SECURITIES AND EXCHANGE COMMISSION
	WASHINGTON, D.C. 20549
                         ----------------------
                              FORM 10-KSB
    	ANNUAL REPORT UNDER SECTION 13 OR 15 (D) OF THE
     	SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002.

Commission file number 2-67918

                      MIKROS SYSTEMS CORPORATION
                      --------------------------
         (Name of Small Business Issuer in Its Charter)

            Delaware                        14-1598200
            --------                        -----------
 (State or other jurisdiction of          (I.R.S. Employer
  incorporation or organization)           Identification No.)

   707 Alexander Road, Suite 208, Princeton, New Jersey 08540
  (Address of principal executive offices, Including Zip Code)

Issuer's Telephone Number, including area code: 609-987-1513
                                                    ------------

Securities Registered Pursuant to Section 12(b) of the Exchange Act:  None
Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                   Common Stock, $.01 par value

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

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

State Registrant's revenues for the fiscal year ended December 31, 2002:
$126,000.

State the aggregate market value of the voting and non-voting common
equity  held
by nonaffiliates of Registrant as of March 26, 2003, was
approximately $161,841,
based on the average of the bid and asked price quoted by National Quotation
Bureau, Inc.

The number of shares outstanding of the Registrant's $.01 par value
common stock
as of March 26, 2003 was 31,566,753.

				Transitional Small Business Disclosure Format

				Yes:________           No: ____X____


PART I

Item 1.  Description of Business
--------------------------------

Introduction
------------

Mikros Systems Corporation was founded in 1978 in Albany, New York to exploit
microprocessor technology developed at the General Electric Research and
Development Center for the military defense industry.  The Company's
headquarters
are located at 707 Alexander Road, Suite 208, Princeton, New Jersey; telephone
(609)987-1513.

The Company supplied technology and products to the Department of
     Defense for military applications through March
1998. The
knowledge base and proprietary technology developed were recognized
as applicable
to the rapidly expanding commercial wireless business.

In 1995, the Company decided to also pursue a business plan which would employ
these advanced techniques to enhance the data transmission rates in the
AM and FM
radio spectrum.

In 1996, Safeguard Scientifics (Delaware), Inc., invested $1 million
in Mikros in
exchange for 10% ownership in the Company.  At the same time,
Mobile Broadcasting
Corporation (MBC) was created to exploit the AM radio technology,
particularly in
mobile or portable platforms such as automobiles.  Mikros owned a majority
interest in MBC, with the balance of MBC ownership held by
Safeguard Scientifics.

Data Design and Development Corporation (3D) was also founded in
1996 as part of
the Safeguard Scientific agreement to own the AM and FM technology.
 3D licensed
the FM technology rights in North America to Mikros and the AM technology
rights
in North America to MBC. Mikros owned two-thirds  of the equity of 3D, and
Safeguard owned the remaining one-third interest.

In November 2002, Safeguard Scientifics sold its equity interests in MBC,
3D and
the Company to Paul G. Casner, Thomas Lynch, Thomas J. Meaney,
Wayne E. Meyer and
Tom L. Schaffnit, each of whom is a Director of the Company.
Mr. Meaney also is
President, Chief Executive Officer and Chief Financial Officer of the Company.
Each of such individuals acquired from Safeguard Scientifics (Delaware), Inc.
382,400 shares of the Company's Common Stock and warrants to purchase 1,091,800
shares of Common Stock.  In January 2003, Messrs. Casner, Lynch, Meaney, Meyer
and Schaffnit each contributed the equity interests of MBC and 3D
 to the capital
of the Company.  Upon this contribution, MBC and 3D became wholly owned
subsidiaries of the Company.

In April 1998, the Company sold its military contracts to an unrelated third
party (the Purchaser).  The Purchaser entered into a royalty agreement with the
Company, and was required to pay a 2% royalty on all data terminal sets over a
four-year period that expired in April 2002.  In addition, the Purchaser was
obligated to supply $1,000,000 in engineering services to the Company,
which was
expended by the end of 1999 on the AM data program in cooperation with MBC.

Mikros' commercial business assets now consist of both the original
FM technology
and the AM Radio technology. Continued development of the FM technology was
postponed in order to focus on the further development of the AM Radio
technology.

The digital system Mikros developed for AM radio data transmission allows
simultaneous broadcasting of the present radio signal with a digital
signal. The
Company believes that this is accomplished with minimal disturbance to the
existing radio channel. Installation of this system requires minor
modifications
to the radio station transmitter, which the Company believes will
not require new
FCC approval since adjacent channel interference is avoided.

The Company developed a business model for the AM technology during 1999.  This
model combined the AM data transmission technology with the operations of a
nationwide or area wide network of AM radio stations equipped with the minor
modifications to the radio station's transmitter.  Data could be broadcast from
point to multipoint, and the signal received by a small portable receiver to be
developed based on the prototype used in the Company's experimental trials.

During 2001, the Company's Board of Directors decided to explore providing
services to the government business sector in order to further leverage its
technical knowledge base. During its tenure as a supplier of military
applications, Mikros had been successful in securing a number of governmental
contracts.  For example, Mikros had received over twelve competitive contract
awards through the Small Business Innovative Research Program.

In May 2002, the U.S. Navy's Dahlgren Division, Naval Surface Warfare Center
(NSWCDD) awarded Mikros a Phase I SBIR (Small Business Innovative Research)
contract. The contract was valued at $70,000 and represents the first stage in
the development of a Multiple Function Distributed Test and Analysis Tool
(MFDAT).  The MFDAT project is focused on developing standardized test
equipment and testing processes, using modern artificial intelligence
techniques, to provide a foundation for new, less manpower-intensive methods
of system maintenance, alignment, fault detection and isolation. The potential
benefits to the U.S. Navy are:  (1) increased readiness through reduced
maintenance downtime of critical systems; (2) increased system reliability
through predictive failure analysis and proactive remediation; and (3) more
efficient and effective use of technical manpower through increased
automation, distance support, and interactive training.

Mikros, in conjunction with Anteon Corporation, as a subcontractor, will
initially focus on the development of an intelligent test and maintenance tool
for the AN/SPY-1A AEGIS Radar.  The objective is to develop a "smart" tool
capable of aiding the technician in the troubleshooting, repair, alignment,
and maintenance efforts necessary to keep the SPY-1A Radar system in peak
operating condition, while at the same time, significantly reducing the
downtime currently required for periodic system alignment and calibration.
Added benefits include a system measurement data collection capability, and
interactive capability for distance support, and an interactive offline
training capability. In addition this technology is applicable to most DoD
radars such as the SPS-49, SPQ-95 etc.

Mikros' current strategy is to build a core of highly specialized people to
support the government business, as well as its developments in the commercial
market. Mikros believes that there are significant opportunities for Mikros'
technical team to provide support for many of the larger defense
contractors that
are required by law to subcontract a significant portion of their governmental
business to smaller contractors.  Mikros has initiated this strategic plan by
contacting various defense contractors that they have successfully assisted in
the past. There is no assurance that any of the contemplated services will be
established.

In February 2003 Mikros was invited by the Navy to submit a Phase II
proposal for
the MFDAT.  The proposal was submitted on March 10, 2003 for
$600,000 of funding
to the Company and an option for additional funding of $150,000.
 In addition, in
March 2003 the Company was awarded an option for additional funding
of $30,000 on
the Phase I contract for MFDAT.

Marketing
---------

The Company is focused on developing interest in its AM technology and defense
related government business.


Backlog
-------

As of December 31, 2002 and 2001, the Company had no backlog.



Engineering; Research and Development
-------------------------------------

In 1994, the Company began research on a method of optimizing
spectrum efficiency
for wireless communications in radio data broadcasting and Personal
Communications Services markets and has continued this effort.

Engineering is a critical factor in the development of the Company's
present and
future products. The Company previously subcontracted its development work to
General Atronics Corporation, a high technology company primarily involved in
communications and radar equipment for the US Department of Defense and allied
countries.

Patents
-------

The Company has two patents covering digital signal processing technology and
our base scheme of implementing Link-11.


Competition
-----------

High technology products such as wireless technology often require large
investments of both money and talent.  Many large companies with greater
financial and human resources than the Company are currently
investing heavily in
products that could compete directly with Mikros.  There is no
assurance that the
Company could compete successfully against such competition.

Being first in the market with new high technology is a critical factor in a
company's success in the market.  There is no assurance that the
 Company will be
able to introduce new products to the market before any of its competitors.

Employees
---------

As of March 26, 2003, the Company had three employees, all of
whom are executive
officers. The Company believes its relations with its employees
 are satisfactory.




Risk Factors
------------

The Company operates in a rapidly changing business environment that involves
substantial risk and uncertainty.  The following discussion addresses some of
the risks and uncertainties that could cause, or contribute to causing, actual
results to differ materially from expectations.  The Company cautions all
readers to pay particular attention to the descriptions of risks and
uncertainties described below and in other sections of this Annual Report and
the Company's other filings with the Securities and Exchange Commission.

The Company does not presently know of any additional risks and uncertainties
that are currently deemed material and which may also impair the Company's
business operations and financial results.  If any of the following risks
actually occur, the Company's business, financial condition or results of
operations could be materially adversely affected.  In such case, the trading
price of the Company's Common Stock could decline and the Company may be
forced to consider additional alternatives, including bankruptcy.

This Annual Report on Form 10-KSB also contains forward-looking statements
that involve risks and uncertainties.  The Company's actual results could
differ materially from those anticipated in the forward-looking statements as
a result of certain factors, including the risks described below and elsewhere
in this Annual Report on Form 10-KSB.

History of Losses, Lack of Liquidity; Working Capital Deficit.  The Company
incurred a net loss of $41,812 and $77,171 for the years ended
December 31, 2002
and 2001, respectively.  As of December 31, 2002, the Company
 had an accumulated
deficit of $11,776,159 and had a working capital deficiency of $25,265. In
addition, the Company expects to incur substantial expenditures to expand its
commercial wireless communications business.  The Company's current working
capital will not be sufficient to meet such objectives.  There can be no
assurance that the Company will achieve a profitable level of operations in the
future.

Additional Financing Requirement; Merger and Partnering Opportunities. The
Company requires additional financing if it chooses to build a datacasting
network around the AM radio stations from which it would lease bandwidth.
Alliances or other partnership agreements must be developed with
 entities who may
be interested in supporting the Company's commercial programs,
or other business
transactions which would generate resources sufficient to assure
continuation of
the Company's operations and research programs.  There can be no assurance,
assuming the Company successfully raises additional funds or
enters into business
alliances, that the Company will identify users for its datacasting network and
thereby  will achieve profitability or positive cash flow.  If the Company is
unable to obtain additional adequate financing or enter into such business
alliances, management will be required to further curtail its operations.
Failure to obtain such additional financing on terms acceptable to the Company,
if coupled with a material shortfall from the Company's current operating plan
could negatively impact the Company's ability to continue operations.

There is a Substantial Doubt About the Company's Ability to Continue as a Going
Concern.  Based on the Company's current plans, the Company believes that its
existing available cash may not be adequate to satisfy current and planned
operations for the next 12 months. Additionally, the Company expects
that it will
require additional financing prior to a return to profitability.  All of these
factors raise a substantial doubt as to the Company's ability to continue as a
going concern.  The report of our independent auditors, which is
included in this
Annual Report, includes a going concern qualification. If the Company cannot
sufficiently improve its profitability or raise more funds at acceptable terms,
the Company could be required to further reduce its expenditures,
further reduce
its workforce and possibly explore additional alternatives including seeking
bankruptcy protection.

