** **

**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-QSB**

 

**(Mark One)**

 
| **ý** |   | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934** |
|------------|--------|----------------------------------------------------------------------------------------|
|       |   | **For  the quarterly period ended December 31, 2001**                                  |
|       |   |                                                                                   |
| **o**      |   | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES ACT OF 1934**   |

**Forthe transition period from                                  to                                **

**Commissionfile number                 0-011275                                               **

 

 

**TELTONE CORPORATION**

(Exact name ofregistrant as specified in its charter)

 

 

| **WASHINGTON**                                                  |   | **91-0839067**                        |
|-----------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
|                                                            |   |                                  |
|                                                            |   |                                  |
| **22116  – 23rd Drive SE, Bothell, Washington**            |   | **98021**                             |
| (Address of  principal executive offices)                       |   | (Zip Code)                            |
|                                                            |   |                                  |
|                                                            |   |                                  |
| **(425)  487-1515**                                             |
| (Registrant's  telephone number, including area code)           |
|                                                            |   |                                  |
|                                                            |   |                                  |
| **N/A**                                                         |
| (Former name,  former address and former fiscal year)           |

 

Check whether the issuer(1) filed all reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.                Yesý No o

 

**APPLICABLEONLY TO ISSUERS INVOLVED IN BANKRUPTCY**

**PROCEEDINGSDURING THE PRECEDING FIVE YEARS**

 

                Check whether the registrant filed all documents andreports required to be filed by Section 12, 13 or 15(d) of the Exchange Actafter the distribution of securities under a plan confirmed by a court.  Yes o  No o

 

**APPLICABLEONLY TO CORPORATE ISSUERS**

 

State the number ofshares outstanding of each of the issuer's classes of common equity, as of thelatest practicable date.

 

6,865,503 sharesof common stock outstanding as of December 31, 2001.

 

Transitional SmallBusiness Disclosure Format (Check One):                      Yes o  No ý

 

 
| Index        |                                                                                                        |   |
|--------------|-------------------------------------------------------------------------------------------------------------|--------|
|         |                                                                                                        |   |
| **PART I.**  | **FINANCIAL INFORMATION**                                                                                   |   |
|         |                                                                                                        |   |
| Item 1.      | Balance Sheets at December 31, 2001  (unaudited) and June 30, 2001                                          |   |
|         |                                                                                                        |   |
|         | Statements  of Operations for the three months and six months ended December 31, 2001 and  2000 (unaudited) |   |
|         |                                                                                                        |   |
|         | Statements  of Cash Flows for the six months ended December 31, 2001 and 2000 (unaudited)                   |   |
|         |                                                                                                        |   |
|         | Notes to  Unaudited Financial Statements                                                                    |   |
|         |                                                                                                        |   |
| Item  2.     | Management’s  Discussions and Analysis of Financial Conditions and Results of Operations               |   |
|         |                                                                                                        |   |
| **PART II.** | **OTHER INFORMATION**                                                                                       |   |
|         |                                                                                                        |   |
| Item  1.     | Legal  Proceedings                                                                                          |   |
|         |                                                                                                        |   |
| Item 2.      | Changes in Securities                                                                                       |   |
|         |                                                                                                        |   |
| Item 3.      | Defaults Upon Senior  Securities                                                                            |   |
|         |                                                                                                        |   |
| Item  4.     | Submission  of Matters to a Vote of Security Holders                                                        |   |
|         |                                                                                                        |   |
| Item  5.     | Other  Information                                                                                          |   |
|         |                                                                                                        |   |
| Item 6.      | Exhibits and Reports  on Form 8-K                                                                           |   |
|         |                                                                                                        |   |
| Signature    |                                                                                                        |   |

 

 

 

**PART 1 – FINANCIAL INFORMATION**

 

**Item 1.  Financial Information**

 

Balance Sheets at December 31, 2001 (unaudited) and June 30, 2001

 

Statements of Operations for the three months and six months endedDecember 31, 2001 and 2000 (unaudited)

 

Statements of Cash Flows for the six months ended December 31, 2001 and2000 (unaudited)

 

Notes to Unaudited Financial Statements

 

