================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

                                   (Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2002
                                                 ------------------
                                       OR

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

        FOR THE TRANSITION PERIOD From _____________ to ________________

                         Commission file number 000-7336

                            RELM WIRELESS CORPORATION
             (Exact name of registrant as specified in its charter)

               NEVADA                                      59-3486297
     -------------------------------                       ----------
     (State of other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)

                              7100 TECHNOLOGY DRIVE
                             WEST MELBOURNE, FLORIDA
                             -----------------------
                    (Address of principal executive offices)

                                      32904
                                      -----
                                   (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (321) 984-1414

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 [ ]

               8,537,424 shares outstanding as of November 4, 2002
================================================================================

<PAGE>
                          PART I- FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------

                            RELM WIRELESS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                               SEPTEMBER 30  DECEMBER 31
                                                                                   2002          2001
                                                                                  -------      -------
                                                                               (UNAUDITED)   (SEE NOTE 1)
<S>                                                                               <C>          <C>
ASSETS
------
Current assets:
        Cash and cash equivalents                                                 $ 2,318      $   335
        Trade accounts receivable (net of allowance for doubtful accounts
         of $95 as of September 30, 2002 and $1,540 as of December 31, 2001)        1,491        3,597
        Inventories, net                                                            7,967        8,961
        Notes receivable                                                               59           60
        Prepaid expenses and other current assets                                     364          452
                                                                                  -------      -------
Total current assets                                                               12,199       13,405

Property, plant and equipment, net                                                  1,927        2,156
Notes receivable, less current portion                                                 10          911
Debt issuance costs, net                                                              384          512
Other assets                                                                          462          639
                                                                                  -------      -------
Total assets                                                                      $14,982      $17,623
                                                                                  =======      =======
</TABLE>

See notes to condensed consolidated financial statements


                                       1
<PAGE>


ITEM 1 - FINANCIAL STATEMENTS - CONTINUED
-----------------------------------------

                            RELM WIRELESS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                            SEPTEMBER 30      DECEMBER 31
                                                                                2002             2001
                                                                              --------         --------
                                                                             (UNAUDITED)      (SEE NOTE 1)
<S>                                                                           <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
         Current maturities of long-term liabilities                          $    100         $    110
         Accounts payable                                                        1,856            3,171
         Accrued compensation and related taxes                                    458              532
         Accrued warranty expense                                                   33               79
         Accrued expenses and other current liabilities                            299              251
                                                                              --------         --------
Total current liabilities                                                        2,746            4,143

Long-term liabilities:
         Loan, notes and mortgages                                               1,991            3,848
         Convertible subordinated notes                                          3,150            3,150
                                                                              --------         --------
                                                                                 5,141            6,998

Stockholders' equity:
         Preferred stock; $1.00 par value; 1,000,000 authorized shares
         at September 30, 2002 and December 31, 2001; none issued                    -                -
         Common stock; $.60 par value; 20,000,000 authorized shares:
         8,537,424  issued and outstanding shares at September 30,
         2002; 5,346,174 issued and outstanding at December 31, 2001             5,122            3,207
         Additional paid-in capital                                             21,558           21,452
         Accumulated deficit                                                   (19,585)         (18,177)
                                                                              --------         --------
Total stockholders' equity                                                       7,095            6,482

                                                                              --------         --------
Total liabilities and stockholders' equity                                    $ 14,982         $ 17,623
                                                                              ========         ========
</TABLE>


See notes to condensed consolidated financial statements.


                                       2
<PAGE>

ITEM 1 - FINANCIAL STATEMENTS - CONTINUED
-----------------------------------------



                            RELM WIRELESS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                              THREE MONTHS ENDED                 NINE MONTHS ENDED
                                           --------------------------       ---------------------------
                                           SEPTEMBER 30     SEPTEMBER 30     SEPTEMBER 30     SEPTEMBER 30
                                               2002            2001             2002             2001
                                             -------         --------         --------         --------
                                          (SEE NOTE 1)     (SEE NOTE 1)     (SEE NOTE 1)      (SEE NOTE 1)

<S>                                          <C>             <C>              <C>              <C>
Sales                                        $ 3,979         $  6,223         $ 13,662         $ 17,131
Expenses
    Cost of products                           2,821            4,293            9,610           12,212
    Selling, general & administrative          1,489            1,528            4,359            4,378
    Loss on notes receivables                      -                -              900                -
                                             -------         --------         --------         --------
                                               4,310            5,821           14,869           16,590
                                             -------         --------         --------         --------
Operating income (loss)                         (331)             402           (1,207)             541
Other income (expense):
    Interest expense                            (115)            (149)            (336)            (452)
    Other income (expense)                        51              (40)             135              (18)
                                             -------         --------         --------         --------
Net Income (loss)                            $  (395)        $    213         $ (1,408)        $     71
                                             =======         ========         ========         ========


Earnings (loss) per share-basic              $ (0.05)        $   0.04         $  (0.19)        $   0.01
                                             =======         ========         ========         ========

Earnings (loss) per share-diluted            $ (0.05)        $   0.04         $  (0.19)        $   0.01
                                             =======         ========         ========         ========
</TABLE>


See notes to condensed consolidated financial statements.

                                       3
<PAGE>


 ITEM 1 - FINANCIAL STATEMENTS - CONTINUED
 -----------------------------------------

                            RELM WIRELESS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                            NINE MONTHS ENDED
                                                                        ---------------------------
                                                                        SEPTEMBER 30   September 30
                                                                            2002           2001
                                                                          -------         -----
                                                                        (SEE NOTE 1)   (SEE NOTE 1)
<S>                                                                       <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                         $(1,408)        $  71
Adjustments to reconcile net (loss) income to net cash provided by
   operating activities:
    Loss on notes receivable                                                  900             -
    Depreciation and amortization                                             575           799
    Change in current assets and liabilities:
      Accounts receivable                                                   2,106            90
      Inventories                                                             994          (402)
      Accounts payable                                                     (1,313)         (471)
      Other current assets and liabilities                                    128           261
                                                                          -------         -----
Cash provided by operating activities                                       1,982           348

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                                          (153)          (64)
Other                                                                           2            53
                                                                          -------         -----
Cash used in investing activities                                            (151)          (11)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt and capital lease obligations                               (10)         (727)
Net change in revolving credit lines                                       (1,859)          398
Net proceeds from issuance of common stock                                  2,021             -
                                                                          -------         -----
Cash provided by (used in) financing activities                               152          (329)

Increase in cash                                                            1,983             8
Cash and cash equivalents, beginning of period                                335           208
                                                                          -------         -----
Cash and cash equivalents, end of period                                  $ 2,318         $ 216
                                                                          =======         =====

Supplemental disclosure
    Interest paid                                                         $   336         $ 452
                                                                          =======         =====
</TABLE>


See notes to condensed consolidated financial statements.


                                       4
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated balance sheet as of September 30, 2002, the
     condensed consolidated statements of operations for the three and nine
     months ended September 30, 2002 and 2001 and the condensed consolidated
     statements of cash flows for the nine months ended September 30, 2002 and
     2001 have been prepared by RELM Wireless Corporation (the Company), without
     audit. In the opinion of management, all adjustments (which include normal
     recurring adjustments) necessary for a fair presentation have been made.
     The balance sheet at December 31, 2001 has been derived from the audited
     financial statements at that date.