Our Lack of Operating History in Providing Commercial Wireless Applications
Makes Evaluating Our Future Performance Difficult.  Historically, we developed
and sold technology and products for military applications, primarily to the
U.S. Navy.  The commercial wireless products that the Company intends to
develop perform different functions than our historic products, and are
targeted at an entirely different customer base.  Because the Company has not
previously operated as a provider of commercial wireless products, the Company
has no basis to evaluate its ability to develop, market and sell such
products.  The Company's ability to commercialize these products and services
and generate operating profits and positive operating cash flow will depend
principally upon our ability to: develop and manufacture commercially
attractive products; attract and retain an adequate number of customers; enter
new markets and compete successfully in them; manage operating expenses; raise
additional capital to fund the Company's capital expenditure plans; and
attract and retain qualified personnel.

Uncertainty of Market Acceptance.  In 1995, the Company expanded
 its initiatives
in commercial wireless communications in the current and emerging radio data
broadcasting and the personal communications service markets.
Market acceptance
of the Company's network in the commercial sector will be determined in large
part by the Company's ability to develop a customer base which would
have a need
to broadcast data and could be convinced of the value and cost effective
uses of
the AM radio based network.  To date, the Company has limited evidence
with which
to evaluate the market reaction to its service in the commercial sector because
there has been no commercial experience.  There can be no assurance that the
Company's services will achieve market acceptance.

Limited Marketing Experience.  The Company will be required to develop a
marketing and sales network that will effectively demonstrate the advantages of
its commercial offerings over competing options.  The Company's marketing
experience with its new commercial products is limited, and the Company has not
identified a customer for a commercially feasible application.  The Company
currently performs all its marketing through its own employees and
through MBC.
There can be no assurance that the Company will be successful in its marketing
efforts, that it will be able to establish adequate sales and distribution
capabilities, or that it will be able to enter into marketing agreements or
relationships with third parties on financially acceptable terms.



Government Regulation. Under current Federal Communications Commission ("FCC")
regulations, designated portions of the FM radio broadcast spectrum, known as
subcarriers, may be used to transmit information in addition to normal station
programming.  Listeners with specially equipped FM radios can decode the
subcarrier information, while standard FM radios continue to receive
 normal radio
station programs.  FM subcarrier broadcasting currently represents
a $100 million
industry operating within well-established and stable FCC
regulatory guidelines.
Any significant change in these regulatory requirements or the enforcement
thereof could adversely affect the Company's prospects.

Rapid Technological Change; Potential Infringement.  The market
for the Company's
products and planned products is characterized by rapid changes in technology
including the potential introduction of new types of wireless
communications and
digital signal processor technologies which could have a material
 adverse impact
on the Company's business.  The Company's future success will depend in part on
its ability to continually enhance its current technology and to develop or
acquire new ideas that address the needs of potential users.  There can be no
assurance that the Company will be successful in developing new products or
procedures that respond to technological changes. There can be no
assurance that
research and development by competitors will not render the
Company's technology
obsolete or uncompetitive.  In addition, in a technology-based industry, there
can be no assurance that a claim of patent or other infringement
will not be made
against the Company.  While the Company is not aware of any such claims, no
infringement studies have been conducted on behalf of the Company.

Competition. High technology applications such as those being developed by the
Company often require large investments of both money and talent.  Many large
entities with greater financial, technical and human resources than the Company
are currently investing heavily in products and services that compete directly
with the Company's contemplated services and underlying products.  There is no
assurance that the Company's offerings can be successfully marketed
against such
competition.  In addition being first in the market with new high
technology is a
critical factor in a company's success in the market.  There is no
assurance that
the Company will be able to introduce new offerings to the market before any of
its competitors.  As the markets in which the Company competes mature
and new and
existing companies compete for customers, price competition is likely to
intensify, and such price competition could adversely affect the Company's
results of operations.



Potential Dilutive Effect of Preferred Stock, Warrants and Options; Possible
Adverse Effect on the Company's Ability to Obtain Additional Financing.  The
outstanding securities of the Company include shares of convertible preferred
stock, options and warrants.  During the respective terms of the options and
warrants, and when the preferred stock is outstanding, the holders thereof are
given an opportunity to profit from a rise in the market price of the Common
Stock, causing a dilution of the interests of existing stockholders.  Thus, the
terms on which the Company may obtain additional financing during
 that period may
be adversely affected.  The holders of preferred stock, options, and
warrants may
exercise their respective rights to acquire Common Stock at a time when the
Company would, in all likelihood, obtain needed capital through a
new offering of
securities on terms more favorable than those provided by these outstanding
securities.  In the event that such holders exercise their rights to acquire
shares of Common Stock at such time, the net tangible book value
per share of the
Common Stock will be subject to dilution.

Potential Future Sales.  Future sales of shares by existing stockholders under
Rule 144 of the Securities Act or through the exercise of outstanding
options or
otherwise could have a negative impact on the market price of the
 Common Stock.
The Company is unable to estimate the number of shares that may be sold under
Rule 144 because such sales depend on the market price for the Common Stock of
the Company, the personal circumstances of the sellers and a variety of other
factors.  Any sale of substantial amounts of Common Stock or other
securities of
the Company in the open market may adversely affect the market price of the
Company's Common Stock and may adversely affect the Company's ability to obtain
future financing in the capital markets as well as create a potential market
overhang.

The Company's Common Stock is Subject to "Penny Stock" Regulations Which May
Affect the Ability of the Company's Stockholders to Sell Their Shares.  The
Company's common stock is subject to Rule 15g-9 under the Securities Exchange
Act, which imposes additional sales practice requirements on broker/dealers
that sell such securities to persons other than established customers and
'accredited investors' (generally, an individual with a net worth in excess of
$1,000,000 or an annual income exceeding $200,000, or $300,000 together with
his or her spouse's income). For transactions covered by this rule, a
broker/dealer must make a special suitability determination for the purchaser
and receive the purchaser's written consent to the transaction prior to the
sale. Consequently, the rule may adversely affect the ability of the holders
of the Company's common stock to sell their shares in the secondary market.

Regulations of the SEC define 'penny stock' to be any non-Nasdaq equity
security that has a market price (as therein defined) of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require delivery, prior to any transaction involving penny
stock, of a disclosure schedule prepared by the SEC relating to the penny
stock market. The SEC also requires disclosure about commissions payable to
both the broker/dealer and its registered representative and information
regarding current quotations of the securities. Finally, the SEC requires that
monthly statements be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.

The Company Relies on Third-Party Contractors for Engineering Services That
May be Difficult to Replace.  The Company currently provides all engineering
services through third-party contractors such as Anteon Corporation.  These
services may not continue to be available on commercially reasonable terms, if
at all.  Services that are not immediately replaceable would need to be
internally developed, which could take substantial time and resources.  The
loss or inability to maintain any of these engineering service providers could
result in delays in the development of the Company's products and services
until equivalent services, if available, are identified, developed, and
integrated, which could harm the Company's business.

No Dividends.  The Company has never paid cash dividends on its Common Stock.
Any payment of cash dividends in the future will depend upon the Company's
earnings (if any), financial condition and capital requirements.  In addition,
the Company has executed certain loan agreements, which prohibit the
 payment of a
dividend on the Common Stock as long as such agreements are in place.
Accordingly, any potential investor who anticipates the need for current
dividends from its investment should not purchase any of the securities.

Public Market; Possible Volatility of Stock Price.  The Company's Common Stock
currently is traded over-the-counter on the NASD Bulletin Board.
 There can be no
assurance that an active market in any of the Company's securities will be
sustained.  Absent a public trading market, an investor may be unable to
liquidate its investment.  The Company believes that factors such as the
Company's and its competitors' announcements of the availability of
new services
and new contracts, quarterly fluctuations in the Company's financial
results and
general conditions in the communications industry could cause the price of the
Common Stock to fluctuate substantially.   In addition, stock markets
have
experienced extreme price volatility in recent years.  This volatility
has had a
substantial effect on the market prices of securities issued by many companies
for reasons unrelated to the operating performance of the specific companies.

Concentration of Share Ownership.  The Company's directors, officers and
principal stockholders, and certain of their affiliates, beneficially own
approximately 41.1% (without giving effect to any outstanding options, warrants
or other convertible securities) of the outstanding Common Stock and will have
significant influence over the outcome of all matters submitted to the
stockholders for approval, including the election of directors of the Company.
In addition, such influence by management could have the effect of discouraging
others from attempting to take-over the Company, thereby increasing the
likelihood that the market price of the Common Stock will not reflect a premium
for control.



Anti-Takeover Provisions.  The Company has authorized 4,040,000 shares of
preferred stock, which may be issued by the Board of Directors on such
 terms, and
with such rights, preferences and designations as the Board may determine.
Issuance of such preferred stock, depending upon the rights, preferences and
designations thereof, may have the effect of delaying, deterring or
preventing a
change in control of the company.  The 2,052,433 shares of issued
and outstanding
preferred stock have certain rights and preferences, including dividend and
liquidation preferences, which also may have the effect of delaying,
deterring or
preventing a change in control of the Company.  In addition, certain "anti-
takeover" provisions of the Delaware General Corporation Law
(the "DGCL"), among
other things, restrict the ability of stockholders to effect a merger
or business
combination or obtain control of the Company, and may be considered
disadvantageous by a stockholder.


Item 2.  Properties
-------------------

The Company owns no real property.  The Company is currently leasing 112 square
feet of office space in Princeton, New Jersey.


Item 3.  Legal Proceedings
---------------------------

None.


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

None.



PART II

Item 5.	Market for the Registrants' Common Equity and Related Stockholder
Matters
------------------------------------------------------------------------------

The following table sets forth the range of high and low closing bid prices of
the Common Stock for the periods indicated as determined by the National
Quotation Bureau, Inc.  The quoted prices represent only prices between dealers
on each trading day as submitted from time to time by certain of the securities
dealers wishing to trade in the Company's Common Stock, do not reflect retail
mark-ups, mark-downs or commissions, and may differ substantially
from prices in
actual transactions.

                                               Bid
                                        High          Low
2002

  First Quarter			      $ 0.0500        $ 0.0160
  Second Quarter				  0.0850		0.0100
  Third Quarter				  0.0480		0.0260
  Fourth Quarter				  0.0260		0.0080


2001


  First Quarter				$ 0.0900	    $ 0.0310
  Second Quarter				  0.0450          0.0250
  Third Quarter				  0.0320		0.0230
  Fourth Quarter				  0.0610          0.0150


The Company has never paid cash dividends on its Common Stock.  Any payment of
cash dividends in the future will depend upon the Company's earnings (if any),
financial condition, and capital requirements.

As of March 26, 2003, the Company had 373 holders of record of its
Common Stock.




Item 6.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations
----------------------------------------------------------

Critical Accounting Policies And Estimates

The discussion and analysis of the Company's financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America.  The preparation of these financial statements
requires
the Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent
assets and liabilities.  On an on-going basis, the Company evaluates its
estimates, including those related to bad debts, investments, recoverability of
long-lived assets, income taxes, restructuring charges, and contingencies and
litigation.  The Company bases its estimates on historical experience and on
various other assumptions that the Company believes to be reasonable under the
circumstances, the results of which form the basis for making judgments
 about the
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

The Company's financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America,
which contemplates the continuation of the Company as a going concern.  The
Company has sustained substantial operating losses in recent years. In
addition, the Company has used substantial amounts of working capital in its
operations.  These conditions raise substantial doubt about the Company's
ability to continue as a going concern.  Management's plans and intentions on
the going concern issue are discussed below.  These financial statements do
not include any adjustments that would be required if the Company were unable
to continue as a going concern.

