Rival 10QSB 2005 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarter period ended March 31, 2005

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission File No. 000-49900

RIVAL TECHNOLOGIES INC.

(Exact name of small business issuer as specified in its charter)

British Columbia, Canada N/A

(State or other jurisdiction of incorporation or organization) (IRS Employer ID)

#200, 100 Park Royal, West Vancouver, British Columbia, Canada V7T 1A2

(Address of principal executive offices)

(604) 689-0584

(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

As of May 12, 2005, approximately 41,683,776 shares of common stock were outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

(Unaudited)

MARCH 31, 2005

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian dollars)

	March 31,	December 31,
	2005	2004

	(Unaudited)	(Audited)

ASSETS

Current
Cash and cash equivalents	$ 933,691	$ 62,611
Receivables	20,248	15,944
Prepaid expenses	6,070	70


Total current assets	960,009	78,625

Equipment(Note 3)	7,306	4,938
Deferred income taxesless valuation allowance of $1,357,800	-	-


Total assets	$ 967,315	$ 83,563




LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIENCY IN ASSETS)

Current
Accounts payable and accrued liabilities	$ 148,975	$ 143,287
Promissory note payable (Note 5)	5,575	5,575
Convertible debentures (Note 6)	129,762	106,137


Total current liabilities	284,312	254,999



Shareholder’s equity (deficiency in assets)
Common stock (Note 7)
Authorized
100,000,000 common shares without par value
Issued
44,491,847 common shares (December 31, 2004 – 43,010,233)	13,387,251	12,075,429
Additional paid-in capital	261,544	261,544
Deficit accumulated during the development stage	(5,733,304)	(5,584,866)
Deficit	(7,232,488)	(7,232,488)


Total shareholder’s equity (deficiency in assets)	683,003	(171,436)


Total liabilities and shareholder’s equity (deficiency in assets)	$ 967,315	$ 83,563

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

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in Canadian dollars)

(Unaudited)

	Cumulative
	Amounts
	From
	Beginning of
	Development
	Stage (April	Three-Month		Three-Month
	1, 2003) to	Period Ended		Period Ended
	March 31,	March 31,		March 31,
	2005	2005		2004



EXPENSES
Accounting and legal	$ 117,351	$ 9,372	$	3,250
Amortization of beneficial conversion
feature	74,747	23,625
Consulting	286,035	4,494		32,625
Depreciation	1,901	438		237
Foreign exchange	21,717	21,717		-
Interest expense	15,523	3,699		835
Investor relations	399,332	19,186		4,903
Office and miscellaneous	23,934	7,393		625
Management and director fees	3,650	3,650		-
Regulatory fees	35,949	8,617		1,844
Rent	17,214	2,850		1,772
Research and development	155,805	36,955		10,000
Shareholder costs	3,666	3,666		-
Telephone and utilities	6,906	1,850		499
Travel and related	17,235	862		-
Website design and maintenance	2,361	86		-


Loss before other items	(1,183,326)	(148,460)		(56,590)

OTHER ITEMS
Impairment of intangible property	(4,550,000)	-		-
Interest income	22	22		-


	(4,549,978)	22		-


Loss before income taxes	(5,733,304)	(148,438)		(56,590)

Provision for income taxes	-	-		-


Net loss for period	(5,733,304)	(148,438)		(56,590)


Basic and diluted net loss per
common share		$ (0.01)	$	(0.01)


Weighted average number of
common shares outstanding – basic
and diluted		43,818,564		42,582,934

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

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

STATEMENT OF SHAREHOLDER’S EQUITY (DEFICIENCY) IN ASSETS

(Expressed in Canadian Dollars)

											Deficit
	Common stock						Share				Accumulated
					Additional		Subscriptions				During the
					Paid-in		Received in		Obligation to		Development
	Number		Amount		Capital		Advance		Issue Shares		Stage		Deficit		Total


