FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 2002

                                       OR

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

For the transition period  ___________________ to __________________

Commission file number 1-11394
                       -------
                             MEDTOX SCIENTIFIC, INC.
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                         95-3863205
--------------------------------------------------------------------------------
  (State or other jurisdiction of                          (I.R.S. Employer
  incorporated or organization)                            Identification No.)

  402 West County Road D, St.Paul, Minnesota                    55112
--------------------------------------------------------------------------------
   (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number including area code:           (651) 636-7466
--------------------------------------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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 ______ N ___X___

The number of shares of Common Stock, $.15 par value,  outstanding as of October
31, 2002, was 4,811,720.

<PAGE>




                             MEDTOX SCIENTIFIC, INC.

                                      INDEX

                                                                            Page

Part I     Financial Information:

           Item 1:  Financial Statements (Unaudited)

                    Consolidated Statements of Operations - Three and
                    Nine Months Ended September 30, 2002 and 2001 ..........   3

                    Consolidated Balance Sheets - September 30, 2002
                    and December 31, 2001 ..................................   4

                    Consolidated Statements of Cash Flows - Nine
                    Months Ended September 30, 2002 and 2001 ...............   5

                    Notes to Consolidated Financial Statements..............   6

           Item 2:

                    Management's Discussion and Analysis of
                    Financial Condition and Results of Operations ..........  11

           Item 3:

                    Quantitative and Qualitative Disclosure
                    About Market Risk ......................................  22

           Item 4:

                    Evaluation of Disclosure Controls and Procedures........  22


Part II    Other Information ...............................................  23

           Signatures ......................................................  24

           Certifications...................................................  25


<PAGE>


Item 1:  FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>

                                                      MEDTOX SCIENTIFIC, INC.
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                         (Dollars in thousands except per share amounts)
                                                         (Unaudited)
<CAPTION>

                                                         Three Months Ended                       Nine Months Ended
                                                            September 30,                           September 30,
                                                       2002                2001                2002               2001
                                                ------------------   -----------------   -----------------  ------------------
<S>                                            <C>                  <C>                 <C>                <C>
REVENUES:
   Laboratory services                            $      10,562        $      9,446        $      30,439      $      28,741
   Product sales                                          3,070               3,135                9,462              8,007
                                                ------------------   -----------------   -----------------  ------------------
                                                         13,632              12,581               39,901             36,748

COST OF REVENUES:
  Cost of services                                        7,104               6,711               20,184             19,681
  Cost of sales                                           1,178                 876                3,539              2,879
                                                ------------------   -----------------   -----------------  ------------------
                                                          8,282               7,587               23,723             22,560
                                                ------------------   -----------------   -----------------  ------------------

GROSS PROFIT                                              5,350               4,994               16,178             14,188

OPERATING EXPENSES:
   Selling, general and administrative                    4,137               3,587               12,152             10,178
   Research and development                                 327                 323                  905                956
                                                ------------------   -----------------   -----------------  ------------------
                                                          4,464               3,910               13,057             11,134
                                                ------------------   -----------------   -----------------  ------------------

INCOME FROM OPERATIONS                                      886               1,084                3,121              3,054

OTHER INCOME (EXPENSE):
   Interest expense, net                                   (332)               (263)              (1,025)              (791)
   Other expense, net                                       (17)                (31)                 (66)               (75)
                                                ------------------   -----------------   -----------------  ------------------
                                                           (349)               (294)              (1,091)              (866)
                                                ------------------   -----------------   -----------------  ------------------

INCOME BEFORE INCOME TAX BENEFIT                            537                 790                2,030              2,188

INCOME TAX BENEFIT                                       10,783                   -               10,783                  -
                                                ------------------   -----------------   -----------------  ------------------

NET INCOME                                        $      11,320        $        790        $      12,813      $       2,188
                                                ==================   =================   =================  ==================

BASIC EARNINGS PER COMMON
   SHARE (1)                                      $        2.36        $       0.18        $        2.67      $        0.51
                                                ==================   =================   =================  ==================

DILUTED EARNINGS PER COMMON
   SHARE (1)                                      $        2.27        $       0.17        $        2.55      $        0.48
                                                ==================   =================   =================  ==================

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
          Basic (1)                                   4,804,106           4,331,655            4,793,793          4,289,791
          Diluted (1)                                 4,988,958           4,718,635            5,029,818          4,544,077

(1) Share and per share amounts for the three and nine months ended September 30, 2001 have been restated for the ten percent
stock dividend paid on July 5, 2002.
</TABLE>


<PAGE>

<TABLE>

                                                  MEDTOX SCIENTIFIC, INC.
                                                CONSOLIDATED BALANCE SHEETS
                                      (In thousands, except share and per share data)
                                                        (Unaudited)
<CAPTION>

                                                                                             September 30,     December 31,
                                                                                                 2002             2001
                                                                                            ---------------  ---------------
<S>                                                                                        <C>              <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                                      $    889         $     67
   Accounts receivable:
         Trade, less allowance for doubtful accounts ($1,553 in 2002 and $1,069 in 2001)            10,422            8,439
         Other                                                                                         307              181
                                                                                            ---------------  ---------------
             Total accounts receivable                                                              10,729            8,620
   Inventories                                                                                       3,872            3,897
   Prepaid expenses and other                                                                        1,337            1,617
   Deferred tax asset, net                                                                             767                -
                                                                                            ---------------  ---------------
             Total current assets                                                                   17,594           14,201
BUILDING, EQUIPMENT AND IMPROVEMENTS, net                                                           14,112           12,200
GOODWILL                                                                                            15,197           15,197
DEFERRED TAX ASSET, net                                                                             10,016                -
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $587 in 2002 and $187 in 2001            1,813            2,213
OTHER ASSETS                                                                                           345              345
                                                                                            ---------------  ---------------
TOTAL ASSETS                                                                                   $    59,077       $   44,156
                                                                                            ===============  ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Line of credit                                                                              $     5,066       $    2,914
   Accounts payable                                                                                  3,633            2,914
   Accrued expenses                                                                                  2,910            3,450
   Current portion of long-term debt                                                                 2,389            2,120
   Current portion of capital leases                                                                   105              223
                                                                                            ---------------  ---------------
             Total current liabilities                                                              14,103           11,621
LONG-TERM DEBT, net of current portion                                                               8,947            9,749
LONG-TERM PORTION OF CAPITAL LEASES, net of current portion                                            202              266

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par value; authorized shares, 50,000; none issued and outstanding              -                -
   Common stock, $0.15 par value; authorized shares, 14,400,000; issued and outstanding
         shares, 4,806,918 in 2002 and 4,746,732 in 2001                                               721              647
   Additional paid-in capital                                                                       80,613           75,199
   Deferred stock-based compensation                                                                  (545)            (463)
   Accumulated deficit                                                                             (44,788)         (52,584)
   Note receivable from related party                                                                    -             (103)
   Treasury stock                                                                                     (176)            (176)
                                                                                            ---------------  ---------------
             Total stockholders' equity                                                             35,825           22,520
                                                                                            ---------------  ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                   $      59,077       $   44,156
                                                                                            ===============  ===============