In order to continue as a going concern, the Company will need to incur
substantial expenditures to develop and market its commercial wireless
communications business.

In view of these matters, realization of a major portion of the assets
reflected in the Company's balance sheet is dependent upon continued
operations of the Company, which in turn is dependent on the Company being
able to obtain financing and/or equity to support further development for its
commercial wireless business and continuing operations.  Management of the
Company believes that actions presently being taken to revise the Company's
operating and financial requirements provide the opportunity to continue as a
going concern.

Results of Operations, General: Historically, the Company derived a large
percentage of its revenues from government contracts. In the last three years,
the Company has been developing commercial applications. While the
financial data
presented reflects the Company's financial history, it cannot predict future
results as the Company divested its government contracts early in 1998. The
Company's current focus is on the development of its AM data casting
 program and
renewal of government contracting.

The statements contained in this Annual Report on Form 10-KSB that are not
historical facts are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995).  Such forward-looking
statements may be identified by, among other things, the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should"or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and
 uncertainties.
These forward-looking statements, such as statements regarding
 anticipated future
revenues, products under development, size of markets for products under
development and other statements regarding matters that are not
historical facts,
involve predictions.  The Company's actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these
forward-looking statements contained in this Annual Report on Form 10-KSB.
Factors that could cause actual results, performance or achievements to vary
materially include, but are not limited to: changes in business conditions,
changes in Mikros' sales strategy and product development plans, changes in the
radio digital data marketplace, competition between Mikros and other companies
that may be entering the radio digital data marketplace, competitive pricing
pressures, market acceptance of Mikros' products under development,
and delays in
the development of products.

2002 vs. 2001:
-------------

Total revenues in 2002 were approximately $126,000 compared to $87,000 in 2001,
an increase of 44.8%.  The increase was due entirely to the Phase I
SBIR contract
in the amount of $70,000.  Royalties decreased in 2002 from approximately
$87,000
to $56,000 a decrease of 35.6%.

In 2002, revenues were derived from a SBIR contract and royalties
pursuant to an
agreement with General Atronics Corporation. In 2001 revenues were derived from
royalties earned according to Mikros' agreement with General Atronics
Corporation.

General and Administrative expenses were approximately $143,000
in 2002 compared
to $164,000 in 2001. No interest expense was incurred in 2002 and 2001.

The engineering expenses were approximately $33,000 in 2002 compared to $0 in
2001.

The Company incurred a net loss of approximately $42,000 in 2002 compared to
approximate net loss of $77,000 in 2001.



Liquidity and Capital Resources
-------------------------------

The Company's financial statements have been prepared on the basis that the
Company will continue as a going concern, which contemplates the realization of
assets and satisfaction of liabilities and commitments in the normal course of
business.  At December 31, 2002, the Company had an accumulated deficit of
$11,776,159 and a working capital deficiency of $25,265. Thus, there is
substantial doubt about the Company's ability to continue as a going concern.

Since its inception, the Company has financed its operations through debt,
private and public offerings of equity securities and cash generated by
operations.

In 2002, the Company had cash flow used in operations of approximately $32,000
compared to cash flow in operations of approximately $33,000 in 2001.
There was    a
working capital deficiency of $25,265 as of December 31, 2002 as compared to
working capital of $9,000 at December 31, 2001.

Commencing April 10, 1998, for a period of four years which concluded in April
2002 the Company received a royalty of 2% of all data terminal sales by General
Atronics Corporation (GAC). The royalty agreement provided for quarterly
reports
and payments based on the GAC shipments and receipts during the quarter.  The
royalties for 2002 were $56,213.

Mikros is presently seeking $5M in financing in order to implement its business
plan.  There is no guarantee that the Company will be able to obtain the
necessary financing or that the application contemplated will be embraced by
potential users.

The Company intends to continue the development and marketing of its commercial
applications of its wireless communications technology both directly and
through
third parties. In order to continue such development and marketing, the Company
will be required to raise additional funds. The Company intends to consider the
sale of additional debt and equity securities under appropriate market
conditions, alliances or other partnership agreements with entities
interested in
supporting the Company's commercial programs, or other business transactions
which would generate resources sufficient to assure continuation of
the Company's
operations and research programs.  There can be no assurance, assuming the
Company successfully raises additional funds or enters into business alliances,
that the Company will achieve profitability or positive cash flow.  If the
Company is unable to obtain additional adequate financing or enter into such
business alliances, management will be required to sharply curtail its
operations.  Failure to obtain such additional financing on terms acceptable to
the Company may materially adversely affect the Company's ability
to continue as
a going concern.

Item 7.	Financial Statements
--------------------------------

The financial statements required to be filed pursuant to this Item 7 are
appended to this report on Form 10-KSB.

Independent Auditors' Reports

Balance Sheet at December 31, 2002

Statements of Operations for the years ended December 31, 2002 and 2001

Statements of Shareholders' Equity (Deficiency) for the years
 2002 and 2001

Statements of Cash Flows for the years ended December 31, 2002 and 2001

Notes to Financial Statements


Item 8.	Changes In and Disagreements with Accountants on  Accounting and
Financial Disclosure
------------------------------------------------------------------------------

Not Applicable.



PART III

Item 9.  Directors and Executive Officers of the Company
---------------------------------------------------------

The current members of the Board of Directors of the Company are as follows:

       Served as a		Positions with
Name				Age		Director Since		the Company

Paul G. Casner		65			2002			Director


Thomas C. Lynch	 	60			1997			Director

Thomas J. Meaney	 	68			1986			President
and Director

Wayne E. Meyer		76			1988			Chairman of the
Board and
Director

Tom L. Schaffnit		56			2000			Director

The principal occupation and business experience, for at least the past
five years, of each current director and named executive is as follows:

Paul G. Casner, Jr. has been a director of the Company since May 2002. Mr.
Casner currently serves as Executive Vice President and Chief Operating Officer
of DRS Technologies, Inc.  From 1994 to 1998, Mr. Casner served as President of
the Electronic Systems Group of DRS Technologies. Before joining
DRS Technologies
Mr. Casner was the Chairman and Chief Executive Officer of Technology
Applications and Service Company.  Mr. Casner has over 35 years of Defense
Industry experience including several senior positions in Business Management,
Technical Management, Strategic Planning and Business Development.
 He is a member
of the Naval Reserve Association and is a Commodore of the Navy League of the
United States, in addition to other professional affiliations.
Mr. Casner is also
a director of ACE-COMM Corporation.

Thomas C. Lynch has been a Director of the Company since February 1997. Mr.
Lynch has served as Senior Vice President of The Staubach Company
since November
2001. From August 2000 to November 2001, Mr. Lynch served as Senior Vice
President of Safeguard Securities, Inc. From 1998 to August 2000, he was
Executive Vice President and later became President and Chief Operating Officer
of CompuCom Systems, Inc. Prior to joining CompuCom, Mr. Lynch had been Senior
Vice President of Safeguard Scientifics, Inc., a position he held from November
1995.  Mr. Lynch is a director of the Eastern Technology Council, Armed Forces
Benefit Association, and the U.S. Naval Academy Foundation. Mr. Lynch is also a
director of Sanchez Computer Associates, Inc., and BecTech Systems.



Thomas J. Meaney has been a Director of the Company since July 1986 and was
Chairman of the Board from June 1997 to February 1999. He was
appointed President
in June 1986 and continued to serve until February 1997.  On September
  30, 1998,
he was reappointed President of the Company.  From February 1983 to June 1986,
Mr. Meaney was Senior Vice President and Director of Robotic Vision Systems
Incorporated ("RVSI"), a manufacturer of robotic vision systems.
Mr. Meaney
served as a Director of RVSI until 1991 when he resigned from the post.
  Prior to
1983 and for more than five years, he was Vice President - Business
Development,
International of Norden Systems and President - Norden Systems Canada, both
divisions of United Technologies Corporation and developers of computer and
electronic products and systems.  He presently owns his own defense consulting
company with offices in Arlington, VA and Chadds Ford, PA.

Wayne E. Meyer has been a Director of the Company since April 1988.
Chairman of the Board 1990 to 1997, and re-elected as Chairman in
 February 1999.
From 1986 to present he has been the Founder and President of the W.E. Meyer
Corporation which engages in  consulting and advice to industry, government and
academic institutions in matters of systems engineering, project management,
strategic planning and military and electronic designs.  He enlisted in
the U.S.
Navy as an Apprentice Seaman in 1943 and retired in 1985 in the rank of Rear
Admiral.  As a national authority on Ballistic Missile Defense, he serves on
numerous boards, groups and panels.

Tom L. Schaffnit has been a Director of the Company since June 2000.  Since
March 1999, he has been President of Schaffnit Consulting, Inc., a technology-
related management consulting company specializing in wireless data
communications and automotive telematics.  He was President of CUE Data
Corporation from February 1997 to March 1999, responsible for creating and
implementing new datacasting services on a nationwide FM subcarrier paging
network.  Previously, he served as a Senior Manager with Deloitte & Touche
Consulting Group, and as Director with Nordicity Group (since acquired by
PricewaterhouseCoopers). Mr. Schaffnit remains actively involved in
the evolution
of wireless technology, and is co-author of the book "The
Comprehensive Guide to
Wireless Technologies".

Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's Directors, officers and shareholders who
beneficially own more than 10% of any class of equity securities of the Company
registered pursuant to Section 12 of the Exchange Act to file initial
 reports of
ownership and reports of changes in ownership with respect to the Company's
equity securities with the SEC.  All reporting persons are required by SEC
regulation to furnish the Company with copies of all reports that
such reporting
persons file with the SEC pursuant to Section 16(a).
Based solely on the Company's review of the copies of such forms received by
the Company and upon written representations of the Company's reporting
persons received by the Company, Messrs. Casner, Lynch, Meaney, Meyer and
Schaffnit did not report on a timely basis certain transactions.  In November
2002, each of such persons acquired from Safeguard Scientifics (Delaware),
Inc. 382,400 shares of the Company's Common Stock and warrants to purchase
1,091,800 shares of Common Stock in a private transaction.  Such transactions
were reported on a Form 5 on February 14, 2003.





The following table identifies the current executive officers of the
Company:


					Capacities in 		In Current
Name				Age		Which Served		Position Since
----------------        ---         -------------           --------------

Thomas J. Meaney	 	68	      President  			  September 1998
and Director

David C. Bryan		48		Executive Vice President  March 2002
					      Chief Operating Officer

Patricia A. Kapp	 	36		Secretary and		  September 1998
Treasurer


Item 10.  Executive Compensation
--------------------------------

The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or
paid to the
Company's Chief Executive Officer and the four most highly
compensated executive
officers of the Company whose aggregate cash compensation exceeded $100,000
(collectively, the "Named Executives") during the years ended December
 31, 2000,
2001 and 2002.


	SUMMARY COMPENSATION TABLE





Annual
Compensation(1)

	Name and Principal Position

Year

Salary ($)

(a)

(b)

(c)

Thomas J. Meaney, President

	2002
	2001
	2000

        0
        0
        0








(1)	The costs of certain benefits are not included because they did not
exceed, in the case of each Named Executive, the lesser of $50,000 or 10%
of the total of annual compensation reported in the above table.




