<PAGE>

                     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, 2004.

                         COMMISSION FILE NUMBER 00-29266

                          CVF TECHNOLOGIES CORPORATION
     -----------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

                NEVADA                                 87-0429335
   ----------------------------------      ------------------------------------
     (State or other jurisdiction of       (I.R.S. Employer Identification No.)
      incorporation or organization)

        8604 Main Street, Suite 1
        WILLIAMSVILLE, NEW YORK                           14221
----------------------------------------         -----------------------
(Address of principal executive offices)                (Zip Code)

                                   (716) 565-4711
                         ----------------------------------
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act: Common Stock ($0.001 par
value)

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

                              Yes  [X]   No  [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

State issuer's revenues for most recent fiscal year: $7,957,675.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates (based on the closing price on the NASD OTC Bulletin Board) as
of March 9, 2005: $4,437,943. For purposes of determining this amount only,
Registrant has defined affiliates as including (a) the executive officers named
in Part III of this 10-KSB report, (b) all directors of Registrant, and (c) each
shareholder that has informed Registrant by March 9, 2005 that it is the
beneficial owner of 10% or more of the outstanding common stock of Registrant.

Indicate the number of shares outstanding of each class of the Registrant's
Common Stock, as of March 9, 2005:

                         Common Stock: 13,820,396 shares

Transitional Small Business Disclosure Format: Yes  [ ]    No  [X]

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

CVF Technologies Corporation (www.cvfcorp.com) ("CVF" or the "Company") was
incorporated in 1995 and is involved in the business of managing early stage
companies primarily engaged in the information technology and environmental
technology sectors. CVF's mandate is to acquire significant holdings in new and
emerging technology companies and then to assist them in their management, and
through them to engage in their respective businesses. CVF's current holdings
include investments made in its investee companies during the period from 1990
to the present.

CVF generates revenues and profits through consolidation of the operating
results of its investee companies. CVF also endeavors to realize gains through
the eventual sale of all or a portion of its holdings in these companies at such
time as management determines that CVF's funds can be better deployed in other
industries or companies. CVF's goal is to maximize the value of its holdings in
its investee companies for the Company's shareholders. One important way that
CVF accomplishes this is by the investee company going public at the appropriate
time. This has been done with CVF's former investee companies Certicom
Corporation and TurboSonic Technologies, Inc. Also, in January 2005 Biorem
Technologies Inc. completed its going public transaction.

After CVF's initial investment, an investee company often requires additional
capital to meet its business plan. Consequently, the Company actively assists
its investee companies in obtaining additional capital which is usually sourced
through CVF's own resources or via other participants. CVF's ability to continue
to provide assistance to its investees is subject to the limitations of its own
financial resources. Even though one of the investee companies has been
profitable in 2004, CVF, on a consolidated basis, has incurred losses over the
past year and the past seven years. These losses have depleted the Company's
cash reserve which have significantly limited the Company's ability to assist
its investees with its own capital in the past. However now that Biorem has gone
public in January 2005 and is currently valued at $9.5 million (as of March 28,
2005) and a public market exists for its stock, CVF will have more flexibility
in assisting its investee companies. See "Factors That May Affect Future
Results."

The following is a list of CVF's investee companies (the "Corporations"),
showing CVF's percentage ownership in each as of March 1, 2005:

<TABLE>
<CAPTION>
                                      CVF's PERCENTAGE
                                        OWNERSHIP OF
                                     VOTING SECURITIES
CORPORATION                         OF ACTIVE COMPANIES
-----------                         -------------------
<S>                                 <C>
 1.  Biorem Technologies Inc.                33%
 2.  Ecoval Corporation                      85%
 3.  Gemprint(TM)Corporation                 65%
 4.  SRE Controls Inc.                       37%
 5.  Petrozyme Technologies Inc.             50%
</TABLE>

The Corporations

All of the Corporations were private companies during 2003 and 2004. In January
2005 Biorem went public in Canada. The following paragraphs provide a brief
description of each Corporation. Each Corporation that is actively involved in
operating a technology business has its own business plan, history, financial
statements, and has put effective management teams in place, completed the
development of its own products, established markets and distribution channels
and sold its products.

Proceeds from any additional funding received by CVF's Corporations will be
utilized, in each case, primarily for expansion of marketing and sales
capability to enable the entity to realize its commercial potential over the
next two to three years. As is common with early stage technology companies,
some of these holdings have historically operated at a loss or at break-even and
some of them may continue to operate at a loss for the foreseeable future.
However, one of the holdings,

<PAGE>

Biorem, was profitable in 2002, 2003 and 2004. The ability of those investees
which are unprofitable to meet their business goals may be subject to
limitations of CVF's ability to provide continued financial assistance - see
"Factors That May Affect Future Results." However, the investee companies have
the option to seek third party financing.

Consolidated Entities:

"Consolidated Entities" refers to those Corporations in which CVF has a greater
than 50% ownership of the voting stock at some point during 2004. The total
assets and liabilities of each of the Consolidated Entities are included within
the financial results and position of CVF for the year ended December 31, 2004
and in the comparative balances for the previous year as shown in the Financial
Statements included in Part II, Item 7 of this Form 10-KSB. The Company has
provided loans to its subsidiaries which have been eliminated for accounting
purposes in consolidation and are not reflected in CVF's financial statements.
These loans represent amounts owed to the parent Company by the Corporations.

The five Consolidated Entities that are consolidated within the financial
results of CVF are as follows:

1. BIOREM Technologies Inc. ("BIOREM")

(Effective November 24, 2004, Biorem's results are no longer included in CVF's
consolidated results as CVF's ownership in Biorem decreased to 48% at that
date).

BIOREM (www.biorem.biz), an industrial biotech company based in Guelph, Ontario,
is engaged in the business of applying industrial microbiological technology to
municipal and industrial environmental applications. The business focus of
BIOREM is the design and installation of biological air filters, or biofilters,
for the removal of odor and other air pollutants from municipal and industrial
sources. Since 1999, BIOREM has made significant progress in the
commercialization of its biofilter technology, having successfully completed
more than 100 biofilter installations in the U.S. and Canada. During 2004,
BIOREM received its first overseas orders from China and Saudi Arabia. BIOREM
has a network of manufacturers' representatives to provide effective coverage of
the rapidly growing U.S. and Canadian municipal odor control market.

In 2000, BIOREM introduced BIOSORBENS(TM) a new, long lasting, superior
biofilter media. BIOREM also introduced the BASYS(TM) biofilter, a patented,
modular unit adapted for catalogue item type purchases. Both product
developments specifically address the dramatically increasing demand for easy to
use, highly efficient biofilter systems for air emission control. Continued
technical and service support to clients has earned BIOREM a reputation as the
leading biofilter supplier in the North American market for municipal odor
control.

2. Ecoval Corporation ("Ecoval")

Ecoval (www.naturesglory.com), which has its headquarters located in
Williamsville, N.Y. is in the business of developing, manufacturing and
marketing environmentally friendly organic herbicides, targeted primarily for
the lawn and garden retail/consumer market, municipalities and parks
departments, institutional markets and specialty agricultural markets. Ecoval
has also developed a non-toxic insecticide, a fungicide and a moss-cleaner. The
world wide industry sales for pesticides (which include herbicides, insecticides
and fungicides) was $33.5 billion ($11.0 billion in the U.S.) in 1999.

Ecoval owns U.S., European, Canadian and other international patents for its
herbicide. Research results show the herbicide to be efficacious, non-toxic,
biodegradable and faster acting than conventional chemical products. Ecoval's
herbicides have received regulatory approval in Canada through the PMRA
(Pesticide Management Regulatory Agency) and through the Environmental
Protection Agency (EPA) in the United States.

To be cost-effective, Ecoval out-sources its production, packaging and some of
its shipping functions. Ecoval's principal focus is to expand sales through a
number of major distributors and licensees. Ecoval is currently in discussions
regarding licensing of its patented products with a number of potential
distributors. Ecoval is also pursuing sales to government agencies at the
municipal, state and federal levels. The brand name for both U.S. and Canadian
products is Nature's Glory(TM) and the herbicide is also sold under the brand
name Ecoclear; the products are also sold

<PAGE>

under private label by a number of distributors. The herbicide product is sold
in both a ready-to-use version and in concentrate form.

In 2004 Ecoval signed an exclusive retail licensing agreement with Scotts Canada
for the production and retail marketing of Ecoval's patented, fast-acting,
natural, non-selective herbicide in Canada with an option to license some for
the US. It will be sold in Canada under the Scotts' EcoSense brand of natural
alternative lawn and garden care products. Ecoval will receive royalty payments
based on Scotts' sales of Ecoval's herbicide product. Scotts will support its
new brand with a national advertising and marketing program for EcoSense with
the intention of having it available in all major chains in Canada for the 2005
season.

3. Gemprint(TM)Corporation ("Gemprint")

GemprintTM (www.gemprint.com), a Toronto, Ontario based company, is in the
business of providing security systems and services to the jewelry industry to
enable diamonds and other precious gems to be uniquely identified non-invasively
(fingerprinted) using a patented low power laser imaging system. The results are
stored in a data base for later verification and recovery of lost or stolen gems
and for gem inventory management. Gemprint's Isi System has application with all
segments of the diamond supply chain (i.e. cutters/polishers, grading
laboratories, manufacturers, wholesalers, retailers and Internet traders).
Gemprint's Isi System sells for approximately $7,500. Gemprint also sells a more
sophisticated system for verification of memo goods for inventory management at
a selling price of $30,000. A $15.00 fee is normally charged to the user for
each registration on the international database, which Gemprint owns and
maintains. Law enforcement agencies and many insurance companies support the
Gemprint system (approximately 25 insurance companies offer a 10% discount on
diamond insurance policies if the insured gem is accompanied by its GemprintTM
Certificate of Registration).

Over the last several years Gemprint signed important agreements employing the
use of its technology: (1) an agreement completed with the Government of the
Northwest Territories of Canada to design a 'Northern' diamond certificate, to
establish an on-site data base and to Gemprint northern diamonds with three
major diamond manufacturers involved in the program; (2) a contract with a major
Italian diamond merchant launching Gemprint(TM) as the "DNA" of Diamonds, a new
brand of Diamonds and using Gemprint as the core technology; and (3) an
agreement with an Antwerp corporation (ADIS) to set up and operate a Gemprint
service center in the Antwerp diamond district. Gemprint is also used by several
Internet diamond traders as well as Zales Corporation, the largest U.S. retailer
of jewelry, and Movado Corporation, one of the largest watch manufacturers in
the world.

4. SRE Controls Inc. ("SRE")

(Results were consolidated through March 24, 2004 only, the date CVF had its
majority interest in SRE diluted to 37% as a result of a third party
investment).

SRE (www.srecontrols.com), based in Waterloo, Ontario, designs, manufactures and
markets a range of high-efficiency, programmable electronic motor speed control
products for electric and alternative powered vehicle (ex. hybrid fuel - cell)
applications. These markets include material handling equipment (e.g. forklift
trucks), airport Ground Support Equipment (GSE), Automated Guided Vehicles
(AGV), Neighborhood Electric Vehicles (NEV), golf carts and lower-end products
such as scooters, sweepers and scrubbers. SRE supplies its controller products
to Original Equipment Manufacturers (OEMs) of vehicles through direct sales and
to the aftermarket through distribution channels that provide access to a
network of over 2000 dealers throughout North America. Additionally, SRE has
established strategic alliances with companies that can help SRE open up
additional markets for its existing products and to bring new products to their
markets especially on an international basis.

On March 11, 2005, a secured creditor of SRE Controls Inc. called a $550,000 cdn
secured demand note and appointed a receiver to administer the Company. The
assets of SRE are estimated by the receiver at $902,000 cdn while the total due
creditors (secured and unsecured) is estimated at $1,600,000 cdn. On March 31,
2005 a bankruptcy filing was filed in the office of the Superintendent of
Bankruptcy Canada. The first meeting of creditors has been set for April 15,
2005.

CVF is currently examining its various options as a result of the action by this
creditor which may include bidding on the assets claimed by the creditor. There
is

<PAGE>

no assurance that CVF will be successful in such a bid in which case CVF's
equity portion in SRE would only have nominal value. CVF currently carries SRE
in its books at zero value.

Equity Investees:

"Equity Investees" are investee Corporations in which CVF holds 50% or less
equity ownership but more than or equal to 20% ownership. The Equity Investees'
accounts are not consolidated in CVF's financial statements and generally the
net incomes or losses of the Equity Investees would be included in CVF's
financial statements only to the extent of CVF's percentage holdings of these
entities. The net equity positions, after share of losses, of all other
investors have been reduced to nil. As such, the Company had included 100% of
the investee losses in income (until CVF's investment was reduced to zero)
rather than the percentage owned by the Company.

CVF's two Equity Investees are described below:

5. Petrozyme Technologies Inc. ("Petrozyme")

Petrozyme (www.petrozyme.com), is a Guelph, Ontario based company engaged in the
business of developing and marketing its proprietary processes utilizing
industrial bio-reactors for the degradation and recovery of petroleum and
organic wastes. The exploration, production and refinement of oil generate
significant quantities of oily wastes. According to estimates from the American
Petroleum Institute (API), the U.S. Environmental Protection Agency (EPA) and
the U.S. Department of Energy, based on data between 1996 and 1998, the cost to
safely manage oily wastes produced in the United States exceeds $1.0 billion per
year. Petrozyme's low cost onsite process is well positioned to penetrate this
market.

Around the world, more countries are moving to ban the "land disposal" of
untreated refinery sludge. Petrozyme's low cost treatment technology is ideally
suited for countries that want to improve their environmental protection but
lack the infrastructure for petroleum waste treatment.

Saudi Arabia, the world's largest oil producer, is a perfect example. In 2004,
Petrozyme was contracted to pilot test their bio-reactor technology on refinery
sludge in Saudi Arabia. These tests demonstrated that even in the hot summer
weather of Saudi Arabia, Petrozyme's technology can treat refinery sludge to
meet the United States Environmental Protection Agency (U.S. EPA) standards for
non-hazardous waste. Regulations banning the land application of untreated
refinery sludges in Saudi Arabia are expected to be in force by 2007.

SRE Controls Inc. ("SRE")

SRE is recorded under the equity method of accounting subsequent to March 24,
2004 when CVF's ownership position in SRE declined to 37%.

Biorem Technologies Inc. ("Biorem")

Biorem is recorded under the equity method of accounting subsequent to November
23, 2004 when CVF's ownership position in Biorem declined to 48%.

Less Than 20% Owned:

"Less Than 20% Owned" refers to those investee corporations in which CVF has a
less than 20% ownership interest. The direct financial results of the Less Than
20% Owned Corporations are not included in CVF's consolidated financial results.

Number of Employees

As of December 31, 2004, CVF and its Consolidated Entities (Ecoval and Gemprint)
had a total of 10 full-time employees and its equity holdings (Biorem and SRE)
had 40 full-time employees.

<PAGE>

ITEM 2 DESCRIPTION OF PROPERTY

CVF leases premises in which its principal executive office is located at 8604
Main Street, Suite 1, Williamsville, New York on a one year lease (commencing
December 2004) with lease payments equal to $17,712 annually. All of the
business premises and facilities used by the Consolidated Entities are leased.
These facilities serve as administrative offices and manufacturing (where
appropriate) facilities. The facilities generally range in size from 200 to
2,500 square feet. The lease terms expire in 2005 to 2006.

ITEM 3 LEGAL PROCEEDINGS

The Company is not aware of any material pending proceedings.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 2004 no matter was submitted to a vote of security
holders, through the solicitation of proxies or otherwise.

PART II

ITEM 5 MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
       ISSUER PURCHASES OF EQUITY SECURITIES

(a)    Market Information

The following table sets forth the high and low sales prices per Common Share on
the American Stock Exchange ("AMEX") for the periods prior to September 28, 2004
and the high and low bid prices on the NASD OTC Bulletin Board subsequent to
September 28, 2004 as indicated:

<TABLE>
<CAPTION>
                              LOW            HIGH
                              ---            ----
<S>                           <C>            <C>
2003  - 1st Quarter           0.12           0.18
      - 2nd Quarter           0.14           0.50
      - 3rd Quarter           0.24           0.45
      - 4th Quarter           0.26           0.55

2004  - 1st Quarter           0.32           0.48
      - 2nd Quarter           0.29           0.69
      - 3rd Quarter           0.25           0.48
      - 4th Quarter           0.17           0.48
</TABLE>

The prices quoted on the OTC Bulletin Board represent over-the-counter market
quotations and reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not represent actual transactions. The American Stock
Exchange (Amex) informed CVF in September 2004 that the Listing Qualifications
Panel of the Amex Committee on Securities (the Panel) had affirmed the decision
of the Listing Qualifications Dept. of the Amex to initiate delisting
proceedings.

<PAGE>

(b)   Holders of Record

At March 9, 2005, there were approximately 342 holders of record of CVF's common
stock.

(c)   Dividends

CVF has never paid a dividend on the common stock. The payment of any future
dividends will be at the sole discretion of CVF's Board of Directors. CVF
intends to retain earnings to finance the expansion of its business but may
consider paying dividends of its common stock if it receives a large profit from
the sale of one of its holdings.

(d)   Recent Sales of Unregistered Securities

On October 15, 2004, the Company issued 606,061 shares of its common stock to an
outside investor for consideration of $200,000. These shares were issued
pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933 (the "Securities Act").

On December 21, 2004, the Company issued 71,190 shares of its common stock to
one of its officers who exercised stock options. Some of these shares were
issued pursuant to an effective registration statement on Form S-8 and others
were issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act.