</TABLE>

<PAGE>


<TABLE>

                                              MEDTOX SCIENTIFIC, INC.
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (In thousands)
                                                    (Unaudited)
<CAPTION>

                                                                                        Nine Months Ended
                                                                                          September 30,
                                                                                    2002                   2001
                                                                              ----------------       ----------------
<S>                                                                          <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                      $   12,813             $    2,188
   Adjustments to reconcile net income to net cash provided by (used in)
    operating activities:
      Depreciation and amortization                                                     1,858                  1,800
      Provision for losses on accounts receivable                                         313                    229
      Deferred compensation                                                               254                    139
      Deferred income taxes                                                           (10,783)                     -
      Changes in operating assets and liabilities:
         Accounts receivable                                                           (2,422)                (2,544)
         Inventories                                                                       25                   (379)
         Prepaid expenses and other current assets                                        280                   (150)
         Other assets                                                                      (2)                  (187)
         Accounts payable and accrued expenses                                            179                    (26)
         Accrued restructuring costs                                                        -                   (160)
                                                                              ----------------       ----------------
                Net cash provided by operating activities                               2,515                    910

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                (3,163)                (7,795)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in checks written in excess of bank balances                                    -                     57
   Proceeds from note receivable from related party                                       103                      -
   Net proceeds from sale of common stock                                                 136                    294
   Net proceeds from legal settlement                                                       -                    628
   Net proceeds (payments) on revolving credit facility                                 2,152                   (559)
   Proceeds from long-term debt                                                         1,128                  7,400
   Principal payments on long-term debt                                                (1,867)                  (976)
   Principal payments on capital leases                                                  (182)                  (172)
                                                                              ----------------       ----------------
              Net cash provided by financing activities                                 1,470                  6,672
                                                                              ----------------       ----------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                          822                   (213)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                           67                    213
                                                                              ----------------       ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                         $      889             $        -
                                                                              ================       ================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Non-cash activities:
          Additions to capital leases                                              $        -             $       75
   Cash paid for:
          Interest                                                                        971                    824
</TABLE>
<PAGE>

                             MEDTOX SCIENTIFIC, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2002

NOTE A - BASIS OF PRESENTATION

The  accompanying   unaudited   consolidated   financial  statements  of  MEDTOX
Scientific, Inc. (the "Company") have been prepared in accordance with generally
accepted  accounting  principles for interim financial  information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the  information  and notes  required by  generally  accepted
accounting principles. In the opinion of management, all adjustments (consisting
only  of  normal  recurring   adjustments)   considered  necessary  for  a  fair
presentation  of  financial  condition  and  results  of  operations  have  been
included.  Operating  results for the nine-month period ended September 30, 2002
are not  necessarily  indicative  of the results  that may be  attained  for the
entire  year.  These  consolidated   financial  statements  should  be  read  in
conjunction  with the  consolidated  financial  statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2001.

Reclassifications:   Certain  reclassifications  have  been  made  to  the  2001
financial statements to conform with the 2002 presentations.

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Accounting  Financial  Standards  No. 142 (SFAS  142),  "Goodwill  and Other
Intangible  Assets." This statement requires that goodwill and intangible assets
deemed  to have an  indefinite  life not be  amortized.  Instead  of  amortizing
goodwill and intangible  assets deemed to have an indefinite life, the statement
requires a test for  impairment  to be performed  annually,  or  immediately  if
conditions indicate that such an impairment could exist. The Company adopted the
provisions  of SFAS 142  effective  January  1, 2002,  and as a result,  will no
longer record goodwill  amortization of approximately $0.8 million per year. The
Company completed the initial goodwill impairment test during the second quarter
of 2002 and determined that there was no impairment of goodwill upon adoption of
SFAS No.  142.  The  Company  will  perform  its annual  assessment  of goodwill
impairment pursuant to SFAS No. 142 in the fourth quarter. At September 30, 2002
and  December  31,  2001 the Company  had $15.2  million of  goodwill  which was
related to the Laboratory Services segment.

The following table provides the comparable  effects of the adoption of SFAS No.
142 for the three and nine months ended  September  30, 2002 and  September  30,
2001.


<PAGE>


<TABLE>

(In thousands, except per share data)
<CAPTION>
                                                  Three months ended               Nine months ended
                                                    September 30,                     September 30,
                                                  2002           2001             2002             2001
                                                  -----------------------------------------------------
<S>                                             <C>          <C>              <C>            <C>
Reported net income                              $11,320      $   790           $12,813       $   2,188
Add back goodwill amortization                         -          205                 -             617
                                                 -------      -------           -------       ---------
Adjusted net income                              $11,320      $   995           $12,813       $   2,805
                                                 =======      =======           =======       =========

Reported earnings per share - basic              $  2.36      $  0.18           $  2.67       $    0.51
Goodwill amortization                                  -         0.05                 -            0.14
                                                 -------      -------           -------       ---------
Adjusted earnings per share - basic              $  2.36      $  0.23           $  2.67       $    0.65
                                                 =======      =======           =======       =========

Reported earnings per share - diluted            $  2.27      $  0.17           $  2.55       $    0.48
Goodwill amortization                                -           0.04                -             0.14
                                                 -------      -------           -------       ---------
Adjusted earnings per share - diluted            $  2.27      $  0.21           $  2.55       $    0.62
                                                 =======      =======           =======       =========
</TABLE>

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."  SFAS No. 143  addresses  financial  accounting  and reporting for
obligations  associated  with  the  retirement  of  long-lived  assets  and  the
associated asset retirement  costs. SFAS No. 143 is effective for the Company on
January 1, 2003.  The  Company is  currently  in the process of  evaluating  the
impact of the adoption of SFAS No. 143.

In September 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 addresses  financial  accounting
and reporting for the  impairment or disposal of long-lived  assets.  While SFAS
144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," it retains many of the fundamental
provisions of that  statement.  The adoption of this standard on January 1, 2002
did not have an effect on the Company's financial position or operating results.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities."  SFAS No. 146 requires  that a liability for
costs  associated  with  exit or  disposal  activities  be  recognized  when the
liability is incurred. Existing generally accepted accounting principles provide
for the recognition of such costs at the date of  management's  commitment to an
exit plan. In addition,  SFAS No. 146 requires that the liability be measured at
fair value and be adjusted for changes in estimated  cash flows.  The provisions
of SFAS No. 146 are effective for exit or disposal  activities  initiated  after
December 31, 2002.  The Company is  currently in the process of  evaluating  the
impact of the adoption of SFAS No. 146.


NOTE B - SEGMENTS

The Company has two reportable segments:  Laboratory Services and Product Sales.
The Laboratory Services segment consists of MEDTOX  Laboratories,  Inc. Services
provided include forensic toxicology,  clinical toxicology, clinical testing for
the  pharmaceutical  industry,  pediatric lead testing,  heavy metals  analyses,
courier delivery,  and medical surveillance.  The Product Sales segment consists
of  MEDTOX  Diagnostics,   Inc.  Products  manufactured  include  easy  to  use,
inexpensive,   on-site  drug  tests  such  as   PROFILE(R)-II,   PROFILE(R)-IIA,
PROFILE(R)-ER, EZ-SCREEN(R), and VERDICT(R)-II.


