UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549


                                   FORM 10-QSB


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                      For Quarter Ended September 30, 2001
                         Commission File Number 0-11353


                           CIRCUIT RESEARCH LABS, INC.
             (Exact name of registrant as specified in its charter)

           Arizona                                              86-0344671
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

2522 West Geneva Drive, Tempe, Arizona                           85282
(Address of Principal executive office)                        (Zip Code)

                         Registrant's telephone number,
                               including area code
                                 (602) 438-0888

                                  172743 20 5
                                 (CUSIP Number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                      YES    X                           NO


Indicate  the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered  by
this report.


                                                   Outstanding at
               Class                               September 30, 2001

   Common stock, $.10 par value                        2,388,880


<PAGE>
           CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                                 INDEX



                                                                Page
                                                               number

Part I.  FINANCIAL INFORMATION:


   Item 1. Financial Statements

       Consolidated Condensed Balance Sheets
         September 30, 2001 and December 31, 2000                2

       Consolidated Condensed Statements of
         Operations - Nine months ended
         September 30, 2001 and 2000                             4

       Consolidated Condensed Statements of Cash
         Flows - Nine months ended September 30, 2001
         and 2000                                                5

       Notes to Consolidated Condensed Financial
         Statements                                              7


   Item 2. Management's Discussion and Analysis
         of Financial Condition and Results
         of Operations                                          11


Part II. OTHER INFORMATION:

   Signatures                                                   14


                                        1
<PAGE>
                  PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS


                                                   September 30,    December 31,
                                                        2001            2000
                                                    (Unaudited)
ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                         $271,056        $272,203
                                                     ---------       ---------
    Accounts receivable, net                         1,009,349         727,001
    Inventories:                                     ---------       ---------
        Raw Materials                                2,268,252       2,062,311
        Work in process                              1,533,729       1,262,536
        Finished goods                                 881,779         774,836
        Obsolescence reserve                          (841,000)       (841,000)
                                                     ---------       ---------
        Inventories, net                             3,842,760       3,258,683
                                                     ---------       ---------
    Other current assets                                88,640         177,662
                                                     ---------       ---------
    Total current assets                             5,211,805       4,435,549
                                                     ---------       ---------


PROPERTY, PLANT AND EQUIPMENT, NET                   1,521,472       1,809,355
                                                     ---------       ---------

OTHER ASSETS:
      Goodwill, net                                  5,999,297       6,774,984
      Other                                             53,266          39,000
                                                     ---------       ---------
                                                     6,052,564       6,813,984
                                                     ---------       ---------

TOTAL                                              $12,785,840     $13,058,888
                                                    ==========      ==========


                                        2
<PAGE>
(continued)
                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS


                                                   September 30,    December 31,
                                                        2001            2000
                                                    (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                $1,012,222        $937,163
    Note payable                                             0          97,500
    Customer deposits                                  128,183         275,502
    Accrued salaries and benefits                      305,775         283,226
    Due to Officer                                      40,087          25,000
    Other accrued expenses and liabilities             232,789         282,912
    Long-term debt - current portion                 8,679,207         385,780
                                                    ----------       ---------
        Total current liabilities                   10,398,263       2,287,083

    Long-Term Debt                                     487,173       8,738,466
                                                    ----------       ---------
        Total Liabilities                           10,885,436      11,025,549
                                                    ----------      ----------
STOCKHOLDERS' EQUITY:
    Preferred stock, $100 par value - authorized
        500,000 shares, none issued
    Common stock, $.10 par value - (authorized
        20,000,000 shares, 2,388,880 issued as of
          September 30, 2001 and 2,269,522
          as of December 31, 2000)                     238,888         226,952
    Additional paid-in capital                       4,196,229       4,077,538
    Accumulated deficit                             (2,534,713)     (2,271,151)
                                                     ---------       ---------
        Total stockholders' equity                   1,900,404       2,033,339
                                                     ---------       ---------
TOTAL                                              $12,785,840     $13,058,888
                                                    ==========      ==========


    See accompanying notes to consolidated condensed financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                           CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                         CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                          (Unaudited)

                                                 Three Months Ended          Nine Months Ended
                                                 September 30,               September 30,
                                                 2001         2000           2001         2000
                                                 ----         ----           ----         ----

