**U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**
**FORM 10-Q**[X]QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934.For the Quarterly Period Ended September 30, 2002.[   ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934.For the Transition Period from __________ to __________.
**COMMISSION FILE NUMBER:  0-17893**
**TELTRONICS, INC.**(Exact name of registrant as specified in its charter)
**DELAWARE**(State or other jurisdiction of incorporation or organization)
**59-2937938**(I.R.S. Employer Identification Number)
**2150 WHITFIELD INDUSTRIAL WAYSARASOTA, FLORIDA 34243**(Address of principal executive offices, including zip code)
**941-753-5000**(Registrant's telephone number, including area code)
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 [  ]

As of November 14, 2002 there were 5,731,539 shares of the Registrant's Common Stock outstanding.

**INDEX**
**PAGE****PART I.****FINANCIAL INFORMATION**   ITEM 1.FINANCIAL STATEMENTS (Unaudited)Condensed Consolidated Balance Sheets at September 30, 2002 andDecember 31, 20013-4Condensed Consolidated Statements of Operations for the three monthsand nine months ended September 30, 2002 and 20015Condensed Consolidated Statements of Cash Flows for the nine monthsended September 30, 2002 and 20016-7Notes to Condensed Consolidated Financial Statements8   ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS16   ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK21**PART II.**OTHER INFORMATION**   ITEM 1.LEGAL PROCEEDINGS22   ITEM 2.CHANGES IN SECURITIES22   ITEM 3.DEFAULTS UPON SENIOR SECURITIES22   ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS22   ITEM 5.OTHER INFORMATION22-23   ITEM 6A.EXHIBITS23   ITEM 6B.REPORTS ON FORM 8-K23**SIGNATURES AND CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER24
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**PART I - FINANCIAL INFORMATION**
**ITEM 1.     FINANCIAL STATEMENTS (Unaudited)**
**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS**

**ASSETS**
September 30,2002December 31,2001(Unaudited)**Current assets:Cash and cash equivalents$        46,115$        63,307Accounts receivable, net of allowance for doubtful accounts     of $364,596 at September 30, 2002 and $469,860 at     December 31, 20018,316,72410,021,731Costs and estimated earnings in excess of billings on     uncompleted contracts997,713638,119Inventories, net6,809,8049,175,567Prepaid expenses and other current assets647,305314,363
     Total current assets16,817,66120,213,087**Property and equipment, net4,093,5695,163,007**Goodwill, net241,371241,371**Other intangible assets, net285,760335,814**Other assets283,774339,569Total assets$	21,722,135$	26,292,848
The accompanying notes are an integral part of these condensed consolidated financial statements.

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**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS - Continued**

**LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)**
September 30,2002December 31,2001(Unaudited)**Current liabilities:     Current portion of long-term debt$   2,687,977 $   4,550,645      Current portion of capital lease obligations4,324 79,497      Accounts payable3,818,661 6,181,434      Billings in excess of costs and estimated earnings          on uncompleted contracts613,602 125,783      Accrued expenses and other current liabilities2,930,568 2,783,532      Deferred revenue1,695,903 1,755,421           Total current liabilities11,751,035 15,476,312 **Long-term liabilities:     Long-term debt, net of current portion8,725,037 9,034,748      Capital lease obligations, net of current portion--- 963      Other long-term liability21,000 3,744,355           Total long-term liabilities8,746,037 12,780,066 **Commitments and contingencies**Shareholders' equity (deficiency):     Common stock, $.001 par value, 40,000,000 shares          authorized, 5,731,539 and 5,105,844 issued and          outstanding at September 30, 2002 and          December 31, 2001, respectively.5,732 5,106      Non-voting common stock, $.001 par value, 5,000,000 shares          authorized, zero shares issued and outstanding.--- ---      Preferred Series A stock, $.001 par value, 100,000 shares          authorized, 100,000 shares issued and outstanding.100 100      Preferred Series B Convertible stock, $.001 par value, 25,000          shares authorized, 12,625 shares issued and outstanding.13 13      Preferred Series C Convertible stock, $.001 par value, 50,000          shares authorized, 40,000 shares issued and outstanding40 ---      Additional paid-in capital23,739,212 19,277,099      Accumulated other comprehensive loss(43,160)(2,941)     Accumulated deficit(22,476,874)(21,242,907)          Total shareholders' equity (deficiency)1,225,063 (1,963,530)          Total liabilities and shareholders' equity (deficiency)$	21,722,135 $	26,292,848 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)**
Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2002200120022001**Net sales     Product sales and installation$	12,106,848 $	8,471,378 $	38,496,377 $	49,273,048      Maintenance and service2,286,042 1,767,187 6,231,323 5,043,555 14,392,890 10,238,565 44,727,700 54,316,603 Cost of sales8,818,823 7,008,312 28,074,831 37,123,385 **Gross profit5,574,067 3,230,253 16,652,869 17,193,218 **Operating expenses:     General and administrative1,161,716 1,511,918 3,907,705 4,580,460      Sales and marketing2,491,061 2,811,835 8,148,484 9,053,225      Research and development1,195,073 1,431,591 3,244,486 4,585,195      Depreciation and amortization362,785 274,478 1,050,652 1,069,160 5,210,635 6,029,822 16,351,327 19,288,040 Income (loss) from operations363,432 (2,799,569)301,542 (2,094,822)**Other income (expense):     Interest(266,540)(391,144)(928,237)(1,192,222)     Financing(93,021)(102,820)(257,573)(277,944)     Litigation costs--- --- (15,500)---      Other40,996 (50,981)29,190 (44,131)(318,565)(544,945)(1,172,120)(1,514,297)Income (loss) before income taxes44,867 (3,344,514)(870,578)(3,609,119)Provision for income taxes (benefit)(2,361)14,240 11,711 25,804  **Net income (loss)**47,228 (3,358,754)(882,289)(3,634,923) Dividends on Preferred Series     B and C Convertible  Stock150,500 37,875 351,678 113,625 Net loss available to common     shareholders$	(103,272)$	(3,396,629)$	(1,233,967)$	(3,748,548) **Net loss per share:**     Basic$(0.02) $(0.68) $(0.23) $(0.75)      Diluted$(0.02) $(0.68) $(0.23) $(0.75) 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)**
Nine Months Ended September 30,20022001**OPERATING ACTIVITIES:     Net loss$	(882,289)$	(3,634,923)     Adjustments to reconcile net loss to net cash     provided by operating activities:          Provision for doubtful accounts(107,079)(85,680)          Provision for slow moving inventories1,609,408 233,740           Depreciation and amortization1,547,664 1,567,651           Amortization of other intangible assets and goodwill50,054 77,261           Amortization of deferred financing costs200,150 155,734           Shares issued for 401(k) match188,629 156,701           Gain on sale of property and equipment(25,020)---      Changes in operating assets and liabilities:          Accounts receivable1,812,086 (4,663,073)          Net decrease in costs and estimated earnings in excess               of billings on uncompleted contracts128,225 ---           Inventories756,355 2,296,242           Prepaid expenses and other current assets(317,192)(134,992)          Other assets21,095 63,962           Accounts payable(2,362,773)4,099,493           Accrued expenses and other current liabilities343,582 1,169,935           Deferred revenue(59,518)822,498 Net cash flows provided by operating activities2,903,377 2,124,549 **INVESTING ACTIVITIES:     Acquisition of property and equipment(478,226)(1,155,900)     Proceeds from sale of property and equipment25,020 899 Net cash flows used in investing activities(453,206)(1,155,001)**FINANCING ACTIVITIES:     Net borrowings (repayments) on line of credit(1,767,590)14,196      Net repayments on loans, notes and capital leases (480,925)(1,015,170)     Proceeds from issuance of common stock113,950 183,301      Dividends paid on Preferred Series B and C Convertible Stock(292,579)(113,625)Net cash flows used in financing activities(2,427,144)(931,298)Effect of exchange rate changes on cash(40,219)(2,003)Net increase (decrease) in cash and cash equivalents(17,192)36,247 Cash and cash equivalents - beginning of period63,307 35,292 Cash and cash equivalents - end of period$    46,115 $      71,539 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued**

**(Unaudited)**Nine Months Ended September 30,20022001**Supplemental noncash financing and investing activities:     Conversion of other long-term liability to Preferred          Series C Convertible stock$	3,744,355$          ---     Conversion of certain accrued expenses to Preferred          Series C Convertible stock255,645---     Unpaid dividends on Preferred Series C Convertible stock          included in accrued expenses59,099---     Deferred financing fee of $21,000 less amortization          expense of $5,250, included in prepaid expenses          and other current assets15,750--     Deferred financing fee of $160,200 included in          amortization of deferred financing costs, as a result of          modifying terms of certain warrants------
The accompanying notes are an integral part of these condensed consolidated financial statements.