     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted. It is suggested that these
     condensed consolidated financial statements be read in conjunction with the
     financial statements and notes thereto included in the Company's December
     31, 2001 Annual Report to Stockholders. The results of operations for the
     three and nine month periods ended September 30, 2002 are not necessarily
     indicative of the operating results for a full year.

     The Company maintains its records on a calendar year basis. The Company's
     first, second, and third quarters normally end on the Friday closest to the
     last day of the last month of such quarter, which was September 27, 2002
     for the third quarter of fiscal 2002. The quarter began on June 29, 2002.

     2. SIGNIFICANT EVENTS AND TRANSACTIONS

     PUBLIC RIGHTS OFFERING

     On March 22, 2002, the Company closed a public rights offering. The purpose
     of the offering was to provide working capital, which among other things,
     the Company believes will speed the development of the Company's new APCO
     Project 25-compliant digital products and capabilities. The securities
     offered were "units"priced at $.90 per unit. A unit was comprised of one
     share of RELM common stock and one warrant to purchase one share of RELM
     common stock, exercisable at $1.08 per share at any time on or after
     February 12, 2003 and until February 11, 2006. Units were offered initially
     to RELM's equity holders in the form of a rights offering. The "right"
     allowed investors in the offering to purchase units at a 10% discount to
     the market price of a share of common stock.

                                       5
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     2. SIGNIFICANT EVENTS AND TRANSACTIONS - CONTINUED

     PUBLIC RIGHTS OFFERING-CONTINUED

     Noble International Investments, Inc. (Noble) was engaged as the standby
     underwriter for this offering. The units were offered to the public
     pursuant to a registration statement that was declared effective by the
     Securities and Exchange Commission (SEC) on February 11, 2002. In
     accordance with the terms of the offering, the units were separated on the
     closing date. The offering resulted in the sale of 2,775,000 shares of
     common stock and warrants to purchase 2,775,000 shares of common stock. The
     offering generated $1,800 in net proceeds. The warrants are currently
     quoted on the OTC Bulletin Board with the symbol RELMW. The Company's
     common stock is listed on the NASDAQ Small Cap Market under the Company's
     current symbol, RELM

     On May 17, 2002, Noble exercised its option to purchase 416,250 additional
     units at a purchase price of $0.90 per unit to cover over-allotments. The
     Company received approximately $326 in net proceeds from the purchase of
     these additional units.

     INTRODUCTION OF NEW PORTABLE TWO-WAY RADIO

     In January 2002, the Company introduced the first model of its new RP
     series of portable radios. The second model, serving a different frequency
     band, was introduced in June 2002. Both models have been type-accepted by
     the Federal Communications Commission (FCC). The next model in the RP
     Series, offering expanded channels and functions, is undergoing internal
     FCC compliance testing and is expected to be available for sale in the
     fourth quarter 2002.

     These radios are manufactured for the Company under a previously announced
     agreement with an electronic technology and manufacturing concern. Under
     the agreement, they will manufacture for the Company, four models of VHF
     and UHF portable two-way radio transceivers, and the Company will have
     exclusive distribution rights for these products in North, Central, and
     South America. The agreement expires on September 11, 2006 and may be
     expanded to include additional products.

     LOSS ON NOTES RECEIVABLE

     During the first quarter of 2002, the Company established a $900 valuation
     reserve. This amount is equal to the total principal amount due to the
     Company from Fort Orange Paper Company, Inc. (Fort Orange), the purchaser
     of its former paper-

                                       6
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     2. SIGNIFICANT EVENTS AND TRANSACTIONS - CONTINUED

     LOSS ON NOTES RECEIVABLE - CONTINUED

     manufacturing subsidiary. In April, the Company learned that Fort Orange
     had ceased operations. Fort Orange owes the Company $900 plus accrued
     interest under the terms of two secured promissory notes and has defaulted
     on its obligations to make principal and interest payments. The Company's
     security interest is subordinated to the security interest granted to the
     purchaser's senior lender.

     In connection with the sale of the subsidiary in 1997, the Company took
     back a secured promissory note from the purchaser in the initial aggregate
     principal amount of $2,400. In December 2000, the terms of the original
     promissory note were modified and the Company received a principal payment
     of $700 plus accrued interest of approximately $166. After this payment,
     the remaining principal amount due on the original note was $900. Also, as
     part of the modification agreement, the original note was replaced by two
     secured promissory notes, one in the principal amount of $600 and the other
     in the principal amount of $300. The $600 note is payable in ten annual
     installments starting on April 2, 2002. The $300 note is payable in five
     annual installments starting on January 1, 2003. Interest on both notes is
     accrued at 2.75% over the prime rate and is payable, in the case of the
     $600 note, in annual installments, and, in the case of the $300 note, in
     semi-annual installments. The $600 note is subject to a standby creditor's
     agreement under which principal and interest payments on the note are
     contingent upon the purchaser achieving a certain debt service coverage
     ratio and the absence of any uncured defaults on other loans or agreements
     of the purchaser. As security for both notes, the purchaser has granted to
     the Company a lien and security interest in certain collateral. The
     Company's security interest, however, is subordinated to the security
     interest granted to the purchaser's senior lender. In addition, the Company
     is subject to a standstill agreement with the senior lender. A principal of
     the purchaser has guaranteed the prompt and complete payment of both notes
     when due. Both notes are subject to forbearance fee payment agreements with
     both the purchaser and the guarantor under which additional amounts may be
     payable to the Company if there is a merger, sale or change of control of
     the purchaser and if the notes are not paid in full by certain dates.

     The Company, with guidance from counsel, will evaluate alternatives and
     take all prudent actions to maximize the possibility of recovery. However,
     the Company believes that the value of Fort Orange's assets and the assets
     of the guarantor are insufficient to provide any recovery of the amounts
     due under the notes. Accordingly, the Company has maintained the valuation
     reserve for the entire principal amount ($900)

                                       7
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     2. SIGNIFICANT EVENTS AND TRANSACTIONS - CONTINUED

     LOSS ON NOTES RECEIVABLE - CONTINUED

     of the two promissory notes that was established in the first quarter 2002.

     3. ALLOWANCE ON TRADE RECEIVABLES

     The allowance for collection losses on trade receivables was $95 on gross
     trade receivables of $1,586 at September 30, 2002. This allowance is used
     to state trade receivables at a net realizable value or the amount that the
     Company estimates will be collected on the Company's gross receivables as
     of September 30, 2002. Because the amount that the Company will actually
     collect on the receivables outstanding as of September 30, 2002 cannot be
     known with certainty as of this document's effective date, the Company
     relies on prior experience. The Company's historical collection losses have
     been typically infrequent with write-offs of trade receivables being less
     than 1% of sales. The Company's policy is to maintain a general allowance
     of approximately 2 to 5% of a gross trade receivable balance in order to
     allow for future collection losses that arise from customer accounts that
     do not indicate the inability to pay but turn out to have such an
     inability. Currently the Company's allowance on trade receivables is 5.99%
     of gross trade receivables. The Company also maintains a specific allowance
     for customer accounts that the Company knows may not be collectible due to
     various reasons such as bankruptcy and other customer liquidity issues. The
     Company analyzes the trade receivable portfolio based on the age of each
     customer's invoice. In this way, the Company can identify those accounts
     that are more likely than not to have collection problems. The Company then
     reserves a portion or all of the customer's balance.