Balance,April 1, 2003
(beginning of development stage)	6,283,934	$	7,008,249	$	105,000	$	-	$	-	$	-	$	(7,232,488)	$	(119,239)

Common stock issued for intangible
property at $0.001 per share, May 2003	35,000,000		4,550,000		-		-		-		-		-		4,550,000
Common stock issued on exercise
of warrants at $0.15 per share, July 2003	70,000		10,500		-		-		-		-		-		10,500
Common stock issued for services at
$0.24 per share, August 2003	1,061,000		255,670		-		-		-		-		-		255,670
Common stock issued for cash at
US$0.20 per share, November 2003	168,000		45,558		-		-		-		-		-		45,558
Settlement of accounts payable to an officer
of the Company	-		-				-		-		-		-		54,744
Share subscriptions received, December 2003	-		-		-		1,948		-		-		-		1,948
Loss for the period	-		-		-		-		-		(4,805,813)		-		(4,805,813)


Balance, December 31, 2003	42,582,934	$	11,869,977	$	159,744	$	1,948	$	-	$	(4,805,813)	$	(7,232,488)	$	(6,632)

Common stock issued for cash at US$0.25 per
share, June 2004	46,900		15,609		-		(1,948)		-		-		-		13,661
Settlement of convertible debentures,
June 2004	30,000		13,729		-		-		-		-		-		13,729
Beneficial conversion feature of convertible
debentures, June 2004	-		-		94,300		-		-		-		-		94,300
Contributed capital on settlement of accounts
payable, Jun 2004	-		-		7,500		-		-		-		-		7,500
Common stock issued on exercise
of warrants at US$0.30 per share,
December 2004	168,000		66,075		-		-		-		-		-		66,075
Common stock issued for cash, net of issue costs,
December 2004	182,399		110,039		-		-		-		-				110,039
Obligation to issue 250,000 shares of common
stock	-		-		-		-		308,945		-		-		308,945
Loss for the period	-		-		-		-		-		(779,053)		-		(779,053)


Balance, December 31, 2004	43,010,233	$	12,075,429	$	261,544	$	-	$	308,945	$	(5,584,866)	$	(7,232,488)	$	(171,436)




					~ continued ~

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

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

STATEMENT OF SHAREHOLDER’S EQUITY (DEFICIENCY) IN ASSETS

(Expressed in Canadian Dollars)

											Deficit
	Common stock						Share				Accumulated
					Additional		Subscriptions				During the
					Paid-in		Received in		Obligation to		Development
	Number		Amount		Capital		Advance		Issue Shares		Stage		Deficit		Total


Continued…


Balance, December 31, 2004	43,010,233	$	12,075,429	$	261,544	$	-	$	308,945	$	(5,584,866)	$	(7,232,488)	$	(171,436)

Common stock issued for cash, net of issue costs,
January 2005	405,464		281,278		-		-		-		-		-		281,278
Common stock issued for cash, net of issue costs,
February 2005	574,850		495,080		-		-		-		-		-		495,080
Common stock issued for services,
February 2005	250,000		308,945		-		-		(308,945)		-		-		-
Common stock issued on exercise of warrants,
February 2005	10,000		4,345		-		-		-		-		-		4,345
Common stock issued for cash, net of issue costs,
March 2005	226,400		208,772		-		-		-		-		-		208,772
Common stock issued for services,
March 2005	5,000		9,418		-		-		-		-		-		9,418
Common stock issued on exercise of warrants,
March 2005	9,900		3,984		-		-		-		-		-		3,984

Loss for the period	-		-		-		-		-		(148,438)		-		(148,438)


Balance, March 31, 2005	44,491,847	$	13,387,251	$	261,544	$	-	$	-	$	(5,733,304)	$	(7,232,488)	$	683,003

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

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

(Unaudited)

	Cumulative
	Amounts From
	Beginning of
	Development
	Stage (April 1,			Three Month		Three Month
		2003) to		Period Ended		Period Ended
	March 31,			March 31,		March 31,
		2005		2005		2004