                                  Item 5 Rider

                      Equity Compensation Plan Information

The Company maintains the 2000 Stock Option Plan pursuant to which 30,000
options to purchase shares of common stock are outstanding and 60,000 may be
granted in the future. The Company also has individual option award agreements
outside of this plan covering an aggregate of 115,000 options to acquire shares
of common stock. The non-plan options were granted to employees, officers and
directors of CVF and its investees, are currently exercisable in full, have
exercise prices of $0.16 per share and expire on April 16, 2007.

<TABLE>
<CAPTION>
                                                                            Number of securities
                                                                            remaining available
                                                          Weighted-                 for
                                      Number of            average            future issuance
                                    securities to       exercise price             under
                                   be issued upon             of            equity compensation
                                     exercise of         outstanding          plans (excluding
                                     outstanding           options,              securities
                                  options, warrants        warrants         reflected in column
        Plan category                and rights           and rights                (a))
-----------------------------     -----------------     --------------      --------------------
                                         (a)                  (b)                   (c)
<S>                               <C>                   <C>                 <C>
Equity compensation plans
 approved by security holders            30,000             $0.16                   60,000

Equity compensation plans not
 approved by security holders           115,000              0.30                    - 0 -

Total                                   145,000              0.27                   60,000
</TABLE>

The Company also has outstanding 484,132 warrants to acquire common stock issued
to officers and service providers of the Company. These warrants have an
exercise price of $0.16 per share and expire on April 16, 2007.

<PAGE>
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS

Plan of Operation

Subject to the limitations of its financial position as discussed above, CVF
plans to build on the successes and advances achieved by its investee companies
in 2004. It will continue its efforts to assist all of its investee companies to
realize their full potential. The ability of certain of the investee companies
(excluding Biorem which has been profitable for the past three fiscal years),
which currently are not profitable, to meet the goals included in the plan of
operation may be limited by CVF's ability to fund its investees as described in
"Factors That May Affect Future Results".

The four Consolidated Entities which are active technology businesses, namely
Ecoval, SRE, Biorem, and Gemprint, each made progress in 2004 and each are
positioned to expand in 2005.

BIOREM's 2004 sales revenues were at a record $7,665,754 and net income of
$750,167. For the twelve months ended December 31, 2004, sales bookings were
$8,720,000 which is a 252% increase over last year's comparable figure of
$2,475,000. The bookings for the year have resulted in a backlog of $3,781,000
at December 31, 2004. Backlog includes firm orders and acknowledgement of
contract awards through a Letter of Intent. The 36% increase in backlog compared
to December 31, 2003 continues to support management's expectations for the
continued growth of the business. Large orders in any particular period make it
difficult to compare periodic revenue and bookings results. Order bookings and
the completion schedule of orders will continue to fluctuate quarter to quarter.

Ecoval expanded its product line with the addition of a moss cleaner. Patents
have also been granted in North America on an improved herbicidal composition
and insecticidal composition. Ecoval also developed an insecticide formulation
that is exempt from U.S. registration because it is composed of ingredients that
the EPA has determined pose minimal risk to the public. In 2005, Ecoval will
continue to generate sales revenues by establishing key distributor
relationships in North America, establishing potential licensees to generate
royalty income and by working to expand sales to its current customer base, as
it has done with Scotts Canada which is a subsidiary of Scotts Miracle-Gro
Company, the largest retail horticultural supply company in the world.

Gemprint's strategy of targeting all links in the diamond supply chain bore
fruit in 1999 with the completion of the Canadian Northwest Territories
Agreements and the commencement of Gemprinting of cut diamonds sourced in the
new Canadian diamond fields. Leveraging on this success, Gemprint is working to
increase sales to wholesalers, major retailers, laboratories and manufacturers
in North America, Europe and the Far East. Over the past few years international
concern over the issue of `conflict diamonds' has heightened. "Clean Diamonds"
legislation has recently been enacted by the U.S. Congress and demonstrates
public interest in the certification of the origin of diamonds imported into the
U.S. Gemprint's technology has already provided the basis for diamond tracking
systems in Canada and may well find wider application as such systems
proliferate.

SRE extended the number of OEM customers served in 2004 and expanded its dealer
network. Also, SRE is continuing to develop working relationships with certain
electric vehicle manufacturers to supply electrical subsystems to expand its
product offering in the marketplace. During 2004 SRE expanded marketing
activities and expanded engineering staff, all intended to increase sales
revenue, quality, new technology and customer appeal. These activities are
expected to have a positive impact on future financial results.

On March 11, 2005, a secured creditor of SRE Controls Inc. called a $550,000 cdn
secured demand note and appointed a receiver to administer the Company. The
assets of SRE are estimated by the receiver at $902,000 cdn while the total due
creditors (secured and unsecured) is estimated at $1,600,000 cdn. On March 31,
2005 a bankruptcy filing was filed in the office of the Superintendent of
Bankruptcy Canada. The first meeting of creditors has been set for April 15,
2005.

CVF's Equity Investee, Petrozyme, advanced in 2004 with a Saudia Arabia
consulting contract to study the feasibility of using Petrozymes technology for
its refineries and is positioned to make further progress in 2005.

CVF, when possible, will continue to work to provide equity investment and/or
debt financing, based on the progress made by the investee companies as it
assesses their

<PAGE>

needs. CVF will accomplish this within the limits of its own funds or by
assisting its investee companies in completing private placements or public
offerings for themselves, as and when appropriate.

Individual investee companies are expected to continue approximately the same
level of research and development that they have performed in the past two
years. There are no expectations for significant increases in plant or equipment
or in the number of employees for these companies over the next 12 months.

Comparison of Consolidated Results 2004 and 2003

Consolidated sales of CVF for the fiscal year amounted to $7,957,675,
representing a decrease of $746,394 (9%) compared to sales of $8,704,069 for
2003. CVF, on a stand-alone basis, has no sales from operations. Sales and gross
profit reflect the operations of CVF's consolidated subsidiaries only. These
subsidiaries include Ecoval, Gemprint, Biorem (effective November 24, 2004,
Biorem's results are no longer included in CVF's consolidated results as CVF's
ownership in Biorem as a result of Biorem issuing additional stock during its
going public transaction as well as the exercising of all stock options and
conversion of all debt, as well as CVF selling a portion of its Biorem shares,
has now decreased to 33%), and SRE (results consolidated through March 24, 2004
only, the date CVF had its majority interest in SRE diluted to 37%).

CVF records profit and loss using the equity method for companies in which CVF
holds 20% to 50% ownership. These companies are not included in the
consolidation. These companies are Petrozyme and SRE (subsequent to March 24,
2004 when CVF's ownership position in SRE declined to 37%).

Biorem's sales that were consolidated in 2004 period were $6,691,686 (excludes
the period November 24, 2004 to December 31, 2004 when CVF's ownership position
fell below 50%), compared to $6,189,488 (for the full year) in 2003 period or an
increase of $502,198 (8%). This increase was due to numerous modular system
installations in Canada and the United States. SRE's sales that were
consolidated in 2004 were $411,357 (from the first quarter only), compared to
$1,518,323 (from the full year 2003) or a decrease of $1,106,966 (73%).
Effective March 25, 2004, SRE's results are no longer included in CVF's
consolidated results as CVF's ownership in SRE decreased to 37%. Gemprint's
sales decreased by $89,863 or 13% compared to 2003 due to lower diamond
registrations and lower system sales. Also the weaker US dollar in the 2004
period contributed to the decrease. Ecoval's sales decreased by $51,763 (18%)
since fertilizer orders were no longer being actively pursued as the company
focuses on its pesticide division.

CVF's gross margin of $3,735,220 for 2004 represents an increase of $160,961
(5%) compared to gross margin of $3,574,259 for 2003. Gross margin as a
percentage of sales increased to 46.9% for 2004 compared to 41.1% in 2003. This
increase is mainly due to Biorem which had $403,491 higher gross margin in the
2004 period due to higher margin business (46.2 % in 2004 versus 43.5 % in
2003). Biorem's gross margin increased as a result of improved cost efficiencies
achieved through increased volumes, purchasing negotiations and improved
manufacturing efficiencies. Ecoval's gross margin increased by $88,846 due to
generally improved margin percentages on its business. Gemprint had a gross
margin decrease of $102,755 (19%) due to weaker sales. SRE had $228,621 lower
gross margin in 2004 as effective March 25, 2004 SRE's sales are no longer
consolidated in CVF's results.

Selling, general and administrative expenses, on a consolidated basis, amounted
to $4,840,615 for 2004 representing a decrease of $380,042 or 7% compared to
$5,220,657 for 2003. This decrease is mainly due to $782,161 lower expenses at
SRE due to CVF no longer consolidating that company, $156,746 lower amortization
expense as the Ecoval intangible asset was fully amortized as of mid 2004,
$112,650 due to one of the Company's subsidiaries settling a claim with a former
officer during 2003, $100,560 (54%) lower accounting fees due to the Company
changing its independent accountants during 2003, and consulting fees
$92,021(17%) lower in 2004. These decreases are off set somewhat by higher
expenses at Biorem due to the high sales activity and to $512,498 of expense in
2004 at CVF related to CVF officers and/or directors exercising stock options.
Management continues to undertake a concerted effort to effect an overall
reduction in administrative costs. Over the past 4 years CVF has undertaken many
initiatives to lower the Company's expenses. (See further discussion in the
Liquidity and Capital Resources section).

<PAGE>

Repriced stock options expense for 2004 amounted to $121,247, representing a
decrease of $374,203 (76%) compared to expense of $495,450 for 2003. The
majority of this decrease is the CVF repriced options as all the CVF officers
and/or directors exercised the repriced stock options in 2004 offset somewhat by
an increase ($276,644) in the value of the repriced Biorem stock options from
$0.80 cdn per share at the end of 2003 to $2.00 cdn per share at the end of
2004.

Research and development expenses for 2004 amounted to $359,233 compared to
$504,613 for 2003 (a 29% decrease). This decrease in R & D spending was
attributable to a decrease in spending for such activity at Ecoval offset
somewhat by an increase in spending at Biorem.

Loss from continuing operations decreased to $1,585,875 in 2004 from $2,646,461
in 2003, a decrease of $1,060,586 (or 40%). $742,558 of this decrease can be
attributed to SRE as that company is no longer consolidated (as of March 25,
2004).

Net interest expense for 2004 increased to $334,364 from $246,371 in 2003. This
increase is due to an increase in loans outstanding in 2004.

Loss on sale of holdings was $2,067 in 2004 from a loss of $1,621 in 2003. In
2004 the Company sold additional holdings in TurboSonic and in 2003 some
holdings in RDM. The remaining holdings are relatively small and are not
expected to contribute significant gains to the Company.

Other expense of $29,829 in 2004 represents other expense representing mainly
foreign exchange loss. Other expense in 2003 of $89,825 represented foreign
exchange loss of $196,924 offset somewhat by other income mainly at Biorem
totaling $107,099.

Income of CVF from equity holdings (entities in which CVF has a 50% or less
ownership) represented $178,885 in 2004 which was CVF's share of Biorem's income
from November 24, 2004 to December 31, 2004.

Gain on sale of equity in subsidiary totaling $742,568 in 2004 representing a
third party investment which resulted in a restructuring of SRE whereby CVF's
equity position decreased from 75% to 37%.

CVF's gain on sale of some Biorem shares totaled $829,287 in 2004.

CVF's realized translation loss totaled $1,662,505 in 2004 due to the
disposition of many Canadian assets during 2004 with the decrease in CVF's
position at SRE and Biorem.

Income tax expense amounted to $78,637 in 2004 compared to a recovery of
$526,386 in 2003 due to tax loss carry forwards recorded at Biorem.

Minority interest portion of the loss decreased to $79,251 in 2004 from $171,286
in 2003. This amount in 2004 relates only to Gemprint while the 2003 loss
relates to Gemprint and SRE. SRE's minority interest balance is now zero since
its results are no longer consolidated with the Company.

As a result of the operations described above, CVF recorded a net loss of
$1,863,286 in 2004 as compared to a net loss of $2,286,606 incurred in 2003.

LIQUIDITY AND CAPITAL RESOURCES

Total Stockholders' equity as of December 31, 2004 was in a deficit position of
$2,096,492 compared to a deficit of $3,732,580 as of December 31, 2003. This net
decrease in the deficit of $1,636,088 is primarily attributable to the
restructuring of the Series B Preferred Stock, common shares sold by Biorem
totaling $681,000 and offset somewhat by a net loss of $200,781 which was
recognized in 2004.

The current ratio of CVF as at December 31, 2004 is .09 to 1, which has
decreased from .58 to 1 as at December 31, 2003. This decrease is mainly due to
no longer consolidating Biorem.

CVF management anticipates that over the next twelve month period CVF should
have sufficient cash from various sources to sustain itself. Between cash on
hand, value of the Biorem stock that became listed on a public market in January
2005 (and is

<PAGE>

valued as of March 28, 2005, at $9.5 million), the issuance of new securities,
and the sales of a portion of its holdings in certain investee companies, the
Company expects to have enough cash to fund itself and certain of its investee
companies that are currently not profitable. Additionally, CVF has limited
outside debt and a line of credit could be sought.

Over the past three and a half years CVF has undertaken many initiatives to
lower the parent company's expenses. These initiatives have included lowering
the head count of its office staff as well as the elimination of two executive
positions. The use of consultants has been significantly reduced except those
consultants who have been satisfied to receive their fee in CVF common shares.
Travel and entertainment has been significantly reduced over the last year and
will continue at the reduced level going forward. CVF management has adopted a
very aggressive cost and expenditure controls and monitoring policy. During 2004
CVF and the holder of CVF's Series B Convertible Preferred Stock entered into a
transaction whereby the holder exchanged its Series B Convertible Preferred
Stock with a stated value of $3,385,000 and accrued dividends of approximately
$673,600 for 1,000,000 shares of CVF's common stock and a new Series C 6%
Convertible Preferred Stock with a stated value of $1,000,000, convertible into
common stock at $1 per share. The Series C Preferred and all accrued dividends
thereon will be subject to mandatory redemption on February 27, 2006; however,
CVF's obligation to redeem will be limited to cash available to it at that time
in excess of one year's prospective working capital. The Company also issued to
the former Series B holder a three-year warrant to purchase 100,000 shares of
CVF's common stock at an exercise price of $0.35 per share.

As at December 31, 2004, CVF's cash balance was $112,648 which is a decrease of
$112,887 compared to December 31, 2003. The primary source of cash for the
Company is expected to be from sale of a portion of its investments in its
public holding, Biorem Inc. (which had a value to CVF as of March 28, 2005 of
approximately $9.5 million) or from CVF issuing additional securities. During
2004 CVF obtained $1,704,000 cdn from Biorem through sale of 923,296 common
shares, sale of preferred shares, dividend receipts and interest income. The
Company also raised $200,000 through the sale of # 606,061 CVF common shares to
an outside investor. The company is pursuing opportunities to raise funds from
potential investors in CVF. The Company will also continue to assist its
investee companies in their efforts to obtain outside financing in order to fund
their growth and development of their business plans. Certain of the Company's
financial obligations included in current liabilities related to items that will
not be paid in the near term. The Company will carefully manage its cash
payments on such obligations.

Critical Accounting Policies

An understanding of CVF's accounting policies is necessary for a complete
analysis of our results, financial position, liquidity and trends. We focus your
attention on the following accounting policies of the Company:

Going concern - These consolidated financial statements have been prepared on a
going concern basis, which presumes that assets will be realized and liabilities
discharged in the normal course of business over the foreseeable future. The
consolidated Company's current liabilities exceed its current assets. The
consolidated Company has incurred losses over the year, although substantially
lower than previous years and for the past six years, which have reduced the
Company's cash reserves, and depleted stockholders' equity. Further, the Company
has a contingent liability described in item 6.

These conditions raise substantial doubt about the consolidated Company's
ability to continue in the normal course of business as a going concern, in
relation to its ability to support its investee companies.

The Company's primary need for cash is to maintain its ability to support the
operations and ultimately the carrying values of certain of its individual
investee companies. The Company plans to sell some of its shares in publicly
traded Biorem, borrow against CVF's assets, or issue additional securities as a
method of generating cash, as well as reducing its cash flow needs. The Company
will continue to assist its investee companies in their efforts to obtain
outside financing in order to fund the growth and development of their
respective businesses and has taken steps to reduce the operating cash
requirements of the parent company and its investees. The Company is also
seeking outside investment. There is no assurance that these initiatives will be
successful that certain of its investees will

<PAGE>

continue to have adequate cash resources and capital to be able to continue as
going concerns.

The Company's ability to continue to realize assets and discharge liabilities in
the normal course is uncertain and dependent on these and other initiatives.
These financial statements do not include any of the adjustments to the amounts
or classification of assets and liabilities that might be necessary should the
Company be unable to continue its business in the normal course.

During 2004 one of its investee companies, Biorem, had operating profitability
and also had positive cash flow. Biorem is currently operating on a positive
cash flow basis and does not currently require any cash support from CVF. The
Company will continue to assist its other investee companies in their efforts to
obtain outside financing in order to fund the growth and development of their
respective businesses, as a means of augmenting CVF's needs to finance them.

Revenue recognition - Revenue from the sale of manufactured products is
recognized when the goods are shipped and accepted by the customer. 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 included as deferred revenue, which is part of current liabilities.
Service revenue is recognized when the services are performed.

Inventory - Finished goods are stated at the lower of cost or market 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.

