|FORM 10-Q
SECURITIES AND EXCHANGE COMMISSIONWashington, 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 March
31, 2003


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 X  No


Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).


Yes  No X


The number of shares of Common Stock,
$.15 par value, outstanding as of May 8, 2003, was 4,921,964.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|MEDTOX SCIENTIFIC, INC.


INDEX
|-------------------------------

|                                                               | Page
|-------------------------------------------------------------- | ----
|Part I        Financial Information:                           |     
|                                                              
|Item 1:  Financial Statements (Unaudited)                     
|                                                              
|Consolidated Statements of Operations - Three                 
|Months Ended March 31, 2003 and 2002                           | 3   
|                                                              
|Consolidated Balance Sheets - March 31, 2003                  
|and December 31, 2002                                          | 4   
|                                                              
|Consolidated Statements of Cash Flows - Three                 
|Months Ended March 31, 2003 and 2002                           | 5   
|                                                              
|Notes to Consolidated Financial Statements                     | 6   
|                                                              
|Item 2:                                                       
|                                                              
|Management's Discussion and Analysis of                       
|Financial Condition and Results of Operations                  | 12  
|                                                              
|Item 3:                                                       
|                                                              
|Quantitative and Qualitative Disclosure                       
|About Market Risk                                              | 20  
|                                                              
|Item 4:                                                       
|                                                              
|Evaluation of Disclosure Controls and Procedures               | 21  
|                                                              
|Part II                                                       
|                                                              
|Other Information                                              | 22  
|                                                              
|Item 1:  Legal Proceedings                                     | 22  
|Item 2:  Changes in Securities                                 | 22  
|Item 3:  Defaults on Senior Securities                         | 22  
|Item 4:  Submission of Matters to a vote of Securities Holders | 22  
|Item 5:  Other Information                                     | 22  
|Item 6:  Exhibits and Reports on Form 8-K                      | 22  
|                                                              
|Signatures                                                     | 23  
|Section 302 Certifications                                     | 24  
|Exhibit Index                                                  | 26  
|                                                              

|2
|-

|PART I          FINANCIAL INFORMATION


Item 1: FINANCIAL
STATEMENTS (UNAUDITED)


MEDTOX SCIENTIFIC, INC. 
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands except share and per share data) 
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                               | Three Months Ended
|---------------------------------------------- | ------------------
|
|REVENUES:                                      |                   
|Laboratory services                            |                   
|Product sales                                  |                   
|                                               |                   
|                                               |                   
|                                               |                   
|COST OF REVENUES:                              |                   
|Cost of services                               |                   
|Cost of sales                                  |                   
|                                               |                   
|                                               |                   
|                                               |                   
|GROSS PROFIT                                   |                   
|                                              
|OPERATING EXPENSES:                            |                   
|Selling, general and administrative            |                   
|Research and development                       |                   
|                                               |                   
|                                               |                   
|                                               |                   
|INCOME FROM OPERATIONS                         |                   
|                                              
|OTHER INCOME (EXPENSE):                        |                   
|Interest expense, net                          |                   
|Other expense, net                             |                   
|                                               |                   
|                                               |                   
|                                               |                   
|INCOME (LOSS) BEFORE INCOME TAX BENEFIT        |                   
|                                              
|INCOME TAX BENEFIT                             |                   
|                                               |                   
|NET INCOME (LOSS)                              |                   
|                                               |                   
|BASIC EARNINGS (LOSS) PER COMMON SHARE (1)     |                   
|                                               |                   
|DILUTED EARNINGS (LOSS) PER COMMON SHARE (1)   |                   
|                                               |                   
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |                   
|Basic (1)                                      |                   
|Diluted (1)                                    |                   
|                                              

|(1)    
          Share and per share amounts for the three months ended March 31, 2002 have been
          restated for the ten percent stock dividend paid on July 5, 2002.


3
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|MEDTOX SCIENTIFIC, INC. 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
|----------------------------------------------------------------------------------------------------------------