CASH FLOWS FROM OPERATING ACTIVITIES
Loss for period	$ (5,733,304)		$	(148,438)	$	(56,590)
Adjustments to reconcile net loss to net cash used
in operating activities:
Amortization of beneficial conversion feature		74,747		23,625		-
Depreciation		1,901		438		237
Shares issued for services		510,712		9,417		-
Impairment of intangible property	4,550,000			-		-
Changes in assets and liabilities:
Increase in receivables and prepayments		(20,248)		(4,304)		(431)
(Increase) decrease in prepaid expenses		57,250		(6,000)		31,625
Increase (decrease) in accounts payable and
accrued liabilities		89,933		5,688		(9,088)


Net cash used in operating activities		(469,009)		(119,574)		(33,412)


CASH FLOWS FROM FINANCING ACTIVITIES
Convertible debenture		162,604		-		28,015
Promissory note payable		5,575		-		-
Proceeds from issuance of common stock	1,241,241			993,460		-
Stock subscriptions received		-		-		7,111


Net cash provided by financing activities	1,406,420			993,460		35,126


CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(9,207)		(2,806)		(1,397)


Net cash used in investing activities		(9,207)		(2,806)		(1,397)


Change in cash and cash equivalents during period		931,204		871,080		317

Cash and cash equivalents, beginning		2,487		62,611		3,580


Cash and cash equivalents, ending	$	933,691	$	608,756	$	3,897


Supplemental disclosure with respect to cash flows
Settlement of accounts payable to an officer of the Company	$	54,744	$	-	$	54,744
Shares issued to acquire intangible property	4,550,000			-		35,000
Shares issued for services		255,670		-		255,670
Shares issued to settle convertible debenture and accrued
interest payable		13,729		-		-
Beneficial conversion feature recorded as additional paid-in capital		94,300		-		-
Contributed capital on settlement of accounts payable		7,500		-		-

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

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

OPERATIONS AND GOING CONCERN

The Company is incorporated under the Company Act of British Columbia with its head office in West Vancouver, British Columbia, Canada.

The Company was the exclusive licensed manufacturer and distributor worldwide of a brand of fire extinguishants and fire retardant products. The license agreement was terminated December 1999. During the three years ended December 2002, all sales were made to customers in North America. The Company does not expect any further sales of these products and has abandoned this business effective the three-month period beginning April 1, 2003.

During the period beginning April 1, 2003, the Company acquired a new technology for reducing diesel emissions and will now focus on developing and marketing this technology. The Company is considered to be a development stage company beginning April 1, 2003, as the Company has changed its business and no longer generates revenues from operations.

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company’s continued existence is dependent upon its ability to raise substantial capital, maintain adequate financing arrangements and to generate profitable operations in the future. During 2001, control of the Company passed to a new group that is actively seeking to raise capital and to identify possible business acquisitions.

The operations of the Company have primarily been funded by the issuance of common stock. Continued operations of the Company are dependent on the Company’s ability to complete equity financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity financings. Such financings may not be available or may not be available on reasonable terms.

	March 31, 2005	December 31, 2004

Working capital (deficiency)	$ 675,697	$ (176,374)
Deficit accumulated during the development stage	(5,733,304)	(5,584,866)
Deficit	(7,232,488)	(7,232,488)

All amounts are expressed in Canadian dollars except for certain per share amounts denoted in United States dollars (“US$”).

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary (consisting of normal recurring accruals) to present fairly the financial information contained therein. The accompanying unaudited consolidated financial statements do not include all disclosures required by generally accepted accounting principles in the United States of America and should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2004. The results of operations for the three-month period ended March 31, 2005, are not necessarily indicative of the results to be expected for the year ending December 31, 2005.

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

SIGNIFICANT ACCOUNTING POLICIES

Net loss per share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic loss per share) and potentially dilutive shares of common stock. The dilutive effect of 27,000 (December 31, 2004 – 46,900) warrants is not reflected in net loss per share as the effect would be anti-dilutive.