Goodwill - In June 2001, the FASB issued SFAS No. 141, "Business Combinations"
and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. SFAS No. 141 also specifies criteria which
intangible assets acquired in purchase method business combinations after June
30, 2001 must meet to be recognized and reported apart from goodwill. SFAS No.
142 addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination and the accounting for goodwill and
other intangible assets subsequent to their acquisition. SFAS No. 142 requires
that intangible assets with finite useful lives be amortized, and that goodwill
and intangible assets with indefinite lives no longer be amortized, but instead
be tested for impairment at least annually.

The Company adopted the provisions of SFAS No. 141 on July 1, 2001. Such
adoption had no effect on the Company's financial position or results of
operations. The Company adopted the provisions of SFAS No. 142 effective January
1, 2002, at which time the amortization of the Company's existing goodwill
ceased. The new standard also required that the Company test the goodwill for
impairment before June 30, 2002. Any impairment, arising from the test, is
charged to income. The Company's goodwill has been tested and the Company has
calculated that no impairment exists as at December 31, 2004.

As of December 31, 2004 the carrying value of the intangible assets associated
with its subsidiary, Ecoval has been reduced through normal amortization to
zero. Although Ecoval has successfully developed natural pesticide, herbicide
and fertilizer products, and patented certain technologies related to these
products, sales of these products and related cashflows are still being
developed, as the Company works to expand its licensing and marketing
partnerships. In addition, the Company's resources available to support the
expansion of Ecoval are currently limited.

Contingencies - The Company is currently under an audit by the Internal Revenue
Service ("IRS"). As part of the routine audit, the IRS indicated that they
reviewed the treatment of capital losses claimed in the prior year and refunds
of $2,532,000 received in 2001. A proposed deficiency in federal income tax was
issued by the IRS on December 1, 2003 totaling $2,969,123. On February 5, 2004
CVF issued a formal protest to the proposed deficiency and its protest has now
gone before appeals at the IRS. If it is not resolved at the appeals level of
the IRS, CVF intends to challenge the IRS ruling in federal tax court, as CVF
and its legal counsel strongly believes its original deductions were correctly
taken. This process could take up to 2 more years to be resolved.

<PAGE>

The Company is involved from time to time in litigation, which arises in the
normal course of business. In respect of these claims the Company believes it
has valid defenses and/or appropriate insurance coverage in place. In
management's judgment, no material exposure exists on the eventual settlement of
such litigation, and accordingly, no provision has been made in the accompanying
financial statements.

Stock Options/Warrants - The Compensation Committee of the Board of Directors
approved an adjustment to the exercise price for all options held by our
employees, including executive officers, as well as certain consultants. The
revised exercise price was established by reference to the closing bid price of
the Company's common stock on April 16, 2002, which was $0.16. Options to
purchase approximately 1,405,000 shares of common stock were repriced, resulting
in the "variable" method for determining compensation expense being enacted
under FASB interpretation #44 of APB 25. Under this method, expense is recorded
for the quoted market price of the stock issued or, in the case of options, for
the difference between the stock's quoted market price on the date of grant and
the option exercise price. Increases and decreases (but not below the exercise
price) in the quoted market price of the stock between the date of grant and the
measurement date result in a change in the measure of compensation for the
award. As the Company's stock as at December 31, 2004 was $0.48 ($0.41 at
December 31, 2003), and 1,260,000 shares of the repriced options as well as
200,000 of the options granted in 2003 were exercised during 2004 additional
compensation expense of $211,474 ($351,250 in 2003) was recorded.

The Company also issued warrants which were priced at $0.16 on April 16, 2002.
The warrants are fully vested and subject to fair value accounting in accordance
with SFAS 123. The charge to income for the warrants issued was $111,094 during
2002.

Special Note Regarding Forward-Looking Statements

Certain statements in this Annual Report on Form 10-KSB, under the captions "The
Corporations," "Financial Considerations" and elsewhere, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve unknown and uncertain risks, uncertainties and other factors
which may cause the actual results, performance or achievements of CVF, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Given these uncertainties, prospective investors are cautioned not
to place undo reliance on such forward-looking statements.

Factors That May Affect Future Results

CVF's current financial condition raises substantial doubt about the ability of
some of its subsidiaries and equity holdings to continue in the normal course of
business as a going concern as CVF may not wish to support the operations and
ultimately the carrying values, of certain of its individual investee companies.

The Company's cash resources have been significantly depleted by operating
losses. As at December 31, 2004 the cash reserve and other liquid resources was
$112,648. The Company has operating cash requirements in the range of $105,000
monthly, though the Company is working to reduce this expense. The primary
source of cash for the Company in 2005 is expected to be from sale of a portion
of its investments in Biorem (which had a value to CVF as of March 28, 2005 of
approximately $9.5 million), through borrowing against CVF's assets, or from CVF
issuing additional securities. The Company will also continue to assist its
investee companies in their efforts to obtain outside financing in order to fund
their growth and development of their business plans. Certain of the Company's
financial obligations included in current liabilities relate to items that will
not be paid in the near term. The Company will carefully manage its cash
payments on such obligations. There is no assurance that all or any of these
initiatives will be successful, and that certain of its investees may not have
sufficient cash resources or capital resources to continue as going concerns.

The investees ability to continue to realize assets and discharge liabilities in
the normal course is uncertain and dependent on these and other initiatives. The
Company's financial statements do not include any of the adjustments to the
amounts or classification of assets and liabilities that might be necessary
should its investees be unable to continue its business in the normal course.
Other factors that may affect CVF's future results include:

   -  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

The Company will not update any forward-looking statements to reflect actual
results or changes in the factors affecting the forward-looking statements.

FINANCIAL CONSIDERATIONS

Early Stage Development Companies. Each of the Corporations is an early stage
development company with a limited relevant operating history upon which an
evaluation of its prospects can be made. As such, there can be no assurance of
the future success of any of the Corporations.

Quarterly Fluctuations. CVF's financial results have historically been, and will
continue to be, subject to quarterly and annual fluctuations due to a variety of
factors, primarily resulting from the nature of the technology companies in
which it invests. Any shortfall in revenues in a given quarter may impact CVF's
results of operations due to an inability to adjust expenses during the quarter
to match the level of revenues for the quarter. There can be no assurance that
CVF will report net income in any period in the future. While some of the
Corporations have consistently reported losses, CVF has recorded income in
certain fiscal periods and experienced fluctuations from period to period due to
the sale of some of its holdings, other one-time transactions and similar
events.

Rapid Technological Change. The markets for the Corporations' products are
generally characterized by rapidly changing technology, evolving industry
standards, changes in customer needs and frequent new product introductions. The
future success of the Corporations will depend on their ability to enhance
current products, develop new products on a timely and cost-effective basis that
meet changing customer needs and to respond to emerging industry standards and
other technological changes. There can be no assurance that the Corporations
will be successful in developing new products or enhancing their existing
products on a timely basis, or that such new products or product enhancements
will achieve market acceptance.

<PAGE>

ITEM 7 FINANCIAL STATEMENTS

Consolidated Financial Statements

CVF TECHNOLOGIES CORPORATION
[Expressed in United States Currency]
December 31, 2004

<PAGE>

CVF TECHNOLOGIES CORPORATION

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                        PAGE NUMBER
<S>                                                     <C>
REPORT OF INDEPENDENT REGISTERED PUBLIC
            ACCOUNTING FIRM                                 F-2

CONSOLIDATED BALANCE SHEETS                                 F-4

CONSOLIDATED STATEMENTS OF OPERATIONS                       F-6

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT)
            EQUITY                                          F-8

CONSOLIDATED STATEMENTS OF CASH FLOWS                      F-10

CONSOLIDATED STATEMENTS OF
            COMPREHENSIVE (LOSS) INCOME                    F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 F-13
</TABLE>

<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Directors
CVF Technologies Corporation
Williamsville, New York

We have audited the accompanying consolidated balance sheet of CVF Technologies
Corporation as of December 31, 2004, and the related consolidated statement of
operations, stockholders' (deficit) equity, cash flows and comprehensive loss
for the year then ended December 31, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CVF Technologies
Corporation as of December 31, 2004, and the results of its operations and its
cash flows for the year then ended December 31, 2004, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
has suffered recurring losses from operations, including a net loss of
approximately $1.9 million for the year ended December 31, 2004, and has a
working capital deficiency as of December 31, 2004. These factors raise
substantial doubt the Company's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                                    /s/ Sherb & Co., LLP
                                                    Certified Public Accountants

      New York, New York
      February 25, 2005

                                                                             F-2
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Directors
CVF Technologies Corporation

We have audited the accompanying consolidated balance sheets of CVF Technologies
Corporation as of December 31, 2003, and the related consolidated statement of
operations, stockholders' (deficit) equity, cash flows and comprehensive loss
for the year then ended December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CVF Technologies
Corporation as of December 31, 2003, and the results of its operations and its
cash flows for the year then ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
has suffered recurring losses from operations, including a net loss of
approximately $2.2 million for the year ended December 31, 2003, and has a
working capital deficiency as of December 31, 2003. These factors raise
substantial doubt the Company's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                                    /s/ Radin, Glass & Co., LLP
                                                    Certified Public Accountants

      New York, New York
      February 26, 2004

                                                                             F-3
<PAGE>

CVF TECHNOLOGIES CORPORATION

                           CONSOLIDATED BALANCE SHEETS

As at December 31                                   [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                                           2004         2003
                                                                             $            $
                                                                         ---------    ---------
<S>                                                                      <C>          <C>
ASSETS
CURRENT
Cash and cash equivalents                                                  112,648      225,535
Trade receivables [note 3[d]]                                              139,313    2,461,980
Inventory [note 4]                                                          58,818      586,009
Prepaid expenses and other                                                  30,086       75,669
Deferred tax asset and Income taxes receivable                                  --      550,830
                                                                         ---------    ---------
TOTAL CURRENT ASSETS                                                       340,865    3,900,023
                                                                         ---------    ---------
Property and equipment, net of accumulated depreciation [note 3[f]]         51,369      220,889
Loans receivable [note 17]                                                 142,251      142,251
Investment & notes receivable in Biorem [note 5]                           791,820           --
Holdings available for sale, at market [note 5]                              2,011        4,772
Technology, net of accumulated amortization [note 6[a]]                         --      228,001
Goodwill, net of accumulated amortization [note 6[b]]                    1,200,108    1,405,222
                                                                         ---------    ---------
TOTAL ASSETS                                                             2,528,424    5,901,158
                                                                         =========    =========
</TABLE>

See accompanying notes

                                                                             F-4
<PAGE>

CVF TECHNOLOGIES CORPORATION

                       CONSOLIDATED BALANCE SHEETS CONT'D

As at December 31                                   [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                                            2004             2003
                                                                              $                $
                                                                         -----------      -----------
<S>                                                                      <C>              <C>
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Current portion of long-term debt [note 7]                                        --           82,297
Loans past due or in default [note 7]                                        239,139          221,269
Accounts payables and accrued liabilities [note 12[a]]                     3,228,089        6,212,368
Preferred and other non-voting stock of subsidiaries [note 12[b]]            208,425          192,850
                                                                         -----------        ---------
TOTAL CURRENT LIABILITIES                                                  3,675,653        6,708,784
                                                                         -----------        ---------
LONG-TERM LIABILITIES
Notes payable - officers and directors [note 7]                                   --        1,836,256
Notes payable - other [note 7]                                                25,000               --
Deferred income taxes [note 9]                                               241,892          368,566
Minority interest                                                                --            79,220
Pension obligation [note 8]                                                  618,916          577,457
                                                                         -----------        ---------
TOTAL LONG-TERM LIABILITIES                                                  885,808        2,861,499
                                                                         -----------        ---------
Redeemable Series A preferred stock, $0.001 par value,
   redeemable at $18.25 per share, authorized 500,000 shares,
   issued and outstanding shares 3,477 [2002; 3,477] [note 10[b]]             63,455           63,455
                                                                         -----------        ---------
                                                                           4,624,916        9,633,738
                                                                         -----------        ---------
Commitments and contingencies [notes 2, 15 and 16]
STOCKHOLDERS' (DEFICIT) EQUITY [note 2]
Series B convertible preferred stock
   $0.001 par value, liquidation preference of 25% of Stated Value,
   authorized, issued and outstanding 0 [2003; 338,500]
   [note 10[b]]                                                                   --              339
Series C convertible preferred stock
   $0.001 par value, issued and outstanding 100,000 shares,
   Stated value $1,000,000 [2003; 0] [note 10[b]]                                100               --
Common stock, $0.001 par value, authorized 50,000,000 shares,
   outstanding 13,761,225 [2003; 10,855,549] and in treasury
   481,700 [2003; 481,700] [note 10[a]]                                       14,243           11,338
Warrants [note 10 [c]]                                                       111,094          111,094
Additional paid-in capital                                                30,632,237       28,473,130
Treasury stock                                                            (2,747,174)      (2,747,174)
Accumulated other comprehensive loss                                        (409,594)      (1,750,291)
Accumulated deficit                                                      (29,697,398)     (27,831,016)
                                                                         -----------      -----------
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY                                      (2,096,492)      (3,732,580)
                                                                         -----------      -----------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)  EQUITY                      2,528,424        5,901,158
                                                                         ===========      ===========
</TABLE>

See accompanying notes

                                                                             F-5
<PAGE>

CVF TECHNOLOGIES CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                    2004            2003
                                                      $               $
                                                 ----------      ----------
<S>                                              <C>             <C>
SALES [note 3[m]]                                 7,957,675       8,704,069
Cost of sales                                     4,222,455       5,129,810
                                                 ----------      ----------
GROSS MARGIN                                      3,735,220       3,574,259
                                                 ----------      ----------
EXPENSES
Selling, general and administrative               4,840,615       5,220,657
Repriced stock options expense                      121,247         495,450
Research and development                            359,233         504,613
                                                 ----------      ----------
TOTAL EXPENSES                                    5,321,095       6,220,720
                                                 ----------      ----------
Loss from continuing operations
   before under noted items                      (1,585,875)     (2,646,461)
                                                 ----------      ----------
OTHER (EXPENSES) INCOME
Interest (expense), net                            (334,364)       (246,371)
(Loss) gain on sale of holdings                      (2,067)         (1,621)
Other income (expense)                              (29,829)        (89,825)
Income from equity investees                        178,885              --
Gain on sale of equity in subsidiary                742,568              --
Gain on sale of Biorem                              829,287              --
Realized translation (loss)                      (1,662,505)             --
                                                 ----------      ----------
TOTAL OTHER (EXPENSES) INCOME                      (278,025)       (337,817)
                                                 ----------      ----------
Loss from operations before
   income taxes                                  (1,863,900)     (2,984,278)
Income taxes [note 9]                                78,637        (526,386)
                                                 ----------      ----------
Loss from operations before
   the following:                                (1,942,537)     (2,457,892)
Minority interest in loss                            79,251         171,286
                                                 ----------      ----------
NET LOSS                                         (1,863,286)     (2,286,606)
                                                 ==========      ==========
</TABLE>

See accompanying notes

                                                                             F-6
<PAGE>

CVF TECHNOLOGIES CORPORATION

                  CONSOLIDATED STATEMENTS OF OPERATIONS CONT'D

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                    2004            2003
                                                      $               $
                                                 ----------      ----------
<S>                                              <C>             <C>
NET LOSS ATTRIBUTABLE TO COMMON
   STOCKHOLDERS [note 11]                        (1,866,382)     (2,628,279)
                                                 ----------      ----------

BASIC AND DILUTED LOSS PER SHARE [note 11]            (0.15)          (0.24)
                                                 ==========      ==========
BASIC AND DILUTED WEIGHTED AVERAGE
   SHARES [note 11]                              12,521,856      10,749,035
                                                 ==========      ==========
</TABLE>

See accompanying notes

                                                                             F-7
<PAGE>

CVF TECHNOLOGIES CORPORATION

        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY CONT'D

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>

                                                   SERIES B                                                ACCUMULATED
                                                  CONVERTIBLE          ADDITIONAL                             OTHER         TOTAL
                                   COMMON STOCK    PREFERRED            PAID-IN    ACCUMULATED  TREASURY   COMPREHENSIVE   EQUITY
                                           AMOUNT    STOCK    WARRANTS  CAPITAL      DEFICIT      STOCK       INCOME      (DEFICIT)
                                  SHARES     $         $         $         $            $           $            $            $
                                ---------- ------ ----------- -------- ---------- ------------ ----------- ------------- -----------
<S>                             <C>        <C>    <C>         <C>      <C>        <C>          <C>         <C>           <C>
BALANCE - DECEMBER 31, 2002     11,095,156 11,095     339     111,094  27,927,197 (25,202,737) (2,747,174)  (1,066,589)    (966,775)
Net loss                                                                           (2,286,606)                           (2,286,606)
Dividends on Series A
   preferred stock                                                                     (3,173)                               (3,173)
Dividends on Series B
   convertible preferred stock                                                       (338,500)                             (338,500)
Unrealized loss on securities
   available for sale, net of
   reclassification adjustment
   [note 10[d]]                                                                                                 (9,054)      (9,054)
Shares issued in lieu of cash
   for services                     92,593     93                          24,907                                            25,000
Shares issued for cash             149,500    150                          25,981                                            26,131
Change in market price -
   re priced options                                                      495,045                                           495,045
Translation adjustment
  [note 10[d]]                                                                                                (674,648)    (674,648)
                                ---------- ------     ---     -------  ---------- -----------  ----------   ----------   ----------
BALANCE - DECEMBER 31, 2003     11,337,249 11,338     339     111,094  28,473,130 (27,831,016) (2,747,174)  (1,750,291)  (3,732,580)
                                ========== ======     ===     =======  ========== ===========  ==========   ==========   ==========
</TABLE>