 

 

 

**TELTONE CORPORATION**

# **BALANCE SHEETS**

December 31, 2001and June 30, 2001

 
|                                                                                                                                                 |   | **December 31** |                 | **June 30** |                 |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|----------------------|-------------|----------------------|
|                                                                                                                                                 |   | **2001**        |                 | **2001**    |                 |
| ASSETS                                                                                                                                               |   | (unaudited)     |                 |        |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| Current assets                                                                                                                                       |   |            |                 |        |                 |
| Cash and cash  equivalents                                                                                                                           |   | $               | 89,922               |        | $                    | 333,243 |   |
| Trade accounts  receivable (net of allowance for doubtful accounts of  $33,655 and $29,798)                                                     |   | 1,178,855       |            | 1,013,325   |            |
| Inventories                                                                                                                                          |   |            |                 |        |                 |
| Raw materials                                                                                                                                        |   | 520,948         |                 | 726,072     |                 |
| Work in process                                                                                                                                      |   | 63,939          |                 | 174,595     |                 |
| Finished goods                                                                                                                                       |   | 427,609         |                 | 426,210     |                 |
| Total  inventories                                                                                                                                   |   | 1,012,496       |                 | 1,326,877   |                 |
| Other current  assets                                                                                                                                |   | 241,491         |                 | 111,020     |                 |
| Total current  assets                                                                                                                                |   | 2,522,764       |                 | 2,784,465   |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| Property, plant  and equipment - net                                                                                                                 |   | 585,452         |                 | 638,429     |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| TOTAL                                                                                                                                                |   | $               | 3,108,216            |        | $                    | 3,422,894 |   |
|                                                                                                                                                 |   |            |                 |        |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| LIABILITIES AND  STOCKHOLDERS' EQUITY                                                                                                                |   |            |                 |        |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| Current  liabilities                                                                                                                                 |   |            |                 |        |                 |
| Line of credit                                                                                                                                       |   | $               | 100,000              |        | $                    | – |   |
| Accounts payable  - trade                                                                                                                            |   | 254,872         |                 | 398,816     |                 |
| Accrued compensation and  benefits                                                                                                                   |   | 295,777         |                 | 437,627     |                 |
| Deferred revenue                                                                                                                                     |   | 158,357         |                 | 197,906     |                 |
| Other accrued  expenses                                                                                                                              |   | 98,719          |                 | 107,258     |                 |
| Note  payable – current portion                                                                                                                 |   | 94,670          |                 | 5,529       |                 |
| Total current  liabilities                                                                                                                           |   | 1,002,395       |                 | 1,147,136   |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| Note  payable – long-term portion                                                                                                               |   | 75,980          |                 | –      |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| Stockholders'  equity                                                                                                                                |   |            |                 |        |                 |
| Convertible  preferred stock - no par value; authorized 6,000,000 shares; 876,684 shares  issued and outstanding ($1,753,368 liquidation preference) |   | 1,665,236       |       | 1,665,236   |       |
| Common stock -  no par value; authorized 20,000,000 shares; 6,865,503 shares issued and  outstanding                                                 |   | 3,811,195       |            | 3,811,195   |            |
| Deferred stock  compensation                                                                                                                         |   | (54,220         | )                    | (67,054     | )                    |
| Accumulated  deficit                                                                                                                                 |   | (3,392,370      | )                    | (3,133,619  | )                    |
| Stockholders'  equity                                                                                                                                |   | 2,029,841       |                 | 2,275,758   |                 |
|                                                                                                                                                 |   |            |                 |        |                 |
| TOTAL                                                                                                                                                |   | $               | 3,108,216            |        | $                    | 3,422,894 |   |
|                                                                                                                                                 |   |            |                 |        |                 |

 

 

The accompanyingnotes are an integral part of these financial statements.