<PAGE>



The  Company's  reportable  segments  are  strategic  business  units that offer
different  products and services.  They are managed  separately as each business
requires different products, services and marketing strategies.

In evaluating financial performance,  management focuses on income before income
taxes as a segment's measure of profit or loss.
<TABLE>

Segment Information
(In thousands)

<CAPTION>
                                                                 Three Months Ended                Nine Months Ended
                                                                    September 30,                    September 30,
                                                                  2002         2001               2002          2001
                                                        ----------------------------     ----------------------------
<S>                                                         <C>          <C>                <C>          <C>
Laboratory Services:
   Revenues                                                   $ 10,562     $  9,446           $ 30,439     $  28,741
   Interest expense                                                312          252                975           755
   Depreciation and amortization                                   565          558              1,714         1,703
   Segment income                                                  211          288                541         1,135
   Segment assets                                               42,034       34,660             42,034        34,660
   Capital expenditures for segment assets                         463          118              1,899         7,541


Product Sales:
   Revenues                                                   $  3,070     $  3,135           $  9,462      $  8,007
   Interest expense                                                 20           11                 50            36
   Depreciation and amortization                                    52           35                144            97
   Segment income                                                  326          502              1,489         1,053
   Segment assets                                                6,260        4,515              6,260         4,515
   Capital expenditures for segment assets                         391           93              1,264           254


Other:
   Deferred tax asset, net                                    $ 10,783     $      -           $ 10,783      $      -


Company:
   Revenues                                                   $ 13,632     $ 12,581           $ 39,901      $ 36,748
   Interest expense                                                332          263              1,025           791
   Depreciation and amortization                                   617          593              1,858         1,800
   Total segment income                                            537          790              2,030         2,188
   Total assets                                                 59,077       39,175             59,077        39,175
   Capital expenditures for total assets                           854          211              3,163         7,795

</TABLE>



<PAGE>


The following is a summary of revenues from external customers for each group of
services provided within the Laboratory Services segment:
(In thousands)
<TABLE>
<CAPTION>

                                                       Three Months Ended                Nine Months Ended
                                                          September 30,                    September 30,
                                                        2002         2001                 2002        2001
                                              ----------------------------      ---------------------------
<S>                                              <C>            <C>                <C>         <C>

Workplace drugs of abuse testing                   $   6,563      $ 6,289            $  19,502   $  19,554
Other specialty testing                                3,999        3,157               10,937       9,187
                                              ----------------------------      ---------------------------
                                                   $  10,562      $ 9,446            $  30,439   $  28,741
                                              ============================      ===========================
</TABLE>

The following is a summary of revenues from external customers for each group of
products and services provided within the Product Sales segment:
(In thousands)
<TABLE>
<CAPTION>

                                                       Three Months Ended                Nine Months Ended
                                                          September 30,                    September 30,
                                                        2002         2001                 2002        2001
                                              ----------------------------      ---------------------------
<S>                                              <C>            <C>                 <C>          <C>

Substance abuse testing products                   $   2,641      $ 2,777             $  8,186     $ 6,908
Contract manufacturing services                          331          324                1,044         846
Agricultural diagnostic products                          98           34                  232         253
                                              ----------------------------      ---------------------------
                                                   $   3,070      $ 3,135             $  9,462     $ 8,007
                                              ============================      ===========================
</TABLE>


NOTE C - INVENTORIES

Inventories consisted of the following:
(In thousands)
                                            September 30,       December 31,
                                                2002               2001
                                            -------------      -------------

Raw materials                               $   2,019          $   1,570
Work in process                                    51                414
Finished goods                                    514                460
Supplies, including off-site inventory          1,288              1,453
                                            -------------      -------------
                                            $   3,872          $   3,897
                                            =============      =============


<PAGE>



NOTE D - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
common share:
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                               Three Months Ended           Nine Months Ended
                                                  September 30,                September 30,
                                                2002       2001 (1)         2002       2001 (1)
<S>                                       <C>          <C>            <C>          <C>
                                            ----------   ----------     ----------   ----------
Net income (A)                              $   11,320   $      790     $   12,813   $    2,188
                                            ==========   ==========     ==========   ==========
Weighted average number of basic
    common shares outstanding (B)            4,804,106    4,331,655      4,793,793    4,289,791
Dilutive effect of stock options and
    warrants computed based on the
    treasury stock method using average
    market price                               184,852      386,980        236,025      254,286
                                            ----------   ----------     ----------   ----------
Weighted average number of diluted
    common shares outstanding (C)            4,988,958    4,718,635      5,029,818    4,544,077
                                            ==========   ==========     ==========   ==========
Basic earnings per common share (A/B)       $     2.36   $     0.18     $     2.67   $     0.51
                                            ==========   ==========     ==========   ==========
Diluted earnings per common share (A/C)     $     2.27   $     0.17     $     2.55   $     0.48
                                            ==========   ==========     ==========   ==========
</TABLE>


Options and warrants to purchase 978,359, 915,565, 17,902, and 927,754 shares of
common stock were  outstanding  during the three and nine months ended September
30, 2002 and 2001,  respectively,  but were not included in the  computation  of
diluted  earnings  per share as their  exercise  prices  were  greater  than the
average market price of the common shares.

(1) Share and per share  amounts for the three and nine months  ended  September
30, 2001 have been restated for the ten percent  stock  dividend paid on July 5,
2002.


NOTE E - INCOME TAX BENEFIT

At December 31, 2001, the Company had net operating loss carryforwards  (NOL) of
approximately  $32.0  million,  which are  available  to offset  taxable  income
through  2014.  Management  previously  established a valuation  allowance  with
respect to these tax loss  carryforwards  and other  temporary  differences,  as
management had determined that it was more likely than not that the tax benefits
of these tax assets would not be realized.  At December 31, 2001,  the valuation
allowance was $13.9 million. At September 30, 2002, based on a review of various
financial  factors,  including the Company's recent  historical  performance and
projected future results,  management determined that it is more likely than not
that $10.8  million of the tax  benefits of these  deferred  tax assets would be
realized.  Accordingly,  the valuation  allowance was reduced by $10.8  million,
resulting in a net deferred tax asset of $10.8 million as of September 30, 2002,
and a net income tax  benefit of $10.8  million  (or $2.16 and $2.14 per diluted
share) for the three and nine months ended September 30, 2002, respectively.







<PAGE>



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


               Cautionary Statement Identifying Important Factors
             That Could Cause the Company's Actual Results to Differ
               From Those Projected in Forward Looking Statements

In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform  Act of  1995,  readers  of this  document  and any  document
incorporated by reference  herein,  are advised that this document and documents
incorporated  by  reference  into  this  document  contain  both  statements  of
historical facts and forward looking statements.  Forward looking statements are
subject to certain risks and uncertainties,  which could cause actual results to
differ  materially  from those  indicated  by the  forward  looking  statements.
Examples  of forward  looking  statements  include,  but are not  limited to (i)
projections  of revenues,  income or loss,  earnings or loss per share,  capital
expenditures,  dividends,  capital  structure and other  financial  items,  (ii)
statements of the plans and objectives of the Company or its management or Board
of  Directors,  including  the  introduction  of new  products,  or estimates or
predictions  of actions  by  customers,  suppliers,  competitors  or  regulatory
authorities,   (iii)  statements  of  future  economic  performance,   and  (iv)
statements of assumptions  underlying  other statements and statements about the
Company or its business.