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**TELTRONICS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION**
Teltronics, Inc. ("Teltronics" or "Company"), a Delaware corporation, designs, develops, installs, manufactures and markets electronic hardware and application software products, and engages in contract manufacturing for the telecommunication industry.

The accompanying condensed consolidated financial statements include the accounts of the Company and are comprised of its wholly-owned subsidiaries TTG Acquisition Corp. and Teltronics, S.A. de C.V.  In July 2002, the Company sold ownership of its Interactive Solutions, Inc. ("ISI") subsidiary and converted all debt and obligations owed to the Company by ISI to 50,000 shares of Series A Preferred stock of ISI, which were pledged as collateral to Finova Mezzanine Capital Inc. (see Note 5).  In connection with the sale of ISI, the Company's ownership of ISI was reduced from 85% to 15%.  Management of the Company has determined the value of the Series A Preferred stock to not be material, as a result, no gain on the sale of ISI was recognized.  The Company's sale of ISI enables the Company to focus on our core business.  All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fairpresentation have been included.  Operating results for the three and nine month periods ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002.

The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

For further information, refer to the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2001.

Certain amounts in our prior period financial statements have been reclassified to conform to the current period presentation.

**NOTE 2 - COMPREHENSIVE INCOME (LOSS)**
Total comprehensive income (loss) is as follows:
Three Months EndedSeptember  30,Nine Months EndedSeptember 30,2002200120022001Net income (loss)$     47,228 $	(3,358,754)$	(882,289)$	(3,634,923)Foreign currency translation(24,086)(938)(40,219)(2,003)Total comprehensive income (loss)$     23,142 $	(3,359,692)$	(922,508)$	(3,636,926)
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**NOTE 3 - NET LOSS PER SHARE**
Basic net loss per share is computed by dividing net loss, adjusted for preferred stock dividends, by the weighted average number of issued common shares outstanding during the applicable period.  Diluted net loss per share is computed by dividing net loss, adjusted for preferred stock dividends, by the weighted average number of issued common shares and potential common shares.  Potential common shares consist of convertible preferred stock,stock options (vested and unvested) and warrants and are computed using the treasury stock method.  Certain potential common shares for 2002 and 2001 were anti-dilutive and were not included in the calculation of diluted net loss per share.
The following table sets forth the unaudited computation of basic and diluted net loss per share:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2002200120022001**BasicNet income (loss)$     47,228 $	(3,358,754)$     (882,289)$	(3,634,923)Preferred dividends(150,500)(37,875)(351,678)(113,625)     Net loss available to common          shareholders$	(103,272)$	(3,396,629)$	(1,233,967)$	(3,748,548)Weighted average shares outstanding5,577,152 5,012,622 5,384,481 4,999,189      Net loss per share$ (0.02)$ (0.68)$ (0.23)$ (0.75)**Diluted**Net income (loss)$      47,228$	(3,358,754)$   (882,289)$	(3,634,923)Preferred dividends(150,500)(37,875)(351,678)(113,625)     Net loss available to common          shareholder$	(103,272)$	(3,396,629)$	(1,233,967)$	(3,748,548)Weighted average shares outstanding5,577,152 5,012,622 5,384,481 4,999,189 Effect of dilutive securities     Employee stock options--- --- --- ---      Convertible preferred stock--- --- --- ---      Dilutive potential common shares5,577,152 5,012,622 5,384,481 4,999,189      Net loss per share$ (0.02)$ (0.68)$ (0.23)$ (0.75)
**NOTE 4 - INVENTORIES**
The major classes of inventories are as follows:September 30,2002December 31,2001(Unaudited)Raw materials$ 4,627,581$ 5,963,289Work-in-process690,8491,136,911Finished goods1,491,3742,075,367$ 6,809,804$ 9,175,567
The reserve for slow moving inventories was $2,270,000 and $1,235,000 as of  September 30, 2002 and December 31, 2001, respectively.