See accompanying notes

                                                                             F-8
<PAGE>

CVF TECHNOLOGIES CORPORATION

        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY CONT'D

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                                        SERIES B                    SERIES C
                                                                      CONVERTIBLE                 CONVERTIBLE
                                                   COMMON STOCK        PREFERRED                    PREFERRED
                                                              AMOUNT     STOCK       WARRANTS         STOCK
                                                SHARES          $          $            $              $
                                              ----------      ------  -----------    --------     ------------
<S>                                           <C>             <C>     <C>            <C>          <C>
BALANCE - DECEMBER 31, 2003                   11,337,249      11,338      339         111,094          0
Net loss
Dividends on Series A preferred stock
Warrants issued to holder of Series C
Warrants issued to note holder
Unrealized loss on securities available
   for sale, net of reclassification
   adjustment [note 10[d]]
Shares issued in cancellation of Series B      1,000,000       1,000     (339)                       100
Shares issued in lieu of cash  for services       74,362          74
Shares issued for cash                           606,061         606
Shares exercised in options                    1,225,253       1,225
Biorem options exercised
Sale of Biorem common shares
Stock Option  - change in market value
Translation adjustment [note 10[d]]
                                              ----------      ------     ---          -------        ---
BALANCE - DECEMBER 31, 2004                   14,242,925      14,243       0          111,094        100
                                              ==========      ======     ===          =======        ===

<CAPTION>
                                                                                        ACCUMULATED
                                               ADDITIONAL                                 OTHER           TOTAL
                                                PAID-IN     ACCUMULATED    TREASURY    COMPREHENSIVE      EQUITY
                                                CAPITAL       DEFICIT       STOCK         INCOME        (DEFICIT)
                                                   $             $            $              $              $
                                               ----------  ------------   ---------    -------------    -----------
<S>                                            <C>         <C>            <C>          <C>              <C>
BALANCE - DECEMBER 31, 2003                    28,473,130  (27,831,016)   (2,747,174)    (1,750,291)    (3,732,580)
Net loss                                                    (1,863,286)                                 (1,863,286)
Dividends on Series A preferred stock                           (3,096)                                     (3,096)
Warrants issued to holder of Series C              19,140                                                   19,140
Warrants issued to note holder                      4,620                                                    4,620
Unrealized loss on securities available
   for sale, net of reclassification
   adjustment [note 10[d]]                                                                       32             32
Shares issued in cancellation of Series B         597,975                                                  598,736
Shares issued in lieu of cash  for services        19,426                                                   19,500
Shares issued for cash                            199,394                                                  200,000
Shares exercised in options                       515,022                                                  516,247
Biorem options exercised                           39,672                                                   39,672
Sale of Biorem common shares                      642,611                                                  642,611
Stock Option  - change in market value            121,247                                                  121,247
Translation adjustment [note 10[d]]                                                       1,340,665      1,340,665
                                               ----------  -----------    ----------      ---------     ----------
BALANCE - DECEMBER 31, 2004                    30,632,237  (29,697,398)   (2,747,174)      (409,594)    (2,096,492)
                                               ==========  ===========    ==========      =========     ==========
</TABLE>

See accompanying notes

                                                                             F-9
<PAGE>

CVF TECHNOLOGIES CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                                            2004            2003
                                                                             $                $
                                                                         -----------     -----------
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
Net (loss) to cash used in operating activities                          (1,863,286)     (2,286,606)
Adjustments to reconcile net loss from continuing operations
   Depreciation and amortization                                            292,767         436,090
   Realized translation loss                                              1,662,505              --
   Income from equity investees                                            (178,885)             --
   Issuance of stock and exercise of options for services                   535,747              --
   Compensation expense for variable accounting for options                 121,247         495,045
   Pension expense                                                           41,459          63,534
   Gain on sale of holdings - SRE                                          (742,568)         (7,461)
   Gain from exchange of debt for Biorem equity                            (284,500)             --
   Minority interest in losses of subsidiaries                                   --        (171,286)
   Deferred income tax expense                                                   --        (526,386)
Changes in operating assets and liabilities
   Decrease (increase) in trade receivables                                 (24,596)     (1,228,697)
   Decrease (increase) in inventory and other                                28,252         (77,809)
   Prepaid expenses                                                            (360)             --
   (Increase) decrease in income taxes receivable                          (126,674)         43,037
   Increase (decrease) in accounts payable and accrued liabilities         (475,508)      1,533,788
   Deferred income taxes payable                                           (126,674)             --
                                                                         ----------      ----------
CASH (APPLIED TO) OPERATING ACTIVITIES                                   (1,141,074)     (1,726,751)
                                                                         ----------      ----------

INVESTING ACTIVITIES
Proceeds from sales of Biorem shares                                        452,947              --
Purchase of property and equipment                                               --         (30,122)
Proceeds from sale of holdings                                                2,761          46,724
Biorem cash divested                                                       (132,653)             --
                                                                         ----------      ----------
CASH PROVIDED BY (APPLIED TO) INVESTING ACTIVITIES                          323,055          16,602
                                                                         ----------      ----------

FINANCING ACTIVITIES
(Decrease) increase in bank indebtedness                                         --           4,796
Borrowings of debt                                                           88,018       1,477,886
Sale of common stock                                                        200,000              --
Issuance of common stock, net of expenses - Biorem                          755,538              --
Exercise of options for cash                                                  6,827              --
Purchase of treasury stock - Biorem                                         (73,255)             --
                                                                         ----------      ----------
CASH PROVIDED BY FINANCING ACTIVITIES                                       977,128       1,482,682
                                                                         ==========      ==========
Effect of exchange rate changes on
   cash and cash equivalents                                               (271,996)        234,999
                                                                         ----------      ----------

CASH AND CASH EQUIVALENTS (APPLIED) DURING YEAR                            (112,887)          7,532
Cash and cash equivalents, beginning of year                                225,535         218,003
                                                                         ----------      ----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                      112,648         225,535
                                                                         ==========      ==========
Cash paid during the year for interest                                      170,321          38,364
                                                                         ----------      ----------
Cash paid during the year for income taxes                                   26,276           1,611
                                                                         ----------      ----------
</TABLE>

See accompanying notes

                                                                            F-10
<PAGE>

CVF TECHNOLOGIES CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31                              [Expressed in U.S. Currency]

SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION

NON-CASH FINANCING ACTIVITIES:

<TABLE>
<CAPTION>
                                                         2004        2003
                                                          $            $
                                                      -----------    ----
<S>                                                   <C>            <C>
REDUCTION TO ASSETS AND LIABILITIES
    DUE TO DIVESTITURE OF SRE AND BIOREM HOLDINGS
    Trade receivables                                 (2,347,263)     --
    Inventory                                           (498,938)     --
    Prepaid expenses                                     (45,944)     --
    Income tax receivables                              (550,830)     --
    Property plant and equipment - net                  (159,600)     --
    Goodwill and intangibles - net                      (205,114)     --
    Accounts payable & accrued liabilities            (2,201,295)     --
    Deferred revenues                                   (307,476)     --
    Notes payable                                     (1,562,426)     --
    Notes receivable                                     791,820      --
    Minority interests                                   (79,220)     --

EXCHANGE OF DEBT FOR BIOREM EQUITY                       385,700      --

EXCHANGE OF SERIES B PREFERRED STOCK
    FOR SERIES C PREFERRED STOCK                         598,736      --
</TABLE>

See accompanying notes

                                                                            F-11
<PAGE>

CVF TECHNOLOGIES CORPORATION

                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Year ended December 31                              [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                                                 2004            2003
                                                                  $                $
                                                              ----------      ----------
<S>                                                           <C>             <C>
NET LOSS                                                      (1,863,286)     (2,286,606)
                                                              ----------      ----------

OTHER COMPREHENSIVE (LOSS) INCOME,
   NET OF TAX [note 10[d]]

Foreign currency translation adjustments
   [net of tax effect]                                          (321,840)       (674,648)
                                                              ----------      ----------

Unrealized holding (losses) gains:

Unrealized holding losses (gains) arising during year
   [net of taxes of $nil, and $nil for the years ended
   December 31, 2004 and 2003]                                        --          12,001

Reclassification adjustments for previously recognized
   unrealized holding (gains) [net of taxes of $21 and
   $6,181 for the years ended December 31, 2004 and 2003]             32         (21,055)
                                                              ----------      ----------
                                                                      32          (9,054)
                                                              ----------      ----------
Total other comprehensive loss                                  (321,808)       (683,702)
                                                              ----------      ----------
COMPREHENSIVE LOSS DURING YEAR                                (2,185,094)     (2,970,308)
                                                              ==========      ==========
</TABLE>

See accompanying notes

                                                                            F-12
<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

1. ORGANIZATION AND BUSINESS DESCRIPTION

CVF Technologies Corporation [the "Company" or "CVF"] is incorporated under the
laws of the State of Nevada.

The Company is engaged primarily in the business of developing and managing
private companies engaged in the environmental and information technologies
areas. The Company's mandate is to acquire significant holdings in new and
emerging companies to assist in the management of such companies and through
them to engage in businesses. The Company's mandate is also to gain income from
the operations of its investees and the ultimate proceeds of disposal of such
investments. The Company holds majority ownership positions directly or
indirectly in the following companies:

Biorem Technologies, Inc. ["Biorem"] a publicly traded industrial biotech
company based in Guelph, Ontario, is engaged in the business of applying
bioconversion and biotransformation technology to municipal and industrial
environmental applications. The current business focus of Biorem is the design
and installation of biological air filters, or biofilters, for the removal of
odor and other air pollutants from municipal and industrial sources. At December
31, 2004, the Company has a 48% [69% in 2003] ownership interest in Biorem.

Ecoval Corporation ["Ecoval"], located in Williamsville, New York, was formed in
December 2000. Ecoval's business involves the development, manufacture and
marketing environmentally friendly organic herbicides, insecticides and tree
recovery systems, targeted primarily for the lawn and garden retail/consumer
market and specialty agricultural markets. At December 31, 2004, the Company has
an 85% [85% in 2003] ownership interest in Ecoval.

Gemprint Corporation ["Gemprint"] is a Toronto, Canada, company in the business
of providing products and services to the jewelry industry to enable diamonds
and other precious gems to be uniquely identified non-invasively
[fingerprinted], using a patented low power laser imaging system. The results
are stored in a database for later verification and recovery of lost or stolen
gems. Gemprint's Isi system has application with all segments of the diamond
supply chain [i.e. cutter/polishers, grading laboratories, manufacturers,
wholesalers, retailers and Internet traders]. At December 31, 2004, the Company
had a 65% [65% in 2003] ownership interest in Gemprint.

SRE Controls Inc. ["SRE"] is a Waterloo, Canada, company in the business of
designing, manufacturing and marketing a range of high efficiency, programmable
electronic motor speed control products for electric vehicles. Examples of the
kind of vehicles that use SRE's products are material handling equipment [e.g.
forklift trucks], aircraft Ground Support Equipment [GSE],

                                                                            F-13

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

1. ORGANIZATION AND BUSINESS DESCRIPTION - CONT'D

Neighborhood Electric Vehicles [NEVs], Golf carts and lower-end products such as
sweepers and scrubbers. SRE supplies its controller products to both Original
Equipment Manufacturers [OEMs] of vehicles through direct sales and to the
aftermarket. At December 31, 2004, the Company had a 37% [75% in 2003] ownership
interest in SRE.

On March 23, 2004 SRE as a result of signing a Memorandum of Agreement received
$500,000 Cdn investment in new equity into the Company. As part of the
requirements of the new investment all debt in the Company excluding $390,000
Cdn held by other shareholders of the Company was converted into equity. The net
result of the new investment and the restructuring of the debt is that CVF holds
approximately 37% of the current shares of SRE.

On March 11, 2005, a secured creditor of SRE Controls Inc. called a $550,000 Cdn
secured demand note and appointed a receiver to administer the Company. The
assets of SRE are estimated by the receiver at $902,000 Cdn while the total due
creditors (secured and unsecured) is estimated at $1,600,000 Cdn. On March 31,
2005 a bankruptcy filing was filed in the office of the Superintendent of
Bankruptcy Canada. The first meeting of creditors has been set for April 15,
2005.

CVF is currently examining its various options as a result of the action by this
creditor which may include bidding on the assets claimed by the creditor. There
is no assurance that CVF will be successful in such a bid in which case CVF's
equity portion in SRE would only have nominal value. CVF currently carries SRE
in its books at zero value.

2. GOING CONCERN

These consolidated financial statements have been prepared on a going concern
basis, which presumes that assets will be realized and liabilities discharged in
the normal course of business over the foreseeable future. The consolidated
Company's current liabilities exceed its current assets. The Company has
incurred losses over the year and for the past five years, which have reduced
the Company's cash reserves, and depleted stockholders' equity. Further, the
Company has several contingent liabilities [note 16].

These conditions raise substantial doubt about the Company's ability to continue
to fund its investee companies and the ability of some of those companies to
continue to operate as a going concern.

The Company's primary need for cash is to maintain its ability to support the
operations and ultimately the carrying values of certain of its individual
investee companies. The Company is actively pursuing the sale of a portion of
its interests in some of its investee companies as a source of funds, as well as
establishing lines of credit or issuing new stock and reduction of cash flow

                                                                            F-14

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

2. GOING CONCERN - CONT'D

needs. The Company will continue to assist its investee companies in their
efforts to obtain outside financing in order to fund the growth and development
of their respective businesses and has taken steps to reduce the operating cash
requirements of the parent company and its investees. The Company is also
seeking outside investment for these companies. There is no assurance that these
initiatives will be successful or that certain of its investees will continue to
have adequate cash resources and capital to be able to continue as going
concerns.

The Company's ability to continue to realize assets and discharge liabilities in
the normal course is uncertain and dependent on these and other initiatives.
These financial statements do not include any of the adjustments to the amounts
or classification of assets and liabilities that might be necessary should the
Company be unable to continue its business in the normal course.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared by management in
accordance with accounting principles generally accepted in the United States
and are within the framework of the significant accounting policies summarized
below:

[a]   PRINCIPLES OF CONSOLIDATION

      The consolidated financial statements include the accounts of the Company
      and its majority-owned subsidiaries. During 2004, the Company reduced its
      ownership percentages of Biorem from 69% to 48% and SRE from 75% to 37%,
      hence these entities were consolidated for operations in 2004 up to the
      date such ownership percentage was reduced to be below 50%. 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, 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-15

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[b]   FOREIGN CURRENCY TRANSLATION

      The 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 exchange 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 EQUIVALENTS

      The 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 RECEIVABLES

      Trade receivables are presented net of allowance for doubtful accounts.
      The allowance was $103,481 at December 31, 2004 [$144,164 at December 31,
      2003]. Bad debt expense was $138,674 during the year ended December 31,
      2004 [$36,935 in 2003].

      The allowance for doubtful accounts is determined at the subsidiary
      company level, and includes specifically identified accounts where there
      is doubt as to collection.

[e]   INVENTORY

      Finished 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-16

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[f]   PROPERTY AND EQUIPMENT

      Property 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:

<TABLE>
<S>                           <C>
Property                      5-10 years
Equipment                     5-10 years
</TABLE>

      Accumulated depreciation at December 31, 2004 was $296,223 [$683,394 at
      December 31, 2003]. Depreciation expense was $64,677 [$51,254 in 2003].

[g]   FINANCIAL INSTRUMENTS

      The 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 values of the Company's pension
      obligation approximates the carrying value, as the debt bears interest at
      rates approximating current market rates. The fair value of the Company's
      long term debt is not readily determinable due to the Company's financial
      condition. 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]:

<TABLE>
<CAPTION>
                                                     2004             2003
                                                      $                 $
                                                   -------          ---------
<S>                                                <C>              <C>
Cash and cash equivalents                           52,911              1,665
Trade receivables                                   87,661            674,339
Bank indebtedness                                       --              5,157
Trade payables                                     611,526          1,306,340
Long-term debt                                          --          1,836,256
Pension obligation                                 618,916            577,457
Preferred and non voting stock of subsidiaries     208,425            192,850
</TABLE>

                                                                            F-17

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[h]   GOODWILL

      Goodwill is recorded in connection with the acquisition of subsidiaries
      representing the difference between the fair value of identifiable net
      assets of the underlying equity interest purchased and the amount paid for
      the interest. Effective January 1, 2002, the Company applied the
      provisions of SFAS 142 with respect to goodwill and ceased amortization of
      the carrying value of goodwill. Prior to 2002 goodwill was amortized.

[i]   INTANGIBLE ASSETS

      Intangible assets with finite useful lives are amortized over their
      estimated useful lives. Intangible assets are reviewed for impairment when
      there are indications that the carrying value of an asset may not be
      recoverable over its estimated useful life. The Company's only intangible
      asset is acquired technology of Ecoval which is amortized over 5 years. As
      of December 31, 2004 this intangible asset had been fully amortized.

[j]   IMPAIRMENT OF LONG-LIVED ASSETS

      The 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.

[k]   MINORITY INTEREST

      Minority 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.

[l]   LOSS PER SHARE

      Basic loss per share is computed by dividing net loss attributable to
      common stockholders by the weighted average number of common shares
      outstanding during the year. The net loss attributable to common
      stockholders consists of net 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 Company has not presented diluted per share amounts as the
      dilution would reduce the loss per share.

                                                                            F-18

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[m]   REVENUE RECOGNITION

      Revenue from the sale of manufactured products is recognized when the
      goods are shipped and accepted by the customer.

      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.