|                                                                                | March 31,
2003 | December 31,
2002
|------------------------------------------------------------------------------- | -------------- | -----------------
|ASSETS                                                                          |                |                  
|CURRENT ASSETS:                                                                 |                |                  
|Cash and cash equivalents                                                       |                |                  
|Accounts receivable:                                                            |                |                  
|Trade, less allowance for doubtful accounts ($1,185 in 2003 and $1,125 in 2002) |                |                  
|Other                                                                           |                |                  
|                                                                                |                |                  
|Total accounts receivable                                                       |                |                  
|Inventories                                                                     |                |                  
|Deferred income taxes                                                           |                |                  
|Prepaid expenses and other                                                      |                |                  
|                                                                                |                |                  
|Total current assets                                                            |                |                  
|BUILDING, EQUIPMENT AND IMPROVEMENTS, net                                       |                |                  
|GOODWILL                                                                        |                |                  
|OTHER INTANGIBLE ASSETS, net                                                    |                |                  
|DEFERRED INCOME TAXES, net                                                      |                |                  
|OTHER ASSETS                                                                    |                |                  
|                                                                                |                |                  
|TOTAL ASSETS                                                                    |                |                  
|                                                                                |                |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                            |                |                  
|CURRENT LIABILITIES:                                                            |                |                  
|Line of credit                                                                  |                |                  
|Accounts payable                                                                |                |                  
|Accrued expenses                                                                |                |                  
|Current portion of long-term debt                                               |                |                  
|Current portion of capital leases                                               |                |                  
|                                                                                |                |                  
|Total current liabilities                                                       |                |                  
|LONG-TERM DEBT, net of current portion                                          |                |                  
|LONG-TERM PORTION OF CAPITAL LEASES, net of current portion                     |                |                  
|                                                                               
|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, 4,921,087 in 2003 and 4,814,001 in 2002                     |                |                  
|Additional paid-in capital                                                      |                |                  
|Deferred stock-based compensation                                               |                |                  
|Accumulated deficit                                                             |                |                  
|Treasury stock                                                                  |                |                  
|                                                                                |                |                  
|Total stockholders' equity                                                      |                |                  
|                                                                                |                |                  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      |                |                  
|                                                                                |                |                  

|4
|-

|MEDTOX SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|----------------------------------------------------------------------------------------

|                                                               | Three Months Ended
|-------------------------------------------------------------- | ------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                          |                   
|Net income (loss)                                              |                   
|Adjustments to reconcile net income (loss) to net cash used in |                   
|operating activities:                                          |                   
|Depreciation and amortization                                  |                   
|Provision for losses on accounts receivable                    |                   
|Deferred compensation                                          |                   
|Changes in operating assets and liabilities:                   |                   
|Accounts receivable                                            |                   
|Inventories                                                    |                   
|Prepaid expenses and other current assets                      |                   
|Other assets                                                   |                   
|Accounts payable and accrued expenses                          |                   
|                                                               |                   
|Net cash used in operating activities                          |                   
|                                                              
|CASH FLOWS FROM INVESTING ACTIVITIES:                          |                   
|Capital expenditures                                           |                   
|                                                              
|CASH FLOWS FROM FINANCING ACTIVITIES:                          |                   
|Checks written in excess of bank balances                      |                   
|Net proceeds from sale of common stock                         |                   
|Net proceeds on revolving credit facility                      |                   
|Proceeds from long-term debt                                   |                   
|Principal payments on long-term debt                           |                   
|Principal payments on capital leases                           |                   
|                                                               |                   
|Net cash provided by financing activities                      |                   
|                                                               |                   
|                                                              
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               |                   
|                                                              
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD               |                   
|                                                               |                   
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                     |                   
|                                                               |                   
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:             |                   
|Cash paid for:                                                 |                   
|Interest                                                       |                   
|                                                              

|5
|-

---

|MEDTOX SCIENTIFIC, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
March 31, 2003


NOTE A  BASIS OF
PRESENTATION


The accompanying unaudited
consolidated financial statements of MEDTOX Scientific, Inc. (the Company) have been
prepared in accordance with accounting principles generally accepted in the United States
of America 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 three-month period ended March 31, 2003 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, 2002.


New Accounting Standards: In
June 2001, the Financial Accounting Standards Board (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 was effective for the
Company on January 1, 2003. The adoption of SFAS No. 143 did not have a material impact on
the Companys financial position or results of operations.


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.


In November 2002, the FASB issued
FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Guarantees of Indebtedness of Others (FIN 45). FIN 45
clarifies the requirements for a guarantors accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial measurement
provisions of FIN 45 are applicable to guarantees issued or modified after December 31,
2002. The disclosure requirements of FIN 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002.


In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-based Compensation  Transition and
Disclosure, which amended SFAS No. 123. SFAS No. 148 provides alternative methods of
transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure
requirement of SFAS No. 123 to require more prominent and more frequent disclosures in
financial statements of the effects of stock-based compensation. The transition guidance
and annual disclosure provisions of SFAS No. 148 are effective for fiscal years ending
after December 15, 2002. The interim disclosure provisions are effective for financial
reports containing condensed financial statements for interim periods beginning after
December 15, 2002. The Company has elected to continue to apply Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its stock option plans,
as permitted under SFAS No. 123 and SFAS No. 148. Accordingly, no compensation cost has
been recognized for its stock option plans. However, the Company has adopted the
disclosure provisions of SFAS No. 148. (See note D).