<S>                                           <C>          <C>           <C>           <C>
NET SALES                                     $3,065,151   $3,111,152    $10,995,290   $4,358,899

COST OF GOODS SOLD                             1,664,731    1,636,923      5,504,568    2,283,985
                                               ---------    ---------      ---------    ---------

      Gross profit                             1,400,420    1,474,229      5,490,722    2,074,914
                                               ---------    ---------      ---------    ---------

OPERATING EXPENSES:
      Selling, general and administrative      1,275,349    1,417,145      3,872,305    2,323,483
      Research and development                   293,026      352,160      1,076,606      662,863
                                               ---------    ---------      ---------    ---------
      Total operating expenses                 1,568,375    1,769,305      4,948,911    2,986,346
                                               ---------    ---------      ---------    ---------

INCOME (LOSS) FROM OPERATIONS                   (167,955)    (295,076)       541,811     (911,432)
                                               ---------    ---------      ---------    ---------

OTHER INCOME (EXPENSE):
      Sundry income                                3,993          234         14,443       17,181
      Interest, net                             (269,459)    (205,268)      (819,816)    (267,940)
                                               ---------    ---------      ---------    ---------

                                                (265,466)    (205,034)      (805,373)    (250,759)
                                               ---------    ---------      ---------    ---------

LOSS BEFORE INCOME TAXES                        (433,421)    (500,110)      (263,562)  (1,162,191)


PROVISION FOR INCOME TAXES                             0            0              0            0
                                               ---------    ---------      ---------    ---------

NET  LOSS                                      ($433,421)   ($500,110)     ($263,562) ($1,162,191)
                                                ========     ========       ========   ==========

NET LOSS PER COMMON SHARE
      Basic and diluted                           ($0.19)      ($0.24)        ($0.11)      ($0.72)
                                                   =====        =====          =====        =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
      Basic and diluted                        2,337,404    2,090,312      2,302,202    1,620,852
                                               =========    =========      =========    =========
</TABLE>

    See accompanying notes to consolidated condensed financial statements.


                                        4
<PAGE>
                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                        Nine Months Ended
                                                          September 30,
                                                       2001            2000
                                                       ----            ----
OPERATING ACTIVITIES:
Net Loss                                             ($263,562)    ($1,162,191)

Adjustments to reconcile net loss to net
    cash provided by (used in) operating activities

Depreciation and amortization                        1,104,276         439,963

Provision for uncollectable accounts                    50,000
Changes in assets and liabilities:
   Accounts receivable                                (332,348)       (191,287)
   Inventories                                        (522,587)       (313,926)
   Prepaid expenses and other assets                    53,102        (141,519)
   Accounts payable and accrued expenses               (99,834)      1,078,228
                                                       -------       ---------
        Net cash used in operating activities          (10,953)       (290,732)
                                                       -------       ---------

INVESTING ACTIVITIES:
Purchases of net assets of Orban, Inc.                              (1,963,783)
Purchase of assets of Avocet Instruments, Inc.          (8,350)
Proceeds from sale or maturity of securities                           383,905
Capital expenditures                                   (15,866)        (37,051)
                                                       -------       ---------
        Net cash used in investing activities          (24,216)     (1,616,929)
                                                       -------       ---------

FINANCING ACTIVITIES:
    Proceeds from debt issuance                                        403,387
    Proceeds from shareholder advances                  36,741         292,500
    Principal payments on long-term debt               (35,846)
    Proceeds from sale of common stock                  33,127       1,371,250
                                                       -------       ---------
        Net cash provided by financing activities       34,022       2,067,137
                                                       -------       ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    (1,147)        159,476

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD       272,203          62,597
                                                       -------       ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD            $271,056        $222,073
                                                       =======       =========

    See accompanying notes to consolidated condensed financial statements.