 

 

 

 

## **TELTONECORPORATION**

**STATEMENTS OF OPERATIONS**

For the Three Months and Six Months Ended December 31, 2001 and 2000

(Unaudited)

 

 
|                                                             |   | **Three Months Ended December 31** |          | **Six Months Ended December 31** |          |
|------------------------------------------------------------------|--------|------------------------------------|---------------|----------------------------------|---------------|
|                                                             |   | **2001**                           |          | **2000**                         |          | **2001** |   | **2000** |   |
| Net sales                                                        |   | $                                  | 2,100,770     |                             | $             | 2,429,999 |   | $ | 4,059,114 |   | $ | 5,133,643 |   |
| Cost of goods  sold                                              |   | 905,360                            |          | 1,032,925                        |          | 1,835,328 |   | 2,151,231 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Gross margin                                                     |   | 1,195,410                          |          | 1,397,074                        |          | 2,223,786 |   | 2,982,412 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Operating  expenses                                              |   |                               |          |                             |          |   |   |   |   |
| Selling, general  and administrative                             |   | 869,295                            |          | 1,492,475                        |          | 1,709,586 |   | 3,033,078 |   |
| Engineering and  development                                     |   | 380,577                            |          | 454,720                          |          | 762,556 |   | 866,556 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Total operating  expenses                                        |   | 1,249,872                          |          | 1,947,195                        |          | 2,472,142 |   | 3,899,634 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Loss  from operations                                            |   | (54,462                            | )             | (550,121                         | )             | (248,356 | ) | (917,222 | ) |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Other  (expense)   income, net                         |   | (6,848                             | )             | 28,956                           |          | (10,395 | ) | 35,445 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Gain on sale of  product line                                    |   | –                             |          | –                           |          | – |   | 1,620,000 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| (Loss) income  before tax                                        |   | (61,310                            | )             | (521,165                         | )             | (258,751 | ) | 738,223 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Income tax  provision                                            |   | –                             |          | –                           |          | – |   | – |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Net (loss)  income                                               |   | $                                  | (61,310       | )                                | $             | (521,165 | ) | $ | (258,751 | ) | $ | 738,223 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Basic net (loss)  income per common share                        |   | $                                  | (.01          | )                                | $             | (.08 | ) | $ | (.04 | ) | $ | .11 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Weighted average  common shares outstanding                      |   | 6,865,503                          |          | 6,504,836                        |          | 6,865,503 |   | 6,429,102 |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Diluted net  (loss) income per common and potential common share |   | $                                  | (.01          | )                                | $             | (.08 | ) | $ | (.04 | ) | $ | .10 |     |
|                                                             |   |                               |          |                             |          |   |   |   |   |
|                                                             |   |                               |          |                             |          |   |   |   |   |
| Weighted average  common and potential common shares outstanding |   | 6,865,503                          |     | 6,504,836                        |     | 6,865,503 |     | 7,648,612 |     |
|                                                             |   |                               |          |                             |          |   |   |   |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

 

 

### **TELTONE CORPORATION**

**STATEMENTSOF CASH FLOWS**

For the Six MonthsEnded December 31, 2001 and 2000

(Unaudited)