6
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Stock-Based Compensation
 Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, requires companies to measure employee stock compensation
plans and non-employee stock-based compensation based on the fair value method of
accounting. However, for stock compensation granted to employees, SFAS No. 123 allows the
alternative of continued use of Accounting Principles Board Opinion (APBO) No. 25,
Accounting for Stock Issued to Employees, with pro forma disclosure of net
income and earnings per share determined as if the fair value method had been applied in
measuring compensation cost. The Company elected the continued use of APBO No. 25.


Had the Company determined
compensation expense based on the fair value at the grant date for its stock options under
SFAS No. 123, the Companys net income (loss) and earnings (loss) per share would
have been changed to the pro forma amounts indicated below:


(In
thousands, except per share data)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             |  | Three months ended
|-------------------------------------------- |  | ------------------
|
|Net income (loss)                            |  |                   
|Less: Total stock-based compensation expense |  |                   
|net of related tax effect                    |  |                   
|                                             |  |                   
|                                             |  |                   
|                                            
|Basic earnings (loss) per share              |  |                   
|                                             |  |                   
|                                            
|Diluted earnings (loss) per share            |  |                   
|                                             |  |                   
|                                            

|In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable Interest Entities.  FIN
46 addresses consolidation by business enterprises of variable interest entities and
significantly changes the consolidation application of consolidation policies to variable
interest entities and, thus improves comparability between enterprises engaged in similar
activities when those activities are conducted through variable interest entities. 
FIN 46 applies to variable interest entities created after January 31, 2003 and to
variable interest entities in which an enterprise obtains an interest after that
date.  FIN 46 applies to the Companys third quarter for variable interest
entities in which the Company holds a variable interest acquired before February 1,
2003.  The Company does not hold any variable interest entities.


7
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|NOTE B  SEGMENTS


The Company
has  two  reportable  segments:  Laboratory  Services  and  Product  Sales.  The
Laboratory  Services  segment  consists  of  MEDTOX  Laboratories  Inc.  and New
Brighton Business Center,  LLC.  Services  provided include forensic  toxicology
(primarily  workplace  drugs of abuse  testing) and  specialty  services,  which
include clinical toxicology,  clinical testing for the pharmaceutical  industry,
pediatric lead testing,  heavy metals analyses,  courier  delivery,  and medical
surveillance.  Providing  revenues  from  external  customers  for each group of
services within the Laboratory  Services segment is  impracticable.  The Product
Sales segment consists of MEDTOX Diagnostics Inc. Products  manufactured include
easy  to  use,   inexpensive,   on-site  drug  tests  such  as  PROFILE®-II,
EZ-SCREEN®, and VERDICT®-II.


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 (loss) before income taxes as a segments measure of
profit or loss.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(In thousands)

|                                          | Three months ended
|----------------------------------------- | ------------------
|
|Laboratory Services:                      |                   
|                                         
|Revenues                                  |                   
|Interest expense, net                     |                   
|Depreciation and amortization             |                   
|Segment income (loss) before income taxes |                   
|Segment assets                            |                   
|Capital expenditures for segment assets   |                   
|                                         
|Product Sales:                            |                   
|                                         
|Revenues                                  |                   
|Interest expense, net                     |                   
|Depreciation and amortization             |                   
|Segment income before income taxes        |                   
|Segment assets                            |                   
|Capital expenditures for segment assets   |                   
|                                         
|Corporate (unallocated):                  |                   
|                                         
|Deferred tax assets, net                  |                   
|                                         
|Company:                                  |                   
|                                         
|Revenues                                  |                   
|Interest expense, net                     |                   
|Depreciation and amortization             |                   
|Income (loss) before income taxes         |                   
|Total assets                              |                   
|Capital expenditures for assets           |                   
|                                         
|                                         

|8
|-

|The following is a summary of
revenues from external customers for each group of services provided within the Laboratory
Services segment:
|------------------------------------------------------------------------------------------------------------------------------------------

|                                    | Three months ended
|----------------------------------- | ------------------
|
|Workplace drugs of abuse testing    |                   
|Other specialty laboratory services |                   
|                                    |                   
|                                    |                   
|                                    |                   
|                                   

|The following is a summary of
revenues from external customers for each group of products and services provided within
the Product Sales segment:
|-------------------------------------------------------------------------------------------------------------------------------------------------

|                                 | Three months ended
|-------------------------------- | ------------------
|
|Substance abuse testing products |                   
|Contract manufacturing services  |                   
|Other diagnostic products        |                   
|                                 |                   
|                                 |                   
|                                 |                   
|                                