                                        5
<PAGE>
                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                        Nine Months Ended
                                                          September 30,
                                                       2001            2000
                                                       ----            ----

Supplementary Disclosures of Cash Flow Information:
         Cash paid during the period for:

              Interest                                $790,483        $267,940
                                                      ========        ========

Non-cash investing and financing activities:

              Acquisitions:

              Fair value of assets acquired
                including goodwill                     $86,330     $12,885,626
              Debt issued to seller                    (77,980)     (8,500,000)
              Fair values of warrants issued to seller              (1,050,000)
              Debt issued to stockholder                              (205,000)
              Liabilities assumed                                     (868,629)
              Cost paid in 1999                              0        (298,215)
                                                        ------       ---------
              Cash and costs paid                       $8,350      $1,963,783
                                                        ======       =========

              Conversion of loan from stockholder
                to equity                              $97,500              $0
                                                        ======       =========

    See accompanying notes to consolidated condensed financial statements.


                                        6
<PAGE>
                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

1.     The Consolidated Condensed Financial Statements included herein have been
prepared by Circuit Research Labs, Inc. ("CRL" or the "Company"), pursuant to
the rules and regulations of the Securities and Exchange Commission. The
Consolidated Condensed Balance Sheet as of September 30, 2001 and the
Consolidated Condensed Statements of Operations for the three and nine months
ended September 30, 2001 and 2000 and the Consolidated Condensed Statements of
Cash Flows for the nine months ended September 30, 2001 and 2000 have been
prepared without audit.

       Certain information and note disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.  It is suggested
that these Consolidated Condensed Financial Statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report on 10-KSB/A for the year ended December 31, 2000.

       In the opinion of management, the Consolidated Condensed Financial
Statements for the unaudited interim periods presented herein include all
adjustments, consisting only of normal recurring adjustments, necessary to
present a fair statement of the results of operations for such interim periods.
Net operating results for any interim period may not be comparable to the same
interim period in previous years, nor necessarily indicative of the results that
may be expected for the full year.

2.     Significant Accounting Policies are as follows:

a.     In calculating earnings per share for the three and nine months ended
September 30, 2001, the effects of 1,000,000 shares relating to options to
purchase common stock and 1,708,158 shares relating to warrants were not used
for computing diluted earnings per share because the result would be
anti-dilutive. In the three and nine months ended September 30, 2000 the options
to purchase 1,182,500 shares of common stock were not used in computing diluted
earnings because the result would be anti-dilutive. Statement of Financial
Accounting Standards No. 128, Earnings per Share, establishes standards for
computing and presenting earnings per share. It also requires the dual
presentation of basic and diluted earnings per share on the face of the
statement of operations. Earnings per share is calculated as follows:

                              Three Months Ended         Nine Months Ended
                                 September 30,              September 30,
                                2001         2000          2001         2000
                                ----         ----          ----         ----
Numerator
   Net loss                   ($433,421)   ($500,110)    ($263,562) ($1,162,191)
                              =========    =========     =========  ===========
Denominator
   Weighted average shares    2,337,404    2,090,312     2,302,202    1,620,852
                              =========    =========     =========    =========
Basic and diluted
   loss per share                ($0.19)      ($0.24)       ($0.11)      ($0.72)
                                 ======       ======        ======       ======


                                        7
<PAGE>

b.     New accounting pronouncements

       In June 2001, the Financial Accounting Standards Board ("FASB") issued
FASB Statements Nos. 141 and 142 ("FAS 141" and "FAS 142"), "Business
Combinations" and "Goodwill and Other Intangible Assets". FAS 141 replaces
APB 16 and eliminates pooling-of-interests accounting prospectively.  It also
provides guidance on purchase accounting related to the recognition of
intangible assets and accounting for negative goodwill.  FAS 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Under FAS 142, goodwill will be tested annually and whenever events or
circumstances occur indicating that goodwill might be impaired. FAS 141 and
FAS 142 are effective for all business combinations initiated after June 30,
2001.

       Upon adoption of FAS 142, amortization of goodwill recorded for business
combinations consummated prior to July 1, 2001 will cease, and intangible assets
acquired prior to July 1, 2001 that do not meet the criteria for recognition
under FAS 141 will be reclassified to goodwill. Companies are required to adopt
FAS 142 for fiscal years beginning after December 15, 2001. The Company will
adopt FAS 142 on January 1, 2002.  In connection with its adoption of FAS 142,
the Company will be required to perform a transitional goodwill impairment
assessment.  The Company has not yet determined the impact, if any, these
standards will have on its results of operations and financial position.