New accounting pronouncements

In January 2003, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 46 “Consolidation of Variable Interest Entities” ("FIN 46") (revised inDecember 17, 2003). The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual retur ns or both. FIN 46 also requires disclosures about variable interest entities that a company is not required to consolidate but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created afterDecember 15, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning afterMarch 15, 2004.

In December 2004, FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29” (“SFAS 153”) which amends Accounting Principles Board Opinion No. 29, “Accounting for Nonmonetary Transactions” to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.

In December 2004, FASB issued Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“SFAS 123R”). SFAS 123R supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and its related implementation guidance by requiring entities to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (with limited exceptions) and revises Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation” (“SFAS 123”) as follows:

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

New accounting pronouncements

Public entities are required to measure liabilities incurred to employees in share-based payment transactions at fair value and nonpublic entities may elect to measure their liabilities to employees incurred in share-based payment transactions at their intrinsic value whereas under SFAS 123, all share-based payment liabilities were measured at their intrinsic value.

ii)

Nonpublic entities are required to calculate fair value using an appropriate industry sector index for the expected volatility of its share price if it is not practicable to estimate the expected volatility of the entity’s share price.

iii)

Entities are required to estimate the number of instruments for which the requisite service is expected to be rendered as opposed to accounting for forfeitures as they occur.

iv)

Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification whereas SFAS 123 required that the effects of a modification be measured as the difference between the fair value of the modified award at the date it is granted and the award’s value immediately before the modification determined based on the shorter of (1) its remaining initially estimated expected life or (2) the expected life of the modified award.

SFAS 123R also clarifies and expands guidance in several areas, including measuring fair value, classifying an award as equity or as a liability and attributing compensation cost to reporting periods. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force No. 96-18 “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods and Services” (“EITF 96-18”). SFAS 123R also does not address the accounting for employee share ownership plans which are subject to Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans”. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first annual report ing period that begins after June 15, 2005. Public entities that file as small business issuers will be required to apply SFAS 123R in the first annual reporting period that begins after December 15, 2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005.

The adoption of these new pronouncements are not expected to have a material effect on the Company's consolidated financial position or results of operations.

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

EQUIPMENT

March 31, 2005

December 31, 2004

Cost

Accumulated

Amortization

Net

Book Value

Cost

Accumulated

Amortization

Net

Book Value

Furniture and equipment

3,810

1,059

2,751

3,811

915

2,896

Computer equipment

5,397

842

4,555

2,590

548

2,042

9,207

1,901

7,306

6,401

1,463

4,938

INTANGIBLE PROPERTY

The Company acquired certain diesel engine technology (“CWI Technology”) from M.A. Turbo/Engine Ltd. (“M.A. Turbo”). It acquired a 100% interest in the CWI Technology for the automotive transportation industry and a 20% interest in the CWI Technology for the marine industry. The purchase agreement includes an option clause to acquire the balance of the marine application.

Under the terms of the purchase agreement, the Company has issued 35,000,000 restricted common shares. The Company has determined the value of the shares based on the market price of the securities under the guidance in Emerging Issues Task Force No. 97-8 “Accounting for Contingent Consideration Issued in a Purchase Business Combination” and Emerging Issues Task Force No. 99-12 “Determination of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination”. On the date of the acquisition agreement, the market value of the stock was $0.15 per share; however, the market value of the stock was adjusted as follows:

A discount of approximately 23%, based upon published materials, was applied against the market value of the stock of $0.15 per share to reflect the thinly traded market in which the Company’s stock trades.

ii)

A premium of approximately 10%, based upon published materials, was applied against the market value of the stock of $0.15 per share to reflect the cost of issuing a significant number of shares that results in control of the Company passing to the vendors of the CWI Technology.

Accordingly, the Company determined the share price for this transaction to be approximately $0.13 per share. As a result, the cost recorded by the Company upon acquisition of the CWI Technology was $4,550,000.