NOTE C  INVENTORIES

Inventories consisted of the
following:

|(In thousands)                         | March 31, 2003 | December 31, 2002
|-------------------------------------- | -------------- | -----------------
|Raw materials                          |                |                  
|Work in process                        |                |                  
|Finished goods                         |                |                  
|Supplies, including off-site inventory |                |                  
|                                       |                |                  
|                                       |                |                  
|                                       |                |                  
|                                      
|                                      

|9
|-

---

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)
|-----------------------------------------------------------------------------------------------------------------------------------------------

|                                              | Three months ended
|--------------------------------------------- | ------------------
|
|Net income (loss) (A)                         |                   
|                                              |                   
|Weighted average number of basic common       |                   
|shares outstanding (B)                        |                   
|Dilutive effect of stock options and warrants |                   
|computed based on the treasury stock method   |                   
|using average market price                    |                   
|                                              |                   
|Weighted average number of diluted            |                   
|common shares outstanding (C)                 |                   
|                                              |                   
|Basic earnings per common share (A/B)         |                   
|                                              |                   
|Diluted earnings per common share (A/C)       |                   
|                                              |                   
|                                             

|Options and warrants to purchase
1,559,355 and 841,028 shares of common stock were outstanding during the first three
months of 2003 and 2002, 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, or because they were antidilutive in 2003 due to the net loss.


     (1)    
          Share and per share amounts for the three months ended March 31, 2002 have been
          restated for the ten percent stock dividend paid on July 5, 2002.


NOTE E  INCOME TAXES


At March 31, 2003, the Company had
federal and state net operating loss carryforwards (NOLs) of approximately $28.7 and $7.5
million, respectively, which are available to offset taxable income through 2020. For
financial reporting purposes, a valuation allowance has been recorded to offset deferred
tax assets that, more likely than not, will not be realized based on the Companys
projected future taxable income, the timing of expiring NOLs, and the Companys tax
planning strategies. Section 382 of the Internal Revenue Code restricts the annual
utilization of certain NOLs incurred prior to a change in ownership. Although the Section
382 limitation is not expected to impair the realization of these NOLs, other factors
could, such as projected future taxable income, the timing of expiring NOLs, and the
companys tax planning strategies.


10
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|NOTE F 
STOCKHOLDERS EQUITY


In January 2003, the Company issued
105,681 shares of restricted stock to certain key employees as an incentive for the
performance of future services that will contribute materially to the successful operation
of the Company. The restriction period on such shares ranges from three to five years. The
market value of the awards on the date of the grant was recorded as deferred stock-based
compensation and additional paid-in-capital. Compensation is charged to operations on a
straight-line basis over the restriction periods and amounted to $134,411 and $89,923 for
the three months ended March 31, 2003 and 2002, respectively.


NOTE G  RELATED
PARTY TRANSACTIONS


In March 2001, the Company entered
into a 10-year lease of the Burlington, North Carolina production facility for an annual
base rent of $197,000, exclusive of operating expenses. This facility has always been
owned and leased to the Company by a director of the Company. The Company believes it is
renting this facility on terms as favorable as those available from third parties for
equivalent premises.


In February 2003, the Company entered
into a month-to-month lease for a warehousing and distribution facility in Burlington,
North Carolina. The monthly base rent for the facility is $9,400 exclusive of operating
expenses. It is the intent that the month-to-month lease shall be converted to a long-term
lease within the next several months. This facility is owned and leased to the Company by
a director of the Company. The Company believes it is renting this facility on terms as
favorable as those available from third parties for equivalent premises.


NOTE H 
CONTINGENCIES


Leases The Company
leases other offices and facilities and office equipment under certain operating leases,
which expire on various dates through April 2011. Under the terms of the facility leases,
a pro rata share of operating expenses and real estate taxes are charged as additional
rent.


Legal  The Company is
party to various legal proceedings arising in the normal course of business activities,
none of which, in the opinion of management, are expected to have a material adverse
impact on the Companys consolidated financial position or results of operations.


11
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|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. These
risks and uncertainties include price competition, the decisions of customers, the actions
of competitors, the effects of government regulation, possible delays in the introduction
of new products, customer acceptance of products and services, and other factors which are
described herein and/or in documents incorporated by reference herein.


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
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
forensic and clinical laboratory services is conducted by MEDTOX Laboratories, Inc. at its
facility in St. Paul, Minnesota, and the business of manufacturing and distribution of
diagnostic devices is executed by MEDTOX Diagnostics, Inc. from its facility in
Burlington, North Carolina.