This document and any documents  incorporated by reference  herein also identify
important  factors which could cause actual  results to differ  materially  from
those indicated by the forward looking statements. The factors that could affect
our actual results include the following:

o  increased competition, including price competition

o  general economic and business conditions, both nationally and internationally

o  changes in business strategy or development plans

o  technological, evolving industry standards, or other problems that could
   delay the sale of our products

o  our inability to obtain appropriate licenses from third parties, protect our
   trade secrets, operate without infringing upon the proprietary rights of
   others, or prevent others from infringing on our proprietary rights

o  our inability to obtain sufficient financing to continue to expand operations

o  changes in demand for products and services by our customers

o  our failure to obtain and retain new customers and alliance partners, or a
   reduction in tests ordered or specimens submitted by existing customers

o  adverse results in litigation matters

o  our ability to attract and retain experienced and qualified personnel

o  failure to maintain our days sales outstanding levels
<PAGE>

o  losses due to bad debt

The cautionary  statements  made pursuant to the Private  Litigation  Securities
Reform Act of 1995 above and elsewhere by the Company should not be construed as
exhaustive or as any admission regarding the adequacy of disclosures made by the
Company prior to the effective date of such Act. Forward looking  statements are
beyond the  ability of the  Company  to  control  and in many cases the  Company
cannot predict what factors would cause results to differ  materially from those
indicated by the forward looking statements.


General

MEDTOX Scientific,  Inc. (formerly EDITEK,  Inc.), a Delaware  corporation,  was
organized  in  September  1986  to  succeed  the  operations  of  a  predecessor
California   corporation.   MEDTOX   Scientific,   Inc.  and  its   wholly-owned
subsidiaries,  MEDTOX  Laboratories,  Inc.,  MEDTOX  Diagnostics,  Inc., and New
Brighton  Business  Center  LLC are  referred  to herein as "the  Company".  The
Company is engaged primarily in two distinct, but very much related, businesses.
The business of manufacturing and distribution of diagnostic  devices is carried
on by MEDTOX Diagnostics,  Inc. from its facility in Burlington,  North Carolina
and the business of forensic and  clinical  laboratory  services is conducted by
MEDTOX Laboratories, Inc. at its facility in St. Paul, Minnesota.

The Company has two reportable segments:  "Laboratory Services" conducted by the
Company's  wholly owned  subsidiary,  MEDTOX  Laboratories,  Inc. and  "Products
Sales" conducted by the Company's wholly owned  subsidiary  MEDTOX  Diagnostics,
Inc.  Laboratory  Services include  forensic  toxicology,  clinical  toxicology,
clinical  testing for the  pharmaceutical  industry and heavy metal  analyses as
well as logistics,  data, and overall program management services. Product Sales
include sales of a variety of  point-of-collection  (POC) screening  devices for
therapeutic  drugs  and drugs of abuse.  For the  three  and nine  months  ended
September 30, 2002,  Laboratory  Services revenue accounted for 77.5% and 76.3%,
respectively,  of the Company's revenues,  compared with 75.1% and 78.2% for the
same periods in 2001.  Revenue from Product Sales  accounted for 22.5% and 23.7%
of the  total  revenues  of the  Company  for the three  and nine  months  ended
September  30, 2002,  respectively,  compared  with 24.9% and 21.8% for the same
periods in 2001.


Critical Accounting Policies

The  Company  has  identified  the  policies  outlined  below as critical to its
business  operations and an understanding of results of operations.  The listing
is not intended to be a comprehensive list of all accounting  policies.  In many
cases,  the accounting  treatment of a particular  transaction  is  specifically
dictated by accounting  principles generally accepted in the United States, with
no need for  management's  judgment  in their  application.  The  impact and any
associated risks related to these policies on the Company's business  operations
is  discussed  throughout  Management's  Discussion  and  Analysis of  Financial
Condition and Results of  Operations  where such  policies  affect  reported and
expected  financial  results.  For a detailed  discussion on the  application of
these and other accounting policies, see Note 1 in the Notes to the Consolidated
Financial  Statements  in Item 14 on Form 10-K for the year ended  December  31,
2001.  Note that the  preparation of this Form 10-Q requires  management to make
estimates  and  assumptions  that  affect  the  reported  amount of  assets  and
liabilities,  disclosure of contingent assets and liabilities at the date of our
financial  statements,  and the reported  amounts of revenue and expenses during
the reporting  period.  There can be no assurance  that actual  results will not
differ from those estimates.
<PAGE>

The Company's critical accounting policies are as follows:

Accounts  Receivable:
The Company  performs  ongoing  credit  evaluations of its customers and adjusts
credit  limits  based upon payment  history and the  customers'  current  credit
worthiness,  as  determined  by  management's  review  of their  current  credit
information. The Company continuously monitors collections and payments from its
customers and  maintains a provision for estimated  credit losses based upon the
Company's historical experience and any specific customer collection issues that
have been identified. While such credit losses have historically been within the
Company's  general  expectations  and the  provisions  established,  the Company
cannot  guarantee that it will continue to experience the same credit loss rates
that have  occurred  in the past.  The  Company's  consolidated  trade  accounts
receivable balance as of September 30, 2002 was $10.4 million,  net of allowance
for doubtful accounts of $1.6 million.

Off-Site Supplies Inventory:
Off-site  supplies  represents  collection kits and forms located at collections
sites  throughout  the United States used by Laboratory  Services'  customers to
submit specimens for testing services. At September 30, 2002, off-site inventory
was $0.7  million.  The  process  for  estimating  off-site  inventory  involves
significant  assumptions and judgments.  The estimate is based on the historical
average time that a collection site uses the inventory, as well as the amount of
inventory expected to be scrapped.

Goodwill:
The Company  continually  evaluates  whether events and changes in circumstances
warrant  revised  estimates of useful lives or recognition of an impairment loss
of  unamortized  goodwill.  The  conditions  that would  trigger  an  impairment
assessment of unamortized  goodwill  include a significant,  sustained  negative
trend in operating results or cash flows, a decrease in demand for the Company's
products  or  services,  a change  in the  competitive  environment,  and  other
industry and  economic  factors.  Until  January 1, 2002,  the Company  measured
impairment of unamortized  goodwill utilizing the undiscounted cash flow method.
The estimated cash flows were then compared to recorded goodwill amounts; if the
unamortized  balance of the goodwill  exceeded  the  estimated  cash flows,  the
excess of the unamortized balance would have been written off.