 
|                                                                                   |   | **Six Months Ended December 31** |          |
|----------------------------------------------------------------------------------------|--------|----------------------------------|---------------|
|                                                                                   |   | **2001**                         |          | **2000** |   |
| Cash flows from  operating activities:                                                 |   |                             |          |   |   |
| Net (loss)  income                                                                     |   | $                                | (258,751      | ) | $ | 738,223 |   |
| Adjustments to  reconcile net (loss) income to net cash used for operating activities: |   |                             |     |   |     |
| Depreciation and  amortization                                                         |   | 126,860                          |          | 90,204 |   |
| Gain on sale of  product line                                                          |   | –                           |          | (1,620,000 | ) |
| Changes in:                                                                            |   |                             |          |   |   |
| Accounts  receivable                                                                   |   | (165,530                         | )             | 576,688 |   |
| Inventories                                                                            |   | 314,381                          |          | (388,231 | ) |
| Accounts payable  and accrued liabilities                                              |   | (333,882                         | )             | (37,733 | ) |
| Other current  assets                                                                  |   | (130,471                         | )             | (99,665 | ) |
|                                                                                   |   |                             |          |   |   |
| Cash used for  operating activities                                                    |   | (447,393                         | )             | (740,514 | ) |
|                                                                                   |   |                             |          |   |   |
| Cash flows from  investing activities:                                                 |   |                             |          |   |   |
| Net proceeds  from sale of product line                                                |   | –                           |          | 1,895,184 |   |
| Investment in  property, plant and equipment                                           |   | (61,049                          | )             | (124,898 | ) |
|                                                                                   |   |                             |          |   |   |
| Cash provided by  (used for) investing activities                                      |   | (61,049                          | )             | 1,770,286 |   |
|                                                                                   |   |                             |          |   |   |
| Cash flows from  financing activities:                                                 |   |                             |          |   |   |
| Borrowings on  line of credit, net                                                     |   | 100,000                          |          | – |   |
| Borrowings on  note payable                                                            |   | 200,000                          |          | – |   |
| Payments on note  payable                                                              |   | (34,879                          | )             | (15,578 | ) |
| Employee stock  sales, net                                                             |   | –                           |          | 96,450 |   |
|                                                                                   |   |                             |          |   |   |
| Cash provided by  financing activities                                                 |   | 265,121                          |          | 80,872 |   |
|                                                                                   |   |                             |          |   |   |
| Increase  (decrease) in cash and cash equivalents                                      |   | (243,321                         | )             | 1,110,644 |   |
| Beginning of  period                                                                   |   | 333,243                          |          | 503,590 |   |
| End of period                                                                          |   | $                                | 89,922        |   | $ | 1,614,236 |   |

 

 

The accompanyingnotes are an integral part of these financial statements.

 

 

 

**TELTONE CORPORATION**

### **NOTES TO UNAUDITED FINANCIAL STATEMENTS**

 

 

**1.****             ****BASIS OF PRESENTATION**

 

The unaudited InterimFinancial Statements reflect all adjustments, which are, in the opinion ofmanagement, necessary to present fairly the financial condition and the resultsfor the interim periods.  The results ofoperations for the period ended December 31, 2001, are not necessarilyindicative of operating results to be expected for the full year.  Portions of the accompanying financialstatements are derived from the June 30, 2001, audited financial statements ofthe Company.  These interim condensedfinancial statements should be read in conjunction with the June 30, 2001audited financial statements filed on Form 10-KSB.

 

 

**2.       STOCKHOLDERS' EQUITY**

 

The Company hastwo active stock option plans.  The 1992Employees Stock Option Plan which expires in February 2002,  provides for the grant of options topurchase up to 1,900,000 common shares to key employees of the Company. Of thistotal, options to purchase 1,351,500 shares of common stock are outstanding and131,500 shares remain available for grant at December 31, 2001.   The Nonemployee Directors Stock Option Planprovides for the grant of options to purchase up to 320,000 common shares tooutside directors of the Company.  Ofthis total, options to purchase 200,000 shares of common stock are outstandingand 120,000 shares remain available for grant at December 31, 2001.  All options are granted at the fair marketvalue of the stock on the date of grant and vest over a four-year period.  The maximum term of an option may not exceedsix years.

 

 

**3.    FEDERAL INCOME TAX**

 

At December 31, 2001, approximately $12,770,000 in netoperating loss carry-forwards were available to offset future taxable incomeand expire from 2002 through 2021.  Ifsubstantial changes in the Company’s ownership should occur, there may beannual limitations on the utilization of such carry-forwards.   Although the Company has adopted theStatement of Financial Accounting Standards No. 109, “Accounting for IncomeTaxes,” there is no tax asset recognized for the net operating losscarry-forwards and tax credits due to the Company’s loss history, andtherefore, uncertainty regarding future taxable income.

 

 

**4.****          ****NET (LOSS) INCOME PER SHARE**

 

Basic net (loss)income per common share is based on the weighted average number of commonshares outstanding during the period. Diluted earnings per share is computed using the weighted average numberof common shares outstanding and potential common shares outstanding.  Potential shares result from the assumedexercise of outstanding stock options and convertible preferred stock.  Because of the net loss for the three andsix months ended December 31, 2001, and the three months ended December 31,2000, potentially dilutive common stock issuances were not included in thecalculation of diluted earnings per share as their inclusion would beantidilutive.  Diluted earnings pershare excludes the effect of antidilutive stock options, aggregating 1,351,500for the quarter ended December 31, 2001, and 16,451 for the quarter endedDecember 31, 2000.