12
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company has two reportable
segments: Laboratory Services conducted by the Companys wholly owned
subsidiaries, MEDTOX Laboratories, Inc. and New Brighton Business Center, LLC and
Products Sales conducted by the Companys wholly owned subsidiary MEDTOX
Diagnostics, Inc. Laboratory Services include forensic toxicology (primarily workplace
drugs of abuse testing) and specialty laboratory services, including clinical toxicology,
clinical testing for the pharmaceutical industry (central laboratory services,
bioanalytical and pharmacokinetic testing), and analysis of heavy and trace metals. In
addition, the Laboratory Services segment provides logistical support, data management and
overall program management services. Product Sales include sales of a variety of on-site
screening products and contract manufacturing. For financial information relating to the
Companys segments, see Note B of Notes to the Consolidated Financial Statements. For
the three months ended March 31, 2003, Laboratory Services revenue accounted for 76.4% of
the Companys revenue, compared with 75.6% for the same period in 2002. Revenue from
Product Sales accounted for 23.6% of the Companys revenue compared with 24.4% for
the same period in 2002.


Critical Accounting
Policies


The Company has identified the
policies outlined below as critical to understanding its business and 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 of
America, 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 15 on
Form 10-K for the year ended December 31, 2002. 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.


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 generally been within the Companys
historical 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 March 31, 2003
was $9.4 million, net of allowance for doubtful accounts of $1.2 million.


Some of the Companys laboratory
services revenues for certain types of tests are billed to third-party payors including
insurance companies, state Medicaid and Medicare agencies. These payors pay for such
services at established amounts, which are typically lower than gross amounts billed by
the Company. However, the tests are sometimes billed directly to patients or other parties
and paid at the gross amount billed for these tests. In addition, billings for the tests
are occasionally re-billed to alternative payors in situations where incorrect billing
information was submitted to the Company by the customer. The Company estimates an
aggregate discount on the billings for these tests, and recognizes revenue and related
accounts receivable at a net amount after discount in order to state revenue and accounts
receivable at the amount expected to be paid. While the Company believes that estimated
discounts and the related net revenue and net accounts receivable from these testing
services are materially correct, there can be differences in amounts ultimately paid
compared to estimated amounts. These differences are recorded upon payment and may affect
previously recorded amounts. The Company considers historical discounts when estimating
future discounts on a quarterly basis.


13
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Off-Site Supplies
Inventory:
Off-site supplies
represent collection kits and forms located at collections sites throughout the United
States used by Laboratory Services customers to submit specimens for testing
services. At March 31, 2003, off-site inventory was $0.7 million. The process for valuing
off-site inventory involves significant assumptions regarding the average time that a
collection site uses the inventory, as well as the amount of inventory expected to be
scrapped.


Goodwill and Other
Intangible Assets:
Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.
SFAS No. 142 requires that goodwill and other intangible assets be tested for impairment
within six months of adoption of SFAS No. 142 and then on a periodic basis thereafter.
During the first half of 2002, the Company completed impairment testing and determined
that there were no impairment losses related to goodwill and other intangible assets. On
October 1, 2002, the Company updated its impairment testing and determined that there was
no impairment. In assessing the recoverability of goodwill and other intangible assets,
projections regarding estimated future cash flows and other factors are made to determine
the fair value of the respective assets. If these estimates or related projections change
in the future, the Company may be required to record impairment charges for these assets.
During the three months ended March 31, 2003, no circumstances occurred that required an
impairment charge.


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 tax planning strategies, 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. The
Companys deferred tax assets primarily consist of certain net operating losses
(NOLs) carried forward. The valuation allowance is based on managements estimate of
taxable income, the period over which NOLs will be recoverable, and tax planning
strategies. In the future, subsequent revisions to the estimated net realizable value of
these deferred tax assets 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 or expires unused.


14
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Results of Operations


Total revenues for the first quarter
of 2003 increased 1% over the first quarter of 2002, driven by strong specialty laboratory
volume and continued success in acquiring new laboratory clients, partially offset by
lower volume from existing occupational health clients and product sales to government
clients. Operating expenses as a percentage of sales were higher in the first quarter of
2003, reflecting increased spending on research and development and in support of clinical
trial services, as well as higher overall business insurance expenses. The following table
sets forth the percentages of total revenues represented by certain items reflected in the
Companys Consolidated Statements of Operations:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                        | Three months ended,
|--------------------------------------- | -------------------
|
|Revenues                                |                    
|Cost of revenues                        |                    
|                                        |                    
|Gross margin                            |                    
|Operating expenses:                     |                    
|Selling, general, and administrative    |                    
|Research and development                |                    
|                                        |                    
|                                        |                    
|Income (loss) from operations           |                    
|Other expense, primarily interest       |                    
|                                        |                    
|Income (loss) before income tax benefit |                    
|Income tax benefit                      |                    
|                                        |                    
|Net income (loss)                       |                    
|                                        |                    
|                                       