     4. INVENTORIES

     The components of inventory, net of reserves totaling $2,323 and $2,319 at
     September 30, 2002 and December 31, 2001, respectively, consist of the
     following:

                                       8
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)



     4. INVENTORIES - CONTINUED

                                            September 30         December 31
                                                2002                 2001
                                              ------                ------
     Finished goods                           $5,260                $5,724
     Work in process                             454                   799
     Raw materials                             2,253                 2,438
                                              ------                ------
                                              $7,967                $8,961
                                              ======                ======

     The reserve for slow-moving, excess, or obsolete inventory was $2.3 million
     at September 30, 2002. The reserve for excess or obsolete inventory is used
     to state the Company's inventories at the lower of cost or market. Because
     the amount of inventoriable costs that will actually be recouped through
     sales of inventory as of September 30, 2002 can not be known with certainty
     as of this document's effective date, the Company's relies on past sales
     experience, future sales forecasts, and strategic business plans.
     Generally, in analyzing inventory levels, the Company classifies inventory
     as having been used or unused during the past year. For inventory with no
     usage in the past year, the Company reserves 85% of its cost which takes
     into account a 15% scrap value. For inventory with usage in the past year,
     the Company reviews the average annual usage over the past three years,
     projects that amount over the next seven years, and then reserves 25% of
     the excess amount (in which the excess amount equals inventory on hand less
     a seven year projected usage amount). The Company believes that 25%
     represents the value of excess inventory that would not be able to be
     recovered due to new product introductions and other technological
     advancements.


                                       9
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     5. STOCKHOLDERS' EQUITY

     The consolidated changes in stockholders' equity for the nine months ended
     September 30, 2002 are as follows:
<TABLE>
<CAPTION>
                                           Common Stock           Additional
                                     ------------------------       Paid-In     Accumulated
                                      Shares          Amount        Capital        Deficit           Total
                                     ---------        ------        -------        --------         -------
<S>                                  <C>              <C>           <C>            <C>              <C>
Balance at December 31, 2001         5,346,174        $3,207        $21,452        $(18,177)        $ 6,482

Public rights offfering              3,191,250         1,915            106              --           2,021

Net loss                                    --            --             --          (1,408)         (1,408)
                                     ---------        ------        -------        --------         -------
Balance at September 30, 2002        8,537,424        $5,122        $21,558        $(19,585)        $ 7,095
                                     =========        ======        =======        ========         =======
</TABLE>


     6. EARNINGS (LOSS) PER SHARE

     The following table sets forth the computation of basic and diluted
     earnings (loss) per share:


                                       10
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)



     6. EARNINGS (LOSS) PER SHARE - CONTINUED
<TABLE>
<CAPTION>

                                                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                     -----------------------------     -----------------------------
                                                                     September 30      September 30    September 30     September 30
                                                                         2002              2001            2002              2001
                                                                      -----------       ----------      -----------       ----------
<S>                                                                   <C>               <C>             <C>               <C>
Numerator:
   Net income (loss)  (numerator for basic earnings per share)        $      (395)      $      213      $    (1,408)      $       71
   Effect of dilutive securities:
      8% convertible notes                                                     --               --               --               --
                                                                      -----------       ----------      -----------       ----------
   Net income (loss) (numerator for dilutive earnings per share)             (395)             213           (1,408)              71
                                                                      -----------       ----------      -----------       ----------
Denominator:
   Denominator for basic earnings per share-weighted
   average shares                                                       8,537,424        5,346,174        7,501,389        5,346,174
   Effect of dilutive securities:
      8% convertible notes                                                     --               --               --               --
      Options                                                                  --           50,000               --           30,000
                                                                      -----------       ----------      -----------       ----------
   Denominator for diluted earnings per share -
   adjusted weighted average shares                                     8,537,424        5,396,174        7,501,389        5,376,174
                                                                      ===========       ==========      ===========       ==========
Basic earnings (loss) per share                                       $     (0.05)      $     0.04      $     (0.19)      $     0.01
                                                                      ===========       ==========      ===========       ==========
Diluted earnings (loss) per share                                     $     (0.05)      $     0.04      $     (0.19)      $     0.01
                                                                      ===========       ==========      ===========       ==========
</TABLE>


     A total of 2,893,884 shares related to options, warrants, and convertible
     debt are not included in the computation of loss per share for the three
     and nine months ended September 30, 2002 because to do so would be
     anti-dilutive.

     7. COMPREHENSIVE LOSS

     The total comprehensive income (loss) for the three and nine months ended
     September 30, 2002 was ($395) and ($1,408), respectively, compared to $213
     and $71 for the same periods in the previous year.


                                       11
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)

     8. RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 2001, the FASB issued Statements of Financial Accounting Standards
     (SFAS) No. 141, Business Combinations, and No. 142, Goodwill and Other
     Intangible Assets. Under the new rules, goodwill and indefinite lived
     intangible assets are no longer amortized but are reviewed annually for
     impairment. Separable intangible assets that are not deemed to have an
     indefinite life will continue to be amortized over their useful lives. The
     amortization provisions of SFAS No. 142 apply to goodwill and intangible
     assets acquired after June 30, 2001. With respect to goodwill and
     intangible assets acquired prior to July 1, 2001, the Company applied the
     new accounting rules beginning January 1, 2002. The adoption of SFAS No.
     141 and No. 142 did not have a material impact on the Company's Condensed
     Consolidated Financial Statements.

     In June 2001, the FASB issued Statement of Financial Accounting Standards
     No. 143, "Accounting for Retirement Obligations" ("Statement 143").
     Statement 143 establishes accounting standards for the recognition and
     measurement of an asset retirement obligation and its associated asset
     retirement cost. It also provides accounting guidance for legal obligations
     associated with the retirement of tangible long-lived assets. The Company
     will adopt the provisions of Statement 143 for fiscal 2003, which is not
     expected to result in a material impact to the its financial position.

     In October 2001, the FASB issued Statement of Financial Accounting
     Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
     Assets" ("Statement 144"). Statement 144 supersedes Statement of Financial
     Accounting Standards No. 121, but retains its fundamental provisions for
     the (a) recognition and measurement of impairment of long-lived assets to
     be held and used, and (b) measurement of long-lived assets to be disposed
     of by sale. Statement 144 also supersedes the accounting and reporting
     provisions of Accounting Principles Board Opinion No. 30 for segments of a
     business to be disposed of, but retains the requirement to report
     discontinued operations separately from continuing operations and extends
     that reporting to a component of an entity that either has been disposed of
     or is classified as held for sale. The Company has adopted the provisions
     of Statement 144 for fiscal 2002, which did not result in a material impact
     to the its financial position.