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

INTANGIBLE PROPERTY(cont’d…)

Subsequent to the acquisition of the CWI Technology and under the guidance in Statements of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, the Company determined that carrying value of the CWI Technology exceeded the fair value which was estimated to be approximately $35,000 based upon expected future cash flows. Consequently, the Company recorded a charge in the consolidated statements of operations of $4,515,000 during the year ended December 31, 2003 as the carrying value of CWI Technology was written down to fair value in the year the impairment was recognized. During the year ended December 31, 2004, the Company determined a further write down was required and accordingly, a charge of $35,000 was recorded in the consolidated statements of operations.

The Company has also committed to provide M.A. Turbo with $230,000 in development and marketing funds to complete the CWI Technology for the automotive transportation industry plus $100,000 for its 20% interest in the CWI Technology for the marine industry. At December 31, 2004, the Company has not incurred any costs related to these commitments.

In connection with the purchase of the CWI Technology, the Company entered into a contractor agreement for a one-year term. Under the agreement, the Company provided compensation of 150,000 common shares for services related to the acquisition.

PROMISSORY NOTE PAYABLE

On April 17, 2003, the Company issued a promissory note of $5,575 to an individual related to a director of the Company. The note is unsecured, bears no interest and is payable on demand.

CONVERTIBLE DEBENTURES

On January 16, 2004, the Company borrowed $15,000 from a lender and issued a convertible debenture for a period of one year, bearing interest of 10% per annum. The Company may prepay the principal and interest accrued to the date of payment, in whole or in part, without penalty. If all or any portion of the principal and interest remains unpaid at the end of the term, the lender and/or the Company shall have the right to convert the principal and interest earned into common stock of the Company at a value of US$0.35 per share. On January 16, 2005, the option to convert expired unexercised and the term of the loan was extended to July 15, 2005.

On March 8, 2004, the Company borrowed $13,015 (US$10,000) from a lender and issued a convertible debenture for a period of one year, bearing interest of 10% per annum. The Company may prepay the principal and interest accrued to the date of payment, in whole or in part, without penalty. If all or any portion of the principal and interest remains unpaid at the end of the term, the lender and/or the Company shall have the right to convert the principal and interest earned into common stock of the Company at a value of US$0.35 per share. On March 8, 2005, the option to convert expired unexercised and the term of the loan was extended to September 8, 2005.

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

CONVERTIBLE DEBENTURES (cont’d…)

On April 13, 2004, the Company borrowed $27,000 from a lender and issued a convertible debenture for a period of one year, bearing interest of 10% per annum. The Company may prepay the principal and interest accrued to the date of payment, in whole or in part, without penalty. If all or any portion of the principal and interest remains unpaid at the end of the term, the lender and/or the Company shall have the right to convert the principal and interest earned into common stock of the Company at a value of US$0.35 per share. Subsequent to March 31, 2005, the option to convert expired unexercised at the term of the loan was extended to October 13, 2005.

On June 9, 2004, the Company borrowed $67,300 (US$50,000) from a lender and issued a convertible debenture for a period of one year, bearing interest of 10% per annum. The Company may prepay the principal and interest accrued to the date of payment, in whole or in part, without penalty. If all or any portion of the principal and interest remains unpaid at the end of the term, the lender and/or the Company shall have the right to convert the principal and interest earned into common stock of the Company at a value of US$0.35 per share. As the market price of the Company’s common stock exceeded the exercise price on the commitment date, the intrinsic value of the beneficial conversion feature recorded by the Company as additional paid-in capital was $67,300. To date, the Company recognized $54,497 of intrinsic value of the beneficial conversion feature in the consolidated statements of operations.