[n]   STOCK-BASED COMPENSATION

      We account for our stock-based compensation plans under Accounting
      Principles Board Opinion 25, (APB 25) Accounting for Stock Issued to
      Employees and the related interpretation, for which no compensation cost
      is of the grant and recorded in the statement of operations for the
      estimated fair value of stock options issued with an exercise price equal
      to the fair value of the common stock on the date of grant. The Company
      uses the "intrinsic" method for determining compensation expense for new
      options whereby expense is recorded for the quoted market price of the
      stock issued, or in the case of options, for the difference between the
      stock's quoted market price on the date of the grant and the option
      exercise price. When the market price at the date of the grant exceeds the
      exercise price of the underlying shares, compensation expense is recorded.
      Statement of Financial Accounting Standards No. 123 (SFAS 123) Accounting
      for Stock-Based Compensation, as amended by Statement of Financial
      Accounting Standards No. 148 (SFAS 148) Accounting for Stock-Based
      Compensation - Transition and Disclosure, requires that companies, which
      do not elect to account for stock-based compensation as prescribed by this
      statement, disclose the pro-forma effects on earnings and earnings per
      share as if SFAS 123 has been adopted.

      During 2003, the Company repriced options of the registrant and certain of
      its subsidiaries, resulting in the "variable" method for determining
      compensation expense being applied to the options subject to repricing.
      Under this method, expense is recorded for the difference between the
      stock's quoted market price on the date of the grant and the option
      exercise price. Increases and decreases (but not below the exercise price)
      in the quoted market price of the stock between the grant date and the
      measurement date results in a change in the measurement of the
      compensation for the award.

                                                                            F-19

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

If we applied the recognition provisions of SFAS 123 using the Black-Scholes
option pricing model, the resulting pro-forma net income (loss) available to
common shareholders, and pro-forma net income (loss) available to common
shareholders per share would be as follows:

<TABLE>
<CAPTION>
                                                For the year ended December 31,
                                                -------------------------------
                                                     2004             2003
                                                --------------    -------------
<S>                                             <C>               <C>
Net (loss) available to common
shareholders, as reported                       $   (1,866,382)   $  (2,628,279)

Add: Stock-based compensation expense
included in the reported net income, net of
related tax effects                                    701,286          495,045

Deduct: Stock-based compensation, net of tax           701,286          581,703

Net income (loss)available to common
shareholders, pro-forma                         $   (1,866,382)   $  (2,714,937)
                                                ==============    =============

Basic earnings (loss) per share:
                               As reported -    $         (.15)   $        (.24)
                                 Pro-forma -    $         (.15)   $        (.25)
</TABLE>

The above stock-based employee compensation expense has been determined
utilizing a fair value method, the Black-Scholes option-pricing model.

The recorded compensation expense for repriced stock options granted to
employees during the years ended December 31, 2004 and 2003 was $121,247 and
$495,450 respectively.

                                                                            F-20

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[n]   STOCK-BASED COMPENSATION CONT'D

      In accordance with SFAS 123, the fair value of each option grant has been
      estimated as of the date of the grant using the Blach-Scholes option
      pricing model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                    For Years Ended December 31,
                                   ------------------------------
                                     2004                  2003
                                   -------                -------
<S>                                <C>                    <C>
Risk free interest rate              3.50%                  5.00%
Expected life                      2 years                5 years
Dividend rate                        0.00%                  0.00%
Expected volatility                  36.1%                 124.3%
</TABLE>

[o]   RESEARCH AND DEVELOPMENT

      Research costs and development costs are expensed as incurred. Research
      and development expenditures are reduced by any related investment tax
      credits and government grants.

[p]   INCOME TAXES

      The 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. Canadian research and development tax credits of subsidiaries
      are credited to research and development expense when qualifying
      expenditures are incurred and realization of such credits is reasonably
      assured.

[q]   USE OF ESTIMATES

      The 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 reporting year. Management has recorded its estimate of costs
      attributed to the tax audit. Actual results could differ from those
      estimates.

                                                                            F-21

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

[r]   CREDIT RISK

      The 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.

[s]   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      FASB 151 - INVENTORY COSTS

      In November 2004, the FASB issued FASB Statement No. 151, which revised
      ARB No.43, relating to inventory costs. This revision is to clarify the
      accounting for abnormal amounts of idle facility expense, freight,
      handling costs and wasted material (spoilage). This Statement requires
      that these items be recognized as a current period charge regardless of
      whether they meet the criterion specified in ARB 43. In addition, this
      Statement requires the allocation of fixed production overheads to the
      costs of conversion be based on normal capacity of the production
      facilities. This Statement is effective for financial statements for
      fiscal years beginning after June 15, 2005. Earlier application is
      permitted for inventory costs incurred during fiscal years beginning after
      the date of this Statement is issued. Management believes this Statement
      will have no impact on the financial statements of the Company once
      adopted.

      FASB 152 - ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS

      In December 2004, the FASB issued FASB Statement No. 152, which amends
      FASB Statement No. 66, Accounting for Sales of Real Estate, to reference
      the financial accounting and reporting guidance for real estate
      time-sharing transactions that is provided in AICPA Statement of Position
      (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This
      Statement also amends FASB Statement No. 67, Accounting for Costs and
      Initial Rental Operations of Real Estate Projects, to state that the
      guidance for (a) incidental operations and (b) costs incurred to sell real
      estate projects does not apply to real-estate time-sharing transactions.
      The accounting for those operations and costs is subject to the guidance
      in SOP 04-2. This Statement is effective for financial statements for
      fiscal years beginning after June 15, 2005. Management believes this
      Statement will have no impact on the financial statements of the Company
      once adopted.

                                                                            F-22

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

    FASB 153 - EXCHANGES OF NON-MONETARY ASSETS

    In December 2004, the FASB issued FASB Statement No. 153. This Statement
    addresses the measurement of exchanges of non-monetary assets. The guidance
    in APB Opinion No. 29, Accounting for Non-monetary Transactions, is based on
    the principle that exchanges of non-monetary assets should be measured based
    on the fair value of the assets exchanged. The guidance in that Opinion,
    however, included certain exceptions to that principle. This Statement
    amends Opinion 29 to eliminate the exception for non-monetary exchanges of
    similar productive assets and replaces it with a general exception for
    exchanges of non-monetary assets that do not have commercial substance. A
    non-monetary exchange has commercial substance if the future cash flows of
    the entity are expected to change significantly as a result of the exchange.
    This Statement is effective for financial statements for fiscal years
    beginning after June 15, 2005. Earlier application is permitted for
    non-monetary asset exchanges incurred during fiscal years beginning after
    the date of this Statement is issued. Management believes this Statement
    will have no impact on the financial statements of the Company once adopted.

    FASB 123 (REVISED 2004) - SHARE-BASED PAYMENTS

    In December 2004, the FASB issued a revision to FASB Statement No. 123,
    Accounting for Stock Based Compensation. This Statement supersedes APB
    Opinion No. 25, Accounting for Stock Issued to Employees, and its related
    implementation guidance. This Statement establishes standards for the
    accounting for transactions in which an entity exchanges its equity
    instruments for goods or services. It also addresses transactions in which
    an entity incurs liabilities in exchange for goods or services that are
    based on the fair value of the entity's equity instruments or that may be
    settled by the issuance of those equity instruments. This Statement focuses
    primarily on accounting for transactions in which an entity obtains employee
    services in share-based payment transactions. This Statement does not change
    the accounting guidance for share-based payment transactions with parties
    other than employees provided in Statement 123 as originally issued and EITF
    Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling, Goods or
    Services." This Statement does not address the accounting for employee share
    ownership plans, which are subject to AICPA Statement of Position 93-6,
    Employers' Accounting for Employee Stock Ownership Plans.

    A nonpublic entity will measure the cost of employee services received in
    exchange for an award of equity instruments based on the grant-date fair
    value of those instruments, except in certain circumstances.

                                                                            F-23

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D

A public entity will initially measure the cost of employee services received in
exchange for an award of liability instruments based on its current fair value;
the fair value of that award will be re-measured subsequently at each reporting
date through the settlement date. Changes in fair value during the requisite
service period will be recognized as compensation cost over that period. A
nonpublic entity may elect to measure its liability awards at their intrinsic
value through the date of settlement.

The grant-date fair value of employee share options and similar instruments will
be estimated using the option-pricing models adjusted for the unique
characteristics of those instruments (unless observable market prices for the
same or similar instruments are available).

Excess tax benefits, as defined by this Statement, will be recognized as an
addition to paid-in-capital. Cash retained as a result of those excess tax
benefits will be presented in the statement of cash flows as financing cash
inflows. The write-off of deferred tax assets relating to unrealized tax
benefits associated with recognized compensation cost will be recognized as
income tax expense unless there are excess tax benefits from previous awards
remaining in paid-in capital to which it can be offset.

The notes to the financial statements of both public and nonpublic entities will
disclose information to assist users of financial information to understand the
nature of share-based payment transactions and the effects of those transactions
on the financial statements.

The effective date for public entities that do not file as small business
issuers will be as of the beginning of the first interim or annual reporting
period that begins after June 15, 2005. For public entities that file as small
business issuers and nonpublic entities the effective date will be as of the
beginning of the first interim or annual reporting period that begins after
December 15, 2005. Management intends to comply with this Statement at the
scheduled effective date for the relevant financial statements of the Company.

4. INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
                                          2004          2003
                                           $              $
                                        -------        -------
<S>                                     <C>            <C>
Raw material                                 --        568,364
Finished goods                          124,821         87,071
Less reserve for obsolescence           (66,003)       (69,426)
                                        -------        -------
                                         58,818        586,009
                                        =======        =======
</TABLE>

                                                                            F-24

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

5. HOLDINGS

The Company accounts for its holdings in the following companies using the
equity method:

[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]   SRE Controls Inc. ["SRE"], a Waterloo, Canada, private company, which
      designs, manufactures and markets a range of high-efficiency, programmable
      electronic motor speed control products for electric and alternative
      powered vehicle applications.

[c]   Biorem Technologies Inc. ["Biorem"], a Guelph, Canada, private company at
      December 31, 2004, which went public in January 2005, is an industrial
      biotech company engaged in the business of applying industrial
      microbiological technology to municipal and industrial environmental
      applications.

-     In addition, the Company has other holdings available for sale, other
      notes and other holdings which are not individually significant.

Holdings consisted of the following at December 31, 2004:

<TABLE>
<CAPTION>
                                                                                  HOLDINGS
                                                                    HOLDINGS   AVAILABLE FOR
                                                                    AT COST     FOR SALE AT
                                                      PERCENTAGE   OR EQUITY    FAIR VALUE
                                                      OWNERSHIP        $             $
                                                      ----------   ---------   -------------
<S>                                                   <C>          <C>         <C>
Petrozyme
            50   common shares                             50%           --           --
       250,000   Class C non-voting shares                100%           --           --
                 notes and advances [net of equity
                 in losses] [i]
                                                         ----       -------        -----

SRE
     3,085,372   common shares [ii]                      37.5%           --           --
                                                         ----       -------        -----

Biorem
     3,589,142   effective common shares [iii]           48.5%      791,820           --
                                                         ----       -------        -----

Other notes and holdings                                   --            --        2,011
                                                         ----       -------        -----
TOTAL                                                               791,820        2,011
                                                                    =======        =====
</TABLE>

                                                                            F-25

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

5. HOLDINGS - CONT'D

Holdings consisted of the following at December 31, 2003:

<TABLE>
<CAPTION>
                                                                                    HOLDINGS
                                                                     HOLDINGS    AVAILABLE FOR
                                                                     AT COST      FOR SALE AT
                                                      PERCENTAGE    OR EQUITY     FAIR VALUE
                                                      OWNERSHIP         $              $
                                                      ----------    ---------    -------------
<S>                                                   <C>           <C>          <C>
Petrozyme
            50   common shares                            50%              --           --
       250,000   Class C non-voting shares               100%              --           --
                 notes and advances [net of equity
                 in losses] [i]
                                                                    ---------        -----

Other notes and holdings                                                   --        4,772
                                                                    ---------        -----
Total                                                                      --        4,772
                                                                    =========        =====
</TABLE>

[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. The Company does not intend to demand
      repayment of these notes during the year. The carrying value of these
      assets has been reduced to zero by the Company's share of losses of
      Petrozyme.

[ii]  On March 23, 2004, the Company entered into a transaction with a
      shareholder of SRE to contribute all of its outstanding debt to the CVF to
      equity and forgive 37.5% of the CVF's ownership n SRE for this shareholder
      to invest additional monies into SRE. This transaction reduced CVF's
      ownership in SRE from 75% to 37.5%. See note 19 - Subsequent events.

[iii] During 2004, the Company entered into several transactions involving
      Biorem during the year to recapitalize Biorem and sell some of CVF's
      equity ownership of Biorem. The result was CVF's ownership in Biorem was
      reduced from 69% at December 31, 2003 to 48.5% at December 31, 2004, based
      on the conversion of certain outstanding indebtedness due to CVF in
      January 2005. In January 2005, based on the conversion of certain
      indebtedness due to CVF, CVF owned 3,540,000 shares of Biorem or 35% of
      the then outstanding common stock. As of February 24, 2005, the date of
      the auditors report, the Biorem shares were trading at $3.15 Cdn on the
      Ontario stock exchange. The public company shares were put into escrow
      with 25% of the escrowed shares being released in January 2005 and a
      further 25% every six months thereafter.

                                                                            F-26

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

5. HOLDINGS - CONT'D

The following table gives certain combined summarized unaudited financial
information related to the Company's equity holdings (excluding SRE and Biorem
which is stated separately):

<TABLE>
<CAPTION>
                                              2004            2003
INCOME STATEMENT DATA (UNAUDITED)              $                $
---------------------------------          ----------      ----------
<S>                                        <C>             <C>
Net sales                                     181,022         183,569
Gross profit (loss) on sales                   53,702          58,075
Net (loss)                                   (154,911)       (195,370)
                                           ----------      ----------
CVF'S SHARE OF NET (LOSS)                     (77,456)        (96,936)
                                           ==========      ==========

BALANCE SHEET DATA
Current assets                                 32,056         113,364
TOTAL ASSETS                                   32,056         113,364
                                           ==========      ==========

Current liabilities                            67,312         269,546
Non-current liabilities                     2,652,394       2,311,613
(Deficit)                                  (2,687,650)     (2,467,795)
                                           ----------      ----------
TOTAL LIABILITIES AND EQUITY                   32,056         113,364
                                           ==========      ==========

CVF'S SHARE OF (ACCUMULATED DEFICIT)       (1,343,825)     (1,230,036)
                                           ==========      ==========

CVF'S SHARE OF NON-CURRENT LIABILITIES      2,652,394       2,311,613
                                           ==========      ==========
</TABLE>

The investee companies have various debt and equity securities and options
outstanding, which are convertible into common stock of the respective investee
companies. Such conversions, except where noted, would not materially decrease
or increase the Company's interest in the earnings or net assets of any
investee.

                                                                            F-27

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

5. HOLDINGS - CONT'D

The summarized unaudited financial data of SRE and Biorem for the year ended
December 31, 2004 is as follows ( the prior year information is presented in
note 14 as such entities were consolidated in 2003);

<TABLE>
<CAPTION>
                                                      BIOREM           SRE
INCOME STATEMENT DATA (UNAUDITED)                       $               $
---------------------------------                   ---------       ---------
<S>                                                 <C>             <C>
Net sales                                           7,665,754       2,553,085
Gross profit (loss) on sales                        4,036,054         909,264
Net income (loss)                                     319,559        (803,141)
                                                    ---------       ---------
CVF'S SHARE OF NET INCOME (LOSS)                      154,986        (301,178)
                                                    =========       =========

BALANCE SHEET DATA
Current assets                                      4,769,445         812,868
                                                    ---------       ---------
TOTAL ASSETS                                        4,769,445         812,868
                                                    =========       =========

Current liabilities                                 2,356,875       1,515,754
Non-current liabilities                             1,994,985               -
Equity (Deficit in assets)                            939,744        (629,377)
                                                    ---------       ---------
TOTAL LIABILITIES AND EQUITY                        5,291,604         886,377
                                                    =========       =========

CVF'S SHARE OF EQUITY (ACCUMULATED DEFICIT)           455,776        (236,016)
                                                    =========       =========

CVF'S SHARE OF NON-CURRENT LIABILITIES              1,161,285               -
                                                    =========       =========
</TABLE>

The Biorem entity had debt and equity securities and options outstanding, which
are convertible into common stock of the respective investee company. Such
conversions, was noted in note 5(vii) above. There was no convertible debt or
equity held by CVF which are convertible into common stock of the respective
investee company. The separate calendar 2004 audited financials of Biorem public
entity are available for public viewing with the System for Electronic Document
Analysis and Retrieval, "SEDAR", at www.sedar.com. The two reconciling items
between such financials presented on a Canadian GAAP basis verses US GAAP basis
are that such financials will need to be converted to US dollars as they are
presented in Canadian dollars, and the repricing of certain stock options by
Biorem was not recorded as an expense of approximately $420,000 on the Biorem
financials filed with SEDAR. Details on the repriced Biorem stock options are
discussed in Note 13(b).

                                                                            F-28

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

6. TECHNOLOGY AND GOODWILL

[a]   The details of purchased technology are as follows:

<TABLE>
<CAPTION>
                                     2004               2003
                                       $                  $
                                  ----------          ---------
<S>                               <C>                 <C>
Cost                               1,210,132          1,210,132
Accumulated amortization          (1,210,132)          (982,131)
                                  ----------          ---------
                                          --            228,001
                                  ==========          =========
</TABLE>

      Although Ecoval has successfully developed natural pesticide, herbicide
      and fertilizer products, and patented certain technologies related to
      these products, sales of these products and related cashflows are still
      being developed. The Company is working to expand its marketing
      partnerships. The cash flows from this business have fallen below earlier
      expectations and the Company's resources available to support the
      expansion of Ecoval are currently limited. As of December 31, 2004 this
      asset has been fully amortized.