Item 11.  Security Ownership of Certain Beneficial Owners and
          Management
------------------------------------------------------------------------

The following is certain information about our equity compensation plans
as of December 31, 2002:


                              Equity Compensation Plan Information

              (a)				(b)				(c)
              ---------------------------------------------------------------
										Number of securities
              Number of securities to					remaining available for
		  be issued upon		Weighted-average		future issuance under
                 exercise of outstanding	exercise price of		equity compensation
                 options, warrants and       outstanding options,		plans
1054:    (excluding
                  rights		        warrants and rights		securities reflected in
										column (a))
Plan Category
-------------------------------------------------------------------

Equity compensation plans
 approved by
 security holders	    140,000		$.10					   -

Equity compensation plans
 not approved by
 security holders		-		   -		    			   -

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

Total		    140,000		$ .10					  -
     ===============       ==================      ==================




Common Stock

The following table sets forth certain information, as of  March 26, 2003
with respect to holdings of the Company's Common Stock by (i) each person known
by the Company to be the beneficial owner of more than 5% of the total
number of
shares of Common Stock outstanding as of such date, (ii) each of the current
directors and Named Executives, and (iii) all current directors and
officers as a
group.
  Amount and Nature
		   			          of Beneficial	       Percent
Name of Beneficial Owner	     Ownership(1)		Of Class

(i)	Transitions Two,  			 2,137,775(2)	         6.4
  Limited Partnership
920 Hopmeadow Street
Simsbury, Connecticut 06070

      Princeton Valuation Consultants,     2,920,050(3)         9.0
        L.L.C.
      5 Vaughn Drive
      Princeton, New Jersey 08540

(ii)	Current Directors and Named Executives:

Paul G. Casner				 1,474,200(4)		   4.5

Thomas C. Lynch			       1,474,200(4)		   4.5

Thomas J. Meaney				 5,174,367(5)         15.6

Wayne E. Meyer			 	 4,582,200(6)         13.8

Tom L. Schaffnit				 2,174,654(7)		   6.6

(iii)	All Current Directors and Officers as a Group
(seven persons)		            15,382,621(4)(5)(6)(7)(8)40.1

*	Less than 1%

(1)	Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.



(2)	Includes 1,750,275 shares issuable upon conversion of Series B Stock.

(3)	Includes 202,500 shares issuable upon conversion of Convertible Preferred
Stock	and 695,883 shares issuable upon conversion of Series B Stock.

(4)   Includes 1,091,800 shares issuable upon the exercise of warrants.

(5)	Includes 50,000 shares issuable upon conversion of Convertible Preferred
Stock, 199,500 shares issuable upon conversion of Series B Stock and
1,366,800 shares issuable upon the exercise of warrants.

(6)	Includes 30,000 shares issuable upon conversion of Series B Stock,
100,000 shares issuable upon the exercise of options and 1,410,550 shares
issuable upon the exercise of warrants.

(7)   Includes 300,454 shares issuable upon the exercise of options
and 1,091,800
      shares issuable upon the exercise of warrants.

(8)	See Notes 4 through 7.  Also includes 40,000 shares issuable upon the
	exercise of options held by other officers.






Convertible Preferred Stock

The following table sets forth certain information, as of March 26, 2003,
with respect to holdings of the Company's Convertible Preferred Stock
by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
total number of shares of Convertible Preferred Stock outstanding as of such
date, (ii) each of the current directors and Named Executives, and (iii) all
current directors and officers as a group.

  Amount and Nature
     of Beneficial	 Percent
Name of Beneficial Owner	     Ownership(1)     	 of Class

(i)	Certain Beneficial Owners:

Princeton Valuation Consultants
        L.L.C.				        202,500		  79.4
      5 Vaughn Drive
      Princeton, New Jersey 08540

(ii)	Current Directors and Named Executives:

	Paul G. Casner				   --			   --

Thomas C. Lynch				   --			   --

Thomas J. Meaney				   50,000		  19.6

Wayne E. Meyer				   --			   --

Tom L. Schaffnit				   --                --


(iii)	All Current Directors and Officers as a Group
(seven persons)			   50,000	              19.6


(1)	Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.



Series B Stock

The following table sets forth certain information, as of March 26, 2003,
with respect to holdings of the Company's Series B Stock by (i) each
person known
by the Company to be the beneficial owner of more than 5% of the
total number of
shares of Series B Stock outstanding as of such date, (ii) each of the current
directors and Named Executives, and (iii) all current directors and
officers as a
group.

    Amount and Nature
       of Beneficial	      Percent
Name of Beneficial Owner	        Ownership(1)           of Class

(i)	Certain Beneficial Owners:
The Mercantile & General 		   91,342			 8.3
        Reinsurance Company, PLC
Moorfields House
Moorfields
London EC2Y 9AL

Transitions Two, Limited Partnership  583,425			52.9
920 Hopmeadow Street
Simsbury, Connecticut 06070

Princeton Valuation Consultants,      231,961			21.0
 L.L.C
5 Vaughn Drive
Princeton, New Jersey 08540

(ii)	Current Directors and Named Executives:

	Paul G. Casner				    --			 --

Thomas C. Lynch				    --		       --

Thomas J. Meaney				   66,500			 6.0

Wayne E. Meyer				   10,000			 *

Tom L. Schaffnit				    --			 --

(iii)	All Current Directors and Officers as a Group
(seven persons)				    76,500       		 6.9

*	Less than 1%
(1)	Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.







Series C Stock

The following table sets forth certain information, as of March 26, 2003,
with respect to holdings of the Company's Series C Stock by (i) each
 person known
by the Company to be the beneficial owner of more than 5% of the
total number of
shares of Series C Stock outstanding as of such date, (ii) each of the current
directors and Named Executives, and (iii) all current directors and
officers as a
group.

Amount and Nature
  of Beneficial	  	Percent
Name of Beneficial Owner	        Ownership(1)           of Class

(i)	Certain Beneficial Owners:

Transitions Two, Limited Partnership	 5,000		  100.0
920 Hopmeadow Street
Simsbury, Connecticut 06070

(ii)  Current Directors and Named Executives:

Paul G. Casner					  --			   --

Thomas C. Lynch				  --			   --

Thomas J. Meaney				  --			   --

Wayne E. Meyer					  --			   --

Tom L. Schaffnit				  --			   --

(iii) All Current Directors and Officers as a Group
(seven persons)				  --			   --



* Less than 1%

(1)	Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.



Series D Stock

The following table sets forth certain information, as of March 26, 2003,
with respect to holdings of the Company's Series D Stock by (i) each
person known
by the Company to be the beneficial owner of more than 5% of the
 total number of
shares of Series D Stock outstanding as of such date, (ii) each of the current
directors and Named Executives, and (iii) all current directors
and officers as a
group.


Amount and Nature
   of Beneficial		Percent
Name of Beneficial Owner		   Ownership(1)     	of Class

(i)	Certain Beneficial Owners:

Princeton Valuation Consultants,
 L.L.C.					      138,000           20.0
5 Vaughn Drive
Princeton, New Jersey 08540

Frederick C. Tecce				138,000		20.0
c/o Mikros Systems Corporation
707 Alexander Road, Bldg 2, Suite 208
Princeton, New Jersey 08540

The Estate of Joseph R. Burns             138,000		20.0
c/o Mikros Systems Corporation
707 Alexander Road, Bldg 2, Suite 208
Princeton, New Jersey 08540

(ii) Current Directors and Named Executives:

	Paul G. Casner					--			 --

Thomas C. Lynch					--		       --

Thomas J. Meaney					138,000		20.0

Wayne E. Meyer					138,000		20.0

Tom L. Schaffnit					--			 --


(iii)	All Current Directors and Officers as a Group
(seven persons)					276,000	      40.0


(1)	Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.









Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

In 1996, Safeguard Scientifics (Delaware), Inc., invested $1 million in the
Company in exchange for 10% ownership in the Company.  At the same time,
Mobile Broadcasting Corporation (MBC) was created to exploit the AM radio
technology, particularly in mobile or portable platforms such as automobiles.
 Mikros owned a majority interest in MBC, with the balance of MBC ownership
held by Safeguard Scientifics.

Data Design and Development Corporation (3D) was also founded in 1996 as part
of  the Safeguard Scientific agreement to own the AM and FM technology.  3D
licensed the FM technology rights in North America to Mikros and the AM
technology rights in North America to MBC. Mikros owned two-thirds of the
equity of 3D, and Safeguard owned the remaining one-third interest.
In November 2002, Safeguard Scientifics (Delaware), Inc. sold its equity
interests in MBC, 3D and the Company to Paul G. Casner, Thomas Lynch, Thomas J.
Meaney, Wayne E. Meyer and Tom L. Schaffnit, each of whom is a Director of the
Company.  Mr. Meaney also is President, Chief Executive Officer and Chief
Financial Officer of the Company. Each of such individuals acquired 382,400
shares of the Company's Common Stock and warrants to purchase
1,091,800 shares of
Common Stock.  In January 2003, Messrs. Casner, Lynch, Meaney, Meyer and
Schaffnit each contributed the equity interests of MBC and 3D to the capital of
the Company.  Upon this contribution, MBC and 3D became wholly
 owned subsidiaries
of the Company.


PART IV

Item 13.  Exhibits, Lists and Reports on Form 8-K
-----------------------------------------------------------------

(a)  Exhibits

Note:  All exhibits that were filed as exhibits (I) to the Company's
 Registration
Statement on Form S-18, File No. 2-67918-NY, as amended, (ii) or, if so
specified, to previously filed Annual Reports on Form 10-K or to
previously filed
Current Reports on Form 8-K, are indicated by a parenthesis setting forth the
exhibit number by which the exhibits were identified in said Registration
Statement and are hereby incorporated by reference.

     3.1	Certificate of Incorporation [Exhibit 2(I)]
     3.2  	By-laws [Exhibit 2(ii)]
     3.3   	Form of Certificate of Amendment to Certificate of
           	Incorporation [Exhibit 2(iii)]
     3.4   	Form of Certificate of Amendment of Incorporation with
           	respect to increase of authorized shares [Exhibit iv)]
     4.1   	Certificate of Designations of Series B Preferred Stock and Series
		C Preferred Stock [Exhibit 4.1 to Form 8-K filed September 12, 1988]
     4.2   	Revised form of Series C Preferred Stock Purchase
           	Warrant issued to Bishop Capital, L.P. as assigned to
           	the Investors.
     4.3   	Form of Series C Preferred Stock Purchase Warrant
           	issued to Unicorn Ventures, Ltd., Renaissance Holdings
           	PLC and Gartmore Information and Financial Trust PLC.
           	[Exhibit 4.5 to Form 10-K for 1988 filed May 15, 1989]
     4.4   	Form of Series C Preferred Stock Purchase Warrant
           	assigned to the Investors. [Exhibit 4.10 to Form 10-K
           	for 1990 filed April 12, 1991]
     4.5   	Form of Series C Preferred Stock Purchase Warrant
           	assigned to the Investors [Exhibit 4.11 to Form 10-K
           	for 1990 filed April 12, 1991]
     4.6   	Assignment and Sale Agreement dated October 27, 1992 by
           	and among Renaissance Holdings PLC, acting by its
           	Receivers, the Company, and each of the Investors and,
           	as to Section 1.1 thereof only, the Chartfield Group,
           	acting by its Receivers [Exhibit 4.1 to Form 8-K filed
           	October 27, 1992]
     4.7   	Loan Modification and Intercreditor Agreement dated
           	October 27, 1992 by and among the Company and the
           	Investors [Exhibit 4.2 to Form 8-K filed October 27,
           	1992]
     4.8   	Certificate of Designations of Serial Preferred Stock
           	[Exhibit 4.16 to Form 10-K for 1993 filed March 30, 1994]