     In April 2002, the FASB issued Statement of Financial Accounting Standards
     No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
     Statement No. 13 and Technical Corrections" ("Statement 145"). Statement
     145 updates, clarifies and simplifies existing accounting pronouncements.
     Statement 145 rescinds Statement of Financial Accounting Standards No. 4
     ("Statement 4"), which required all gains and losses from extinguishment of
     debt to be aggregated and, if material, classified as an extraordinary
     item, net of related income tax effect. As a result, the criteria in


                                       12
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)

     8. RECENTLY ISSUED ACCOUNTING STANDARDS - CONTINUED

     Accounting Principles Board Opinion No. 30 will now be used to classify
     those gains and losses because Statement 4 has been rescinded. Statement
     145 amends Statement of Financial Accounting Standards No. 13 to require
     that certain lease modifications that have economic effects similar to
     sale-leaseback transactions be accounted for in the same manner as
     sale-leaseback transactions. This amendment is consistent with the FASB's
     goal of requiring similar accounting treatment for transactions that have
     similar economic effects. Statement 145 also makes technical corrections to
     existing pronouncements. While those corrections are not substantive in
     nature, in some instances, they may change accounting practice. The Company
     has adopted the provisions of Statement 145 for fiscal 2002, which did not
     result in a material impact to the its financial position.

     In July 2002, the FASB issued Statement of Financial Accounting Standards
     No. 146, "Accounting for Costs Associated with Exit or Disposal
     Activities," ("Statement 146"). Statement 146 addresses financial
     accounting and reporting for costs associated with exit or disposal
     activities and nullifies Emerging Issues Task Force ("EITF") Issue No.
     94-3, "Liability Recognition for Certain Employee Termination Benefits and
     Other Costs to Exit an Activity (including Certain Costs Incurred in a
     Restructuring)" ("Issue 94-3"). The principal difference between Statement
     146 and Issue 94-3 relates to Statement 146's requirements for recognition
     of a liability for a cost associated with an exit or disposal activity.
     Statement 146 requires that a liability for a cost associated with an exit
     or disposal activity be recognized when the liability is incurred. Under
     Issue 94-3, a liability for an exit cost as generally defined in Issue 94-3
     was recognized at the date of an entity's commitment to an exit plan. A
     fundamental conclusion reached by the FASB in this Statement is that an
     entity's commitment to a plan, by itself, does not create an obligation
     that meets the definition of a liability. Therefore, this Statement
     eliminates the definition and requirements for recognition of exit costs in
     Issue 94-3. This Statement also establishes that fair value is the
     objective for initial measurement of the liability. The provisions of this
     Statement are effective for exit or disposal activities that are initiated
     after December 31, 2002. The Company is assessing whether the adoption of
     Statement 146 will have a material impact on its consolidated financial
     statements.

9. CONTINGENT LIABILITIES

     From time to time, the Company may become liable with respect to pending
     and threatened litigation, tax, environmental and other matters.

                                       13
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     GENERAL INSURANCE

     Under the Company's insurance programs, coverage is obtained for
     catastrophic exposures as well as those risks required to be insured by law
     or contract. It is the policy of the Company to retain a portion of certain
     expected losses related primarily to workers' compensation, physical loss
     to property, business interruption resulting from such loss and
     comprehensive general, product, and vehicle liability. Provisions for
     losses expected under these programs are recorded based upon the Company's
     estimates of the aggregate liability for claims incurred. Such estimates
     utilize certain actuarial assumptions followed in the insurance industry
     and are included in accrued expenses. The amounts accrued are included in
     accrued compensation and related taxes in the balance sheets.

     LEGAL PROCEEDINGS

       In 1993, a civil action was brought against the Company by a plaintiff to
     recover losses sustained on the note of a former affiliate. The plaintiff
     alleged violations of federal security and other laws by the Company in
     collateral arrangements with the former affiliate. In February 1994, the
     liquidator of the former affiliate filed a complaint claiming that
     intentional and negligent conduct by the Company and others caused the
     former affiliate to suffer millions of dollars of losses leading to its
     ultimate failure. In response, the Company filed motions for summary
     judgment to dismiss these complaints.


     On September 12, 2002, the Court granted in significant part the motions
     for summary judgment filed by the Company and one of its directors. As the
     result, the lone remaining claim seeks damages against the Company for
     non-payment of the note. The Company's contends that this note was canceled
     and released for fair consideration in 1993 and that there is no basis in
     law or fact for the Liquidator's claim. The Company, with the advice of
     counsel, believes that it has a meritorious defense and that the likelihood
     of an unfavorable outcome is remote.

     In February 12, 1999, the Company initiated collection and legal
     proceedings in Sao Paulo, Brazil, against its Brazilian dealer, Chatral,
     for failure to pay for product shipments totaling $1,400 which has been
     fully reserved in a prior year. In April 2001, the Brazilian court ordered
     the Company to post security with the court totaling approximately $300 in
     the form of cash or a bond in order for the case to proceed. The Company
     has elected not to post security. Consequently, the case was involuntarily
     dismissed. On December 8, 1999, Chatral filed a counter claim against the
     Company


                                       14
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     9. CONTINGENT LIABILITIES - CONTINUED

     LEGAL PROCEEDINGS - CONTINUED

     alleging damages totaling $8,000 as a result of the Company's
     discontinuation of shipments to Chatral. The Company and Chatral have
     agreed to a joint stipulation of dismissal under which all claims between
     the parties have been released.

     Heath & Company filed a suit against RELM Wireless Corporation and RELM
     Communications, Inc. in the United States District Court for the District
     of Massachusetts in early 2001 year for breach of contract,
     misrepresentation and unfair trade practices. Pursuant to a Memorandum and
     Order dated April 24, 2001, most of Heath's claims were dismissed. The
     court ruled as a matter of law that a fact finder must determine whether
     RELM Communications withheld information it knew to be essential to the
     Plaintiff and whether it did so in a bad faith attempt to withdraw from a
     brokerage agreement. On March 21, 2002, the parties settled the matter for
     payment to Heath of $33.

     On December 20, 2000, a products liability lawsuit was filed in Los Angeles
     Superior Court in Los Angeles, California. Although the Company was not
     named in the suit, one of the Defendants, C.P. Allstar Corporation had
     purchased all or substantially all of the assets of a RELM affiliate. As
     part of the asset sale, the asset purchase agreement contained
     indemnification provisions, which could result in liability for the
     Company. On October 23, 2001, C.P. Allstar Corporation served us with a
     claim for indemnification under a provision of the asset purchase
     agreement. In June 2002, the Company was released from this matter by C.P.
     Allstar.

     On November 19, 2001 a products liability lawsuit was filed in the 353rd
     Judicial District Court of Travis County, Texas. On August 26, 2002 a
     products liability lawsuit was filed in the Probate Court of Galveston
     County, Texas. RELM Wireless Corporation, RELM Communications,
     Incorporated, and C.P. Allstar Corporation are named defendants in these
     lawsuits. C.P. Allstar Corporation had purchased all or substantially all
     of the assets of a RELM affiliate. The asset purchase agreement contains
     indemnification provisions, which could result in liability for both
     parties. Counsel for the Company's insurer is vigorously defending both
     claims. Counsel believes the Company has meritorious defenses and the
     likelihood of an unfavorable outcome in each of these actions is remote.


