
    
    
    
    
    
    1,452
    
    
    
    2,491
    
    
    
    13,614
 F-34




---



##### 



CVF Technologies Corporation
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 13. SEGMENTED INFORMATION  contd
 Electric
    
    Identification
    
    Natural
    
    Corporatevehicle
    
    systems
    
    fertilizer
    
    administration2006
    
    $
    
    $
    
    $
    
    $
    
    TotalSales
    
    
    1,330,641
    
    
    
    
    
    
    
    180,997
    
    
    
    
    
    
    
    1,511,638Income (loss) from operations before depreciation
    
    
    (164,192
    )
    
    
    (176,983
    )
    
    
    (221,067
    )
    
    
    (1,428,993
    )
    
    
    (1,991,235
    )Depreciation
    
    
    943
    
    
    
    
    
    
    
    
    
    
    
    2,372
    
    
    
    3,315(Loss) from operations before other income (expenses)
    
    
    (165,135
    )
    
    
    (176,983
    )
    
    
    (221,067
    )
    
    
    (1,431,365
    )
    
    
    (1,994,550
    )Interest income
    
    
    
    
    
    
    102,446
    
    
    
    
    
    
    
    43,828
    
    
    
    146,274Interest (expense)
    
    
    (8,276
    )
    
    
    
    
    
    
    
    
    
    
    (35,956
    )
    
    
    (44,232
    )Other income (expense)
    
    
    
    
    
    
    6,273
    
    
    
    
    
    
    
    154,978
    
    
    
    161,251(Loss) from equity investees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188,077
    )
    
    
    (188,077
    )Minority interest
    
    
    15,885
    
    
    
    491,833
    
    
    
    
    
    
    
    
    
    
    
    507,718Realized currency translation income (loss)
    
    
    553
    
    
    
    (185,136
    )
    
    
    (12,699
    )
    
    
    (220,378
    )
    
    
    (417,660
    )Segment income (loss) before (recovery) of income taxes
    
    
    (156,973
    )
    
    
    238,433
    
    
    
    (233,766
    )
    
    
    (1,676,970
    )
    
    
    (1,829,276
    )Income taxes
    
    
    4,275
    
    
    
    
    
    
    
    3,960
    
    
    
    7,580
    
    
    
    15,815Net income (loss)
    
    
    (161,248
    )
    
    
    238,433
    
    
    
    (237,726
    )
    
    
    (1,684,550
    )
    
    
    (1,845,091
    )Depreciation and amortization
    
    
    943
    
    
    
    
    
    
    
    
    
    
    
    2,372
    
    
    
    3,315Capital expenditures
    
    
    8,511
    
    
    
    
    
    
    
    657
    
    
    
    600
    
    
    
    9,768Segment assets
    
    
    7,595
    
    
    
    
    
    
    
    591
    
    
    
    3,981
    
    
    
    12,167
 F-35




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 14. COMMITMENTS
   Year ended December 31
 $2008
    
    
    72,9832009
    
    
    11,3582010
    
    
    2011
    
    
    Beyond
    
    
    Total minimum future rental payments
    
    
    84,341
  15. CONTINGENCIES
   F-36




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 15. CONTINGENCIES  contd
   16. LOANS RECEIVABLE
  17. RELATED PARTY TRANSACTIONS
  18. SUBSEQUENT EVENTS
  F-37




---



##### 



CVF Technologies Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ending December 31, 2007 and 2006
    
    [Expressed in U.S. Currency]
 19. GOING CONCERN
     F-38




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 
 F-39




---



##### 




    
    to give reasonable assurance that the information required to be disclosed by us in reports that
we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions rules and forms, and
    
    to ensure that information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934 is accumulated and communicated to our management, including
our CEO and our CFO, to allow timely decisions regarding required disclosure.
  
    
    pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of our assets,
    
    provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that our
receipts and expenditures are being made only in accordance with authorization of management and
directors, and
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on our financial
statements.




---



##### 




    
    All but Biorem, Inc (an investee) of our foreign investees and subsidiaries have yet to conduct a
formal assessment of their internal controls. Partially due to the lack of financial resources and
partially due to the lack of adequate man power.
    