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets"  (SFAS No.  142).  The Company  adopted SFAS No. 142 on January 1, 2002.
According to the  provisions  of SFAS No. 142,  the Company  assessed the impact
based on a two-step  approach to assess  goodwill based on applicable  reporting
units and reassessed  any intangible  assets,  including  goodwill,  recorded in
connection with previous  acquisitions.  The Company recorded approximately $0.2
million  and $0.6  million of  goodwill  amortization  during the three and nine
months  ended  September  30,  2001,  respectively,   and  would  have  recorded
approximately $0.2 million and $0.6 million of goodwill  amortization during the
same  periods  of  2002,  without  the  adoption  of SFAS  No.  142.  In lieu of
amortization,  the Company  performed the initial  impairment review of goodwill
during the second  quarter of 2002 and will be required to perform such a review
at  least  annually  thereafter.  The  Company  determined  that  there  was  no
impairment  of goodwill upon adoption of SFAS No. 142. As of September 30, 2002,
the Company had unamortized goodwill of $15.2 million. As of September 30, 2002,
the  Company  had  other   identifiable   intangible  assets  of  $1.8  million.
Amortization  expense of other identifiable  intangible assets was approximately
$134,000,  $403,000,  $9,000, and $27,000 during the three and nine months ended
September 30, 2002 and September 30, 2001 respectively.
<PAGE>

Accounting  for  Income  Taxes:
As part of the process of preparing the consolidated  financial statements,  the
Company is required to estimate  income  taxes in each of the  jurisdictions  in
which it operates.  This process involves estimating actual current tax exposure
together with assessing temporary differences resulting from differing treatment
of items for tax and accounting  purposes.  These differences result in deferred
tax assets and  liabilities.  The Company must then assess the  likelihood  that
deferred tax assets will be  recovered  from future  taxable  income and, to the
extent  management  believes  that  recovery  is not likely,  the  Company  must
establish  a  valuation  allowance.  To the  extent  the  Company  increases  or
decreases  the  valuation  allowance  in a period,  the Company  must include an
expense or benefit  within the tax  provision in the  consolidated  statement of
operations.

Significant  management  judgment is required in  determining  the provision for
income taxes,  deferred tax assets and liabilities,  and any valuation allowance
recorded  against net deferred tax assets.  As of December 31, 2001, the Company
has recorded a full  valuation  allowance of $13.9 million due to  uncertainties
related to the  Company's  ability  to  utilize  the net  deferred  tax  assets,
primarily  consisting  of certain net operating  losses (NOL)  carried  forward,
before  they  expire.  At  September  30,  2002,  based on a review  of  various
financial  factors,  including the Company's recent  historical  performance and
projected future results,  management determined that it is more likely than not
that $10.8  million of the tax  benefits of these  deferred  tax assets would be
realized.  Accordingly,  the valuation  allowance was reduced by $10.8  million,
resulting  in a net income tax  benefit of $10.8  million for the three and nine
months ended  September 30, 2002,  and a net deferred tax asset of $10.8 million
as of September 30, 2002. The $10.8 million tax benefit and related deferred tax
asset are reported in the  consolidated  statements of operations  for the three
and nine month periods ending September 30, 2002 and consolidated  balance sheet
as of September 30, 2002. In the future,  subsequent  revisions to the estimated
net realizable value of the net deferred tax asset could cause the provision for
income taxes to vary significantly from period to period, although the Company's
cash payments would remain unaffected until the benefit of the NOL is completely
utilized.


Results of Operations

Revenues for the third  quarter of 2002  increased 8% over the third  quarter of
2001, driven by strong specialty  laboratory volume as well as continued success
in acquiring  new  laboratory  clients.  Selling,  general,  and  administrative
expenses  as a  percentage  of sales were  higher in the third  quarter of 2002,
reflecting  increased  sales and  marketing  efforts and  increased  spending in
client service support for clinical trial services.  The Company also recorded a
$10.8  million  non-cash tax benefit as part of net income for the third quarter
of 2002.  The  following  table sets  forth the  percentages  of total  revenues
represented by certain items reflected in the Company's Consolidated  Statements
of Operations:


<PAGE>
<TABLE>
<CAPTION>



                                                  Three Months Ended          Nine Months Ended
                                                    September 30,               September 30,
                                                  2002          2001          2002         2001
-------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>           <C>          <C>

   Revenues                                      100.0%        100.0%        100.0%       100.0%
   Cost of revenues                               60.7          60.3          59.5         61.4
                                                 ------        ------        ------       ------
   Gross margin                                   39.3          39.7          40.5         38.6
   Operating expenses:
     Selling, general, and administrative         30.4          28.5          30.4         27.7
     Research and development                      2.4           2.6           2.3          2.6
                                                 ------        ------        ------       ------
                                                  32.8          31.1          32.7         30.3
   Other expense, primarily interest               2.6           2.3           2.7          2.3
                                                 ------        ------        ------       ------
   Income before income tax benefit                3.9           6.3           5.1          6.0
   Income tax benefit                             79.1             -          27.0            -
                                                 ------        ------        ------       ------
   Net income                                     83.0%          6.3%         32.1%         6.0%
                                                 ======        ======        ======       ======

</TABLE>

Three Months Ended September 30, 2002 Compared to Three Months Ended
September 30, 2001

Revenues

Revenues  increased 8% to $13.6 million for the three months ended September 30,
2002, driven by a $1.1 million, or 12% increase in Laboratory Services revenues.
Product  Sales  revenues  in the third  quarter  were  even with the prior  year
period,  reflecting a slight drop in sales of substance abuse testing  products,
partially  offset  by a slight  increase  in sales  of  agricultural  diagnostic
products.

The  Laboratory  Services  segment  benefited  from a 27%  increase in specialty
laboratory  services  revenues due to the expansion of clinical  testing for the
pharmaceutical industry and the October 2001 acquisition of Leadtech Corporation
(Leadtech),  a  pediatric  lead-testing  laboratory.  Specimen  volume  from the
Company's occupational health and corporate clients increased 5%, reflecting the
Company's  continued  success in acquiring new client  relationships and gaining
market share, despite the continued softness in new business employment.

In the Product Sales segment,  sales of substance abuse testing products,  which
incorporates the PROFILE(R)-II,  PROFILE(R)-ER, PROFILE-IIA(R) and VERDICT(R)-II
on-site  test kits and other  ancillary  products  for the  detection  of abused
substances,  declined 5% to $2.6 million in the third quarter of 2002.  Sales of
PROFILE(R)-II devices to existing workplace clients were down from last year and
continue  to be  impacted  by  the  reduction  in  nationwide  hiring.  However,
continuing  success in acquiring  new client  relationships  and gaining  market
share has helped to mitigate the negative  impact of lower volumes from existing
clients.  Sales of PROFILE(R)-II ER and the Company's new PROFILE(R)-IIA devices
continue to grow and have  increased  more than  $780,000  over the same quarter
last year. The PROFILE(R)-ER  device is an on-site,  nine drugs-of-abuse  panel,
targeted  at  hospital   laboratories  for  emergency   response   screening  in
drugs-of-abuse  overdose situations.  The PROFILE(R)-IIA  device,  introduced in
October  2001,  screens for five drugs of abuse and uses a unique  lateral  flow
test strip to screen for the five most common adulterants.  In the VERDICT(R)-II
product  line,   sales  to  government   clients  for   probation,   parole  and
rehabilitation  were  down 24% from the  prior  year  period,  primarily  due to
reductions in state budgets.  In 2001, the strong economy created surplus budget
dollars  with which large  government  orders  were  initiated  at their  fiscal
year-end,  which is in the Company's third quarter. As the fourth quarter begins
and new government budgets are in place, ordering patterns are recovering.
<PAGE>

Product sales from agricultural diagnostic products increased $64,000 to $98,000
million primarily as a result of increased  purchases by the U.S.  Department of
Agriculture  (USDA)  for  the  Company's  products.  The  USDA's  needs  for the
Company's  products vary from year-to-year and sales to the USDA are expected to
fluctuate accordingly. Sales of contract manufacturing services, microbiological
and associated  products were $0.3 million in the quarter,  up 2% from the prior
year period.