                                       15
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
              (IN THOUSANDS EXCEPT SHARE DATA AND PER SHARE DATA)


     10. NASDAQ COMMUNICATION

     On May 1, 2002 the Company was notified by Nasdaq Listing Qualifications
     that for the last 30 consecutive trading days the Company's stock had
     closed below the minimum $1.00 per share requirement for continued listing
     under Marketplace Rule 4310(c)(4). In accordance with Marketplace Rule
     4310(c)(8)(d) the Company had 180 days, until October 28, 2002, to regain
     compliance. The Company did not regain compliance by the designated date.
     On October 29, 2002 the Company was granted an additional 180 days, until
     April 28, 2003, to regain compliance. If at any time before April 28, 2003
     the bid price of the Company's common stock closes at $1.00 per share or
     more for a minimum of 10 consecutive trading days, the Nasdaq Staff will
     provide written notification that the Company complies with the rule.
     Otherwise the Staff will provide written notification that the Company's
     securities will be delisted. At that time, the Company may appeal the
     staff's determination to a Listing Qualifications Panel.


                                       16
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     RESULTS OF OPERATIONS
     ---------------------

     As an aid to understanding our operating results, the following table shows
     each item from the condensed consolidated statement of operations expressed
     as a percentage of sales:
<TABLE>
<CAPTION>

                               Percentage of Sales          Percentage of Sales
                             ------------------------    -------------------------
                                   THREE MONTHS ENDED       NINE MONTHS ENDED

                              September 30  September 30 September 30  September 30
                                  2002         2001         2002         2001
                                 -----        -----        -----        -----
<S>                              <C>          <C>          <C>          <C>
Sales                            100.0%       100.0%       100.0%       100.0%
Cost of sales                     70.9         69.0         70.3         71.3
                                 -----        -----        -----        -----
Gross margin                      29.1%        31.0         29.7         28.7
Selling, general and
  administrative expenses        (37.4)       (24.6)       (31.9)       (25.6)
Loss on Notes Receivable            --           --         (6.6)          --
Interest expense                  (2.9)        (2.4)        (2.5)        (2.6)
Other income (expense)             1.3         (0.6)         1.0         (0.1)
                                 -----        -----        -----        -----
Net income (loss)                 (9.9)%        3.4%       (10.3)%        0.4%
                                 =====        =====        =====        =====
</TABLE>

     NET SALES

     Net sales for the three months and nine months ended September 30, 2002
     decreased by approximately $2.2 million (36.1%) and $3.5 million (20.2%),
     respectively, compared to the same period for the prior year. These
     decreases are primarily the result of the absence of sales to the
     Communications Electronics Command of the U. S. Army in 2002, and a decline
     in sales of our BK Radio-brand mobile radios resulting from the expiration
     of our contract for mobile radios with the U.S. Forest Service in the third
     quarter of 2001.

     During the prior fiscal year, revenues from product shipments to CECOM
     totaled approximately $2.4 million. The contract under which those
     shipments were made expired in October 2001. CECOM solicited bids for a new
     contract in March 2002 and we submitted proposals. Numerous delays have
     been encountered by CECOM, and the contract has not yet been awarded. Based
     upon discussions with CECOM, we believe that the contract will be awarded
     before the end of the year. The contract, if it is awarded to us, qualifies
     us as the exclusive supplier of certain products to CECOM. The contract
     will not specify definite delivery dates or quantities.


                                       17
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     As disclosed in our third quarter 2001 Form 10-Q filing with the Securities
     and Exchange Commission, we were not awarded the 2002 USFS contract for
     mobile radios. Accordingly, sales of our BK Radio-brand mobile radios for
     the nine months ended September 30, 2002 declined approximately $1.9M
     compared to the same period for the prior year. The USFS is our largest
     customer representing revenues of approximately $3.4M and $4.8M for the
     nine months ended September 30, 2002 and 2001, respectively. Bids for
     participation on a new contract were recently solicited by the USFS. The
     USFS has notified us that we have been awarded participation for mobile
     radios along with one other company. We have been awarded exclusive (i.e.
     no other companies were named as suppliers) participation for portable
     radios. We were also awarded participation for base stations and repeaters.
     The USFS contract does not specify definite delivery dates or quantities.

     For the quarter ended September 30, 2002, sales in the business and
     industrial market segment, served by Uniden-branded and RELM-branded
     products, decreased approximately $0.4 million (37.7%) when compared to the
     same period of the prior year. Customer demand in this market segment
     continued to be weak, reflecting the lack of a sustained economic recovery.
     Revenues for Uniden products declined while we realized modest revenue
     increases in RELM products compared to the same period last year as a
     result of the introduction of the first two models of our RP Series
     portable radios. The RP series is designed as a quality, full-featured,
     low-cost line to compete effectively in the business and industrial market.

     COST OF SALES AND GROSS MARGIN

     Cost of sales as a percentage of net sales for the three months ended
     September 30, 2002 was 70.9% compared to 69.0% for the same period in the
     prior year. For the nine months ended September 30, 2002, cost of sales as
     a percentage of net sales was 70.3% compared to 71.3% for the same period
     in the prior year. The increase in cost of sales as a percent of sales for
     the three months ended September 30, 2002 compared to the same period for
     the prior year was due to lower product volumes, which in turn resulted in
     under-absorbed manufacturing overhead costs.

     The improvement in cost of sales for the nine months ended September 30,
     2002 compared to the same period for the prior year is a reflection of
     various and continuing initiatives to reduce direct product costs and
     manufacturing infrastructure costs. These initiatives, started in 2000,
     have included facility and staff reductions, and leveraging strategic
     external manufacturing relationships, some of which are offshore.
     Additional initiatives designed to further reduce product costs are
     underway. We believe that, combined with new product revenues, these
     efforts will continue to yield improved cost of sales and gross margin
     performance. We anticipate that the current relationships or comparable
     alternatives will be available to the company in the future.


                                       18
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses consist of marketing, sales,
     commissions, engineering, research and development, management information
     systems, accounting, and headquarters expenses. For the three months ended
     September 30, 2002, SG&A expenses totaled approximately $1,489,000 (37.4%
     of sales) compared to $1,528,000 (24.6% of sales) for the same period last
     year. For the nine months ended September 30, 2002, SG&A expenses totaled
     approximately $4,359,000 (31.9% of sales) compared to $4,378,000 (25.6% of
     sales) for the same period last year.

     While total SG&A spending remained largely unchanged, we reduced general
     and administrative expenses while investing more in engineering and
     research and development. Research and development expenses increased as a
     result of the continuing development of our new APCO Project 25-compliant
     products and new ESAS system features and capabilities. We anticipate that
     the initial models of digital products will be introduced for sale in the
     fourth quarter 2002. ESAS systems are currently being actively marketed and
     sold. These additional expenses in engineering and R&D were largely offset
     by reductions in general and administrative expenses. Certain information
     systems functions were outsourced and legal expenses were reduced as
     several pending legal matters were resolved.

     INTEREST EXPENSE

     For the three months ended September 30, 2002 interest expense totaled
     $115,000 (2.9% of sales) compared to $149,000 (2.4% of sales) for the same
     period during the prior year. Interest expense for the nine months ended
     September 30, 2002 totaled $336,000 ( 2.5% of sales) compared to $452,000
     (2.6% of sales) for the same period during the prior year. We have
     generated working capital through expense reductions, a short collection
     cycle, and reduced inventory, enabling us to reduce the amount outstanding
     on our revolving line of credit. Additionally, we satisfied capital lease
     obligations associated with certain computer equipment.