      In November 2004, Ecoval granted a large manufacturer "Licensor" of
      wholesale and retail home and garden products and exclusive license in
      Canada to manufacture, distribute and sell certain herbicide products
      developed by Ecoval. The license agreement contains a first right of
      refusal for the licensee to enter into similar license agreement for the
      United States. The royalties due under the license agreement are as
      follows; A one time initial royalty fee of $25,000 due upon execution of
      the agreement, 7% of the gross product sales for the period Oct. 1, 2004
      to Sept. 30, 2005 or a minimum of $15,000, 6% of the gross product sales
      for the period Oct. 1, 2005 to Sept. 30, 2006 or a minimum of $25,000, 5%
      of the gross product sales for the period Oct. 1, 2006 to Sept. 30, 2007
      or a minimum of $30,000, 5% of the gross product sales for the period Oct.
      1, 2007 to Sept. 30, 2008 or a minimum of $35,000. The Licensor is
      entitled to terminate this license agreement subject to certain terms and
      conditions.

[b]   The goodwill of subsidiaries consists of:

<TABLE>
<CAPTION>
                                  ACCUMULATED      NET BOOK
                     COST         AMORTIZATION       VALUE
2004                   $               $               $
--------           ---------      ------------     ---------
<S>                <C>            <C>              <C>
Gemprint           2,444,366       1,244,258       1,200,108
                   ---------       ---------       ---------
                   2,444,366       1,244,258       1,200,108
                   ---------       ---------       ---------
</TABLE>

                                                                            F-29

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

<TABLE>
<CAPTION>
                                  ACCUMULATED      NET BOOK
                     COST         AMORTIZATION       VALUE
2003                   $               $               $
--------           ---------      ------------     ---------
<S>                <C>            <C>              <C>
SRE                  523,816         369,346         154,470
Biorem               162,428         111,784          50,644
Gemprint           2,444,366       1,244,258       1,200,108
                   ---------       ---------       ---------
                   3,130,610       1,725,388       1,405,222
                   ---------       ---------       ---------
</TABLE>

      The Company adopted the provisions of SFAS No. 142 effective January 1,
      2002, at which time the amortization of the Company's existing goodwill
      ceased. The goodwill of Gemprint is sustained by using discounted cash
      flows derived from its high gross profit margin of the recurring Gemprint
      fee base.

7. LONG-TERM DEBT

Long-term debt comprises the following:

<TABLE>
<CAPTION>
                                                                             2004          2003
                                                                              $              $
                                                                           -------        -------
<S>                                                                        <C>            <C>
Convertible debenture issued by Gemprint, for Cdn. $286,841
   [2003 - $286,841], bearing interest at 5% per annum.
    The loan has matured and is past due.                                  239,139        221,269

Loans from a Biorem employee to Biorem of Cdn. $nil
   [2003 - $100,000. The loans are payable on demand upon
    the consent f CVF and bear interest at Canadian prime plus 4.0%.            --         77,140

Loans from an SRE officer to SRE of Cdn. $nil
   [2003 - $80,000] and an SRE director of Cdn $nil [2003 -
   $840,000]. Loan terms as outlined below.                                     --        709,688

Loans from a Biorem director to Biorem of Cdn. $nil
    [2003 - $960,420]. Loan terms as outlined below.                            --        740,868

Loan from a SRE director to CVF of Cdn. $nil
   [2003 - $500,000]. Loan terms as outlined below.                             --        385,700

Loan from an unrelated party to CVF of $25,000
   [2003 - $nil]. Loan terms as outlined below.                             25,000             --
</TABLE>

                                                                            F-30

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

7. LONG-TERM DEBT - CONT'D

<TABLE>
<S>                                                          <C>          <C>
Total long-term debt                                          264,139     2,134,665
Less: current portion of long-term debt                            --       (77,140)
   loans past due or in default                              (239,139)     (221,269)
                                                             --------     ---------
LONG-TERM DEBT EXCLUDING CURRENT PORTION AND LOANS PAST
   DUE OR IN DEFAULT                                           25,000     1,836,256
                                                             ========     =========
</TABLE>

Loan from SRE officer - this amount was payable on or before the 1st day of
October, 2004. Should SRE obtain either senior debt financing or equity
financing of at least $1 million prior to October 1, 2004, all outstanding
principal and interest due shall be due and payable as of the closing date of
such financing. The note bears interest at the rate of 12% per annum.

Loan from SRE director - this amount was due on December 31, 2004 and consists
of a convertible term note. Under the conversion terms, $4.00 of indebtedness
can be exchanged for one common share of the Company at the option of the
holder. The note bears interest at 5% per annum, calculated daily, and is
payable at the end of the term.

Loan from Biorem director - this amount is due in September 2006 and consists of
a convertible term note. Under the conversion terms, $1.76 of indebtedness can
be exchanged for one common share of the Company at the option of the holder.
The note bears interest at 10% per annum, and is payable quarterly.

Loan from SRE director - this amount is due in January 2005. The holder also
received 100,000 warrants to purchase CVF common stock at $0.30 per share. The
note bears interest at 10% per annum and is payable at the end of the term.

Loan from an unrelated party - this amount is due in February 2006. The holder
also received 25,000 warrants to purchase CVF common stock at $0.41 per share as
compensation for services. The note bears interest at 10% per annum and is
payable on a quarterly basis.

8. PENSION OBLIGATION

In recognition of past service contributions by a retired executive officer, the
Company has agreed to provide a Cdn. $6,000 [U.S. $5,002 at current exchange
rates] monthly pension benefit for life. The accrued pension obligation
represents the actuarial value of this benefit. This obligation is adjusted
annually based on payments made and changes in actuarial assumptions.

                                                                            F-31

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

9. INCOME TAXES

Details of the income tax (recovery) related to income from continuing
operations are as follows:

<TABLE>
<CAPTION>
                                                                   2004         2003
                                                                     $           $
                                                                ----------   ----------
<S>                                                             <C>          <C>
Current:
   U.S.
        Income taxes on interest income from subsidiary             24,637       82,358
        Capital gains taxes due on sale of subsidiary equity       281,958           --
                                                                ----------   ----------
   Foreign
        Taxes (net of recovery) on operations of subsidiaries       54,000     (134,366)
                                                                ----------   ----------
Total current taxes                                                360,595      (52,008)
                                                                ----------   ----------
Deferred:
   U.S.                                                           (281,958)          --
   Foreign                                                              --     (474,378)
                                                                ----------   ----------
Total deferred taxes                                              (281,958)    (474,378)
                                                                ----------   ----------
INCOME TAX (RECOVERY)                                               78,637     (526,386)
                                                                ==========   ==========

(Loss) income before (recovery of) income taxes:
   U.S.                                                         (2,041,337)  (1,241,810)
   Foreign                                                         177,437   (1,742,468)
                                                                ----------   ----------
(LOSS) BEFORE (RECOVERY OF) INCOME TAXES                        (1,863,900)  (2,984,278)
                                                                ==========   ==========
</TABLE>

No income tax provisions or recoveries are allocable to operations of
discontinued business, or extraordinary items.

The recovery of income taxes differs from the amount computed by applying the
statutory income tax rate to net loss before recovery of income taxes as
follows:

<TABLE>
<CAPTION>
                                                                       2004      2003
                                                                        %         %
                                                                      -----     -----
<S>                                                                   <C>       <C>
U.S. statutory income tax rate                                        (35.0)    (35.0)
                                                                      =====     =====
(Decrease) increase in income tax resulting from:
   Non-deductible equity compensation                                   2.3      (5.8)
   Loss in subsidiaries not recognized for tax purposes                 4.5       9.6
   Recognized tax benefit of subsidiary foreign loss carryforwards       --      17.7
   Foreign translation loss not recognized                             31.2        --
   Other                                                                1.2      (4.1)
                                                                      -----     -----
EFFECTIVE INCOME TAX RATE                                               4.2     (17.6)
                                                                      =====     =====
</TABLE>

                                                                            F-32

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

9. INCOME TAXES - CONT'D

The components of the temporary differences which created the deferred tax
(recovery) provision are as follows:

<TABLE>
<CAPTION>
                                                              2004             2003
                                                               $                $
                                                            --------         --------
<S>                                                         <C>              <C>
Change in:
   Operating Tax loss carryforward, CVF Corporation          229,858         (684,381)
   Operating tax loss carryforward, subsidiaries            (940,361)        (368,355)
   Capital tax loss carryforward, CVF Corporation           (281,958)              --
   Pension obligation                                         14,096           38,043
   Change in accounting principal                                 --           86,444
   Lack of tax basis for technology                          (77,520)        (102,392)
   Other                                                    (115,355)         211,504
   Change in valuation allowance                             889,282          341,759
                                                            --------         --------
                                                            (281,958)        (474,378)
                                                            --------         --------
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities are presented below:

<TABLE>
<CAPTION>
                                                             2004             2003
                                                              $                 $
                                                          ----------       ----------
<S>                                                       <C>              <C>
Deferred tax assets:
U.S.
   Operating tax loss carryforward                         1,150,350          827,319
   Capital loss carry-forward                                475,458          757,416
   Related to pension obligation                             210,431          196,335
   Related to the unrealized loss attributable
        securities available for sale valued at market            --            4,080
   Less: Valuation allowance                              (1,836,239)      (1,785,150)
                                                          ----------       ----------
                                                                  --               --
                                                          ----------       ----------
Deferred tax liabilities:
U.S.
   Related to lack of tax basis for technology                    --           77,520
   Investment & notes in investees                           241,892          291,046
                                                          ----------       ----------
                                                             241,892          368,566
                                                          ----------       ----------
NET DEFERRED TAX (LIABILITY)                                (241,892)        (368,566)
                                                          ==========       ==========
Deferred tax assets:
Foreign
   Income tax losses available for carryforward in
    subsidiaries                                           2,027,961        3,497,702
   Less: Valuation allowance                              (2,027,961)      (2,968,332)
                                                          ----------       ----------
NET DEFERRED TAX ASSET - FOREIGN                                  --          529,370
                                                          ==========       ==========
</TABLE>

                                                                            F-33

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

9. INCOME TAXES - CONT'D

At December 31, 2004, the Company has losses available for carryforward in
certain of its Canadian subsidiaries of approximately $5,794,200 [$11,698,000 in
2003] available to reduce future years' income for tax purposes in these
subsidiaries. These losses expire as follows:

<TABLE>
<CAPTION>
                                                    $
                                                ---------
<S>                                             <C>
2005                                            1,411,300
2006                                            2,451,100
2007                                              785,900
2008                                              557,700
Beyond                                            588,200
                                                ---------
                                                5,794,200
                                                =========
</TABLE>

At December 31, 2004, the Company has U.S. net operating losses available for
carryforward of approximately $3,109,000 available to reduce future years'
income for tax purposes, which expire in the years 2022 through 2024. In
addition there are capital loss carryforwards of approximately $1,398,000 with
no expiration.

10. STOCKHOLDERS' EQUITY

[a]   COMMON SHARES

      Holders of the common shares are entitled to one vote per share on each
      matter submitted to vote at any meeting of the shareholders. Common shares
      do not carry cumulative voting rights, and, therefore, holders of a
      majority of the outstanding shares of common shares will be able to elect
      the entire Board of Directors, and, if they do so, minority shareholders
      would not be able to elect any members to the Board of Directors. The
      Company's Board of Directors has authority, without the action by the
      Company's shareholders, to issue all or any portion of the authorized but
      unissued common shares, which would reduce the percentage ownership of the
      Company of its shareholders and which may dilute the book value of the
      common shares. Dividends declared on the common shares are payable in U.S.
      dollars.

      In 2004, the Company issued 74,362 shares of its common stock in
      consideration of consultation services to the Company. Also in 2004, the
      Company issued 606,061 shares of its common stock to an outside investor
      for consideration of $200,000.

      In 2003, the Company issued 92,593 shares of its common stock in
      consideration of legal services to the Company. Also in 2003, the Company
      issued 149,500 shares of its common stock to an officer/director and to
      the wife of an officer/director for total cash consideration of $26,131.

                                                                            F-34
<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

10.   STOCKHOLDERS' EQUITY - CONT'D

[b]   PREFERRED STOCK

      Preferred shares may be issued in one or more series as may from time to
      time be determined by the Board of Directors. Each series shall be
      distinctly designated.

      REDEEMABLE SERIES A PREFERRED STOCK

      The Company currently has outstanding a series of non-voting Preferred
      Stock designated as Series "A" Preferred Stock ["Series A Preferred"].
      Each share of Series A Preferred has a stated value [the "Stated Value"]
      of the U.S. dollar equivalent of Cdn. $25 determined at the date of
      issuance. The holders of Series A Preferred are entitled to cumulative
      dividends at the rate of 5% annually of the Stated Value plus accrued but
      unpaid dividends, to be paid in U.S. dollars. The dividends have priority
      over any payments of dividends on common shares and on all other shares of
      preferred stock ranking junior to the Series A Preferred.

      The Company may, at its option and at any time, redeem all or part of the
      Series A Preferred from the holders thereof. Additionally, at any time
      after August 20, 2000, a holder of the Series A Preferred may require the
      Company to redeem any or all of the Series A Preferred held by such
      holder. The redemption price shall be the Stated Value plus all accrued
      but unpaid dividends. In light of the mandatory redemption feature, the
      preferred stock is classified outside of permanent equity. As at December
      31, 2004, an amount of $23,097 [$20,001 at December 31, 2003] has been
      accrued in respect of cumulative unpaid dividends.

      SERIES B & C CONVERTIBLE PREFERRED STOCK

      In February 2004 the Company's outstanding Series B Convertible Preferred
      Stock was restructured in a transaction agreed to with the holder of this
      stock. The holder exchanged its Series B Convertible Preferred Stock with
      a stated value of $3,385,000 and accrued dividends of approximately
      $673,600 for 1,000,000 shares of the Company's common stock and a new
      Series C 6% Convertible Preferred Stock with a stated value of $1,000,000,
      convertible into common stock at $1 per share. The Series C Preferred will
      be subject to mandatory redemption on February 27, 2006; however, the
      Company's obligation to redeem will be limited to cash available to it at
      that time in excess of one year's prospective working capital. The Company
      also issued to the former Series B holder a three-year warrant to purchase
      100,000 shares of the Company's common stock at an exercise price of $0.35
      per share.

                                                                            F-35

<PAGE>


CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

10.   STOCKHOLDERS' EQUITY CONT'D

[c]   WARRANTS

      There are 1,132,784 Warrants outstanding at December 31, 2004 [1,132,784
      at December 31, 2003].

      There were 125,000 warrants issued during the year. See notes 7 and 10(b).
      Compensation expense was recorded for the 25,000 warrants issued to the
      debt holder for services rendered valued at $4,620.

[d]   COMPREHENSIVE INCOME (LOSS)

      SFAS 130 requires unrealized gains or losses on the Company's
      available-for-sale securities and foreign currency translation adjustments
      to be included in other comprehensive income.

      Disclosure of accumulated balances related to each component of other
      comprehensive income (loss) is as follows:

<TABLE>
<CAPTION>
                                           UNREALIZED                  ACCUMULATED
                                         GAINS (LOSSES)    FOREIGN        OTHER
                                         ON SECURITIES     CURRENCY   COMPREHENSIVE
                                          [NET OF TAX]   TRANSLATION  INCOME (LOSSES)
                                                $             $              $
                                         --------------  -----------  ---------------
<S>                                      <C>             <C>          <C>
BALANCE - DECEMBER 31, 2002                  13,563      (1,080,152)    (1,066,589)

Current year other comprehensive (loss)      (9,054)       (674,648)      (683,702)
                                             ------      ----------     ----------
BALANCE - DECEMBER 31, 2003                   4,509      (1,754,800)    (1,750,291)

Current year other comprehensive (loss)          32       1,340,665      1,340,697
                                             ------      ----------     ----------
BALANCE - DECEMBER 31, 2004                   4,541        (414,135)      (409,594)
                                             ======      ==========     ==========
</TABLE>

                                                                            F-36

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

10.   STOCKHOLDERS' EQUITY - CONT'D

[d]   COMPREHENSIVE INCOME (LOSS) - CONT'D

      The details of unrealized holding gains and losses included in
      comprehensive income net of reclassification adjustments are as follows:

<TABLE>
<CAPTION>
             GAINS        (LOSSES)         TAXES          NET
               $              $              $             $
             -----        --------         -----        ------
<S>          <C>          <C>              <C>          <C>
2003            --        (15,242)         6,188        (9,054)
2004            54             --            (22)           32
</TABLE>

11.   LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per
share:

<TABLE>
<CAPTION>
                                                          2004            2003
                                                           $               $
                                                       ----------      ----------
<S>                                                    <C>             <C>
Numerator:
  Net (loss)                                           (1,863,286)     (2,286,606)
  Dividends on Series A preferred stock                    (3,096)         (3,173)
  Dividends on Series B preferred stock                        --        (338,500)
                                                       ----------      ----------
  Numerator for basic and diluted (loss) per share
     (loss) attributable to common stockholders        (1,866,382)     (2,628,279)
                                                       ----------      ----------
Denominator:
  Denominator for basic and diluted (loss) per
     share - weighted average shares outstanding       12,521,856      10,749,035

                                                       ----------      ----------

Basic and diluted (loss) per share                          (0.15)          (0.24)
                                                       ----------      ----------
</TABLE>

                                                                            F-37

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

12.   BUSINESS AQUISITION AND SUPPLEMENTARY SUBSIDIARY INFORMATION

[a]   GEMPRINT

      During 2000, the Company sold a portion of its holdings in Gemprint to a
      corporation formed for the benefit of certain Gemprint employees. The sale
      involved 5,614,743 common shares of Gemprint reducing CVF's interest from
      73% to 56.1%. Consideration received was a demand promissory note in the
      amount of $333,600 [Cdn. $500,000], bearing interest at 5% per annum.