Gross profit

Consolidated  gross margin declined  slightly to 39.3% of revenues for the three
months  ended  September  30, 2002  compared  to 39.7% of revenues  for the same
period of 2001,  reflecting  a drop in Product  Sales  gross  margin,  partially
offset by improvement in Laboratory Services gross margin.

Laboratory  Services  gross  margin was 32.7% of revenues  for the three  months
ended September 30, 2002, up from 29.0% of revenues for the same period in 2001.
This improvement was primarily  attributable to the Company's continued focus on
higher margin specialty  laboratory testing services.  Gross margin from Product
Sales  declined to 61.6% of revenues for the three months  ended  September  30,
2002 from 72.0% of revenues in the  comparable  period of 2001, and was impacted
by product mix factors and favorable  manufacturing  variances in the prior year
period.

Selling, general and administrative expenses

Selling,  general and  administrative  expenses were $4.1  million,  or 30.4% of
revenues  in the third  quarter of 2002,  compared  to $3.6  million or 28.5% of
revenues  in the third  quarter  of 2001.  The  increase  was  primarily  due to
increased  sales and  marketing  expenses  related to acquiring new business and
increased spending in client service support for clinical trial services.

Other expense

Other expense,  consisting  primarily of interest expense,  increased 19% in the
third quarter of 2002,  reflecting higher average debt levels,  partially offset
by lower interest rates.

Income before income tax benefit

In the three months ended September 30, 2002, the Company recorded income before
income tax benefit of $0.5 million,  compared to $0.8 million in the same period
of 2001.  The  decline in income  was caused  primarily  by  increased  selling,
general,  and  administrative  expenses,  partially  offset by an 8% increase in
consolidated revenues

Laboratory  Services  income  before  income tax benefit of $0.2 million for the
three months ended  September  30, 2002 was down  slightly from the $0.3 million
recorded in the prior year period. The slight decline was primarily attributable
to  increased  sales and  marketing  expenses and  increased  spending in client
service support for clinical trial services, as well as higher interest expense,
partially offset by increased revenues and an improved gross margin.

Product  Sales income  before  income tax benefit was $0.3 million for the three
months ended  September 30, 2002 compared to $0.5 million for the same period of
2001. This decline was primarily caused by a reduced gross margin.
<PAGE>

Income tax benefit

As of December 31, 2001, the Company had recorded a full valuation  allowance of
$13.9 million due to uncertainties  related to the Company's  ability to utilize
the net  deferred  tax assets,  primarily  consisting  of certain net  operating
losses (NOL) carried forward,  before they expire.  At September 30, 2002, based
on a review  of  various  financial  factors,  including  the  Company's  recent
historical performance and projected future results,  management determined that
it is more  likely  than not that  $10.8  million of the tax  benefits  of these
deferred tax assets would be realized.  Accordingly, the valuation allowance was
reduced by $10.8 million, resulting in a net income tax benefit of $10.8 million
for the three months ended  September 30, 2002,  and a net deferred tax asset of
$10.8  million as of  September  30,  2002.  The $10.8  million  tax benefit and
related  deferred  tax asset  are  reported  in the  consolidated  statement  of
operations for the three month period ending September 30, 2002 and consolidated
balance sheet as of September 30, 2002. In the future,  subsequent  revisions to
the estimated net realizable value of the net deferred tax asset could cause the
provision for income taxes to vary significantly from period to period, although
the Company's cash payments would remain unaffected until the benefit of the NOL
is completely utilized.


Nine Months Ended September 30, 2002 Compared to Nine Months Ended
September 30, 2001

Revenues

Revenues  increased 9% to $39.9 million for the nine months ended  September 30,
2002, driven by a $1.7 million,  or 6% increase in Laboratory  Services revenues
and a $1.5 million, or 18% increase in Product Sales revenues.

The growth in  Laboratory  Services  revenues  was driven by a 19%  increase  in
revenues from the Company's  specialty  laboratory services due to the expansion
of  clinical  testing  for the  pharmaceutical  industry  and the  October  2001
acquisition  of  Leadtech  Corporation  (Leadtech),   a  pediatric  lead-testing
laboratory.  This  positive  trend was slightly  offset by a 1% drop in specimen
volume from the Company's occupational health and corporate clients,  reflecting
the  impact of the  slowing  economy  and lower  levels  of  employment  hiring.
However,  this impact has been  partially  mitigated by the Company's  continued
success in acquiring new client relationships and gaining market share.

The Product  Sales  segment  achieved  higher  sales due to  increased  sales of
substance abuse testing products and contract manufacturing services,  partially
offset by decreased sales of  agricultural  diagnostic  products.  Product sales
from substance abuse testing  products,  which  incorporates the  PROFILE(R)-II,
PROFILE(R)-ER,  PROFILE-II(R)A  and  VERDICT(R)-II  on-site  test kits and other
ancillary  products  for the  detection  of abused  substances,  increased  $1.3
million to $8.2 million in the first nine months of 2002. This growth  reflected
strong sales in the PROFILE-ER(R)  and  PROFILE-IIA(R)  product lines.  However,
sales of PROFILE(R)-II devices to existing workplace clients were down from last
year and continue to be impacted by the reduction in nationwide  hiring.  In the
VERDICT-II(R)  product line, sales to government  clients for probation,  parole
and  rehabilitation  were up 9% over the first nine months of last year, despite
the softness in the third quarter due to reductions in state budgets.

Sales  of  contract  manufacturing  services,   microbiological  and  associated
products increased 23% to $1.1 million,  reflecting increased revenues from both
historical  customers  and  new  customers.   Product  sales  from  agricultural
diagnostic  products  decreased  8% to $0.2  million  primarily  as a result  of
decreased  purchases  by the  U.S.  Department  of  Agriculture  (USDA)  for the
Company's  products.  The  USDA's  needs for the  Company's  products  vary from
year-to-year and sales to the USDA are expected to fluctuate accordingly.
<PAGE>

Gross profit

Consolidated  gross  margin  improved to 40.5% of  revenues  for the nine months
ended  September  30, 2002  compared to 38.6% of revenues for the same period of
2001, reflecting  improvement in Laboratory Services gross margin as well as the
continuing  shift  in  the  Company's  business  mix  toward  Product  Sales  at
significantly higher margins.  This improvement was partially offset by a slight
drop in Product Sales gross margin.