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**NOTE 5 - DEBT**
Debt consists of the following:
September  30,2002December 31,2001
(Unaudited)
Secured promissory note - payable to Harris Corporation in monthly installments of $96,805 with interest at 8% commencing May 1, 2002 witha balloon payment of $7,196,801 due May 2006.$ 8,980,265$ 9,196,801
Bank line of credit - On December 22, 1998, the Company's principal lender, The CIT Group/Business Credit, Inc. entered into an Amendmentto the Company's existing Line of Credit Facility and Term Loan.  Underthe Amendment, the interest rate is 2.0% above prime rate, maximumavailability is $5,500,000 and a prepayment penalty is assessed at 1.5%.On October 28, 2000, the Line of Credit Facility was extended to October28, 2002.  Substantially all of the Company's present and future assets,except for fixed assets, are pledged as collateral with borrowings limitedto certain gross availability formulas based on accounts receivable andinventory as defined in the agreement.  The facility provides for minimumloan fees, unused line fees and renewal term fees.  The outstandingborrowings are classified as a current liability.  A director of the Companyhas personally guaranteed a portion of the facility.  At September 30,2002, the Company had $2,138,436 available pursuant to this facility.  Theavailability of this unused line of credit is restricted based on availabilityformulas.  The Bank line of credit was subsequently amended on October16, 2002, as further described in Note 10.1,390,900	3,158,490
Senior Secured Promissory Note - On September 30, 2002, the Company entered into a Fourth Amended and Restated Senior Secured PromissoryNote with a revised maturity date of August 13, 2003, interest at 14% andmonthly principal and interest payments of $55,000, commencing October1, 2002.830,9641,000,000
Notes payable to finance companies, payable in monthly installments of $4,200 with interest at 5%.  The notes mature through May 2007 and arecollateralized by vehicles.210,885160,752
Notes payable - officer, payable upon demand with interest accruing at 8% per annum.---69,350Total11,413,01413,585,393Less current portion2,687,9774,550,645Long-term portion$ 8,725,037$ 9,034,748
The Company maintains a promissory note to Harris Corporation ("Harris") related to the acquisition of the 20-20® Product Line, which was restructured on March 27, 2002, under a Master Restructuring Agreement.  Under this restructuring, the principal and capitalized interest total was stated at $9,196,801.  The Company made principal payments of $500,000 during the three month period ended March 31, 2002.  This amount was classified withinaccrued expenses and other current liabilities as of December 31, 2001.  Monthly payments of $96,805 in principal and interest commenced in May 2002 and continue until May 2006 at which time a balloon payment of the remaining

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unpaid balance of $7,196,801 will be due.  The interest rate is 8%.  In conjunction with the restructuring, Harris agreed to convert $4,000,000 of accrued expenses owed by the Company for additional inventory and servicesprovided in connection with the transition of the 20-20® Switching Product Line to the Company, to 40,000 shares of Preferred Series C Convertible stock.

The Note is secured by a first lien on certain of the acquired assets and a lien on the Company's other assets.
On February 25, 1998, the Company entered into senior Secured Loans ("Loans") for $1,000,000 and $280,000.  Interest was initially paid quarterly starting May 15, 1998.  On May 12, 2000, the Company amended and restated  the $1,000,000 Loan Agreement originally entered into on February  25, 1998 with Finova Mezzanine Capital Corp. ("Finova") and originally due February 25, 1999 to  extend the maturity to February 13, 2002.  On May 1, 2002, Finova and the Company entered into a Third Amended and Restated Senior Secured Promissory Note.  On September 30, 2002, Finova and the Company entered into a Fourth Amended and Restated Senior Secured Promissory Note ("Note").  Under the terms of the Note, monthly principal and interest payments of $55,000 are required commencing October 1, 2002 until August 13, 2003 at which time all outstanding principal and interest isdue.  The interest rate was increased from 12% to 14%.