3.     Long term-debt at September 30, 2001 consisted of the following:

       Orban, Inc. Tranche A Note                  $5,000,000
       Orban, Inc. Tranche B Note                   3,500,000
       Note to shareholder                            192,454
       Mortgage note                                  352,844
       Employee note                                   58,102
       Avocet Instruments, Inc.                        62,980
                                                    ---------
       Total long-term debt                         9,166,380
       Less current portion                         8,679,207
                                                    ---------
       Total long-term debt, less current portion    $487,173
                                                     ========


                                        8
<PAGE>
On May 31, 2000, CRL Systems, Inc. and Harman Acquisition Corp. (formerly known
as Orban, Inc.) entered into a Credit Agreement to establish the terms and
conditions of the $8,500,000 loan from Harman to CRL Systems. The agreement was
executed in conjunction with the Asset Sale Agreement between Harman and CRL
Systems, Inc. The loan is evidenced by two promissory notes, the Senior
Subordinated Tranche A Note (the "Tranche A Note") and the Senior Subordinated
Tranche B Note (the "Tranche B Note").  The Tranche A Note, in the amount of
$5,000,000, originally bore interest at 8 percent per annum and required
quarterly principal payments beginning March 31, 2001, with a balloon payment of
$3,000,000 due on March 31, 2003.  The Tranche B Note, in the amount of
$3,500,000, originally bore interest at 8 percent per annum for the period from
June 1, 2000 to July 31, 2000 and 10 percent per annum from August 1, 2000 up to
its September 30, 2000 maturity date. The notes are collateralized by, among
other things, all receivables, inventory and equipment, investment property,
including CRL's capital stock in CRL Systems, and intellectual property of CRL
and CRL Systems, as defined in the "Guarantee and Collateral Agreement". In
addition, all proceeds of debt or equity or sales of assets are to be first
applied to the remaining balance due on the notes.

The Company received several payment extensions on the Tranche A and B
notes. First, in exchange for $150,000 cash and an increase in the interest
rates to 12 percent per annum for both the Tranche A and Tranche B notes,
Harman extended the maturity date of the Tranche B note to November 30, 2000.
The maturity date of the Tranche B note was subsequently extended several
additional times without fees or other significant changes to the original
terms of the note and is now due in full on April 30, 2002. Also, the first
principal payment on the Tranche A note of $250,000, originally due March 31,
2001, was extended to September 30, 2001 with the remaining quarterly
principal payments deferred until April 30, 2002.  Interest only payments are
payable monthly for both notes. The Asset Sale Agreement between CRL Systems and
Harman contains a provision to allow Harman to rescind the transaction if, as of
November 30, 2000, CRL Systems has not paid in full the $3.5 million short-term
note.  If Harman exercises its option to rescind the agreement, it is to return
$9,250,000 of the purchase price to CRL Systems, with the difference due to
Harman as liquidating damages.  The note has been extended to April 30, 2002
with Harman retaining the option to rescind the agreement.

On October 1, 2001, the Company and Harman entered into an Amendment to the
Credit Agreement (the "Amended Credit Agreement") under which both the
short-term and the long-term promissory notes were amended and restated.  Under
the Amended Credit Agreement, both promissory notes were converted to demand
notes payable on the demand of Harman.  Interest only payments remain payable
from time to time for both notes.  Additionally, under the Amended Credit
Agreement, the first principal payment in the amount of $1,250,000 is due April
30, 2002, unless Harman demands payment at an earlier date.

In consideration for arranging the purchase financing of Orban, the Company
incurred fees of $97,500 to a stockholder, the total of which was included in
the current portion of long-term debt at December 31, 2000.  The note was due on
August 14, 2001 after being extended from its prior due date of May 14, 2001 and
accrues interest of 7.5 percent per annum. On August 10, 2001, the note was
converted to equity at the market price of $1.05 per share.


                                        9
<PAGE>
In connection with the acquisition of the assets of Orban, the Company issued
$205,000 in long-term debt to a stockholder in consideration for his role in
such acquisition. The note bears interest at 7.5 per cent per annum, with
principal and interest due monthly beginning August 1, 2000 for four years.
Based on a verbal agreement with the note holder, the Company has made payments
in 2001, sufficient for interest and some principal. Subsequently on November
12, 2001 the Company amended the agreement whereby the Company and the
stockholder agreed to defer the payments to January 2002 with interest accruing
at the rate of 7.5% per annum.