Laboratory Services gross margin was 33.7% of revenues for the nine months ended
September 30, 2002, up from 31.5% of revenues for the same period in 2001.  This
improvement  was  primarily  attributable  to the Company's  continued  focus on
higher margin specialty  laboratory testing services.  Gross margin from Product
Sales  declined  slightly to 62.6% of revenues for the first nine months of 2002
from 64.0% of revenues in the  comparable  period of 2001,  and was  impacted by
product mix factors and favorable  manufacturing  variances in the third quarter
of 2001.

Selling, general and administrative expenses

Selling,  general and  administrative  expenses were $12.2 million,  or 30.4% of
revenues in the first nine months of 2002, compared to $10.2 million or 27.7% of
revenues in same period of 2001.  The  increase was  primarily  due to increased
sales and  marketing  expenses  related to acquiring  new business and increased
spending in client service support for clinical trial services.

Research and development expenses

Research and development expenses decreased 5% in the first nine months of 2002,
reflecting a slight  planned  reduction in spending for the  development  of new
products for on-site and other ancillary products in the Product Sales segment.

Other expense

Other expense,  consisting  primarily of interest expense,  increased 26% in the
first nine months of 2002,  reflecting  higher  average debt  levels,  partially
offset by lower interest rates.

Income before income tax benefit

In the nine months ended September 30, 2002, the Company  recorded income before
income tax benefit of $2.0 million,  compared to $2.2 million in the same period
of 2001.  The  decline in income  was caused  primarily  by  increased  selling,
general,  and  administrative  expenses,  partially  offset by a 9%  increase in
consolidated revenues and an improved gross margin.

Laboratory  Services  income  before income tax benefit was $0.5 million for the
nine months ended September 30, 2002 compared to $1.1 million in the same period
of 2001. The decline in income was primarily attributable to increased sales and
marketing  expenses  as well as higher  interest  expense,  partially  offset by
increased revenues and an improved gross margin.

Product  Sales  income  before  income tax benefit was $1.5 million for the nine
months ended  September  30, 2002 compared to $1.1 million in the same period of
2001. This improvement was primarily driven by the growth in sales.
<PAGE>

Income tax benefit

As of December 31, 2001, the Company had recorded a full valuation  allowance of
$13.9 million due to uncertainties  related to the Company's  ability to utilize
the net  deferred  tax assets,  primarily  consisting  of certain net  operating
losses (NOL) carried forward,  before they expire.  At September 30, 2002, based
on a review  of  various  financial  factors,  including  the  Company's  recent
historical performance and projected future results,  management determined that
it is more  likely  than not that  $10.8  million of the tax  benefits  of these
deferred tax assets would be realized.  Accordingly, the valuation allowance was
reduced by $10.8 million, resulting in a net income tax benefit of $10.8 million
for the nine months ended  September  30, 2002,  and a net deferred tax asset of
$10.8  million as of  September  30,  2002.  The $10.8  million  tax benefit and
related  deferred  tax asset  are  reported  in the  consolidated  statement  of
operations for the nine month period ending  September 30, 2002 and consolidated
balance sheet as of September 30, 2002. In the future,  subsequent  revisions to
the estimated net realizable value of the net deferred tax asset could cause the
provision for income taxes to vary significantly from period to period, although
the Company's cash payments would remain unaffected until the benefit of the NOL
is completely utilized.


Liquidity and Capital Resources

The working capital  requirements  of the Company have been funded  primarily by
cash received from bank and debt financing and the sale of equity securities.

Net cash provided by operating  activities  was $2.5 million for the nine months
ended September 30, 2002 compared to $0.9 million in the same period of 2001.

Net cash used in investing activities,  consisting of capital expenditures,  was
$3.2  million  for the nine months  ended  September  30, 2002  compared to $7.8
million in the same period of 2001. In March of 2001, the Company  purchased the
three building,  129,039 square foot complex in St. Paul,  Minnesota,  where the
Company's  laboratory  segment  formerly leased 53,576 square feet. The purchase
price,  exclusive  of expenses  and  closing  costs,  was $6.35  million and was
financed by a mortgage loan from Principal Life Insurance Company of Des Moines,
Iowa in the amount of $6.2 million.

Net cash  provided by financing  activities  of $1.5 million for the nine months
ended  September 30, 2002 primarily  represented net proceeds from the revolving
credit  facility.  Net cash provided by financing  activities of $6.7 million in
the first nine months of 2001 was principally  associated with proceeds received
under the mortgage loan discussed above and the Company's  credit  agreement for
the purchase of capital equipment.

In January 1998, the Company entered into a Credit Security Agreement (the Wells
Fargo Credit  Agreement) with Wells Fargo Business Credit,  Inc. The Wells Fargo
Credit  Agreement,  as amended,  consists  of (i) a term loan of $3.185  million
bearing interest at prime + 0.75%;  (ii) a revolving line of credit,  payable on
demand,  of not more than $6.0 million or 85% of the  Company's  eligible  trade
accounts receivable bearing interest at prime + 0.50%; and (iii) a capex note of
up to $3.5 million for the  purchase of capital  equipment  bearing  interest at
prime + 0.75% and (iv)  availability  of  letters  of credit in  amounts  not to
exceed  the  lesser of  $300,000  (less  outstanding  letters  of credit) or the
unborrowed portion of the revolving line of credit (less outstanding  letters of
credit).

The Wells Fargo  Credit  Agreement  requires  the Company to comply with certain
covenants and maintain certain quarterly financial ratios as to minimum debt
<PAGE>
service  coverage  and  maximum  debt to book net  worth.  It also sets  minimum
quarterly  net income and book net worth levels,  which  restrict the payment of
dividends.  As of September  30, 2002,  the Company was in  compliance  with the
financial covenants of the Wells Fargo Credit Agreement.

The Company is relying on expected positive cash flow from operations,  its line
of credit and capex note to fund its future working capital and asset purchases.
The amount of credit on the revolving  line of credit is based  primarily on the
receivables  of the  Company  and,  as such,  varies  with the level of accounts
receivable.  As of September 30, 2002, the Company had total borrowing  capacity
of $6.0  million on its line of  credit,  of which $5.1  million  was  borrowed,
leaving a net availability of $0.9 million as of September 30, 2002.

In the short term, the Company believes that the aforementioned  capital will be
sufficient to fund the Company's planned  operations for the next twelve months.
While there can be no assurance that the available capital will be sufficient to
fund the future  operations of the Company  beyond the next twelve  months,  the
Company  believes  that  future  profitable  operations,  as well as  access  to
additional capital through debt or equity financings,  will be the primary means
for funding the operations of the Company for the long term.