The Holder of the Loans previously received 890,000 warrants to purchase the Company's Common stock at an exercise price of $2.75 per share.  These warrants were exercisable in whole, or in part, at any time during a five-year holding period beginning on the date of issuance.   In connection with the Third Amended and Restated SeniorSecured Promissory Note, Finova and the Company entered into an Amended and Restated Stock Purchase Warrant ("Warrant") that modified the terms of the 890,000 previously issued warrants to change the exercise price to $1.00 per share and extend the exercise period to February 26, 2004.  The Note contains certain covenants.

As a result of modifying the exercise price and extending the exercise period of the 890,000 warrants, the Company recorded a deferred financing fee of approximately $160,000 in May 2002.  This fee was expensed as a financing cost in our condensed consolidated statements of operations from May 1, 2002 through August 13, 2002.

The covenants in the Secured Promissory Note, Loan and Security Agreement and the Senior Secured Loans restrict certain sales of assets; mergers and acquisitions; borrowings and guarantees; dividends and redemptions; creation of liens; investments; issuance of subsidiary shares; and transactions with affiliates.

**NOTE 6 - SHAREHOLDERS' EQUITY**
The total number of shares of all classes of capital stock, which the Company has the authority to issue is 50,000,000 shares divided into three classes of which 5,000,000 shares, par value $.001 per share are designated Preferred stock, 40,000,000 shares, par value $.001 per share are designated Common stock and 5,000,000 shares, par value $.001 per share, are designated Non-Voting Common stock.
**(A)   Preferred Stock** - The Preferred Series A stock are restricted securities owned by the Company's Director and Senior Vice President of Business Development and subject to resale restrictions including the right of the Company to approve or disapprove any sale, transfer or disposition to any third party not controlled by the Director.  Each share is entitled to 400 votes and is not entitled to any dividends.  Accordingly, this would give the Senior Vice President voting control of the Company.

The Preferred Series B Convertible stock provided for a $12 per share annual dividend, payable quarterly and increasing to $20 in May 2002.  On April 22, 2002, the terms of the Preferred Series B Convertible stock were modified.  On February 26, 2002, the annual dividend rate increased from $12 per share to $16 per share,payable quarterly.  The annual dividend rate will increase to $18 per share on February 27, 2004 and to $20 per share on February 27, 2005.  The holder of the Preferred Series B Convertible stock initially had the right at its option to convert to the Company's Common stock at $2.75 per share.  The Company adjusted the conversion price on April 22, 2002 for the Preferred Series B Convertible stock from $2.75 to $1.75 per share in conjunction with the Third Amended and Restated Senior Secured Promissory Note.  In May 2002, the Company has the right to redeem the Preferred Series B Convertible stock in full at 100% of the face value plus accrued and unpaid dividends.  The PreferredSeries B Convertible stock contains certain financial covenants.

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The Company issued 40,000 shares of Preferred Series C Convertible stock to Harris Corporation in March 2002 in connection with the Master Restructuring Agreement.  The Preferred Series C Convertible stock provides for a $10 per share annual dividend, payable quarterly beginning May 15, 2002.  The annual dividend increases to $20 per share beginning April 1, 2007.  The holder of the Preferred Series C Convertible stock has the right at its optionto convert to the Company's Common stock at $2.75 per share subject to adjustment.  The Company has the right to redeem all or a portion of the then outstanding Preferred Series C Convertible stock at any time at 100% of the face value plus accrued and unpaid dividends.

**(B)   Warrants** - In connection with the Third Amended and Restated Senior Secured Promissory Note, Finova and the Company entered into an Amended and Restated Stock Purchase Warrant ("Warrant") that modified the terms of the 890,000 previously issued warrants to change the exercise price to $1.00 per share and extend the exercise period to February 26, 2004.

**NOTE 7 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS**
September 30,2002December 31,2001(Unaudited)Costs incurred on uncompleted contracts$ 3,898,817 $   770,551 Estimated earnings2,308,092 534,505  6,206,909 1,305,056 Less: Billings to date5,822,798  792,720 $      384,111 $      512,336 Included in accompanying condensed consolidated balance      sheets under the following captions:Costs and estimated earnings in excess of billings on      uncompleted contracts$    997,713 $    638,119 Billings in excess of costs and estimated earnings on      uncompleted contracts(613,602)(125,783)$      384,111 $      512,336 
**NOTE 8 - GOODWILL**
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 142, *Goodwill and Other Intangible Assets.*  SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized but instead tested for impairment at least annually. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values.  The Company fully adopted the provisions of SFAS No. 142 effective January 1, 2002.