On May 30, 2000, the Company mortgaged its office building and manufacturing
facility in Tempe, Arizona for $335,000.  The mortgage note bears interest at
15.25 percent per annum, payable monthly, with the full principal balance due on
November 30, 2000. Prior to the December 2000 extended maturity date, the
Company refinanced the unpaid balance and entered into two new mortgage
agreements for $300,000 and $62,000, respectively. The notes bear interest at
11.75 percent per annum and 14.75 percent per annum, respectively. Principal and
interest payments are payable monthly for both notes commencing in February
2001, using a 12-year amortization period and requiring a balloon payment in
February 2006.

On June 12, 2000, the Company entered into an unsecured promissory note for
$68,387 from an employee, which bears interest at 12 percent per annum.  The
unpaid principal and interest that was due September 12, 2000 was extended to
June 30, 2001. In order to further extend the note, the Company agreed to make
12 monthly installments of principal and interest over a one-year period
commencing September 1, 2000. As part of the agreement, the note will continue
to bear interest at 12 percent per annum, but will be compounded monthly.

On May 31, 2001, CRL acquired the assets of Avocet Instruments, Inc., for
$86,330. The acquisition has been accounted for as an asset purchase. The excess
of the total acquisition costs over the fair value of the assets acquired was
$15,184 and is being amortized over 7 years.  In conjunction with the Asset Sale
Agreement between the Company and Avocet Instruments, Inc. and Eric B. Lane,
(Sellers), the Company and the Sellers entered into a Credit Agreement to
establish the terms and conditions of the purchase price.  The loan is evidenced
by an agreement whereby the Company will pay the Sellers  $25,000 interest-free,
payable $5,000 on the Closing Date, and $5,000 in each month over the following
four months.  Thereafter, the Company will pay the balance ($57,980) in
monthly installments of $1,200, including interest at the rate of five percent
per annum for 54 months.


4.     Certain reclassifications have been made to the 2000 financial statements
to conform to the classifications used in 2001.


                                       10
<PAGE>
Item.  2

                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

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


Results of Operations

On May 31, 2000 the Company acquired the assets of Orban, Inc., which were
$ 5,134,000 at December 31, 1999.  The assets of the Company at December 31,
1999 were $1,684,000. The revenues for Orban for the year ended December 31,
1999 as reported in the Company's current report on Form 8-K/A filed November
21, 2000 were $ 12.4 million compared to revenues for the Company for the same
period of $1.0 million. Accordingly, due to the consolidation of Orban's
operations into the Company's beginning May 31, 2000, period to period
comparisons of results of operations may not be meaningful.

Net Sales. Total net sales during the three and nine months ended September 30,
2001 were $3.1 million and $11.0 million, respectively, compared to $3.1 million
and $4.4 million during the comparable periods in 2000, respectively, reflecting
no change and an increase of 152%, respectively.

The increase in net sales was primarily attributable to Orban revenues. CRL
continues to experience a stabilized demand across its product lines, in both
domestic and international markets. Included in the net sales for the three
and nine months ended September 30, 2001 were $2.9 million and $10.2 million,
respectively, for the sale of Orban products, while the CRL division reported
$150,000 and $800,000 for the same periods.

Gross Profit. The increased sales generated gross profit of $1.4 million and
$5.5 million for the three and nine months ended September 30, 2001, which was a
decrease of 5% and an increase of 265% over the comparable periods in 2000,
respectively. Gross profit as a percentage of net sales decreased from 47% to
45% for the three months ended September 30, 2001 as compared to the three
months ended September 30, 2000. The decrease in gross profit is primarily due
to the increase in cost of material and labor. Gross profit as a percentage of
net sales increased from 48% to 50% for the nine months ended September 30,
2001 as compared to the nine months ended September 30, 2000. The increase in
the gross profit percentage resulted primarily from increased sales of higher
margin products.