     LOSS ON NOTES RECEIVABLE

     The loss on notes receivable is discussed under the section titled "Recent
     Events".

     INCOME TAXES

     No income tax provision was provided for the three or nine months ended
     September 30, 2002 or 2001. We have net operating loss carryforward
     benefits totaling


                                       19
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     INCOME TAXES - CONTINUED

     approximately $29 million at September 30, 2002. We have evaluated our tax
     position in accordance with the requirements of SFAS No. 109, Accounting
     for Income Taxes, and do not believe that we have met the
     more-likely-than-not criteria for recognizing a deferred tax asset. As a
     result, we have provided valuation allowances against our net deferred tax
     assets.

     RECENT EVENTS

     PUBLIC RIGHTS OFFERING

     On March 22, 2002, we closed a public rights offering. The purpose of the
     offering was to provide working capital, which among other things, will
     speed the development of our new APCO Project 25-compliant digital products
     and capabilities. The securities offered were "units". A unit was comprised
     of one share of RELM common stock and one warrant to purchase one share of
     RELM common stock for $1.08 per share. The warrants may be exercised at any
     time on or after February 12, 2003 and the warrants expire on February 11,
     2006. Units were offered initially to RELM's equity holders in the form of
     a rights offering. The "right" allowed investors in the offering to
     purchase units at a 10% discount to the market price of a share of common
     stock. We believe that a rights offering provided several advantages over a
     traditional public offering. It allowed us to offer the units to our
     current equity holders who already have some knowledge of our business, and
     it provided them with the opportunity to maintain their fully-diluted
     pro-rata ownership in the company. Additionally, the warrant component gave
     investors the opportunity to buy our shares in the future at a fixed price.
     Noble International Investments, Inc. was engaged as the standby
     underwriter for this offering. The units were offered to the public
     pursuant to a registration statement that was declared effective by the
     Securities and Exchange Commission on February 11, 2002. In accordance with
     the terms of the offering, the units were separated on the closing date.
     The offering resulted in the sale of 2,775,000 shares of common stock and
     warrants to purchase 2,775,000 shares of common stock. The offering
     generated $1.8 million in net proceeds. The warrants are currently quoted
     on the OTC Bulletin Board with the symbol RELMW. The Company's common stock
     is listed on the NASDAQ Small Cap Market under our current symbol, RELM.

     On May 17, 2002, Noble exercised its option to purchase 416,250 additional
     units at a purchase price of $0.90 per unit to cover over-allotments. We
     received approximately $326,000 in net proceeds from the purchase of these
     additional units.


                                       20
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     LOSS ON NOTES RECEIVABLE

     During the first quarter of 2002, we established a $900,000 valuation
     reserve. The reserve equals the total principal amount due to us from Fort
     Orange Paper Company, Inc. (Fort Orange), the purchaser of our former
     paper-manufacturing subsidiary.

     In April, we learned that Fort Orange had ceased operations. Fort Orange
     owes us $900,000 plus accrued interest under the terms of two secured
     promissory notes and has defaulted on its obligations to make principal and
     interest payments. Our security interest is subordinated to the security
     interest granted to the purchaser's senior lender. In connection with the
     sale of the subsidiary in 1997, we took back a secured promissory note from
     the purchaser in the initial aggregate principal amount of $2,400,000. In
     December 2000, the terms of the original promissory note were modified and
     we received a principal payment of $700,000 plus accrued interest of
     approximately $166,000. After this payment, the remaining principal amount
     due on the original note was $900,000. Also, as part of the modification
     agreement, the original note was replaced by two secured promissory notes,
     one in the principal amount of $600,000 and the other in the principal
     amount of $300,000. The $600,000 note is payable in ten annual installments
     starting on April 2, 2002. The $300,000 note is payable in five annual
     installments starting on January 1, 2003. Interest on both notes is accrued
     at 2.75% over the prime rate and is payable, in the case of the $600,000
     note, in annual installments, and, in the case of the $300,000 note, in
     semi-annual installments. The $600,000 note is subject to a standby
     creditor's agreement under which principal and interest payments on the
     note are contingent upon the purchaser achieving a certain debt service
     coverage ratio and the absence of any uncured defaults on other loans or
     agreements of the purchaser. As security for both notes, the purchaser has
     granted to us a lien and security interest in certain collateral. Our
     security interest, however, is subordinated to the security interest
     granted to the purchaser's senior lender. In addition, we are subject to a
     standstill agreement with the senior lender. A principal of the purchaser
     has guaranteed the prompt and complete payment of both notes when due. Both
     notes are subject to forbearance fee payment agreements with both the
     purchaser and the guarantor under which additional amounts may be payable
     to us if there is a merger, sale or change of control of the purchaser and
     if the notes are not paid in full by certain dates.

     The Company, with guidance from counsel, will evaluate alternatives and
     take all prudent actions to maximize the possibility of recovery. However,
     the Company believes that the value of Fort Orange's assets and the assets
     of the guarantor are insufficient to provide any recovery of the amounts
     due under the notes. Accordingly, the Company has maintained the valuation
     reserve for the entire principal amount ($900,000) of the two promissory
     notes that was established in the first quarter 2002.


                                       21
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     LOSS ON NOTES RECEIVABLE - CONTINUED

     The Fort Orange business and the associated promissory notes are legacies
     from before 1997, and not at all related to land mobile radio (LMR)
     operations, which have been our focus for the past several years. We have
     excluded the subject promissory notes from our cash flow projections and
     operating plans since 2000. Although the valuation reserve impacted
     earnings, we anticipate no impact on the execution of our core LMR business
     plan objectives, including the completion and introduction of our digital
     products, which are proceeding on-schedule.

     SIGNIFICANT CUSTOMERS
     ---------------------

     Sales to the United States government represented approximately 42.8% and
     42.4% of our total revenues for the three and nine months ended September
     30, 2002, respectively, compared to 57.5% and 52.6% for the prior year.
     These sales were primarily to the United States Forest Service (USFS). The
     decline in the percentage of total revenues attributable to sales to the
     United States government is primarily due to the expiration of our CECOM
     contract described below and reduced sales of mobile radio products because
     they are not on the 2002 USFS contract.

     In 1996, we were awarded a contract to provide land mobile radios to CECOM.
     This contract was for a term of five years with no specified minimum
     purchase requirement. The contract expired in 2001. CECOM solicited bids
     for a new contract in March 2002 and we submitted proposals. The evaluation
     of proposals for this solicitation is in process, but has been subjected to
     delays. Consequently, the contract has not yet been awarded. Based upon
     discussions with CECOM, we anticipate that the contract will be awarded
     before the end of the year.

     We were not awarded a new contract for the sale of our BK Radio-brand
     mobile radios to the USFS when our contract expired in the third quarter of
     2001. Bids for participation on a new contract were recently solicited by
     the USFS. The USFS has notified us that we have been awarded participation
     for mobile radios along with one other company. We have been awarded
     exclusive (i.e. no other companies were named as suppliers) participation
     for portable radios. We were also awarded participation for base stations
     and repeaters. The USFS contract does not specify definite delivery dates
     or quantities.


                                       22
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     INFLATION AND CHANGING PRICES
     -----------------------------

     Inflation and changing prices for the three and nine months ended September
     30, 2002 and 2001 have contributed to increases in wages, facilities, and
     raw material costs. Effects of these inflationary effects were partially
     offset by increased prices to customers. We believe that we will be able to
     pass on most of our future inflationary increases to our customers.