    We do not maintain a sufficient complement of personnel with an appropriate level of accounting
knowledge, experience and training in the selection and application of U.S. GAAP commensurate with
our financial reporting requirements at our foreign investees and subsidiaries.
        (a)
    
    Directors and Executive Officers
  NAME
    
    AGE
    
    POSITIONJeffrey I. Dreben
    
    
    62
    
    
    Director; Chairman, Chief Executive
Officer; and PresidentRobert B. Nally
    
    
    60
    
    
    Director; Chief Operating Officer, Chief
Technology Officer, Secretary; and TreasurerRobert L. Miller
    
    
    56
    
    
    Chief Financial Officer




---



##### 








---



##### 



NonqualifiedNon-Equity
    
    DeferredStock
    
    Option
    
    Incentive Plan
    
    Compensation
    
    All OtherName and Principal
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    Earnings
    
    Compensation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)(a)
    
    (b)
    
    (c) (1)
    
    (d) (1)
    
    (e) (2)
    
    (f)
    
    (g)
    
    (h)
    
    (i) (3)
    
    (j)Jeffrey I. Dreben
Chairman, President
and Chief Executive
Officer
    
    
    2007
    
    
    
    187,154
    
    
    
    
    
    
    
    97,958
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,644
    
    
    
    300,756Robert B. Nally
Chief Operating
Officer, Chief
Technology Officer,
Secretary,
Treasurer
    
    
    2007
    
    
    
    188,469
    
    
    
    
    
    
    
    97,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,434
    
    
    
    294,403
 
 (1)
    
    Robert Nallys paid (11 months) in Canadian currency but translated in the
table to U.S. Currency. Based on the average exchange rate for 2007 of CND
$1 = US $.9371.(2)
    
    Represents a portion of the restricted CVF common shares that began to
vest in April 2007. Restricted CVF common shares were granted in April 2006
and vest over the following 3 year period.(3)
    
    This amount consists of: (i) Executive Disability insurance premium
totaling $8,924 and automobile allowance totaling $6,720 to Mr. Dreben and (ii) $8,434
automobile allowance paid to Mr. Nally. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 Option Awards
    
    Stock AwardsEquity IncentivePlan Awards:Equity Incentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity Incentive
    
    Market orNumber of
    
    Number of
    
    Plan Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan Awards:
    
    Payout Value ofSecurities
    
    Securities
    
    Number of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number of
    
    UnearnedUnderlying
    
    Underlying
    
    Securities
    
    
    
    
    
    
    
    
    
    Number of
    
    Market Value of
    
    Unearned Shares,
    
    Shares, Units orUnexercised
    
    Unexercised
    
    Underlying
    
    Option
    
    
    
    
    
    Shares or Units
    
    Shares or Units
    
    Units or Other
    
    Other RightsOptions
    
    Options
    
    Unexercised
    
    Exercise
    
    Option
    
    of Stock That
    
    of Stock That
    
    Rights That Have
    
    That Have Not(#)
    
    (#)
    
    Unearned Options
    
    Price
    
    Expiration
    
    Have Not Vested
    
    Have Not Vested
    
    Not Vested
    
    VestedName
    
    Exercisable
    
    Unexercisable
    
    (#)
    
    ($)
    
    Date
    
    (#)
    
    ($)
    
    (#)
    
    ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h) (1)
    
    (i)
    
    (j)Jeffrey I. Dreben
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    408,333
    
    
    
    32,667
    
    
    
    
    
    
    
    Robert B. Nally
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    312,500
    
    
    
    25,000
    
    
    
    
    
    
    
    
 
 (1)
    
    Represents shares of restricted stock at value on December 31, 2007 of $0.08 per share.




---



##### 



DIRECTOR COMPENSATION
 NonqualifiedNon-Equity
    
    DeferredFees Earned or
    
    Stock
    
    Option
    
    Incentive Plan
    
    Compensation
    
    All OtherPaid in Cash
    
    Awards
    
    Awards
    
    Compensation
    
    Earnings
    
    Compensation
    
    TotalName
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)(a)
    
    (b)
    
    (c) (1)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)Jeffrey I. Dreben
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert B. Nally
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert H. Glazier
    
    
    2,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100




---



##### 



NUMBER OF
    
    PERCENTAGE OFCOMMON SHARES
    
    COMMON SHARESNAME AND ADDRESS
    
    BENEFICIALLY OWNED
    
    OWNEDJeffrey I. Dreben (1)
    
    1,739,321
    
    12.1%8604 Main Street, Suite 1Williamsville, NY 14221Robert B. Nally (2)
    
    1,422,872
    
    9.9%8604 Main Street, Suite 1Williamsville, NY 14221Robert L. Miller (3)
    