|Three Months Ended March
31, 2003 Compared to Three Months Ended March 31, 2002


Revenues


Revenues increased 1% to $12.5
million for the three months ended March 31, 2003, driven by a $0.2 million, or 2%
increase in Laboratory Services revenue. Product Sales revenues in the first quarter
declined slightly from the prior year period, reflecting a slight drop in sales of
substance abuse testing products, a slight decline in contract manufacturing services and
flat sales of other diagnostic products.


The Laboratory Services segment
benefited from a 15% increase in specialty laboratory services revenues. Clinical testing
for the pharmaceutical industry increased $0.4 million, or 14% from the previous quarter.
Specimen volume from the Companys occupational health and corporate clients
increased 3%, reflecting the Companys continued success in acquiring new client
relationships and gaining market share, despite the continued softness in new business
employment.


15
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In the Product Sales segment, sales
of substance abuse testing products, which incorporates the PROFILE®-II,
PROFILE®-II ER, PROFILE®-II A and VERDICT®-II on-site test kits and other
ancillary products for the detection of abused substances, declined 1% to $2.7 million in
the first quarter of 2003. Sales of PROFILE®-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®-II ER and the Companys new PROFILE®-II A devices
continue to grow and have increased more than $0.5 million over the same quarter last
year. The PROFILE®-II 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®-II A device 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®-II product line, sales to government clients for probation, parole and
rehabilitation were down 9% from the prior year period, primarily due to reductions in
state budgets.


Product sales from agricultural
diagnostic products were flat due to level purchases from 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, down 12% from the prior year period.


Gross Profit


Consolidated gross margin declined to
38.0% of revenues for the three months ended March 31, 2003, compared to 39.7% of revenues
for the same period in 2002, reflecting a decline in Product Sales gross margin, partially
offset by a slight improvement in Laboratory Services gross margin.


Laboratory Services gross margin was
32.2% of revenues for the three months ended March 31, 2003, up from 31.9% of revenues for
the same period in 2002. 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 57.0% of revenue for the three months ended March 31, 2003, from
63.9% of revenue in the comparable period of 2002, and was negatively impacted by
unabsorbed overhead resulting from lower production activity. The lower production
activity was a result of managements decision to reduce inventory in response to
lower than expected sales volume.


Selling, General and
Administrative Expenses


Selling, general and administrative
expenses were $4.3 million, or 34.2% of revenue in the first quarter of 2003, compared to
$3.8 million or 30.6% of revenue in the first quarter of 2002. The increase was primarily
due to increased spending in client service support for specialty lab services and
increased business insurance expenses. In addition, deferred compensation expense
increased in the quarter as a result of the issuance of restricted stock in January 2003.


Research and Development
Expense


Research and Development expenses
were $0.4 million, or 0.3% of revenue in the first quarter of 2003, compared to $0.3
million, or 0.2% of revenue in the first quarter of 2003. The increase was primarily due
to increased development activity associated with new product configurations and assays
and other new product research in the Diagnostics Products segment, compared to the prior
period, which is expected to continue through the remainder of 2003.


16
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Other Expense


Other expense, consisting primarily
of interest expense, increased 7% in the first quarter of 2003. The increase was largely
due to higher vacancy rates at the Companys facility in St. Paul, Minnesota,
partially offset by lower interest rates. While the Company is actively seeking additional
tenants for the building, there can be no assurance it will be able to lower overall
vacancy rates during the remainder of 2003.


Income (Loss) Before
Income Tax Benefit


During the three months ended March
31, 2003, the Company recorded a loss before income tax benefit of $0.3 million, compared
to pretax income of $0.5 million in the same period of 2002. The decline in income was
caused primarily by increased selling, general, and administrative expenses, partially
offset by a slight increase in consolidated revenue.


Laboratory Services loss before
income tax benefit of $0.4 million for the three months ended March 31, 2003 was down $0.4
million from the prior year period. The decline was primarily attributable to increased
spending in client service support for clinical trial services, and increased business
insurance expenses.


Product Sales income before income
tax benefit was $0.1 million for the three months ended March 31, 2003, compared to $0.5
million for the same period of 2002. This decline was primarily caused by a reduced gross
margin and increased research and development expenditures.