    10.1   	Loan Agreement dated April 26, 1988 between the Company
           	and Bishop Capital, L.P. as assigned to the Investors
           	[Exhibit 10.1 to Form 8-K filed September 12, 1988].
    10.2   	Security Agreement dated April 26, 1988 between the
           	Company and Bishop Capital, L.P. as assigned to the
           	Investors [Exhibit 10.2 to Form 8-K filed September 12,
           	1988]
    10.3   	Amendment to Loan Agreement and Promissory Note dated
           	as of January 27, 1989 between Bishop Capital, L.P. as
           	assigned to the Investors and the Company. [Exhibit
           	10.4 to Form 10-K for 1988 filed May 15, 1989]
    10.4   	Investment Agreement dated as of June 30, 1988 between
           	Unicorn Ventures, Ltd., Unicorn Ventures II, L.P., as
           	assigned to the Investors and the Company [Exhibit 10.6
           	to Form 8-K filed September 12, 1988]
    10.5   	Security Agreement dated June 30, 1988 from the Company
           	to Unicorn Ventures, Ltd. and Unicorn Ventures II, L.P.
           	as assigned to the Investors [Exhibit 10.9 to Form 8-K
           	filed September 12, 1988]
    10.6   	Registration Agreement dated as of June 30, 1988
           	between Unicorn Ventures, Ltd., Unicorn Ventures II,
           	L.P., as assigned to the Investors and the Company
           	[Exhibit 10.10 to Form 8-K filed September 12, 1988]
    10.7   	Consent and Amendment Agreement dated March 31,1989 as
           	assigned to the Investors. [Exhibit 10.10 to Form 10-K
           	for 1988 filed May 15, 1989]
    10.8   	1988 Restricted Stock Award Plan. [Exhibit 10.20 to
           	Form 10-K for 1988 filed May 15, 1989]
    10.9   	Form of Restricted Stock Agreement. [Exhibit 10.21 to
           	Form 10-K for 1988 filed May 15, 1989]
    10.10  	Incentive Stock Option [Exhibit 10(c)(iii) to Form 10-K
           	for the year ended December 13, 1981]
    10.11  	Amended and Restated Stock Option Plan (1988)[Exhibit
           	10.27 to Form 10-K for 1989 filed April 3, 1990]
    10.12  	Security Agreement dated April 19, 1990 from Mikros
           	to Bishop Capital, L.P. as assigned to the Investors
           	[Exhibit 10.35 to Form 10-K for 1990 filed April 12,
           	1991]
    10.13  	Security Agreement dated April 19, 1990 from Mikros to
           	Renaissance Holdings PLC as assigned to the Investors.
           	[Exhibit 10.36 to Form 10-K for 1990 filed April 12,
           	1991]
    10.14  	Consent and Amendment Agreement dated as of April 19,
           	1990 as assigned to the Investors. [Exhibit 10.37 to
           	Form 10-K for 1990 filed April 12, 1991]
    10.15  	Note Modification and Stock Purchase Agreement dated
           	December 31, 1993. [Exhibit 10.47 to Form 10-K for
           	1993 filed March 30, 1994]
    10.16  	Common Stock and Warrant Purchase Agreement dated
           	November 15, 1996 by and between Mikros Systems
           	Corporation and Safeguard Scientifics (Delaware), Inc. (Delaware),
Inc.
           	[Exhibit 10.1 to Form 8-K filed November 18, 1996]
    10.17  	License Agreement dated November 15, 1996 by and


           	between Mikros Systems Corporation and Data Design and
           	Development Corporation.  [Exhibit 10.2 to Form 8-K
           	filed November 18, 1996]
    10.18  	Technology License Agreement dated November 15, 1996 by
           	and among Data Design and Development Corporation,
           	Mikros Systems Corporation and Mobile Broadcasting
           	Corporation.  [Exhibit 10.3 to Form 8-K filed November
           	18, 1996]
    10.19  	Form of 1996 Warrant with Schedule of Warrants.
     	[Exhibit 10.24 to Form 10-K filed February 28,1997]
    10.20  	Registration Statement of shares included in the
	     	Incentive Stock Option Plan (1981)and the 1992
     	Incentive Stock Option Plan [Form S-8/S-3 filed April 25,1997]
    10.21  	Contract to sell defense contracts to General Atronics Corporation
	     	dated April 10, 1998 [Exhibit 10.25 to Form 10-K filed November 13,
	     	1998]
    10.22 	Non-Compete agreement with General Atronics Corporation dated April
           	10,1998 [Exhibit 10.26 to Form 10-K filed November 13, 1998]
    10.23  	Lease agreement with the Daily Plan It for office space dated July
		29, 1998 [Exhibit 10.23 to Form 10-K filed February 28, 1997]
(b)  Reports on Form 8-K
The Company did not file a current Report on Form 8-K with the Securities
and Exchange Commission during the fourth quarter of 2002.
10.24	Exhibit 10.24 Contribution Agreement dated as of January 28, 2003
between the Company and Paul G. Casner, Thomas C. Lynch, Thomas J.
Meaney, Wayne E. Meyer and Tom L. Schaffnit.

Exhibit 99.1 Certification of principal executive officer and
principal financial
officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C 150.




Item 14.  Controls and Procedures
Evaluation of disclosure controls and procedures.  Based on their
evaluation of the Company's disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15d-14(c) under the Exchange Act) as of a date
within 90 days
of the filing date of this Annual Report on Form 10-KSB, the Company's
president
and chief executive officer (principal executive officer) and the
Company's chief
financial officer (principal accounting and financial officer) have concluded
that the Company's disclosure controls and procedures are designed to
 ensure that
information required to be disclosed by the Company in the reports
that it files
or submits under the Exchange Act is recorded, processed, summarized
 and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms and are operating in an effective manner.

Changes in internal controls.  There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of their most recent evaluation.







	SIGNATURE PAGE

Pursuant to the requirements of Section 13 or 15(d) 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.

                              MIKROS SYSTEMS CORPORATION
                              --------------------------
                                     (Registrant)
Dated: March 31, 2003
                          By: /s/ Thomas J. Meaney
                          --------------------------------
 Thomas J. Meaney, President


Pursuant to the requirements of the Securities Exchange Act of 1934,
this report
has been signed below by the following persons on behalf of the
registrant and in
the capacities indicated and on the date indicated.


Signatures                                   Date


/s/ Wayne E. Meyer
---------------------------		   	   March 31, 2003
Wayne E. Meyer, Chairman


/s/ Paul G. Casner
---------------------------		   	   March 31, 2003
Paul G. Casner, Director


/s/ Thomas C. Lynch                    	   March 31, 2003
------------------------------
Thomas C. Lynch, Director


/s/  Thomas J. Meaney
------------------------------		   March 31, 2003
Thomas J. Meaney, Director


/s/  Tom L. Schaffnit                        March 31, 2003
------------------------------
Tom L. Schaffnit, Director







CERTIFICATION
I, Thomas J. Meaney, certify that:
1. I have reviewed this annual report on Form 10-KSB of Mikros Systems
Corporation;
2.  Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. The registrant's other certifying officer 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
annual 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 annual report (the "Evaluation Date"); and
c) presented in this annual 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 officer 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 officer and I have indicated in this
annual 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.
		 			/s/ Thomas J. Meaney______________
Dated:	March 31, 2003	Thomas J. Meaney, President, Chief
					Executive Officer and Chief Financial Officer
					(Principal Executive Officer and
					 Principal Financial Officer)


Lipman Selznick & Witkowksi
Raritan Plaza III
101 Fieldcrest Avenue
Post Office Box 6204
	Edison, New Jersey 08818-6204
	(732) 225-8888
	FAX (732) 225-5326

	Independent Auditors' Report

To the Board of Directors and Shareholders of
MIKROS SYSTEMS CORPORATION

We have audited the accompanying balance sheet of Mikros Systems Corporation as
of December 31, 2002, and the related statements of operations, changes in
shareholders' equity deficiency and cash flows for the years in the two-year
period ended December 31, 2002.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all
material respects, the financial position of Mikros Systems Corporation as of
December 31, 2002, and the results of its operations and its cash
flows for each
of the years in the two-year period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note B to the
financial statements, the Company has sustained recurring losses
from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described
 in Note B.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Lipman Selznick & Witkowski
A Professional Corporation
Edison, New Jersey
February 25, 2003










MIKROS SYSTEMS CORPORATION
                              BALANCE SHEET

                                      DECEMBER 31,
         ASSETS                           2002
------------------------------       ------------

CURRENT ASSETS
  Cash                                $   55,361

  Receivable due on tax attributes sale	41,661

  Other Current Assets                       500
                                     ------------
TOTAL CURRENT ASSETS                      97,522
                                     ------------

  Equipment                               67,738

  Less: Accumulated Depreciation          52,904
 					 ------------
  					14,834
                                     ------------
OTHER ASSETS:

  Patent Costs, net                       21,135

                                     ------------
TOTAL ASSETS			 $   133,491
                                     ============

	See Notes to Financial Statements



	MIKROS SYSTEMS CORPORATION
                           BALANCE SHEET (continued)


         LIABILITIES AND                            DECEMBER 31,
 SHAREHOLDERS'  EQUITY  DEFICIENCY                      2002
----------------------------------                  -----------
CURRENT LIABILITIES
  Accrued Payroll and Payroll Taxes                  $  21,531
  Accrued Expenses                                       9,478
  Accrued directors' fees  				      28,073
  Due to related parties                                48,705
  Customer Advances                                     15,000
                                                   ------------
TOTAL CURRENT LIABILITIES                              122,787
                                                   ------------
COMMITMENTS AND CONTINGENCIES

MANDATORILY REDEEMABLE SERIES C PREFERRED STOCK
par value $.01 per share, authorized 150,000
shares, issued and outstanding 5,000 shares
                                                        80,450
                                                   ------------
SHAREHOLDERS' EQUITY DEFICIENCY

  Preferred Stock, convertible, par value $.01
  per share, authorized 2,000,000 shares, issued
  and outstanding 255,000 shares
                                                         2,550

  Preferred Stock, Series B convertible, par value
  $.01 per share, authorized 1,200,000 shares, issued
  and outstanding 1,102,433 shares                      11,024

  Preferred Stock, Series D, par value $.01 per share
  690,000 shares authorized, issued and outstanding      6,900

  Common Stock, par value $.01 per share,
  authorized 60,000,000 shares, issued and
  outstanding 31,556,753 shares
                             	                   315,668

  Capital in excess of par value                    11,370,271

  Accumulated Deficit                              (11,776,159)
                                                   ------------
TOTAL SHAREHOLDERS' EQUITY DEFICIENCY	    (69,746)
                                                   ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
   DEFICIENCY		             $    133,491
                                                   ============

	See Notes to Financial Statements

























                         MIKROS SYSTEMS CORPORATION
                         STATEMENTS OF OPERATIONS

					Years Ended December 31,
                                        2002          2001
                                    ------------   -----------

 Contract Revenues			$     70,000   $        -

 Cost of sales					31,844            -
                                    ------------   -----------

 Gross margin					38,156		-
 Royalties						56,213	 86,827
						------------   -----------
							94,369	 86,827
                                    ------------   -----------
 Expenses
   Engineering					33,610		-
   General and Administrative            142,759      163,998
                                     ------------  -----------
   Total expenses                        176,369      163,998
                                     ------------  -----------

 Loss from operations			     (82,000)     (77,171)