On June 30, 2004, the Company borrowed $27,000 (US$20,000) from a lender and issued a convertible debenture for a period of one year, bearing interest of 10% per annum. The Company may prepay the principal and interest accrued to the date of payment, in whole or in part, without penalty. If all or any portion of the principal and interest remains unpaid at the end of the term, the lender and/or the Company shall have the right to convert the principal and interest earned into common stock of the Company at a value of US$0.35 per share. As the market price of the Company’s common stock exceeded the exercise price on the commitment date, the intrinsic value of the beneficial conversion feature recorded by the Company as additional paid-in capital was $27,000. To date, the Company recognized $20,250 of intrinsic value of the beneficial conversion feature in the consolidated statements of operations.

The related accrued interest for the convertible debentures has been recorded as accounts payable and accrued liabilities.

COMMON STOCK

During the year ended December 31, 2004, the Company issued and transferred 4,000,000 shares of common stock to a trustee for the sole purpose of selling the shares of common stock. The trustee will receive a trustee fee equal to 3% of the selling value of the shares of common stock. There is no time limit as to when the trustee has to sell the shares of common stock. Any shares of common stock not sold by the trustee will be returned to the Company at its request. Accordingly, those shares of common stock were not recorded as issued and outstanding on the consolidated balance sheet when originally issued and transferred during the year ended December 31, 2004.

In conjunction with the above, the Company entered into an agreement with a third party for investor relations services whereby the third party is entitled to receive a fee equal to 47% of the selling value of the shares of common stock. Additionally, the third party is entitled to receive, on a one-time basis only, 250,000 shares of common stock to be delivered upon execution of this agreement dated November 15, 2004.

To date, 1,389,113 shares of common stock had been issued by the trustee for proceeds of $1,095,169 (net of issue costs).

RIVAL TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

MARCH 31, 2005

(Unaudited)

COMMON STOCK (cont’d…)

Stock options

As at March 31, 2005 there were no stock options outstanding.

Share purchase warrants

As at March 31, 2005, the following share purchase warrants were outstanding:

Number

of Shares

Exercise

Price

Expiry Date

27,000

US$ 0.35

June 17, 2005

SEGMENT INFORMATION

The Company operates in one reportable segment, being the diesel technology industry, in Canada and the United States of America.

FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents, receivables, accounts payable and accrued liabilities, promissory note payable and convertible debentures. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted.

10.

SUBSEQUENT EVENTS

Unless disclosed elsewhere in these consolidated financial statements, the following events occurred subsequent to March 31, 2005:

In April 2005, the Company issued 5,000 shares of common stock for proceeds of $6,000 on the exercise of warrants.

In April 2005, the Company decided not to proceed with the CWI Technology for the marine industry and accordingly, 3,000,000 shares of common stock were returned to treasury and cancelled and the Company was released from its commitment to incur development and marketing expenses of $100,000.

In April 2005, the Company entered into an agreement with UTEK Corporation (“UTEK”) whereby the Company retained UTEK to search for technologies at universities and research institutions that the Company may wish to acquire for a period of one year in exchange for 120,000 shares of common stock.

In May 2005, the Company settled all outstanding convertible debentures plus accrued interest for total cash proceeds of $134,227.

Item 2.

Management's Discussion and Analysis or Plan of Operation.

The following is management's discussion and analysis of significant factors that have affected the Company's financial position and operations during the three-month period ended March 31, 2005.

The financial statements of the Company are expressed in Canadian dollars. All figures herein are also expressed in Canadian dollars, except where specifically indicated in United States dollars.

General Overview

In the period beginning April 1, 2003, we acquired diesel engine technology for reducing engine emissions (“CWI Technology”) from M.A. Turbo/Engine Ltd. (“M.A. Turbo”). Specifically, we acquired a 100% interest in CWI Technology for the automotive transportation industry, and a 20% interest in CWI Technology for the marine industry. The purchase agreement includes an option clause to acquire the balance of the marine application.

Under the terms of the purchase agreement, we issued 35,000,000 restricted common shares. On the date of the acquisition agreement, the market value of the stock was $0.15 per share; however, the market value of the stock was adjusted as follows:

A discount of approximately 23%, based upon published materials, was applied against the market value of the stock of $0.15 per share to reflect the thinly traded market in which our stock trades.

ii)

Accordingly, we determined the share price for this transaction to be approximately $0.13 per share. As a result, the cost recorded by us upon acquisition of the CWI Technology was $4,550,000.