    231,190
    
    1.6%8604 Main Street, Suite 1Williamsville, NY 14221The Shaar Fund Ltd. (4)
    
    1,259,165
    
    8.8%c/o SS&C Fund Services (N.V.)Pareraweg 45Curacao, Netherland AntillesBounty Equity Fund 2, LLC (5)
    
    835,000
    
    5.8%2 West Second Street, Suite 210Tulsa, OK 74103Directors and Officers
    
    3,393,383
    
    23.7%as a Group (3 persons) (1)(2)(3)
 
 (1)
    
    Mr. Drebens amount includes 750,000 restricted shares (which vest over 3 years beginning April
2006) and 100,000 restricted shares (which vest over 3 years beginning November 2007). Included
under Mr. Dreben are 760,321 shares owned by his wife as to which he disclaims beneficial
ownership.(2)
    
    Mr. Nallys amount includes 750,000 restricted shares (which vest over 3 years beginning April
2006)and includes 205,144 shares owned by his wife as to which he disclaims beneficial ownership.(3)
    
    Mr. Millers amount includes 100,000 restricted shares (which vest over 3 years beginning April
2006) and 60,000 restricted shares (which vest over 3 years beginning November 2007).(4)
    
    Based solely on a Schedule 13G dated February 29, 2008 filed with the SEC.(5)
    
    Based solely on a CVF Shareholders listing dated March 14, 2008.




---



##### 



(3)(i)
    
    Articles of Incorporation, as amended, filed as an exhibit to CVFs Form
10-QSB on November 14, 1997, and incorporated by reference herein.(3)(ii)
    
    Amended and Restated Certificate of Designation of Series B 6% Convertible Preferred
Stock, filed as an exhibit to CVFs Registration Statement on Form S-3 on December 30, 1999
and incorporated herein by reference.(3)(iii)
    
    By-laws filed as an exhibit to CVFs Form 10-QSB on February 12, 1997,
and incorporated by reference herein.(10)(ii)
    
    Form of Change in Control Agreement between CVF and Jeffrey Dreben and Robert Nally filed
as an exhibit to CVFs Form 10-KSB on April 2, 2004 and
incorporated by reference herein.(10)(iv)
    
    Employment Letter between CVF and Robert L Miller, as amended, filed as an
exhibit to CVFs Form 10-KSB on April 7, 2006 and incorporated by
reference herein.(21)
    
    Subsidiaries of the Registrant, filed herewith.(31.1)
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the of the Sarbanes
Oxley Act of 2002.(31.2)
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the of the Sarbanes
Oxley Act of 2002.(32)
    
    Certification Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.




---



##### 



CVF  Technologies Corporationby:
    /s/ Jeffrey I. DrebenJeffrey I. Dreben, CEO and President(Principal Executive Officer)Dated: April 15, 2008  Signature
    
    Title
    
    Date/s/ Jeffrey I. Dreben
    
    Director
    
    April 15, 2008Jeffrey I. Dreben/s/ Robert B. Nally
    
    Director
    
    April 15, 2008Robert B. NallyApril 15, 2008/s/ Robert L. Miller
    
    Chief Financial OfficerRobert L. Miller
    
    (Principal Financial and Accounting Officer)




---



##### 



Exhibit No.
    
    Name(3)(i)
    
    Articles of Incorporation, as amended, filed as an exhibit to CVFs Form
10-QSB on November 14, 1997, and incorporated by reference herein.(3)(ii)
    
    Amended and Restated Certificate of Designation of Series B 6% Convertible Preferred
Stock, filed as an exhibit to CVFs Registration Statement on Form S-3 on December 30, 1999
and incorporated herein by reference.(3)(iii)
    
    By-laws filed as an exhibit to CVFs Form 10-QSB on February 12, 1997,
and incorporated by reference herein.(10)(ii)
    
    Form of Change in Control Agreement between CVF and Jeffrey Dreben and Robert Nally filed
as an exhibit to CVFs Form 10-KSB on April 2, 2004 and
incorporated by reference herein.(10)(iv)
    
    Employment Letter between CVF and Robert L Miller, as amended, filed as
an exhibit to CVFs Form 10-KSB on April 7, 2006 and incorporated by
reference herein.(21)
    
    Subsidiaries of the Registrant, filed herewith.(31.1)
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the of the Sarbanes
Oxley Act of 2002.(31.3)
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the of the Sarbanes
Oxley Act of 2002.(33)
    
    Certification Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.