 Other Income:
   Sale of New Jersey tax
    attributes  		                  41,660	      -
                                     ------------  -----------
 Net loss before income taxes            (40,340)     (77,171)

 Income taxes 					 1,472            -
						 ------------  -----------

 Net loss		                    $  (41,812)   $ (77,171)
                                     ============  ===========

Basic loss per share  		        $    (0.00)   $   (0.00)
                                     ============  ===========
Weighted average number of shares
 outstanding                          31,445,657    30,948,410
                                    ============  =============

See Notes to Financial Statements




















MIKROS SYSTEMS CORPORATION
	STATEMENTS OF SHAREHOLDERS' EQUITY DEFICIENCY
	YEARS ENDED DECEMBER 31, 2002 AND 2001


 Preferred Stock    Preferred Stock B  Preferred Stock D
 $0.01 Par Value    $0.01 Par Value     $0.01 Par Value
    ----------------------------------------------------------
 Number      Par     Number     Par     Number     Par
 of shares   Value   of shares  Value   of shares  Value
       -----------------------------------------------------------

690,000   $6,900

Conversion of accrued liabilities

Conversion of Series B
  Preferred stock to common stock                     (29,230)   (292)

Net loss

1878:    ----------  --------  --------- -------   ---------  --------
690,000    6,900

Issuance of common stock

Net loss
1884:  ----------  --------  --------- -------   ---------  --------
1941: Balance,
  December 31, 2002 255,000$ 2,550 1,102,433 $11,024 690,000 $ 6,900
1886:   ==========  ========  ========= =======   =========  ========


                                                  Capital in
                               Common Stock       excess of     Accumulated
                              $0.01 Par Value     Par Value       Deficit
                            ------------------------------------------------
                               Number      Par
                              of shares   Value
                            -----------------------

Balance,January 1, 2002       30,619,063  $306,191 $ 11,334,610   $(11,657,176)

Conversion of accrued liabilities 400,000     4,000       20,000

Conversion of Series B
  Preferred stock to common stock  87,690       877        9,061           -

Net loss                                          		       (77,171)
                               ----------  --------  -----------   ------------
Balance,December 31, 2001      31,106,753   311,068   11,363,671    (11,734,347)

Issuance of common stock          460,000	   4,600        6,600	             -

Net Loss 			                            (41,812)
                              ----------  --------- -----------   -------------
Balance, December 31, 2002    31,566,753   $315,668 $ 11,370,271   $(11,776,159)
                              ==========  ========  ===========   =============

                                  See Notes to Financial Statements









                            MIKROS SYSTEMS CORPORATION
                             STATEMENTS OF CASH FLOWS



                                                Years Ended December 31,
                                                2002             2001
                                             ----------      -----------
Cash Flow From Operating Activities:
  Net loss                                   $   (41,812)    $   (77,171)
 Adjustments to reconcile net loss
 to net cash used in operating activities:
   Depreciation and Amortization                   3,499           4,595
   Common Stock issued for services rendered      11,200          24,000

Net Changes in Operating Assets and Liabilities
  Accounts Receivable                             36,142           2,891
  Receivable due on tax attributes sale          (41,661)         40,964
  Other Current Assets                            16,925         (16,925)
  Accounts Payable                                (8,037)          6,270
  Accrued Payroll and Payroll Taxes               (1,667)          1,119
  Accrued Expenses                                (6,584)        (18,988)
                                               -----------      ---------
 Net Cash used in operating activities	       (31,995)        (33,245)
                                               -----------      ---------
Cash Flows From Investing Activities:

   Purchase of Equipment                          (6,675)         (1,341)
                                               -----------      ----------
Cash Flows Provided Financing Activities:

  Repayment of amounts due to related parties       (221)        (23,124)
  Proceeds from conversion of preferred stock          -	       9,646
  					                 -----------      ----------
   Net Cash used in financing activities		    (221)	     (13,478)
                                               -----------      ----------

Net decrease in cash        			       (38,891)        (48,064)

Cash, Beginning of year 	                        	   94,252          142,316
                                     		      -----------      ----------
Cash, end of year                            $     55,361    $    94,252
                                             ============    =============
Supplemental disclosure of cash flow information

  Cash paid during the year for
    Income taxes			               $        972    $    5,300
                                             ============    =============

Supplemental disclosure of non-cash activities:

  Conversion of Preferred Stock B to
     Common stock                            $        -      $      292
                                             ===========     =============
See Notes to Financial Statements


  	MIKROS SYSTEMS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS


A. THE COMPANY
--------------

Mikros Systems Corporation was founded in 1978 in Albany, New York to exploit
microprocessor technology developed at the General Electric Research and
Development Center for the military defense industry.  The Company's
 headquarters
are located at 707 Alexander Road, Suite 208, Princeton, New Jersey; telephone
(609)987-1513.

Initially, the Company supplied technology for military applications. The
knowledge base and proprietary technology developed was recognized
as applicable
to the rapidly expanding wireless business in the commercial sector.

In 1995, the Company's Board of Directors decided the Company
should also pursue
commercial contracts which would employ these advanced techniques
 to enhance the
data transmission rates in the AM and FM radio spectrum. Since the Company had
limited resources, it was decided to pursue the AM technology.

In 1996, Safeguard Scientifics (Delaware), Inc., (Safeguard) invested
$1,000,000
in the Company in exchange for 10% ownership in the Company.  At the same time,
Mobile Broadcasting Corporation (MBC) was created to exploit the AM radio
technology, particularly in mobile or portable platforms such as automobiles.
Initially, Safeguard invested $1,000,000  in MBC for 75% ownership and the
Company owned the remaining 25%.  The Company's share in MBC was subsequently
increased to 50%, as a result of the Company's investment in the development of
this technology.

Data Design and Development Corporation (3D) was founded in 1996 as
a part of the
Company's agreement with Safeguard Scientific agreement and retains
 ownership of
the AM and FM technology.  3D has licensed the FM technology rights in North
America to the Company and the AM technology rights in North America to MBC.
Mikros owns 2/3 of 3D and Safeguard owns the remaining 1/3.

In November 2002, Safeguard Scientifics sold its equity interests in MBC, 3D
and the Company to Paul G. Casner, Thomas Lynch, Thomas J. Meaney, Wayne E.
Meyer and Tom L. Schaffnit, each of whom is a Director of the Company.  Mr.
Meaney also is President, Chief Executive Officer and Chief Financial Officer
of the Company.  Each of such individuals acquired from Safeguard Scientifics
(Delaware), Inc. 382,400 shares of the Company's Common Stock and warrants to
purchase 1,091,800 shares of Common Stock.  In January 2003, Messrs. Casner,
Lynch, Meaney, Meyer and Schaffnit each contributed the equity interests of
MBC and 3D to the capital of the Company.  Upon this contribution, MBC and 3D
became wholly owned subsidiaries of the Company.
The Company's Board of Directors determined that it would be in the
best interest
of the shareholders to sell the government contracts and use the proceeds to
focus exclusively on the commercial contracts, particularly the AM  radio data
casting

The Company sold its military contracts to an unrelated third party (the
Purchaser).  The Purchaser entered into a royalty agreement with
the Company, and
is required to pay 2% royalty on all data terminal set sales over a four year
period that expired in 2002.







B.   SIGNIFICANT ACCOUNTING POLICIES
------------------------------------

Basis of Presentation
---------------------

The Company's financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America,
which contemplates the continuation of the Company as a going concern. The
Company has sustained substantial operating losses in recent years. In
addition, the Company has used substantial amounts of working capital in
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.  Management's plans and
intentions on the going concern issue are discussed below.  These
financial statements do not include any adjustments that would be required
if the Company were unable to continue as a going concern.

In order to continue as a going concern, the Company will need to incur
	substantial expenditures to develop and market its commercial wireless
	communications business.

     	In view of these matters, realization of a major portion of the
 assets in
     	the accompanying balance sheet is dependent upon continued operations of
  	the Company, which in turn is dependent on the Company being able to
	obtain financing and/or equity to support further development for its
	commercial wireless  business and continuing operations. Management
	believes that actions presently being taken to revise the Company's
	operating and financial requirements provide the opportunity to continue
	as a going concern.


Use of Estimates
----------------

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts
of revenues and  expenses during the reporting period.  Actual results
could differ from those estimates.


Equipment
---------

Equipment is stated at cost. Depreciation is computed using the
straight-line method based on estimated useful lives which range from 2 to
5 years. Depreciation expense amounted to $1,380 and $269 for years ended
December 31, 2002 and 2001, respectively.


Earnings per Common Share
-------------------------

The Company adopted Statement of Financial Accounting Standards No.128,
	earnings per share, and in accordance with this provision has restated all
	prior periods. Basic earnings per common 	share is computed using the
	weighted average number of shares outstanding. 	The  number of common
	shares that would be issued from the exercise of stock options and
	warrants, and the conversion of convertible preferred stock would be anti-
	dilutive.


Revenue Recognition
-------------------

Royalty revenues are recorded when shipments are completed and reported to
the Company. Contract revenue is recorded when contract specifications are
met.





Patents
      -------

In accordance with Statement of Financial Accounting Standard (SFAS)
No. 142, patent costs are amortized over a 17-year life.  Amortization
expense amounted to $2,119  and $4,326 for the years ended
          December 31,
2002 and 2001, respectively.








Cash Equivalents
 	----------------

The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents


C. 	FINANCING TRANSACTIONS

Safeguard Scientifics (Delaware) Inc. (SSI)
-------------------------------------------

On November 15, 1996, the Company, all of its secured creditors and Safeguard
entered into an agreement. Under the agreement Safeguard paid $1,000,000 to the
Company.

Safeguard received:  1) 1,912,000 shares of Common Stock of the Company; 2) a
warrant to purchase 2,388,000 shares of Common Stock at $0.65 per share; 3) a
warrant to purchase 3,071,000 shares at $0.78 per share; 4) a 75%
interest in an
exclusive, royalty-free, perpetual license of the AM technology in the United
States, Canada and Mexico (through Safeguard's ownership in MBC); and 5) a  1/3
interest in the FM and AM technology (through Safeguard's ownership in
 3D).  This
transaction is more fully described below.

Two (2) new companies were formed, Data Design and Development Corporation (3D)
and Mobile Broadcasting Corporation (MBC).  The Company received
 one-third of 3D
in exchange for certain of its AM and FM technology.  Safeguard received one-
third of 3D in exchange for a commitment to invest up to $1,000,000 in
 MBC.  The
secured creditors received one-third of 3D and released their security interest
in the technology transferred.  The Company received 25% of MBC for $50.
Safeguard received 75% of MBC for $200,000.  During 2000, the secured creditors
converted their shares of 3D stock into the Company stock.  Accordingly, the
Company has become the majority stockholder of Data Design and Development
Corporation.



3D granted MBC an exclusive, royalty-free, perpetual license to the AM
technology
in the United States, Canada and Mexico.  3D granted the Company an exclusive,
royalty-free, perpetual license to the FM technology in the United States,
Canada
and Mexico.  3D retained rights to the AM and FM technology in the rest of the
world.  The Company and MBC entered into a consulting arrangement
under which the
Company was paid for the development of the AM technology.  3D owns
 the rights to
such technology.

The Company is unable to assign fair values to these transactions.
No amount of
cash consideration was considered attributable to a sale of the AM or FM
technology or to the license thereto.  No gain was recognized on the
 transfer of
the technology.  The entire amount of the cash consideration received from
Safeguard was recorded as a sale of Common Stock.