We have also committed to provide M.A. Turbo with $230,000 in development and marketing funds to complete the CWI Technology for the automotive transportation industry, plus $100,000 for its 20% interest in CWI Technology for the marine industry. On June 1, 2004 we amended the Schedules to the Purchase Agreement in order to bring them current with our anticipated financing and development schedule. To date we have maintained our funding commitment in accordance with these Schedules.

In connection with the purchase of the CWI Technology, we entered into a contractor agreement for a one-year term. Under the contractor agreement, we agreed to provide compensation of 150,000 common shares for services related to the acquisition. The shares have been issued and delivered.

In April, 2005, we decided not to exercise our right to acquire a 20% interest in CWI Technology for the marine industry and, as a result have returned to treasury 3,000,000 common shares attributable to this technology and will not be required to pay the US$100,000. We intend to focus our development efforts on the automotive transportation industry.

The principle followed in determining the number of shares issued by us was the estimated value of CWI Technology, and our lack of assets or revenue. At the time of the transaction, there was no relationship between ourselves and the owners of CWI Technology, our officers, directors or persons owning 10% or more of the our common stock.

We have entered into Marketing Agreement with MA Turbo allowing it to market the marine application of CWI Technology and providing us with a 15% commission on any sales. In this regard we have also entered into a Memorandum of Understanding with Advanced Engineering Services of Milan Italy to assist in marketing the marine application of CWI Technology in Europe. This marketing effort is in process and firm contracts are being sought from a number of European shipbuilders.

We are actively working on raising funds needed to proceed with our plans for CWI Technology. In April, 2004 the Company executed a Trust Declaration with a German lawyer. The Trust Declaration relates to Reg S common shares that they will be sold to European investors under a separate Berlin Stock Exchange Reg S listing, with the Company receiving the net proceeds from the sale of these shares.

The Company has transferred 4,000,000 shares of common stock to a trustee for the sole purpose of selling the shares of common stock. The trustee will receive a trustee fee equal to 3% of the selling value of the Reg S shares of common stock. The Company’s agent will receive a financing fee equal to 47% of the selling value of the Reg S shares of common stock. Any shares of common stock not sold by the trustee will be returned to the Company at their request. As of the date hereof approximately 1,389,113 Reg S common shares have been sold and the Company has received or is owed net proceeds there from of approximately 679,669.60 Euros. An additional 250,000 Reg S common shares were transferred in accordance with the terms of a financing agreement and an additional 5,000 Reg S common shares were transferred in accordance with the terms of an investor relations agreement.

On April 25, 2005, we entered into a Strategic Alliance Agreement with UTEK Corporation, whereby we retained UTEK to search for technologies at universities and research institutions that we may wish to acquire. UTEK has been paid for the service for a period of one year through our issue of 120,000 restricted common shares. The agreement provides for a structure whereby Rival may acquire additional technologies through the issue of additional restricted common share, subject to Rival’s further agreement in this regard.

We have been and will continue to engage in the business of developing, marketing and distributing environmental products. We have no employees at this time.

Results of Operations

Three-Month Period Ended March 31, 2005, compared to March 31, 2005.

We have had no revenues from the beginning of the development stage on April 1, 2003.

General and Administrative expenses for the three-month period ended March 31, 2005, were $148,460 as compared to $56,590 for the three-month period ended March 31, 2004, representing an increase of 162%. This increase was primarily attributed to Research and Development costs relating to the development of CWI Technology plus increased administrative and investor relations costs expenses relating to our financing.

The Company incurred $36,955 in Research and Development costs during the three-month period ended March 31, 2005.

Liquidity and Capital Resources

We completed the exercise of 19,900 warrants at US$0.35 per warrant during the 3 month period ending March 31, 2005, for total proceeds of Cdn$8,328.80. We will issue 19,900 shares of common stock in this regard subsequent to the end of this quarterly period.