     LIQUIDITY AND CAPITAL RESOURCES
     -------------------------------

     As of September 30, 2002, we had working capital of $9.5 million, including
     $2.3 million of cash and cash equivalents, compared with $9.3 million as of
     December 31, 2001. On March 22, 2002, we closed a public rights offering.
     The purpose of the offering was to provide working capital which, among
     other things, will be used to fund the development of our new APCO Project
     25-compliant digital products and capabilities. The offering generated
     approximately $2.1 million in cash. Also, trade payables were reduced.
     Inventory reduction initiatives and reduced trade receivables resulting
     from collection cycle improvements largely offset these working capital
     increases.

     We have a $7 million revolving line of credit. As of September 30, 2002,
     the formula under the terms of the agreement supported a borrowing base
     totaling approximately $3.0 million, of which approximately $1.2 million
     was available. The line of credit renews annually on February 26th of each
     year unless terminated in writing by either party. We have no reason to
     believe that the line will be terminated by the lender prior to the renewal
     date.


     Capital expenditures for property and equipment for the nine months ended
     September 30, 2002 were approximately $153,000 compared to $64,000 for the
     same period in 2001. The additional capital investment was to support our
     development of APCO Project 25-compliant digital products. Capital
     expenditures for the remainder of the year are anticipated to decrease
     because most of our initial capital needs for the aforementioned
     development were met during the first three quarters.

     FORWARD-LOOKING STATEMENTS
     --------------------------

     This report contains certain forward-looking statements within the meaning
     of the Private Securities Litigation Reform Act Of 1995 and is subject to
     the safe-harbor created by such act. These forward-looking statements
     concern the Company's operations, economic performance and financial
     condition and are based largely on the Company's beliefs and expectations.
     These statements involve known and unknown


                                       23
<PAGE>

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
             -------------------------------------------------------------
     AND FINANCIAL CONDITIONS
     ------------------------

     FORWARD-LOOKING STATEMENTS - CONTINUED
     --------------------------------------

     risks, uncertainties and other factors that may cause the actual results,
     performance or achievements of the Company, or industry results, to be
     materially different from any future results, performance or achievements
     expressed or implied by such forward- looking statements. Such factors and
     risks include, among others, the following: the factors described in the
     Company's filings with the Securities and Exchange Commission; general
     economic and business conditions; changes in customer preferences;
     competition; changes in technology; changes in business strategy; the
     indebtedness of the Company; quality of management, business abilities and
     judgment of the Company's personnel; and the availability, terms and
     deployment of capital. Certain of these factors and risks, as well as other
     risks and uncertainties are stated in more detail in the Company's Annual
     Report on Form 10-K. These forward-looking statements are made as of the
     date of this report, and the Company assumes no obligation to update the
     forward-looking statements or to update the reasons why actual results
     could differ from those projected in the forward-looking statements.


                                       24
<PAGE>


     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
             -------------------------------------------------------

     The Company utilizes a variable-rate line of credit. The Company does not
     expect changes in interest rates to have a material effect on income or
     cash flows in fiscal year 2002, although there can be no assurance that
     interest rates will not significantly change.

     CRITICAL ACCOUNTING POLICIES
     ----------------------------

     In response to the SEC's financial reporting release, FR-60, Cautionary
     Advice Regarding Disclosure About Critical Accounting Policies, we have
     selected our more subjective accounting estimation processes for purposes
     of explaining the methodology used in calculating the estimate in addition
     to the inherent uncertainties pertaining to the estimate and the possible
     effects on the Company's financial conditions. The two accounting
     estimation processes discussed below are the allowance for collection on
     trade receivables and reserves for excess or obsolete inventory. These
     estimation processes affect current assets and are therefore critical in
     assessing the financial and operating status of the Company. These
     estimates involve certain assumption that if incorrect could create an
     adverse impact on the Company's operations and financial position.

     The allowance for collection losses on trade receivables was $0.1 million
     on gross trade receivables of $1.6 million at September 30, 2002. This
     allowance is used to state trade receivables at a net realizable value or
     the amount that we estimate will be collected on our gross receivables as
     of September 30, 2002. Because the amount that we will actually collect on
     the receivables outstanding as of September 30, 2002 cannot be known with
     certainty as of this document's effective date, we rely on prior
     experience. Our historical collection losses have been typically infrequent
     with write-offs of trade receivables being less than 1% of sales. We
     maintain a general allowance of approximately 2 to 5% of a gross trade
     receivable balance in order to allow for future collection losses that
     arise from customer accounts that do not indicate the inability to pay but
     turn out to have such an inability. Currently, our allowance on trade
     receivables is 5.99% of gross receivables. We also maintain a specific
     allowance for customer accounts that we know may not be collectible due to
     various reasons such as bankruptcy and other customer liquidity issues. We
     analyze our trade receivable portfolio based on the age of each customer's
     invoice. In this way, we can identify those accounts that are more likely
     than not to have collection problems. We then reserve a portion or all of
     the customer's balance.

     The reserve for slow-moving, excess, or obsolete inventory was $2.3 million
     at September 30, 2002. The reserve for excess or obsolete inventory is used
     to state our inventories at the lower of cost or market. Because the amount
     of inventoriable costs that we will actually recoup through sales of our
     inventory as of September 30, 2002

                                       25
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
        -------------------------------------------------------

     CRITICAL ACCOUNTING POLICIES - CONTINUED
     ----------------------------------------

     can not be known with certainty as of this document's effective date, we
     rely on past sales experience, future sales forecasts, and our strategic
     business plans. Generally, in analyzing our inventory levels, we classify
     inventory as having been used or unused during the past year. For inventory
     with no usage in the past year, we reserve 85% of its cost which takes into
     account a 15% scrap value. For inventory with usage in the past year, we
     review the average annual usage over the past three years, project that
     amount over the next seven years, and then reserve 25% of the excess amount
     (in which the excess amount equals inventory on hand less a seven year
     projected usage amount). We believe that 25% represents the value of excess
     inventory we would not be able to recover due to our new product
     introductions and other technological advancements.

     PART II- OTHER  INFORMATION
     ---------------------------

     ITEM 1. LEGAL PROCEEDINGS
             -----------------

      In 1993, a civil action was brought against the Company by a plaintiff to
     recover losses sustained on the note of a former affiliate. The plaintiff
     alleged violations of federal security and other laws by the Company in
     collateral arrangements with the former affiliate. In February 1994, the
     liquidator of the former affiliate filed a complaint claiming that
     intentional and negligent conduct by the Company and others caused the
     former affiliate to suffer millions of dollars of losses leading to its
     ultimate failure. In response, the Company filed motions for summary
     judgment to dismiss these complaints.


     On September 12, 2002, the Court granted in significant part the motions
     for summary judgment filed by the Company and one of its directors. As the
     result, the lone remaining claim seeks damages against the Company for
     non-payment of the note. The Company's contends that this note was canceled
     and released for fair consideration in 1993 and that there is no basis in
     law or fact for the Liquidator's claim. The Company, with the advice of
     counsel, believes that it has a meritorious defense and that the likelihood
     of an unfavorable outcome is remote.