 

 

A reconciliation of thenumber of average common shares outstanding to the number of average common andpotential common shares outstanding is as follows:

 
|                                                           |   | **Three  Months Ended December 31,** |   | **Six  Months Ended December 31,** |   |
|----------------------------------------------------------------|--------|--------------------------------------|--------|------------------------------------|--------|
|                                                           |   | **2001**                             |   | **2000**                           |   | **2001** |   | **2000** |   |
| Weighted average common  shares outstanding                    |   | 6,865,503                            |   | 6,504,836                          |   | 6,865,503 |   | 6,429,102 |   |
| Dilutive effect  of potential common shares                    |   | –                               |   | –                             |   | – |   | 1,219,510 |   |
| Weighted average common and potential commonshares outstanding |   | 6,865,503                            |   | 6,504,836                          |   | 6,865,503 |   | 7,648,612 |   |
|                                                           |   |                                 |   |                               |   |   |   |   |   |

 

 

 

**TELTONE CORPORATION**

 

 

**ITEM 2.****                       ****MANAGEMENT'SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**

**                            AND RESULTS OF OPERATIONS**

 

**Statement of Forward-LookingInformation**

 

Statementscontained herein that are not based on historical fact, including withoutlimitation statements containing the words “believes,” “may,” “will,”“estimate,” “continue,” “anticipates,” “intends,” “expects” and words ofsimilar import, constitute “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks,uncertainties and other factors that may cause the actual results, events ordevelopments to be materially different from any future results, events ordevelopments expressed or implied by such forward-looking statements.  Such factors include, among others, thefollowing: general economic and business conditions, both nationally and in theregions in which the Company operates; technology changes; competition; changesin business strategy or development plans; the ability to attract and retainqualified personnel; liability and other claims asserted against the Company;and other factors referenced in the Company's filings with the Securities andExchange Commission.  Given theseuncertainties, readers are cautioned not to place undue reliance on suchforward-looking statements.  The Companydisclaims any obligation to update any such factors or to publicly announce theresult of any revisions to any of the forward-looking statements containedherein to reflect future results, events or developments.

 

# **Overview**

 

*TeltoneCorporation develops and markets a variety of telephony solutions.  TheOfficeLink  product family extends theenterprise communications infrastructure to branch offices and other remotelocations. These products enable customers to maintain seamless connectivitybetween their customers, their offices and their mobile workforce.  The Company also provides a family oftelecom test tools used by application developers and manufacturers of telecomproducts. In addition, the Company provides line sharing products  built to unique market and  customer requirements.  These products allow devices to share asingle telephone line for remote data collection and other applications.Established in 1968, Teltone is a public corporation in Bothell, Washington,listed on the NASD electronic OTC Bulletin Board (TTNC).*

 

**Results of Operations**

 

In the secondfiscal quarter of 2002 net sales for the three months ended December 31,2001,decreased 14% over the same quarter of the prior fiscal year and grossmargin was relatively unchanged at 57%. This decrease was the result of a decrease in sales of test toolproducts.   These products are commonlyused by applications developers and manufacturers of telecom equipment andsales have been adversely affected by the downturn in manufacturing activity inthe telecom industry and lower budgets available for telecom development.  It is uncertain at this time if sales ofthese products will continue to decline or if they will increase as theeconomic climate improves.

 

Operating expensesfor the three months ended December 31, 2001,decreased 36% or approximately$697,000 over the same quarter of the prior fiscal year due to a Company-widereorganization resulting in a 32% reduction in personnel, outsourcing theprinted circuit board assembly process, and moving to a smaller, lower-costfacility.

 

Interest income ofapproximately $29,000 in the second quarter of the prior year resulted frominvested cash balances as opposed to interest expense of approximately $7,000in the period ending December 31, 2001, on borrowings.