We completed the sale of 1,389,113 Reg S shares of common stock during the 3 month period ending March 31, 2005, for total proceeds of 679,669.60 Euros.

Rival's cash position at March 31, 2005, was $933,691 as compared to $62,611 at December 31, 2004, representing an increase of 1,391%.

Rival's net working capital position (current assets less current liabilities) increased to $675,697 at March 31, 2005, from negative ($176,374) at December 31, 2004, due primarily to the sale of Reg S common stock and conversion of warrants.

During the three-month period ending March 31, 2005, the Company met all cash flow needs from the sale of Reg S shares of common stock and the exercise of warrants.

NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS

Except for historical information contained herein, this Form 10-QSB contains express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. We intend that such forward-looking statements be subject to the safe harbors created thereby. We may make written or oral forward-looking statements from time to time in filings with the SEC, in press releases, quarterly conference calls or otherwise. The words "believes," "expects," "anticipates," "intends," "forecasts," "project," "plans," "estimates" and similar expressions identify forward-looking statements. Such statements reflect our current views with respect to future events and financial performance or operations and speak only as of the date the statements are made.

Forward-looking statements involve risks and uncertainties and readers are cautioned not to place undue reliance on forward-looking statements. Our actual results may differ materially from such statements. Factors that cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Form 10-QSB.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate with the result that there can be no assurance the results contemplated in such forward-looking statements will be realized. The inclusion of such forward-looking information should not be regarded, as a representation that the future events, plans, or expectations contemplated will be achieved. We undertake no obligation to publicly update, review, or revise any forward-looking statements to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statements based. Our filings with the SEC may be accessed at the SEC's Web site, www.sec.gov.

Item 3.

Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to our management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including the Chief Executive Officer and the Chief Financial Officer, recognize that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 45 days prior to the filing date of this quarterly report on Form 10-QSB, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective. No changes were made to internal disclosure controls from the prior fiscal quarter.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action has been threatened by or against the Company.

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

During the three-month period ended March 31, 2005, the Company sold 1,389,113 Reg S shares of common stock, plus warrant holders exercised 19,900 warrants and the Company will issue 19,900 shares of common stock in this regard subsequent to the end of this quarterly period, plus the Company issued 250,000 Reg S shares of common stock pursuant to a financing agreement and issued 5,000 Reg S shares of common stock pursuant to an investor relations agreement.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

None.

(b) Reports on Form 8-K during the quarter ended March 31, 2005.

None.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Rival Technologies Inc.

Date: May 20, 2005

/s/ Robin J. Harvey

By: Robin J. Harvey

President, Chief Financial Officer and Director

Date: May 20, 2005

/s/ Perry D. Guglielmi

By: Perry Guglielmi

Director

CERTIFICATIONS

I, Robin J. Harvey, President and Chief Financial Officer of the Company certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Rival Technologies Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Small Business Issuer as of, and for, the periods presented in this report.

4. The Small Business Issuer’s other certifying offering officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Small Business Issuer and have:

Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Small Business Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the Small Business Issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the Small Business Issuer’s internal control over financial reporting that occurred during the Small Business Issuer’s first fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Small Business Issuer’s internal control over financial reporting; and

5. The Small Business Issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Small Business Issuer’s auditors and the audit committee of Small Business Issuer’s board of directors (or persons performing the equivalent function):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting; and

Date:

May 20, 2005.

/s/ Robin J. Harvey

By: Robin J. Harvey

President and Chief Financial Officer

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Rival Technologies, Inc., a British Columbia corporation (the “Company”), on Form 10-QSB for the period ending March 31, 2005, as filed with the Securities and Exchange Commission (the “Report”), I, , President and Chief Financial Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Robin J. Harvey

By: Robin J. Harvey

President and Chief Financial Officer

Rival Inactive 10QSB2005 Q1 Quarterly report (small business)