Income Taxes


As of March 31, 2003, deferred income
taxes of $9.3 million are recorded net of a valuation allowance due to uncertainties
related to the Companys ability to utilize the deferred tax assets, primarily
consisting of certain net operating loss (NOL) carry forwards, before they expire. 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, or if the Company became subject to alternative
minimum taxes.


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 used in operating activities
was $0.7 million for both the three months ended March 31, 2003 and 2002.


Accounts payable and accrued expenses decreased
$1.6 million during the first quarter of 2003, compared to $0.9 million for the first
quarter of 2002, primarily due to a higher level of accounts payable as of December 31,
2002 compared to December 31, 2001 and subsequent payments on such outstanding balances
during the first quarter of 2003. The payments included approximately $0.8 million for new
equipment installed in December 2002, which was financed from the proceeds of long-term
debt.



Net cash used in investing
activities, consisting of capital expenditures, was $0.5 million for the three months
ended March 31, 2003 compared to $0.6 million in the same period of 2002.


17
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net cash provided by financing
activities of $1.6 million for the three months ended March 31, 2003 primarily represented
net proceeds from the revolving credit facility. During the three months ended March 31,
2003, the Company also received proceeds from long term debt of $1.0 million to finance
capital equipment purchases. Offsetting these proceeds were payments on long-term debt of
$0.7 million during the three months ended March 31, 2003 compared to $0.5 million in the
same period of 2002.


Accounts receivable increased $0.5
million during the first quarter of 2003, primarily due to higher sales during the last
month of the quarter, compared to the previous quarter.


In January 1998, the Company entered
into a Credit Security Agreement (the Wells Fargo Credit Agreement) with Wells Fargo
Business Credit, Inc. (the Bank). The Wells Fargo Credit Agreement, as amended, consists
of (i) a term loan of $3.185 million bearing interest at prime + 1.25%; (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 + 1%; and
(iii) a capex note of up to $3.5 million for the purchase of capital equipment bearing
interest at prime + 1.25% 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 service coverage and maximum debt to book net worth,
which are established annually. It also sets minimum quarterly net income and book net
worth levels, which restrict the payment of dividends. As of March 31, 2003 the Company
and the Bank had not established the quarterly financial covenant levels for 2003. The
Company and the Bank are currently in the process of establishing such required levels for
the remainder of 2003.


In the first quarter of 2003, the
Company entered into a Credit and Security Agreement with Wells Fargo Equipment Finance,
Inc. for the acquisition of various pieces of equipment. In connection with the agreement,
the Company signed a note payable for $965,000, payable in monthly installments over four
years. Interest is payable at a variable rate of 1.25% over prime. The note is secured by
the equipment purchased with the proceeds of the loan.


The Company is relying on expected
positive cash flow from operations and its line of credit to fund its future working
capital and asset purchases. The amount available on the revolving line of credit is based
primarily on the receivables of the Company and, as such, varies with accounts receivable,
and to a lesser degree, the inventory of the Company. As of March 31, 2003, the Company
had total borrowing capacity of $6.0 million on its line of credit, of which $5.7 million
was borrowed, leaving a net availability of $0.3 million and a cash balance of $0.8
million.


In the short term, the Company
believes that the aforementioned capital will be sufficient to fund the Companys
planned operations through 2003. While there can be no assurance that the available
capital will be sufficient to fund the future operations of the Company beyond 2003, 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.


18
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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.


Impact of New Accounting
Standards


In June 2001, the Financial
Accounting Standards Board (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 was effective for the Company on January 1, 2003. The
adoption of SFAS No. 143 did not have a material impact on the Companys financial
position or results of operations.


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.


In November 2002,
the FASB issued FASB Interpretation No. 45, Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others (FIN
45). FIN 45 clarifies the requirements for a guarantors accounting for and
disclosure of certain guarantees issued and outstanding. The initial recognition and
initial measurement provisions of FIN 45 are applicable to guarantees issued or modified
after December 31, 2002. The disclosure requirements of FIN 45 are effective for
financial statements of interim or annual periods ending after December 15, 2002.


19
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-based Compensation  Transition and
Disclosure, which amended SFAS No. 123, Accounting for Stock-based
Compensation. SFAS No. 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee
compensation. In addition, SFAS No. 148 amends the disclosure requirement of SFAS No. 123
to require more prominent and more frequent disclosures in financial statements of the
effects of stock-based compensation. The transition guidance and annual disclosure
provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002.
The interim disclosure provisions are effective for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. The Company
has elected to continue to apply Accounting Principles Board (APB) Opinion No. 25 and
related interpretations in accounting for its stock option plans, as permitted under SFAS
No. 123 and SFAS No. 148. Accordingly, no compensation cost has been recognized for its
stock option plans. However, the Company has adopted the disclosure provisions of SFAS No.
148.