Selling, General and Administrative. Total selling, general, and administrative
expenses ("SG&A") decreased 10% and increased 167% for the three and nine months
ended September 30, 2001 as compared to the same periods during 2000,
respectively. As a percentage of sales, SG&A decreased from 46% to 42% for
the three months ended September 30, 2000 compared to 2001, respectively, and
decreased from 53% to 35% for the nine months ended September 30, 2000 compared
to 2001, respectively. The increased SG&A dollars are due in part to the
variable component of SG&A (commissions and other domestic and international
sales and marketing expenses) associated with the increased sales resulting
from the acquisition of Orban. The fixed component of SG&A also increased due to
additional personnel in sales, marketing, administration and amortization of
goodwill. As a result, SG&A is expected to be higher throughout 2001 compared to
2000.


                                       11
<PAGE>
The decrease in percentage to net sales is due to increased revenue.

Research and Development. Research and development expenses decreased 17% and
increased 62% for the three and nine months ended September 30, 2001,
respectively, as compared to the same periods during 2000. The decrease for the
three months ended September 30, 2001 as compared to the same period during 2000
is due to the reduction of outside consulting. For the nine months ended
September 30, 2001 as compared to same period during 2000, the increase is the
result of an increase in the number of engineering staff at CRL and ongoing
research and development activities at Orban.

Other Income (Expense). Other expense, net was $265,000 and $805,000 for the
three and nine months ended September 30, 2001, respectively, compared to
$205,000 and $250,000 for the same periods in 2000.  The increase primarily
represents interest paid to Harman in conjunction with the purchase cost for the
Orban assets.

Operationally, the Company is reporting $197,000 and $1,646,000 million in
income before interest, taxes, depreciation and amortization (EBITDA) for the
three and nine months ended September 30, 2001 respectively, as compared to the
same periods in 2000 where EBITDA was $68,000 and ($471,000) respectively.


Liquidity and Capital Resources

     The Company had negative net working capital of approximately $5,186,000
and the ratio of current assets to current liabilities was .50 to 1 at September
30, 2001.  At December 31, 2000, the Company had net working capital of
approximately $2,148,000 and a current ratio of 1.94 to 1. The decrease in
working capital was a result of the $3,500,000 Tranche B and the $5,000,000
Tranche A notes being converted to demand notes payable on the demand of Harman.

     Accounts receivable were $1,009,000 at September 30, 2001 compared to
$727,000 at December 31, 2000 for a net increase of $282,000 or 39%. The
increase was the result of increased sales for the nine months ended September
30, 2001

     Total inventories were $3,843,000 at September 30, 2001 compared to total
inventories of $3,259,000 at December 31, 2000. The amount of inventory
increased $584,000, or 18% due to the to an increase in purchasing of raw
materials and a build up of finished goods.

     For the year ending December 31, 2001, the Company's principal working
capital requirements are to pay normal recurring operating costs. Management
believes that these requirements can be met from the operating cash flows. In
addition, the Company has $8,679,000 of debt payments due by September 30, 2002,
unless with respect to the $8,500,000 due to Harman, Harman demands payment at
an earlier date. The Company's President, Mr. Charles Jayson Brentlinger, has
committed to exercise his stock options, if necessary, to satisfy a portion of
the Company's debt payment requirements if operating cash flows are inadequate
to retire the debt. If Mr. Brentlinger exercised all of his options to purchase
shares, the Company would realize gross proceeds of approximatley $1,250,000.
The Company is actively pursuing additional capital through a private equity
placement of its common stock, through asset based lending, or a combination
thereof. There is no assurance that the Company will be able to attract
additional capital or that the funds, if acquired will be sufficient to meet its
current obligations.


                                       12
<PAGE>
The Company will be materially and adversely affected if it cannot obtain
funding, and we have no binding commitments from any third part to purchase any
of our equity or make loans to us except Mr. Brentlinger's commitment to
exercise options.

The document includes "forward-looking" statements within the meaning of the
Private Securities Litigation Reform Act of 1996. Management's anticipation of
future events is based upon assumptions regarding levels of competition,
research and development results, raw material markets, the markets in which
the Company operates, and stability of the regulatory environment. Any of these
assumptions could prove inaccurate, and therefore there can be no assurance that
the forward-looking information will prove to be accurate.


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                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES


                                   SIGNATURES



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



                                       Registrant

                                       CIRCUIT RESEARCH LABS, INC.

                                       DATE:  November 14, 2001
                                       BY /s/ Charles Jayson Brentlinger
                                          -----------------------------
                                              Charles Jayson Brentlinger

                                              President (Authorized Officer for
                                              signature)



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