The  Company  continues  to  follow  a  plan  which  includes  (i)  aggressively
monitoring and  controlling  costs,  (ii)  increasing  revenue from sales of the
Company's  existing  products and  services  (iii)  developing  new products and
services,   as  well  as  (iv)  continuing  to  selectively  pursue  synergistic
acquisitions to increase the Company's critical mass.  However,  there can be no
assurance that costs can be controlled, revenues can be increased, financing may
be obtained,  acquisitions successfully consummated, or that the Company will be
profitable.

Impact of Inflation and Changing Prices

The impact of inflation  and changing  prices on the Company has been  primarily
limited to salary,  laboratory and operating supplies and rent increases and has
historically not been material to the Company's  operations.  In the future, the
Company  may not be able to  increase  the  prices of  laboratory  testing by an
amount  sufficient  to cover the cost of  inflation,  although  the  Company  is
responding to these  concerns by refocusing the  laboratory  operations  towards
higher margin testing (including clinical and pharmaceutical  trials) as well as
emphasizing the marketing, sales and operations of the Product Sales business.

Seasonality

The Company believes that the laboratory testing business is subject to seasonal
fluctuations in pre-employment  screening.  These seasonal  fluctuations include
reduced volume in the summer months,  year-end holiday periods,  and other major
holidays.  In addition,  inclement  weather may have a negative impact on volume
thereby reducing net revenues and cash flow.


<PAGE>



Impact of New Accounting Standards

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."  SFAS No. 143  addresses  financial  accounting  and reporting for
obligations  associated  with  the  retirement  of  long-lived  assets  and  the
associated asset retirement  costs. SFAS No. 143 is effective for the Company on
January 1, 2003.  The  Company is  currently  in the process of  evaluating  the
impact of the adoption of SFAS No. 143.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities."  SFAS No. 146 requires  that a liability for
costs  associated  with  exit or  disposal  activities  be  recognized  when the
liability is incurred. Existing generally accepted accounting principles provide
for the recognition of such costs at the date of  management's  commitment to an
exit plan. In addition,  SFAS No. 146 requires that the liability be measured at
fair value and be adjusted for changes in estimated  cash flows.  The provisions
of SFAS No. 146 are effective for exit or disposal  activities  initiated  after
December 31, 2002.  The Company is  currently in the process of  evaluating  the
impact of the adoption of SFAS No. 146.



<PAGE>



Item 3            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
                  MARKET RISK.

Market  risk is the risk that the  Company  will  incur  losses  due to  adverse
changes in interest rates or currency  exchange rates and prices.  The Company's
primary market risk exposures are to changes in interest rates.  During 2001 and
through  September  30,  2002,  the  Company did not have sales  denominated  in
foreign  currencies  nor  did  it  have  any  subsidiaries  located  in  foreign
countries.  As such, the Company is not exposed to market risk  associated  with
currency exchange rates and prices.

As of September  30, 2002 and December 31, 2001,  the Company had $1.05  million
and $100,000 of  subordinated  notes  outstanding at fixed interest rates of 10%
and 8.5%,  respectively.  In addition,  at  September  30, 2002 and December 31,
2001,  the Company had a $6.0 million and $6.1 million  mortgage loan payable to
Principal Life insurance Company,  respectively, at a fixed annual rate of 7.23%
for the first  five  years at which  time the rate will be  renegotiated  by the
parties.  The Company  also had capital  leases at various  fixed  rates.  These
financial  instruments  are subject to interest  rate risk and will  increase or
decrease in value if market interest rates change.

The Company had approximately  $8.7 million and $6.6 million  outstanding on its
line of credit and long-term debt issued under the Wells Fargo Credit  Agreement
as of September 30, 2002 and December 31, 2001, respectively. The debt under the
Wells Fargo Credit Agreement is held at variable interest rates. The Company has
cash flow exposure on its line of credit and long-term  debt due to its variable
prime rate pricing.  At September 30, 2002 and December 31, 2001, a 1% change in
the prime rate would not  materially  increase or decrease  interest  expense or
cash flows.


Item 4            EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

(a)      Evaluation of disclosure controls and procedures.

Under the supervision and with the  participation  of our management,  including
the Company's Chief Executive Officer and Chief Financial Officer,  we evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures  (as defined in Rule  13a-14(c)  under the Exchange Act) as of a date
(the "Evaluation  Date") within 90 days prior to the filing date of this report.
Based upon that  evaluation,  the Chief  Executive  Officer and Chief  Financial
Officer  concluded that, as of the Evaluation Date, our disclosure  controls and
procedures  are effective in timely  alerting  them to the material  information
relating to us (or our consolidated subsidiaries) required to be included in our
periodic SEC filings.

(b)      Changes in internal controls.

There were no  significant  changes  made in our  internal  controls  during the
period covered by this report or, to our knowledge,  in other factors that could
significantly affect these controls subsequent to the date of their evaluation.


<PAGE>


PART II  OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS.   Inapplicable

ITEM 2   CHANGES IN SECURITIES.  Inapplicable

ITEM 3   DEFAULTS ON SENIOR SECURITIES.  Inapplicable

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
         Inapplicable

ITEM 5   OTHER INFORMATION.  Inapplicable

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K.

         a.  Exhibits:

         99.1     Certification of Chief Executive Officer pursuant to 18 U.S.C
                  Section 1350
         99.2     Certification of Chief Financial Officer pursuant to 18 U.S.C
                  Section 1350


         b.       Reports on Form 8-K:

         On July 23, 2002, the Company filed a Form 8-K announcing record
         revenues and net income for the second quarter ended June 30, 2002.


<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


      Signature                       Title                          Date

/s/ Richard J. Braun   President, Chief Executive Officer,     November 14, 2002
--------------------   and Chairman of the Board of Directors
Richard J. Braun       (Principal Executive Officer)



/s/ Kevin J. Wiersma   Vice President, Chief Operating Officer November 14, 2002
--------------------   and Chief Financial Officer (Principal
Kevin J. Wiersma       Financial Officer)


/s/ James D. Hanzlik   Director of Finance/Controller          November 14, 2002
--------------------   (Principal Accounting Officer)
James D. Hanzlik



<PAGE>


                                 CERTIFICATIONS

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

   I, Richard J. Braun, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of MEDTOX
         Scientific, 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 quarterly report;

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

      4. The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

               a) designed such disclosure controls and procedures to ensure
               that material information relating to the registrant, 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;

               b) evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date");
               and

               c) presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

      5. The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

               a) all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

               b) any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal controls; and

      6. The registrant's other certifying officers and I have indicated in
         this quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Dated:   November 14, 2002            By:   /s/ Richard J. Braun
                                            -----------------------
                                            Richard J. Braun
                                            Chief Executive Officer




<PAGE>



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

   I, Kevin J. Wiersma, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of MEDTOX
         Scientific, 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 quarterly report;

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

      4. The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

               a) designed such disclosure controls and procedures to ensure
               that material information relating to the registrant, 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;

               b) evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date");
               and

               c) presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

      5. The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

               a) all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

               b) any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal controls; and

      6. The registrant's other certifying officers and I have indicated in
         this quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Dated:   November 14, 2002                By:   /s/ Kevin J. Wiersma
                                                -----------------------
                                                Kevin J. Wiersma
                                                Chief Financial Officer