      Pursuant to SEC Staff Accounting Bulletin Topic 5E, the Company will
      recognize the gain/loss from this transaction when the related note has
      been paid.

      In addition to Class A voting shares [common], Gemprint has issued Class B
      and C voting shares which have cumulative dividend rates of 10%, are
      retractable by the holder at face value plus dividends in arrears, and are
      convertible to Class A common shares on a one-to-one basis. The Class B
      shares held by third parties have been classified as a liability at
      December 31, 2004 Cdn. $250,000, U.S. $208,425 [at December 31, 2003 Cdn.
      $250,000, U.S. $192,850]. The remaining Class B and all of the Class C
      shares are held by CVF. The timing of these retractions are restricted to
      specific time periods and Gemprint has received a notice to retract Cdn.
      $250,000 by a third-party investor. Cumulative dividends payable to
      third-party investees of $634,446 [$529,180 in 2003] have been accrued in
      these consolidated statements and included in trade payables and accrued
      liabilities.

[b]   PREFERRED AND NON-VOTING STOCK OF SUBSIDIARIES

      Preferred and other non-voting stock of subsidiaries includes the
      following:

<TABLE>
<CAPTION>
                                             2004        2003
                                              $           $
                                           -------     -------
<S>                                        <C>         <C>
Gemprint Class B and C voting shares       208,425     192,850
                                           -------     -------
                                           208,425     192,850
                                           =======     =======
</TABLE>

                                                                            F-38

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

13.   STOCK BASED COMPENSATION

During 2004, the Company granted nil [505,000 in 2003] stock options to certain
officers, employees and directors. The exercise price of all options issued was
equal to the market value of the underlying stock on the date on which options
were granted.

During 2002, the Compensation Committee of the Board of Directors approved an
adjustment to the exercise price for all options held by employees, including
executive officers, as well as certain consultants. The revised exercise price
was established by reference to the closing bid price of the Company's common
stock on April 16, 2002, which was $0.16. Options to purchase approximately
1,415,500 shares of common stock were repriced. The repriced options are all
fully vested. These options are subject to variable plan accounting using the
intrinsic value method. As the Company's stock as at December 31, 2004 was $0.48
($0.41 at December 31, 2003), and 1,260,000 shares of the repriced options as
well as 200,000 of the options granted in 2003 were exercised during 2004
additional compensation expense of $211,474 ($351,250 in 2003) was recorded.

The following is a summary of stock option activity:

<TABLE>
<CAPTION>
                                                  WEIGHTED
                                                  AVERAGE
                                                  EXERCISE
                                                   PRICE
                                       SHARES        $
                                     ----------   --------
<S>                                  <C>          <C>
Outstanding December 31, 2002         1,405,000      0.16
                                     ----------     -----
   Granted during the year              505,000      0.30
   Expired during the year                   --        --
                                     ----------     -----
Outstanding December 31, 2003         1,910,000      0.20
                                     ----------     -----
   Granted during the year                   --        --
   Expired during the year                   --        --
   Exercised during the year         (1,460,000)    (0.18)
                                     ----------     -----
OUTSTANDING DECEMBER 31, 2004           450,000      0.25
                                     ----------     -----
</TABLE>

                                                                            F-39

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

13.   STOCK BASED COMPENSATION - CONT'D

There were no stock options issued in 2004 by the Company.

The following table summarizes information about options outstanding and
exercisable at December 31, 2004:

<TABLE>
<CAPTION>
                                       Outstanding and Exercisable
                           ---------------------------------------------------
                                           Weighted-    Weighted-
                                            average      Average
                              Number    remaining life   Exercise    Number
                           Outstanding     in years       Price    Exercisable
                           -----------  --------------  ---------  -----------
<S>                        <C>          <C>             <C>        <C>
Range of exercise prices:
$0.16                        145,000         2.29         $ 0.16     145,000
$0.30                        305,000         5.67           0.25     305,000
                             -------                                 -------
                             450,000                                 450,000
                             =======                                 =======
</TABLE>

Certain of the Company's subsidiaries have outstanding compensatory options
granted to employees and directors, as described below. In the event the options
granted by its subsidiaries are exercised, the Company's interest in those
subsidiaries will be diluted. A summary of the stock options and shares
outstanding at December 31, 2004 for those consolidated entities which have
issued options are as follows:

[a]   A total of 3,193,831 options to purchase shares of Gemprint are
      outstanding, 3,193,831 of which are exercisable at December 31, 2004.
      These options have a weighted average price of Cdn. $0.05 per share which
      were repriced during 2003 from $0.20 per share. Of the options
      outstanding, none were granted in 2003 or 2002. Gemprint has a total of
      47,653,161 shares outstanding as at December 31, 2004. These options are
      now subject to variable plan accounting using the intrinsic value method.
      No additional compensation expense was recorded in 2004, since there was
      no intrinsic value with these options at December 31, 2004.

[b]   A total of 2,000,615 options to purchase shares of Biorem, subject to
      certain future events, are outstanding as of December 31, 2004. , These
      options are all exercisable. These options have a weighted average
      exercise price of Cdn. $0.61 per share. Up to 1,187,002 option shares were
      granted to the employees of the company, subject to the finalization of
      the future events and the previous options granted were repriced at $0.40
      per share. Biorem has a total of 2,224,150 shares outstanding as at
      December 31, 2004. These options are now subject to variable plan
      accounting using the intrinsic value method. An additional $420,844 of
      additional compensation expense was recorded for 2004, ($144,200 for 2003)
      the estimated intrinsic value of such 503,000 repriced options.

                                                                            F-40

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

14.   SEGMENTED INFORMATION

The Company has five reportable segments: bioremediation, machine controls,
precious gem identification, natural fertilizer, and general corporate. The
bioremediation segment consists of one company that is engaged in bioconversion
and biotransformation of industrial contamination of soil or groundwater. The
machine controls segment consists of one company that designs, manufactures and
sells electric motor controls to machine manufacturers. The gem identification
segment consists of one company that has developed identification and database
systems, and markets its products and services to the companies in the precious
gem business, including producers, cutters, distributors and retailers. The
natural fertilizer segment consists of one company that develops, manufactures
and markets natural fertilizers, insecticides and herbicides. The Company's
general corporate segment provides funding and management overview services to
the holdings. This segment's results also include interest income and expense,
and gains and losses on sales of its various holdings.

Segment assets consist of capital assets and goodwill.

The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes, depreciation, and research and
development. The accounting policies of the reportable segments are the same as
those described in the summary of significant accounting policies.

There are no intersegment sales, transfers or profit or loss.

The Company's reportable segments are business units that offer different
products and services. The reportable segments are each managed separately
because they develop, manufacture and distribute different products and
services.

The basis for attributing revenues from external customers to individual
countries is the location of the customer. Virtually all of the long-lived
assets of the Company are located in Canada.

Consistent with the nature and business plans of the Company, many of its
subsidiaries and equity holdings are dependent on the general corporate segment
for funding to enable them to meet their business objectives.

                                                                            F-41

<PAGE>

CVF TECHNOLOGIES CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31                              [Expressed in U.S. Currency]

14.   SEGMENTED INFORMATION - CONT'D

<TABLE>
<CAPTION>
                                                      MACHINE  IDENTIFICATION    NATURAL     CORPORATE
                                     BIOREMEDIATION  CONTROLS     SYSTEMS      FERTILIZER  ADMINISTRATION    TOTAL
2004                                        $            $           $              $             $            $
-------------------------------      --------------  --------  --------------  ----------  --------------  ----------
<S>                                  <C>             <C>       <C>             <C>         <C>             <C>
SALES                                  6,691,686      411,357      622,729       231,903             --     7,957,675
                                       ---------     --------    ---------      --------     ----------    ----------
Income (loss) from operations
 before depreciation and
  research and development               833,472     (114,615)    (163,008)     (208,170)    (1,509,644)   (1,161,965)
Depreciation                              43,500        6,403       11,888         1,340          1,546        64,677
Research and development                 269,695       89,538           --            --             --       359,233
                                       ---------     --------    ---------      --------     ----------    ----------
Income (loss) from operations
 before other income (expenses)          520,277     (210,556)    (174,896)     (209,510)    (1,511,190)   (1,585,875)
Interest income                               --           --          282            --         89,760        90,042
Interest (expense)                      (253,377)      (8,174)     (88,495)         (883)       (73,477)     (424,406)
Other income (expense)                  (148,061)     (15,539)      30,134        74,781         28,856       (29,829)
Income from equity investees                  --           --           --            --        178,885       178,885
Gain on sale of holdings                      --           --           --            --      1,569,788     1,569,788
Realized translation loss                     --           --           --            --     (1,662,505)   (1,662,505)
                                       ---------     --------    ---------      --------     ----------    ----------
Segment income (loss) before
 (recovery) of income taxes              118,839     (234,269)    (232,975)     (135,612)    (1,379,883)   (1,863,900)
                                       ---------     --------    ---------      --------     ----------    ----------
(Recovery) of income taxes               198,929           --           --      (144,929)        24,637        78,637
                                       ---------     --------    ---------      --------     ----------    ----------
Net income (loss)                        (80,090)    (234,269)    (232,975)        9,317     (1,404,520)   (1,942,537)
Minority interest                             --           --       79,251            --             --        79,251
                                       ---------     --------    ---------      --------     ----------    ----------
NET INCOME (LOSS) FROM
 CONTINUING OPERATIONS                   (80,090)    (234,269)    (153,724)        9,317     (1,404,520)   (1,863,286)
                                       =========     ========    =========      ========     ==========    ==========
Depreciation and amortization             43,500        6,403       11,888       229,429          1,546       292,766
Capital expenditures                    (253,059)    (325,554)      (1,387)           --         (2,892)     (582,892)
Segment assets                                --           --    1,249,687            --          1,790     1,251,477
Segment goodwill (included in
 segment assets)                              --           --           --            --             --            --
Segment technology (included in
 segment assets)                              --           --           --            --             --            --
</TABLE>

                                                                            F-42

<PAGE>

CVF TECHNOLOGIES CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31                              [Expressed in U.S. Currency]

14.   SEGMENTED INFORMATION - CONT'D

<TABLE>
<CAPTION>
                                                     MACHINE   IDENTIFICATION    NATURAL       CORPORATE
                                   BIOREMEDIATION   CONTROLS      SYSTEMS      FERTILIZER   ADMINISTRATION     TOTAL
2003                                      $             $            $              $              $             $
-------------------------------    --------------  ----------  --------------  ----------   --------------  ----------
<S>                                <C>             <C>         <C>             <C>          <C>             <C>
SALES                                6,189,488      1,518,323      712,592       283,666              --     8,704,069
                                     ---------     ----------    ---------      --------      ----------    ----------
Income (loss) from operations
 before depreciation
   and research and development      1,142,041       (659,278)     (69,241)     (672,194)     (1,831,922)   (2,090,594)
Depreciation                            23,237         15,281        7,564            --           5,172        51,254
Research and development               168,505        278,555        8,392        49,161              --       504,613
                                     ---------     ----------    ---------      --------      ----------    ----------
Income (loss) from operations
 before other income (expenses)        950,299       (953,114)     (85,197)     (721,355)     (1,837,094)   (2,646,461)
Interest income                             --             --        2,463            --           3,422         5,885
Interest (expense)                     (90,436)       (20,015)     (82,591)           --         (59,214)     (252,256)
Other income (expense)                  (1,204)       (66,309)      11,447       195,614        (229,374)      (89,825)
(Loss) gain on sale of holdings             --             --           --            --          (1,621)       (1,621)
                                     ---------     ----------    ---------      --------      ----------    ----------
Segment income (loss) before
 (recovery) of income taxes            858,659     (1,039,438)    (153,878)     (525,741)     (2,123,881)   (2,984,278)
                                     ---------     ----------    ---------      --------      ----------    ----------
(Recovery) of income taxes            (474,378)            --           --      (134,389)         82,381      (526,386)
                                     ---------     ----------    ---------      --------      ----------    ----------
Net income (loss)                    1,333,037     (1,039,438)    (153,878)     (391,352)     (2,206,262)   (2,457,892)
Minority interest                           --         74,288       96,998            --              --       171,286
                                     ---------     ----------    ---------      --------      ----------    ----------
NET INCOME (LOSS) FROM
 CONTINUING OPERATIONS               1,333,037       (965,150)     (56,880)     (391,352)     (2,206,262)   (2,286,606)
                                     =========     ==========    =========      ========      ==========    ==========

Depreciation and amortization           23,237         15,281        7,564       384,836           5,172       436,090
Capital expenditures                    27,161          5,668         (440)           --              --        32,389
Segment assets                         152,366        212,348    1,258,548       229,340           1,509     1,854,111
Segment goodwill (included in
 segment assets)                        50,644        154,470    1,200,108            --              --     1,405,222
Segment technology (included in
 segment assets)                            --             --           --       228,001              --       228,001
</TABLE>

                                                                            F-43

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

15.   COMMITMENTS

The Company leases office equipment and property under operating leases expiring
in various years through 2005.

Minimum future rental payments under non-cancelable operating leases having
remaining terms in excess of one year as of December 31, 2004 for each of the
next four years and in aggregate are:

<TABLE>
<CAPTION>
      YEAR ENDED DECEMBER 31                  $
------------------------------------       ------
<S>                                        <C>
2005                                       33,153
2006                                           --
2007                                           --
2008                                           --
Beyond                                         --
                                           ------
TOTAL MINIMUM FUTURE RENTAL PAYMENTS       33,153
                                           ======
</TABLE>

Rental expense for the year was $142,073 [$195,750 for 2003].

16.   CONTINGENCIES

The Company is currently under an audit by the Internal Revenue Service ("IRS").
As part of the routine audit, the IRS indicated that they reviewed the treatment
of capital losses claimed in the prior year and refunds of $2,532,000 received
in 2001. A proposed deficiency in federal income tax was issued by the IRS on
December 1, 2003 totaling $2,969,123. On February 5, 2004 CVF issued a formal
protest to the proposed deficiency and its protest has now gone before appeals
at the IRS. If it is not resolved at the appeals level of the IRS, CVF intends
to challenge the IRS ruling in federal tax court, as CVF and its legal counsel
strongly believes its original deductions were correctly taken. This process
could take up to 6 to 24 more months to be resolved.

The Company is involved from time to time in other litigation, which arises in
the normal course of business. In respect of these claims the Company believes
it has valid defenses and/or appropriate insurance coverage in place. Management
has accrued its estimate of costs associated with this audit. In management's
judgment, no material exposure exists on the eventual settlement of such
litigation.

                                                                            F-44

<PAGE>

CVF TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ending December 31, 2004 and 2003     [Expressed in U.S. Currency]

17.   LOANS RECEIVABLE

Loans receivable pertain to loans advanced to certain Company officers. The
loans are denominated in Canadian dollars, and bear an effective interest rate
of 6%. These loans have no repayment terms.

18.   RELATED PARTY TRANSACTIONS

CVF entered into a Service Agreement dated October 2, 2001 with Michael Dreben,
the son of Jeffrey I. Dreben, CVF's President, Chairman and Chief Executive
Officer. Pursuant to the Service Agreement, Michael Dreben will identify,
analyze and assist in sourcing funding and merger and acquisition opportunities
for CVF and the Corporations. The Service Agreement also entitles Michael Dreben
to receive a cash fee upon the closing of such funding and merger and
acquisition opportunities. During 2004 Michael Dreben received a fee totaling
$79,503 and 50,000 stock option shares of Biorem as his fee for sourcing one of
the investors in Biorem during 2004. Michael Dreben receives an annual salary of
$106,000 and has not received any additional warrants, options or shares. The
Service Agreement terminates upon 30 days' prior written notice by either party.

19.   SUBSEQUENT EVENTS-(UNAUDITED)

Biorem - In January 2005 Biorem completed its going public transactions and
began trading on the Toronto Venture Exchange effective Friday, January 21, 2005
under the symbol BRM. CVF's ownership position in Biorem is approximately 3.5
million shares of Biorem Inc. representing approximately 35% of the outstanding
shares of Biorem.

SRE - On March 11, 2005, a secured creditor of SRE Controls Inc. called a
$550,000 cdn secured demand note and appointed a receiver to administer the
Company. The assets of SRE are estimated by the receiver at $902,000 Cdn while
the total due creditors (secured and unsecured) is estimated at $1,600,000 Cdn.
On March 31, 2005 a bankruptcy filing was filed in the office of the
Superintendent of Bankruptcy Canada. The first meeting of creditors has been set
for April 15, 2005.

CVF is currently examining its various options as a result of the action by this
creditor which may include bidding on the assets claimed by the creditor. There
is no assurance that CVF will be successful in such a bid in which case CVF's
equity portion in SRE would only have nominal value. CVF currently carries SRE
in its books at zero value.

                                                                            F-45
<PAGE>

ITEM  8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Previously reported.