In connection with the sale of the Common Stock and the Warrants, the Company
granted to Safeguard certain piggyback and demand registration rights with
respect to the Common Stock and the Common Stock underlying the Warrants.  In
addition, the Company granted to Safeguard a right of first refusal pursuant to
which, subject to certain conditions, in the event the Company issues, sells or
exchanges any securities, it must first offer such securities to Safeguard and
such offer must remain open and irrevocable for 30 days.  Such right of first
refusal may only be waived in writing and terminates at such time as Safeguard
owns less than 10% of the Common Stock.

Pursuant to the Purchase Agreement, as long as Safeguard owns 1% or more of the
Company's outstanding equity securities, on a fully-diluted basis, the
 Company is
obligated to, among other things:(i) permit Safeguard to inspect the operations
and business of the Company; and (ii) fix and maintain the number of
Directors on
the Board of Directors at eight members.  In addition, the Purchase Agreement
also provides that as long as Safeguard owns such 1%, the Company is subject to
certain negative covenants, including, among other things, restrictions
on:  (i)
transactions with affiliates of the Company; (ii) certain indebtedness;
and (iii)
amendments to the Company's Certificate of Incorporation and Bylaws.

D.   DIVIDENDS
--------------
As of December 31, 2002 and 2001, there were dividends in arrears on shares of
Series D Preferred Stock of $621,000 and $552,000 ($.10 per share) respectively.

E.   REVENUES
-------------

During the years ended December 31, 2002 and 2001, one customer accounted for
100% of royalty revenue.  In 2002, one customer accounted for 100% of contract
revenue.

F.  INCOME TAXES
----------------

Income taxes are recorded in accordance with Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes".





The Income tax provision is computed as follows:


 2002   	  2001
                             ---------   ---------
Current tax expenses        $    1,472	$	-
Benefit from utilization of
 net operating losses             -  		-
Benefit from utilization of
 State R&D credits                -  		-
Deferred Tax Expense (Benefit) 357,252    459,600
Decrease in valuation
   Allowance                  (357,252)  (459,600)
                              ---------   ---------

Net Tax Provision           $	   1,472   $       -
                             =========   =========

During 2002, as permitted by New Jersey Statues, the Company
sold their state
research and development credits.  The Company realized $41,661 from
 the sale of
these tax attributes.

The differences between the statutory federal income tax rate and the
effective Company tax rate is as follows:

                               2002		  2001
                             --------   ----------
Federal statutory rate		 34.0%	 34.0%
Utilization of net operating
 loss carryforwards             0.0		  0.0
State income taxes, net of
 federal tax effect        	  0.0		  0.0
Decrease in valuation
 allowance				(34.0)	(34.0)
                             ---------  ----------
Effective tax rate              0.0%	  0.0%
                             =========  ==========




Total available Net Operating Loss Carry Forwards are reflected in
 the following
schedule:

   		YEAR         AVAILABLE FOR      AVAILABLE FOR
              			 OF             FEDERAL            STATE
            		     EXPIRATION       TAX PURPOSES      TAX PURPOSE

				2003	     $	  606,000        $         -
                              2004             147,000                  -
                              2005              81,000                  -
                              2009                   -             77,000
                              2010             602,000                  -
                              2011           1,422,000                  -
                              2012             339,000                  -
                              2013             277,000                  -
                              2021              77,000                  -
                              2022              39,000                  -
                                           --------------     -------------
                                           $ 3,590,000         $   77,000
                                           ==============     =============





The deferred tax asset and deferred tax liability consist of the following:

                               2002          2001
                             ---------    ---------
Deferred tax asset:
  Net Operating loss
  carry forward            $ 1,220,600  $  1,525,320
  Research and Development
    credit				       -        52,532
  Valuation Allowance      ( 1,220,600)  ( 1,577,852)
                            ----------   -----------
Net deferred tax asset     $         -  $          -
                            ==========   ===========
Total Deferred tax
 liability        	   $         -  $          -
                            ==========   ===========

Deferred income tax assets and liabilities are computed annually
for differences
between the financial statement and tax bases of assets and
liabilities that will
result in taxable or deductible amounts in the future based on enacted tax laws
and rates applicable to the periods in which the differences are expected to
affect taxable income.  Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.  Income tax
expense is the tax payable or refundable for the period plus or minus
 the change
during the period in deferred tax assets and liabilities.


G.  RELATED PARTY TRANSACTIONS
-------------------------------

As of December 31, 2002, the Company owed its board members accrued directors
fees of $28,073.



MBC has advanced the Company $48,705 for working capital purposes.
The obligation
is due on demand without interest.


H.  MANDATORILY REDEEMABLE SERIES C PREFERRED STOCK
----------------------------------------------------

The Series C Preferred Stock, was issued in 1988 in order to satisfy notes
payable and other trade accounts payable pursuant to a debt restructuring. The
Series C Preferred Stock is not convertible into any other class of the
Company's
stock and is subject to redemption at the Company's option at any time and
redemption is mandatory if certain events occur, such as capital
reorganizations,
consolidations, mergers, or sale of all or substantially all of the Company's
assets. Upon any liquidation, dissolution or winding up of the Company, each
holder of Series C Preferred Stock will be entitled to be paid, before any
distribution or payment is made upon any other class of stock of
the Company, an
amount in cash equal to the redemption price for each share of Series
 C Preferred
Stock held by such holder, and the holders of Series C Preferred Stock will not
be entitled to any further payment. The redemption price per share is $16.09.


I. SERIES B CONVERTIBLE PREFERRED STOCK
---------------------------------------

The Series B Preferred Stock, was issued in 1988 in order to satisfy notes
payable and other trade accounts payable pursuant to a debt restructuring.
 Each
share of Series B Preferred Stock is convertible into three shares of the
Company's common stock at a price of $.33 per share of common stock to be
received upon conversion and entitles the holder thereof to cast three votes on
all matters to be voted on by the Company's Shareholders.  Upon
any liquidation,
dissolution, or winding up of the Company, each holder of Series B Preferred
Stock will be entitled to be paid, after all distributions of payments are made
upon the Series C Preferred Stock and before any payment is made upon the
Company's Convertible Preferred Stock, an amount in cash equal to
$1.00 for each
share of Series B Preferred Stock held, and such holders will not
be entitled to
any further payment.


J.  SERIES D PREFERRED STOCK
-----------------------------

The Series D Preferred Stock was issued in 1993 in order to partially satisfy
notes payable and accrued interest thereon pursuant to a debt
restructuring.  The
Series D Preferred Stock provides for an annual cumulative dividend of $.10 per
share.  The shares are not convertible into any other class of stock and are
subject to redemption at the Company's option at any time at a redemption price
of $1.00 per share plus all unpaid cumulative dividends.  Upon liquidation,
dissolution or winding up of the Corporation, each holder of Series D Preferred
Stock will be entitled to be paid, after all distributions or payments are made
upon the Corporation's Convertible Preferred Stock, Series B Preferred
 Stock, and
Series C Preferred Stock, an amount in cash equal to the Redemption Price for
each share of Series D Preferred Stock held by such holder. The holders
of Series
D Preferred Stock will not be entitled to any further payment.




K.  STOCK OPTIONS AND WARRANTS
-------------------------------

In 1992, the Company adopted an Incentive Stock Option Plan.  The stock option
plan, as amended provides for ten-year options to purchase up to
2,000,000 shares
of Common Stock at a price equal to the market price of the shares on date of
grant, exercisable at the cumulative rate of 25% per annum.  The Plan
has expired
as of December 31, 2002, however the Company plans on adopting a new incentive
stock option plan.

The Company has adopted the disclosure-only provisions of Statement
of Financial
Accounting Standards  No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123"),  but applies APB Opinion 25 and related interpretations in
 accounting
for its various stock option plans.  There was no compensation cost
for the years
ended December 31, 2002 and 2001, respectively.  Had compensation cost been
recognized consistent with the method prescribed by Statement of Financial
Accounting Standards No. 123, there would have been no change in the Company's
net loss and loss per share.

The fair value of the Company's stock options used to compute proforma
net income
(loss) and net income (loss) per share disclosures is the estimated
present value
at grant date using the Black-Scholes option-pricing model with the following
weighted average assumptions:

     ASSUMPTION                 2002              2001
                            -----------       ----------
     Dividend yield             0.0%             0.0%
     Risk free interest rate    6.48%            6.48%
     Expected life              5 years          5 years
     Expected volatility      235.0%           235.0%

Proforma net income (loss) reflects only options granted in 1996 and 1995.
Options which were granted in 1997 were subsequently forfeited. In addition,
42.3% of all outstanding options as of December 31, 1998 were
 forfeited in 1999.
Therefore, the full impact of calculating compensation cost for stock options
issued in 1997 under Statement of Financial Accounting Standards No. 123 is not
material. Compensation cost for options granted prior to January 1, 1995 is not
considered.



Option activity under the Company's Plan is summarized below:


         Weighted
         Average
         Exercise
 2002     Price        2001     Price
2520:    ----------------------------------------------
Options outstanding beginning
576,818   $0.1520     576,818     $0.1520
Granted 			              -        -           -      0.0000
Exercised  			              -        -           -      0.0000
Cancelled			        (75,000)  0.0003           -      0.0000
                                   ---------------------------------------------
2527:   Options outstanding, end of year  501,818  $0.1656  576,818 $0.1520
                                   =============================================


The following summarizes information about the Company's stock
options outstanding at December 31, 2002:

Options Outstanding                     Options Exercisable
2555----------------------------------   ---------------------------
2555: Range of  Number   Weighted Avg.  Weighted   Number  Weighted
2556:  Exercise  Outstanding  Remaining  Avg. Exercise  Exercisable  Avg.
                  Exercise
2557:  Prices  at 12/31/02 Contractual Life  Price  as 12/31/02 Price
2561  ----------------   -------------   ------------  -------------
  $0.0625  100,000 	 2.9 years        $0.0625        -$0.0625
  $0.1875   10,000	 5.3 years        $0.1875      - $0.1875
  $0.50	   30,000	 6.5 years        $0.50        - $0.50
  $0.15    280,000       9.4 years   $0.15               -        $0.15
  $0.20	   81,818       9.6 years        $0.20               -      $0.20

          				  As of December 31,

Common Stock Warrants:         2002        2001
                              -------      -------
Warrants outstanding and
 exercisable at,
 beginning of year          5,834,000     6,627,750
Granted                             -             -
Exercised                           -             -
Expired or terminated        (375,000)     (793,750)
                            ----------    ---------
Warrants outstanding and
 exercisable, end of year   5,459,000     5,834,000
                            ==========    =========

Exercise price per warrant
                             $0.65,         $0.06,
     $0.78          $0.26,
                    $0.65&
                                            $0.78



L.   FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------------

The carrying amounts reflected in the financial statements for
cash, approximates
its respective fair values due to the short maturities of those
instruments.

                             December 31, 2002                 December 31, 2001
  -----------------------------------
                             Carrying                              Carrying
Amount     Fair Value                Amount        Fair Value
  -----------------------------------
Assets
Cash    $  55,361    $ 55,361                 $   94,252    $  94,252


Liabilities
      Mandatorily redeemable
     80,450          -        80,450            -



     (A)	It is not practicable to estimate the fair value of
		mandatorily redeemable preferred stock because of the inability to
          	estimate fair value without incurring excessive costs.