In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable Interest Entities.  FIN
46 addresses consolidation by business enterprises of variable interest entities and
significantly changes the consolidation application of consolidation policies to variable
interest entities and, thus improves comparability between enterprises engaged in similar
activities when those activities are conducted through variable interest entities. 
FIN 46 applies to variable interest entities created after January 31, 2003 and to
variable interest entities in which an enterprise obtains an interest after that
date.  FIN 46 applies to the Companys third quarter for variable interest
entities in which the Company holds a variable interest acquired before February 1,
2003.  The Company does not hold any variable interest entities.




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 2002 and through March 31, 2003, 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.


At March 31, 2003, the Company had a
$0.9 million term loan and $3.4 million Capex Notes outstanding at a variable interest
rate of 1.25% over prime. In addition, at March 31, 2003, the Company had a $5.9 million
mortgage loan payable to Principal Life insurance Company at a fixed annual rate of 7.23%
for the first five years at which time the rate will be renegotiated by the parties. At
March 31, 2003, the Company had approximately $1.0 million of subordinated notes
outstanding at a fixed interest rate of 10%, and non interest-bearing promissory notes and
various vehicle loans totaling $0.4 million. The Company also had capital leases at
various fixed rates. These fixed-rate financial instruments are subject to interest rate
risk and will increase or decrease in value if market interest rates change.


The Company had approximately $9.9
million and $7.7 million outstanding on its line of credit and long-term debt issued under
the Wells Fargo Credit Agreement as of March 31, 2003 and 2002. The debt under the Wells
Fargo Credit Agreement is held at variable interest rates. The Company has cash flow
exposure on its committed and uncommitted line of credit and long-term debt due to its
variable prime rate pricing. At March 31, 2003, a 1% change in the prime rate would not
materially increase or decrease interest expense or cash flows.


20
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company does not enter into
derivative or other financial instruments or hedging transactions for trading or
speculative purposes.




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.


21
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

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: See Exhibit Index on page following Certifications under Section 302 of the Sarbanes-Oxley Act of 2002.
|      
|       | b. Reports on Form 8-K:                                                                                             
|      
|       | On January 27, 2003, the Company filed a Form 8-K announcing preliminary unaudited results for year-end 2002.       
|      
|       | On January 29, 2003, the Company  filed a Form 8-K stating the Company had issued a press release                   
|       | regarding an industry article that was written highlighting the company.                                            
|      
|       | On March 6, 2003, the Company filed a Form 8-K announcing  evenues and earnings for the fourth                      
|       | quarter and year-ended December 31, 2002.                                                                           
|      
|       | On March 10, 2003, the Company filed a Form 8-K stating it held its quarterly conference call and                   
|       | announced revenues and earnings for the fourth quarter and year-end December 31, 2002.                              
|      
|       | On March 18,  2003, the Company filed a Form 8-K announcing final results for the fourth quarter                    
|       | and year-end December 31, 2002.                                                                                     
|      

|22
|--

|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, and    | May 14, 2003
|Richard J. Braun     | Chairman of the Board of Directors        
|                     | (Principal Executive Officer)             
|                    
|/s/ Kevin J. Wiersma | Vice President and Chief Operating Officer | May 14, 2003
|Kevin J. Wiersma     | (Principal Financial Officer)             
|                    
|/s/ James D. Hanzlik | Director of Finance and Controller         | May 14, 2003
|James D. Hanzlik     | (Principal Accounting Officer)            
|                    

|23
|--

|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: May 14, 2003 | By:  /s/ Richard J. Braun
|                    | Richard J. Braun         
|                    | Chief Executive Officer  
|                   

|24
|--

|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: May 14, 2003 | By:  /s/ Kevin J. Wiersma
|                    | Kevin J. Wiersma         
|                    | Chief Financial Officer  
|                   

|25
|--

|EXHIBIT INDEX


MEDTOX SCIENTIFIC, INC.


FORM 10-Q FOR QUARTER
ENDED MARCH 31, 2003
|------------------------------------------------------------------------------------

|Exhibit number | Description                                                                          
|-------------- | -------------------------------------------------------------------------------------
|99.1*          | Section 906 Certificate of Chief Executive Officer pursuant to 18 U.S.C Section 1350.
|99.2*          | Section 906 Certificate of Chief Financial Officer pursuant to 18 U.S.C Section 1350.
|              
|              

|* Filed herewith


26
|---------------------

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