ITEM  8A   CONTROLS AND PROCEDURES

      (a)   The Company carried out an evaluation, under the supervision and
            with the participation of the Company's management, including the
            Company's Chief Executive Office and Chief Financial Officer, of the
            effectiveness of the design and operation of the Company's
            disclosure controls and procedures. Based upon that evaluation, the
            Company's Chief Executive Officer and Chief Financial Officer
            concluded that the Company's disclosure controls and procedures are
            effective as of the period covered by this report. Disclosure
            controls and procedures are controls and procedures that are
            designed to ensure that information required to be disclosed in
            Company reports filed or submitted under the Exchange Act is
            recorded, processed, summarized and reported within the time periods
            specified in the SEC rules and forms.

      (b)   There have been no changes in the Company's internal control over
            financial reporting in the last fiscal quarter that has materially
            affected or is reasonably likely to materially affect the Company's
            internal control over financial reporting.

PART III

ITEM  9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

(a)   Directors and Executive Officers

The directors and executive officers of CVF are as follows:

<TABLE>
<CAPTION>
NAME                    AGE      POSITION
-----------------       ---      --------------------------------------------
<S>                     <C>      <C>
Jeffrey I. Dreben        59      Director; Chairman, Chief Executive
                                 Officer; and President
Robert B. Nally          57      Director; Chief Operating Officer, Chief
                                 Technology Officer, Secretary; and Treasurer
Robert L. Miller         53      Chief Financial Officer
Robert H. Glazier        56      Director
</TABLE>

Jeffrey I. Dreben has been President, Chief Executive Officer and Director of
the Company since September 1995. From 1989 until September 1995, Mr. Dreben was
Vice President and Treasurer of Canadian Venture Founders Management Limited
("CVF Management") and was its original founder. Mr. Dreben has been working in
the investment industry since 1979, beginning his career with Merrill Lynch and
subsequently founding his own firm. Mr. Dreben has been working in the venture
capital industry in the United States and Canada since 1985. Mr. Dreben received
an Honors Bachelor of Arts degree from Loyola College of the University of
Montreal.

Robert B. Nally has been Secretary, Treasurer and Director of CVF since
September 1995. From 1989 until 1995, Mr. Nally was Vice President and Secretary
of CVF Management and one of its cofounders. Prior to that time, Mr. Nally
provided commercial development consulting services to the University of
Waterloo as Technology Transfer and Commercial Development Officer. Prior to
joining the University of Waterloo, he worked for NCR Canada, LTD. for 10 years
as Manager of Strategic Planning and New Business Development and Director of
Engineering. He earned a Bachelor of Science degree in electrical engineering
and a Master of Science degree from the University of Waterloo.

Robert L. Miller has been Chief Financial Officer of CVF since June 1999. Mr.
Miller was previously Vice President of Finance/Controller for U.S. Appraisal,
Inc., a national real estate appraisal firm. Prior to that he was with Pratt &
Lambert United, Inc. for seventeen years, most recently as Vice
President/Controller of

<PAGE>

their Consumer Group. From 1973 to 1979 he was with KPMG Peat Marwick in
Buffalo, New York. Mr. Miller, a New York State Certified Public Accountant has
a Bachelor of Science degree from Fairleigh Dickinson University.

Robert H. Glazier has been an outside Director of CVF since January 1998. Mr.
Glazier is founder, President and CEO of Donatech Corporation, an Iowa-based
computer software consulting company. Before founding Donatech in 1986, Mr.
Glazier was a manager on the Cruise Missile Program with General Dynamics
Corporation for 3 years. He also held management positions at Oak Industries,
California. Mr. Glazier holds a Masters Degree in Engineering from the
University of California Berkley and a Bachelors degree in Engineering from
Purdue University.

The members of the Company's audit committee are Messrs. Dreben and Glazier.
Although all members of the Company's audit committee are financially literate
and have substantial experience with analyzing and evaluating financial
statements, the Board of Directors has determined that no one member has all of
the attributes necessary to qualify as an audit committee financial expert as
defined by the SEC. The Company believes the audit committee has sufficient
expertise to perform its functions notwithstanding the absence of an audit
committee financial expert. Furthermore, the Company believes it would be
impractical to add a member to the audit committee who would qualify as such an
expert given the Company's small size and the limited resources it possesses to
compensate such an expert.

CVF has adopted a Code of Business Conduct and Ethics covering its financial
officers and CEO. Interested parties can write to the Company at its
Williamsville, New York office to obtain a copy at no cost.

Section 16(a) Beneficial Ownership Reporting Compliance

During the fiscal year 2004 none of the officers and directors of CVF were late
in filing a report under section 16(a) of the Exchange Act.

ITEM 10 EXECUTIVE COMPENSATION

The following is a summary of the remuneration paid to the chief executive
officer and all other executive officers and others whose total annual salary
and bonus exceeds $100,000 for the period ended December 31, 2004 (the "Named
Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                      Long Term Compensation
                                         Annual Compensation              Awards Payout
                                         --------------------   ---------------------------------
                                                                Restricted   Securities
Name and            Year                         Other Annual      Stock     Underlying    LTIP      All Other
Principal          Ended    Salary       Bonus   Compensation    Award(s)   Options/SARs  Payouts  Compensation
Position           Dec 31      $           $          $             $           (#)          $          $
-----------------  ------  ---------     -----   ------------   ----------  ------------  -------  ------------
<S>                <C>     <C>           <C>     <C>            <C>         <C>           <C>      <C>
Jeffrey I. Dreben   2004   $ 136,000     $   0       $ 0           $ 0              -       $ 0        $ 0
  CEO and           2003   $ 136,000     $   0       $ 0           $ 0        100,000       $ 0        $ 0
  President         2002   $ 162,167     $   0       $ 0           $ 0              -       $ 0        $ 0

Robert B. Nally     2004   $ 163,492(1)  $   0       $ 0           $ 0              -       $ 0        $ 0
  COO, CTO,         2003   $ 151,988(2)  $   0       $ 0           $ 0        100,000       $ 0        $ 0
  Secretary and     2002   $ 134,920(3)  $   0       $ 0           $ 0              -       $ 0        $ 0
  Treasurer
</TABLE>

(1)   Paid in Canadian currency but translated in the table to U.S. Currency.
      Based on the average exchange rate for 2004 of CND $1 = US $.7717

(2)   Paid in Canadian currency but translated in the table to U.S. Currency.
      Based on the average exchange rate for 2003 of CND $1 = US $.7174

(3)   Paid in Canadian currency but translated in the table to U.S. Currency.
      Based on the average exchange rate for 2002 of CND $1 = US $.6368

<PAGE>

AGGREGATED OPTION/SAR EXERCISE AND FISCAL YEAR END OPTION/SAR VALUE TABLE

<TABLE>
<CAPTION>
                                                                    Value of
                                                                  Unexercised
                                               Unexercised       In-the-money
                                                Options at         Options at
                      Shares                   Dec. 31, 2004     Dec. 31, 2004
                     Acquired      Value       Exercisable/       Exercisable/
Name                On Exercise   Realized     Unexercisable     Unexercisable
------------------  -----------   --------    --------------     ---------------
<S>                 <C>           <C>         <C>                <C>
Jeffrey I. Dreben       NIL         NIL        100,000/NIL        $18,000/NIL
Robert B. Nally         NIL         NIL            NIL/NIL            NIL/NIL
</TABLE>

Director's Fees. CVF does not currently pay any additional fees to the directors
who are also officers of or consultants to CVF except as disclosed below. See
"Certain Transactions and Relationships." Mr. Glazier, appointed a director of
CVF in January 1998, is entitled to receive $750 per Board of Directors meeting
attended in person and $375 per telephonic Board meeting in which he
participates. Messr Glazier received options during 2003 to purchase 100,000 CVF
common shares at an exercise price of $.30.

Change of Control Agreements. Messrs. Dreben and Nally are each a party to a
change of control agreement with CVF. These agreements provide that in the event
the executive's employment is terminated or the executive terminates employment
for good reason, in either case, within the three year period following a change
of control of CVF, then CVF is obligated to provide the executive (i) his
average annual base salary or consulting fees and bonuses during the five years
preceding the change of control for a continuing period of three years, (ii) up
to $25,000 for outplacement services, (iii) up to three years of continuing
benefits in effect on the date of the change of control, and (iv) immediate
vesting and extension of exercisability of any options or restricted stock.
Under these agreements, a "change of control" occurs on (i) the sale of all or
substantially all of CVF's assets, (ii) any person becoming the owner of more
than 20% of CVF's voting stock, (iii) the first day on which a majority of
directors of CVF are not directors in office on the date of the agreement,
directors nominated by such in-office directors or directors nominated by any
directors so nominated, or (iv) the first day on which Messrs. Dreben and Nally
constitute less than 50% of the board of directors. Under these agreements,
"good reason" means (i) the assignment to the executive of duties inconsistent
with his position or any diminishment of his position, authority or duties, (ii)
requiring the executive to be based in a location other than where he was based
prior to the change of control or requiring excess or inappropriate travel,
(iii) any purported termination of any employment or consulting arrangement
between the executive and CVF, or (iv) any failure by CVF or any successor to
comply with and satisfy the terms of the services agreement between CVF and D
and N Consulting. This description is just a summary. See exhibit 10 (iv) to
this Annual Report for a complete copy of the form of change of control
agreements.

<PAGE>

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Voting Securities and Principal Holders

The following table sets forth, as of March 9, 2005, the approximate number of
common shares of CVF owned of record or beneficially by each person who owned of
record, or was known by CVF to own beneficially, more than 5% of CVF's common
stock and the name and shareholdings of each officer and director, and all
officers and directors as a group.

<TABLE>
<CAPTION>
                                                NUMBER OF      PERCENTAGE OF
                                              COMMON SHARES    COMMON SHARES
NAME AND ADDRESS                           BENEFICIALLY OWNED      OWNED
-----------------------------------        ------------------  -------------
<S>                                        <C>                 <C>
Jeffrey I. Dreben (1)                             795,774           5.6%
8604 Main Street, Suite 1
Williamsville, NY 14221

Robert B. Nally (2)                               672,872           4.8%
8604 Main Street, Suite 1
Williamsville, NY 14221

Robert L. Miller (3)                              131,190            .9%
8604 Main Street, Suite 1
Williamsville, NY 14221

Robert H. Glazier (4)                             152,941           1.1%
8604 Main Street, Suite 1
Williamsville, NY 14221

The Shaar Fund Ltd. (5)                         1,365,877           9.6%
c/o Citco Funds Services, Curacao
Kaya Flamboyan 9
Curacao, Netherland Antilles

Directors and Officers                          1,752,777          12.4%
as a Group (4 persons) (1)(2)(3)(4)
</TABLE>

(1)   Mr. Dreben's amount includes 100,000 to acquire CVF's common shares at an
option price of $0.30, Included under Mr. Dreben are 695,774 shares owned by his
wife as to which he disclaims beneficial ownership.

(2)   Mr. Nally's amount includes 149,144 shares owned by his wife as to which
he disclaims beneficial ownership.

(3)   Mr. Miller's amount includes 60,000 to acquire CVF's common shares at an
option price of $0.30.

(4)   Mr. Glazier's amount includes 100,000 to acquire CVF's common shares at an
option price of $0.30.

(5)   Based solely on a Schedule 13G dated January 31, 2005 filed with the SEC.

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Service Agreement with D and N Consulting. CVF entered into a Service Agreement
dated February 10, 1997 with D and N Consulting Corporation ("D and N"),
(replacing a similar agreement it had with CVF Inc. from September 1995)
pursuant to which D and N is to provide a variety of administrative, managerial
and clerical services to CVF. Under the Service Agreement, D and N would be
responsible for all administrative requirements of CVF, including, but not
limited to, maintaining the books of CVF, preparing periodic reports to the
Board of Directors of CVF and providing office facilities and travel expenses.
In return for the above services, D and N is to be paid a service fee based on
an annual budget prepared by D and N and approved by the Board of Directors of
CVF. In May, 2002 the Service Agreement was replaced by a new Service Agreement
dated May 1, 2002 containing substantially the same terms and conditions as the
prior agreement and expiring May 27, 2005. The new

<PAGE>

Service Agreement renews automatically for successive one year periods
thereafter unless either party provides 12-months prior written notice of
non-renewal. Upon a change in control of CVF, the term of the Service Agreement
is automatically extended for an additional period of five years. Messrs. Dreben
and Nally are each officers and 50% shareholders of D and N. CVF and D and N
have mutually agreed to defer operation of the Service Agreement. Instead, the
services continue to be provided by officers, employees and consultants of CVF.
CVF has neither paid nor accrued service fees under the Service Agreement. D and
N Consulting maintains the right to begin the operation of the Service Agreement
at any time. A failure by CVF or any successor to comply with its obligations
under the Services Agreement following a change in control shall constitute
grounds for Messr. Dreben or Nally to terminate employment and invoke the
benefits of their change in control agreements described above.

Services Agreement with Michael Dreben. CVF entered into a Service Agreement
dated October 2, 2001 with Michael Dreben, the son of Jeffrey I. Dreben, CVF's
President, Chairman and Chief Executive Officer. Pursuant to the Service
Agreement, Michael Dreben will identify, analyze and assist in sourcing funding
and merger and acquisition opportunities for CVF and the Corporations. The
Service Agreement also entitles Michael Dreben to receive a cash fee upon the
closing of such funding and merger and acquisition opportunities. During 2004
Michael Dreben received a fee totaling $79,503 and 50,000 stock option shares of
Biorem as his fee for sourcing one of the investors in Biorem during 2004.
Michael Dreben receives an annual salary of $106,000 and has not received any
additional warrants, options or shares. The Service Agreement terminates upon 30
days' prior written notice by either party. Michael Dreben brings to CVF 7 years
of experience in the investment field, most recently with Goldman Sachs.

ITEM 13 EXHIBITS

      a)    Exhibits

(3)(i)      Articles of Incorporation Incorporated by reference to the filing on
            Form 10SB dated May 29, 1997

(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)    Certificate of Designation of Series C 6% Convertible Preferred
            Stock, as amended and incorporated herein by reference.

(3)(iv)     By-laws Incorporated by reference to the filing on Form 10SB dated
            May 29, 1997

(10)(i)     2000 Stock Option Plan, filed as an exhibit to CVF's Schedule 14A on
            May 12, 2000 and incorporated by reference herein.

(10)(ii)    Common Stock Purchase Warrant dated February 27, 2004 in favor of
            The Shaar Fund Ltd. and incorporated herein by reference.

(10)(iii)   Exchange Agreement dated February 27, 2004 between CVF and The Shaar
            Fund Ltd. and incorporated herein by reference.

(10)(iv)    Form of Change in Control Agreement between CVF and Jeffrey Dreben
            and Robert Nally and incorporated herein by reference.

(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)        Certificates Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to
            Section 906 of the Sarbanes-Oxley Act of 2002.

<PAGE>

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following paragraphs describe the aggregate fees that were charged by Ernst
& Young, Radin Glass & Co., and Sherb & Co. for the fiscal years ended December
31, 2003 and December 31, 2004.

Audit Fees.

CVF was charged $19,730 for the fiscal years ended December 31, 2003 by Ernst &
Young for the audit of CVF and the review of the financial statements included
in CVF's quarterly reports. CVF was charged $97,713 and $18,000 respectively for
the fiscal year ended December 31, 2003 and December 31, 2004 by Radin Glass &
Co for the audit of CVF and the review of the financial statements in CVF's
quarterly reports. CVF was charged $70,000 for the fiscal year ended December
31, 2004 by Sherb & Co for the audit of CVF.

Tax Fees.

CVF was charged $9,685 and $3,500 respectively for the fiscal years ended
December 31, 2003 and December 31, 2004 by Ernst & Young for services rendered
related to the on-going audit by the Internal Revenue Service.

SIGNATURE

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized:

CVF Technologies Corporation

by: /s/ Jeffrey I. Dreben
    ------------------------------------
    Jeffrey I. Dreben, CEO and President
    (Principal Executive Officer)
date: April 8, 2005

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
Signature                                      Title                Date
---------------------                 -----------------------  -------------
<S>                                   <C>                      <C>
/s/ Jeffrey I. Dreben                 Director                 April 8, 2005
---------------------
Jeffrey I. Dreben

/s/ Robert B. Nally                   Director                 April 8, 2005
---------------------
Robert B. Nally

/s/ Robert H. Glazier                 Director                 April 8, 2005
---------------------
Robert H. Glazier

/s/ Robert L. Miller                  Chief Financial Officer  April 8, 2005
---------------------                 (Principal Financial
Robert L. Miller                      and Accounting Officer)
</TABLE>

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.                         Name
-----------                         ----
<S>         <C>
(3)(i)      Articles of Incorporation Incorporated by reference to the filing on
            Form 10SB dated May 29, 1997

(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)    Certificate of Designation of Series C 6% Convertible Preferred
            Stock, as amended and incorporated herein by reference.

(3)(iv)     By-laws Incorporated by reference to the filing on Form 10SB dated
            May 29, 1997

(10)(i)     2000 Stock Option Plan, filed as an exhibit to CVF's Schedule 14A on
            May 12, 2000 and incorporated by reference herein.

(10)(ii)    Common Stock Purchase Warrant dated February 27, 2004 in favor of
            The Shaar Fund Ltd. and incorporated herein by reference.

(10)(iii)   Exchange Agreement dated February 27, 2004 between CVF and The Shaar
            Fund Ltd. and incorporated herein by reference.

(10)(iv)    Form of Change in Control Agreement between CVF and Jeffrey Dreben
            and Robert Nally and incorporated herein by reference.

(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)        Certificates Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to
            Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>