M.  SUBSEQUENT EVENT
--------------------

In January 2003, Paul G. Casner, Thomas Lynch, Thomas J. Meaney, Wayne E. Meyer
and Tom L. Schaffnit each contributed certain equity interests of Mobile
Broadcasting Corporation and Data Design and Development Corporation to the
capital of the Company.  Upon this contribution, MBC and 3D became wholly owned
subsidiaries of the Company.  These equity interests were acquired by such
individuals from Safeguard Scientifics (Delaware), Inc. in November 2002.  Each
of Messrs. Casner, Lynch, Meaney, Meyer and Schaffnit is a Director of the
Company.  Mr. Meaney also is President, Chief Executive Officer and Chief
Financial Officer of the Company





















EXHIBITS


EXHIBIT 10.24



CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of the 28th
day of January, 2003 by and between Mikros Systems Corporation, a Delaware
corporation ("Mikros"), and parties set forth on Schedule A attached hereto
(the "Shareholders").
Background
WHEREAS, the Shareholders own the issued and outstanding shares of
capital stock of each of Mobile Broadcasting Corporation, a Delaware
corporation ("MBC"), and Data Design & Development Corporation, a Delaware
corporation ("DDD" and collectively with MBC, the "Contributed Companies");
WHEREAS, Mikros owns the remaining issued outstanding shares of capital
stock of each of the Contributed Companies; and
WHEREAS, each of the Shareholders desires to transfer, contribute and
convey to Mikros as a contribution to the capital of Mikros, and Mikros
desires to accept and receive from each of the Shareholders, the issued and
outstanding shares of capital stock of each of the Contributed Companies held
by the Shareholders so that each of the Contributed Companies shall be a
wholly-owned subsidiary of Mikros;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises and covenants contained in this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1.	Contribution of Capital Stock.  Subject to the terms and
conditions contained herein, each of the Shareholders hereby contributes,
transfers and conveys to Mikros, free and clear of all security interests,
pledges, liens, encumbrances, charges or claims of any kind (collectively,
"Liens"), all right, title and interest in the outstanding shares of capital
stock of each of the Contributed Companies as set forth on Schedule A attached
hereto and made a part hereof (collectively, the "Shares").  Each of the
Shareholders hereby acknowledges and agrees that it has transferred to Mikros
all rights to the Shares and hereby relinquishes any claim thereto.  Each of
the Shareholders agrees to indemnify and hold Mikros harmless for any Liens
created by such Shareholder on the Shares.
2.	Representations and Warranties of the Shareholders.
Each of the Shareholders represents and warrants to Mikros as
follows:
(a)	Requisite Power and Authority.  Each of the Shareholders has
the full power and legal right to execute and deliver this Agreement, and to
perform such Shareholder's covenants and agreements hereunder,
and this Agreement
constitutes a valid and legally binding obligation of each of the Shareholders,
enforceable against each of the Shareholders in accordance with
 its terms, except
to the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and (ii) is subject to general principles of equity.
(b)	Title to Shares.  Each of the Shareholders is in possession of,
and has good, valid and marketable title to, all of the Shares as set forth on
Schedule A.  Schedule A sets forth a complete and correct list of the Shares
owned by each Shareholder.  To the knowledge of each of the
 Shareholders, there
are no other equity holders of either of the Contributed Companies other than
Mikros.  All of the Shares are held by the respective Shareholders free
nd clear
of all Liens.
(c)	Further Covenants and Assurances.  Each of the Shareholders
further agrees that, at any time or from time to time after the effectuation of
this Contribution Agreement, it will, upon the request of Mikros, do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged or
delivered, all such further reasonable acts, assignments, transfers, powers of
attorney or assurances as may be required in order to further transfer, assign,
grant, assure and confirm to Mikros, any of the Shares or to vest in Mikros
good
and marketable title to the Shares.
(d)	No Consents Required.  No consent, approval, or authorization
of, or exemption by, or filing with, any governmental body or other third party
is required in connection with the execution, delivery and performance of this
Agreement, or the consummation of the transactions contemplated hereby, as
contemplated by the parties hereto.
(e)	No Conflicts.  The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and
will not, with or without the giving of notice or the lapse of time or
both, (i)
violate any provision of law of any judgment, order, writ or decree to
 which such
Shareholder is subject, or (iii) result in the breach of or conflict with
any
term, covenant, condition or provision of, result in the termination or
modification of, constitute a default under, or result in the creation of
any
Lien on any of the Shares pursuant to, any contracts, arrangements,
undertakings
and commitments to which such Shareholder is a party or to which
 any of the
Shares is subject.
(f)	No Litigation.  There is no claim, action, suit, proceeding,
arbitration, investigation or inquiry pending or adjudicated before
any federal,
state, local or foreign court, or other governmental, administrative or
regulatory body, or any private arbitration tribunal or other forum
for private
dispute resolution, or to the knowledge of each of the Shareholders,
threatened,
against, relating to or affecting the Shares, or the transactions
contemplated by
this Agreement.
3.	Representations and Warranties of Mikros.
Mikros represents and warrants to each of the Shareholders as
follows:
(a)	Requisite Power and Authority.  Mikros is a corporation duly
organized, validly existing and in good standing under the laws of
the State of
Delaware.  The execution, delivery and performance of this
 Agreement and the
consummation of the transactions contemplated hereby have
been
duly authorized by
all necessary corporate action on the part of Mikros.  This
Agreement
constitutes
the legal, valid and binding obligation of Mikros,
enforceable in
accordance with
its terms, except as such enforcement may be limited by
applicable bankruptcy,
insolvency, moratorium or similar laws affecting the
enforcement
 of creditors'
rights generally.
(b)	No Consents Required.  No consent, approval,
or authorization
of, or exemption by, or filing with, any governmental body
or
other third party
is required in connection with the execution, delivery and
performance of this
Agreement, or the consummation of the transactions
contemplated hereby, as
contemplated by the parties hereto.
(c)	No Conflicts.  The execution, delivery and
performance
 of this
Agreement and the consummation of the transactions
contemplated hereby do not and
will not, with or without the giving of notice or the lapse of
time or
 both, (i)
violate any of the organizational or governing documents
 of
 Mikros, (ii) violate
any provision of law of any judgment, order, writ or decree
 to
which Mikros is
subject, or (iii) result in the breach of or conflict with any
term, covenant,
condition or provision of, result in the termination or
modification
 of,
constitute a default under, or result in the creation of any
 Lien on
 any of the
Shares pursuant to, any contracts, arrangements,
undertakings
and commitments to
which Mikros is a party.
(d)	No Litigation.  There is no claim, action, suit,
 proceeding,
arbitration, investigation or inquiry pending or adjudicated
before
any federal,
state, local or foreign court, or other governmental,
 administrative
 or
regulatory body, or any private arbitration tribunal or
 other forum
for private
dispute resolution, or to the knowledge of Mikros
 threatened,
against, relating
to or affecting the Shares, or the transactions
contemplated by
this Agreement.
4. 	Miscellaneous.
(a) 	Successors and Assigns. This Agreement
shall be
binding upon,
and shall inure to the benefit of, the parties hereto and
 their
respective heirs,
successors and permitted assigns.  This Agreement may
 not be
assigned by any
party hereto to any other person without the consent
of the
other parties
 hereto.

(b) 	No Third-Party Beneficiaries. Nothing expressed
 or
implied in
this Agreement shall be construed to give any person
 or entity
other than the
parties hereto any legal or equitable rights hereunder.
(c) 	Entire Agreement.  This Agreement constitutes
 the entire
agreement among the parties with respect to the
subject matter
 hereof and
supersedes all prior or contemporaneous,
negotiations,
commitments, agreements
and understandings, oral or written.
(d) 	Amendment.  This Agreement may not be
 amended
except by an
instrument signed by the parties hereto.
(e) 	Severability.  If any provision of this Agreement
is invalid,
illegal or incapable of being enforced by any rule of law
or public
policy, such
provision shall be deemed severable and all other
provisions
 of this Agreement
shall nevertheless remain in full force and effect.
(f) 	Headings.  Section headings in this
 Agreement are
included
herein for convenience of reference only and
shall not
constitute a
part of this
Agreement for any other purpose.
(g) 	Notices.  All notices given in connection
 with this
 Agreement
shall be in writing. Service of such notices shall
be deemed
complete (i) if hand
delivered, on the date of delivery, (ii) if by mail,
on the fourth
business day
following the day of deposit in the United States
 mail, by
certified or
registered mail, first-class postage prepaid, (iii) if
 sent for
 overnight
delivery by Federal Express or equivalent courier
service,
on the
next business
day, or (iv) if by telecopier, upon receipt by the
sender of
written
 confirmation
of successful transmission. Such notices shall be
addressed to
the
 parties at the
following addresses or at such other address
 for a party
as shall
be specified by
like notice (except that notices of change of
address
shall be
effective upon
receipt):
If to Mikros:
Mikros Systems Corporation
707 Alexander Road
Bldg 2, Suite 208
Princeton, New Jersey 08543

If to the Shareholders:

c/o the Company at the address set forth above
(h) 	Governing Law.  This Agreement shall
 be governed
 by, and
construed in accordance with, the laws of the
State of
New Jersey,
without giving
effect to the principles of conflict of laws thereof.
(i) 	Consent to Jurisdiction.  The parties
hereto consent
to the
exclusive jurisdiction, venue and forum of
 any state or
federal court in
the
State of New Jersey with respect to any
action that, in
whole or in
 part, arises
under or relates to this Agreement.
(j)	Waivers.  Any waiver of a breach
of a provision
of this
Agreement, or any delay or failure to exercise
 a right
under a
provision
 of this
Agreement, by either party, shall not operate
or be
construed as a
waiver of that
or any other subsequent breach or right.
(k)	Counterparts. This Agreement may
be executed
in
counterparts,
each of which shall be an original, but all
of which
together shall
constitute but one and the same instrument.





IN WITNESS WHEREOF, the parties hereto
 have caused
 this
Agreement
 to be
duly executed as of the date first written
 above.

MIKROS SYSTEMS CORPORATION
By: _________________________
 Name:
 Title:




THE SHAREHOLDERS

_______________________
Thomas Lynch



_______________________
Wayne E. Meyer


_______________________
Paul G. Casner


_______________________
Tom L. Schaffnit


________________________
Thomas J. Meaney






SCHEDULE A


2926:  ShareholderNumber of MBC SharesNumber of DDD Shares
-----------             --------------------          --------------------

Thomas Lynch		7,144					190,800

Wayne E. Meyer		7,144					190,800

Paul G. Casner		7,144					190,800

Tom L. Schaffnit		7,144					190,800

Thomas J. Meaney		7,144					190,800



EXHIBIT 99.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
2873:   In connection with the Form 10-KSB of Mikros
Systems
 Corporation
2874:    (the "Company") for the year ended December 31,
2002 as
filed with
 the
2875:    Securities and Exchange Commission on the date
hereof (the
"Report"), the
2876:    undersigned, Thomas J. Meaney, President,
Executive
Officer and Chief
2877:    Financial Officer, hereby certifies, pursuant to
18 U.S.C.
Section
1350, that:
2878: (1)  The Report fully complies with the
requirements of
Section 13(a)
or
        15(d) of the Securities Exchange Act of 1934;
and
(2)The information contained in the Report fairly
 presents, in all
material respects, the financial condition and
results of operations
 of
the Company.
A signed original of this written statement required
 by Section
906 has been
provided to Mikros Systems Corporation and
 will be retained
by Mikros
 Systems
Corporation and furnished to the Securities
and Exchange
Commission or its
staff upon request.

2888:  Thomas J. Meaney ___________
Dated:	March 31, 2003	Thomas J. Meaney,
President, Chief
2890: Executive Officer and Chief Financial
 Officer
2891: (Principal Executive Officer and
2892: Principal Financial Officer)