     In February 12, 1999, the Company initiated collection and legal
     proceedings in Sao Paulo, Brazil, against its Brazilian dealer, Chatral,
     for failure to pay for product shipments totaling $1,400,000 which has been
     fully reserved in a prior year. In April


                                       26
<PAGE>

     PART II- OTHER INFORMATION
     --------------------------

     ITEM 1. LEGAL PROCEEDINGS - CONTINUED
             -----------------------------

     2001, the Brazilian court ordered the Company to post security with the
     court totaling approximately $300,000 in the form of cash or a bond in
     order for the case to proceed. The Company has elected not to post
     security. Consequently, the case was involuntarily dismissed. On December
     8, 1999, Chatral filed a counter claim against the Company alleging damages
     totaling $8,000,000 as a result of the Company's discontinuation of
     shipments to Chatral. The Company and Chatral have agreed to a joint
     stipulation of dismissal under which all claims between the parties have
     been released.

     Heath & Company filed a suit against RELM Wireless Corporation and RELM
     Communications, Inc. in the United States District Court for the District
     of Massachusetts in early 2001 year for breach of contract,
     misrepresentation and unfair trade practices. Pursuant to a Memorandum and
     Order dated April 24, 2001, most of Heath's claims were dismissed. The
     court ruled as a matter of law that a fact finder must determine whether
     RELM Communications withheld information it knew to be essential to the
     Plaintiff and whether it did so in a bad faith attempt to withdraw from a
     brokerage agreement. On March 21, 2002, the parties settled the matter for
     payment to Heath of $33.

     On December 20, 2000, a products liability lawsuit was filed in Los Angeles
     Superior Court in Los Angeles, California. Although the Company was not
     named in the suit, one of the Defendants, C.P. Allstar Corporation had
     purchased all or substantially all of the assets of a RELM affiliate. As
     part of the asset sale, the asset purchase agreement contained
     indemnification provisions, which could result in liability for the
     Company. On October 23, 2001, C.P. Allstar Corporation served us with a
     claim for indemnification under a provision of the asset purchase
     agreement. In June 2002, the Company was released from this matter by C.P.
     Allstar.

     On November 19, 2001 a products liability lawsuit was filed in the 353rd
     Judicial District Court of Travis County, Texas. On August 26, 2002 a
     products liability lawsuit was filed in the Probate Court of Galveston
     County, Texas. RELM Wireless Corporation, RELM Communications,
     Incorporated, and C.P. Allstar Corporation are named defendants in these
     lawsuits. C.P. Allstar Corporation had purchased all or substantially all
     of the assets of a RELM affiliate. The asset purchase agreement contains
     indemnification provisions, which could result in liability for both
     parties. Counsel for the Company's insurer is vigorously defending both
     claims. Counsel believes the Company has meritorious defenses and the
     likelihood of an unfavorable outcome in each of these actions is remote.


                                       27
<PAGE>

     PART II- OTHER INFORMATION
     ---------------------------


     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
             ------------------------------------------
     None


     ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
             --------------------------------
     None


     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
             ----------------------------------------------------

     The annual meeting of our shareholders was held on July 9, 2002. Of the
     8,121,174 shares of common stock outstanding and entitled to vote at the
     meeting, 7,173,529 shares were represented in person or by proxy.

     ELECTION OF DIRECTORS
     On the proposal to elect Donald F. U. Goebert, David. P. Storey, Buck
     Scott, Robert MacDonald, Ralph R. Whitney, James C. Gale, and George M.
     Benjamin III as directors until the 2003 Annual Meeting of Shareholders and
     until their successors are duly elected and qualified, the nominees for
     Director received the number of votes as set forth below:

                                                       FOR            WITHHELD
                                                       ---            --------

         Donald F. U. Goebert                       7,130,374          43,155
         David P. Storey                            7,130,924          42,605
         Buck Scott                                 7,130,924          42,605
         Robert MacDonald                           7,099,346          74,183
         Ralph R. Whitney                           7,130,924          42,605
         James C. Gale                              7,130,924          42,605
         George N. Benjamin III                     7,130,924          42,605


     RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG, LLP AS INDEPENDENT
     CERTIFIED PUBLIC ACCOUNTANTS

     On the proposal to ratify the appointment of Ernst & Young, LLP as the
     Company's independent auditors, 7,147,900 shares were voted for the
     proposal, 10,594 shares were voted against the proposal, and 15,035 shares
     abstained from the vote. The affirmative vote of the holders of a majority
     of the total votes cast was required to


                                       28
<PAGE>

     PART II- OTHER INFORMATION
     --------------------------

     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - CONTINUED
             ---------------------------------------------------------------

     approve this proposal. Based on the vote, the proposal was approved by the
     shareholders.

     ITEM 5. OTHER INFORMATION
             -----------------

     On May 1, 2002 the Company was notified by Nasdaq Listing Qualifications
     that for the last 30 consecutive trading days the Company's stock had
     closed below the minimum $1.00 per share requirement for continued listing
     under Marketplace Rule 4310(c)(4). In accordance with Marketplace Rule
     4310(c)(8)(d) the Company had 180 days, until October 28, 2002, to regain
     compliance. The Company did not regain compliance by the designated date.
     On October 29, 2002 the Company was granted an additional 180 days, until
     April 28, 2003, to regain compliance. If at any time before April 28, 2003
     the bid price of the Company's common stock closes at $1.00 per share or
     more for a minimum of 10 consecutive trading days, the Nasdaq Staff will
     provide written notification that the Company complies with the rule.
     Otherwise the Staff will provide written notification that the Company's
     securities will be delisted. At that time, the Company may appeal the
     staff's determination to a Listing Qualifications Panel.


     ITEM 6. EXHIBITS AND REPORTS FORM 8-K
             -----------------------------

     (a) The following documents are filed as part of this report:

                  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.

                  Exhibit 99.2 Certification Pursuant to 18 U.S.C Section 1350,
                  as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
                  of 2002.

     (b) Reports on Form 8-K during the fiscal quarter ended September 30, 2002.

                  None


                                       29
<PAGE>


                                   SIGNATURES
                                   ----------

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

                                            RELM WIRELESS CORPORATION
                                            (The "Registrant")
     Date:  November 6, 2002

                                            By:  /s/ W. P. Kelly
                                                 -------------------------------
                                            William P. Kelly
                                            Executive Vice President - Finance
                                            and Chief Financial Officer
                                            (Principal financial and accounting
                                            officer and duly authorized officer)



                                       30
<PAGE>

                                 CERTIFICATIONS

         I, David P. Storey, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of RELM Wireless
Corporation;

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

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

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

                  a) designed such disclosure controls and procedures to ensure
         that material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

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

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

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

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

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

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

November 6, 2002

                                        /s/ David P. Storey
                                        ------------------------------------
                                        David P. Storey
                                        President and Chief Executive Officer


<PAGE>


                                 CERTIFICATIONS

         I, William P. Kelly, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of RELM Wireless
Corporation;

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

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

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

                  a) designed such disclosure controls and procedures to ensure
         that material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

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

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

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

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

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

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

November 6, 2002


                                       /s/ W. P. Kelly
                                       --------------------------------------
                                       William P. Kelly
                                       Executive Vice President - Finance and
                                       Chief Financial Officer