 

In the first halfof fiscal 2002 net sales for the six months ended December 31, 2001, alsodecreased 14% as a result of reductions in sales of test tools, afteradjustment for the sale of the ASIC (Application Specific Integrated Circuits)product family in August 2000, which resulted in a gain of $1,620,000.   During this period, gross margins decreasedfrom 58% to 55% as a result of changes in product mix. Operating expenses forthe six months ended December 31, 2001,decreased 37% due to the cost reductionactivity previously discussed.  In thefirst half of fiscal 2002 the Company incurred interest expense on borrowingsof approximately $10,000 compared to $35,000 of interest income in the prioryear on the invested cash balances.

 

The Company hasapproximately $12,770,000 in net operating loss carry-forwards available tooffset future taxable income, which expire from 2002 through 2022.  If substantial changes in the Company’sownership occur, there may be annual limitations on the utilization of suchcarry-forwards.  The Company has notaccounted for the operating loss carry-forwards as a tax asset due to theuncertainty regarding the amount of future taxable income.

 

 

**Liquidity and Capital Resources**

 

The Company hadcash on hand at December 31, 2001, of approximately $90,000.  The Company has a line of credit facilityfor up to $1,500,000, subject to eligible receivables and letter of creditobligations.  At December 31, 2001,availability on the line of credit was approximately $810,000 and there was$100,000 outstanding.  The agreement iscollateralized by eligible accounts receivable, inventory, and other tangibleand intangible assets and contains financial covenants including workingcapital and debt ratios, as well as maximum loss provisions.

 

The Companyborrowed $200,000 in the first fiscal quarter pursuant to a capital equipmentterm loan to finance long-term purchases At December 31, 2001 there wasapproximately $171,000 outstanding.

 

Accountsreceivable increased approximately $166,000 due to higher sales levels in thequarter ended December 31, 2001, than the quarter ended June 30, 2001.  Inventories decreased approximately $314,000as sales in the first half reduced overstocked quantities on hand in certainproducts.

 

Capital equipmentof approximately $61,000 was purchased to support productivity tools to allowincreased efficiencies for fewer employees.

 

Cash on hand andcash generated from operations as well as the line of credit are expected toenable the Company to meet its operating and working capital needs during atleast the next twelve months.

 

 

 

**PARTII.              OTHER INFORMATION**

 
|   | Item 1.  |   | Legal Proceedings                                    |
|--------|----------|--------|------------------------------------------------------|
|   |     |   |                                                 |
|   |     |   | None                                                 |
|   |     |   |                                                 |
|   | Item  2. |   | Changes in Securities                                |
|   |     |   |                                                 |
|   |     |   | None                                                 |
|   |     |   |                                                 |
|   | Item  3. |   | Defaults Upon Senior  Securities                     |
|   |     |   |                                                 |
|   |     |   | None                                                 |
|   |     |   |                                                 |
|   | Item  4. |   | Submission of Matters  to a Vote of Security Holders |
|   |     |   |                                                 |
|   |     |   | None                                                 |
|   |     |   |                                                 |
|   | Item  5. |   | Other Information                                    |
|   |     |   |                                                 |
|   |     |   | None                                                 |
|   |     |   |                                                 |
|   | Item  6. |   | Exhibits and Reports on  Form 8-K                    |
|   |     |   |                                                 |
|   |     |   | None                                                 |

 

 

 

**SIGNATURES**

 

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 

 

 
|   |             |   | TELTONE CORPORATION |                                     |
|--------|------------------|--------|---------------------|------------------------------------------|
|   |             |   | (Registrant)        |                                     |
|   |             |   |                |                                     |   |
|   |             |   |                |                                     |   |
|   |             |   |                |                                     |   |
|   |             |   |                |                                     |   |
| Date   | February 5, 2002 |   | By                  | /s/ DEBRA L. GRIFFITH                    |   |
|   |             |   |                | Debra L. Griffith                        |   |
|   |             |   |                | President & Chief  Executive Officer |   |
|   |             |   |                |                                     |   |
|   |             |   |                |                                     |   |
|   |             |   |                |                                     |   |
| Date   | February 5, 2002 |   | By                  | /s/ DEBRA L. GRIFFITH                    |   |
|   |             |   |                | Debra L. Griffith                        |   |
|   |             |   |                | Acting Chief  Financial Officer          |   |