Under SFAS No. 142, the Company is required to perform a transitional impairment test for its goodwill as of the date of adoption.  Step one of the transitional goodwill impairment test, which compares the fair values of the Company's reporting units to their respective carrying values, was completed by June 30, 2002.  The Company has concluded that no impairment is required as of January 1, 2002.  The Company will perform its annual goodwill impairment test during the fourth quarter of 2002.

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The following is a summary of net loss and net loss per share for the three months and nine months ended September 30, 2001 as adjusted to remove the amortization of goodwill:
Three Months  EndedSeptember 30, 2001Nine Months EndedSeptember 30, 2001Net loss - as reported$(3,358,754)$(3,634,923)Goodwill amortization 5,457  16,370  Net loss - adjusted$(3,353,297)$(3,618,553)Basic loss per share of common stock:Net loss - as reported $(0.68)$(0.75)Goodwill amortization ---  --- Net loss - adjusted$(0.68)$(0.75)Diluted loss per share of common stock:Net loss - as reported$(0.68)$(0.75)Goodwill amortization ---  --- Net loss - adjusted$(0.68)$(0.75)
Intangible assets with definite useful lives are amortized over their respective estimated useful lives to their estimated residual values.  The following is a summary of intangible assets at December 31, 2001 and September 30, 2002:
December 31, 2001GrossCarryingAmountAccumulatedAmortizationTotal**Definite useful livesCustomer list$  232,332$    76,917$  155,415Patent239,89959,500180,399     Total$  472,231$  136,417$  335,814September 30, 2002GrossCarryingAmountAccumulatedAmortizationTotal**Definite useful livesCustomer list$  232,332$  116,088$  116,244Patent239,89970,383169,516     Total$  472,231$  186,471$  285,760
Amortization expense related to intangible assets was $16,685  and $20,297 for the three months ended September 30, 2002 and 2001, respectively.  Amortization expense related to intangible assets was $50,054 and $60,891 for the nine months ended September 30, 2002 and 2001, respectively.  Estimated amortization expense related to intangible assets for each of the years in the five year period ending December 31, 2006 and thereafter is: 2002 -$66,740;  2003 - $66,740;  2004 - $50,396;  2005 - $29,580;  2006 - $14,510;  thereafter - $107,848.

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**NOTE 9 - SEGMENT INFORMATION**
The Company's operations are classified into three reportable segments, Teltronics, ISI and Mexico.  As further described in Note 1, ISI was sold in July 2002.  Each reportable segment is staffed separately, requires different technology and marketing strategies and sells to different customers.

The accounting policies of the Segments are the same.  Intersegment sales and transfers are recorded at Teltronics' cost plus a normal margin for electronic manufacturing.  Company management evaluates performance based on segment profit, which is net income (loss) before taxes, excluding nonrecurring gains or losses.

The following table presents unaudited information about reportable segment operations and assets.
Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2002200120022001**Net sales     Teltronics$	14,184,000 $ 	9,322,000 $	43,953,000 $	52,732,000      Mexico181,000 587,000 588,000 590,000      ISI28,000 330,000 187,000 995,000      Total net sales$	14,393,000 $	10,239,000 $	44,728,000 $	54,317,000 **Depreciation and amortization     Teltronics$     483,000 $     441,000 $ 	1,521,000 $ 	1,531,000      Mexico3,000 1,000 7,000 3,000      ISI6,000 3,000 20,000 34,000      Total depreciation and amortization$     	492,000 $     	445,000 $ 	1,548,000 $ 	1,568,000 **Interest and financing costs     Teltronics$     	360,000 $     	494,000 $ 	1,186,000 $ 	1,470,000      Mexico--- --- --- ---      ISI--- --- --- ---      Total interest and financing costs$     	360,000 $     	494,000 $ 	1,186,000 $ 	1,470,000 **Segment profit (loss)     Teltronics$      	69,000 $	(3,344,000)$   (891,000)$	(3,038,000)     Mexico(7,000)111,000 (10,000)(157,000)     ISI(17,000)(112,000)30,000 (414,000)     Income (loss) before income taxes$      	45,000 $	(3,345,000)$   (871,000)$	(3,609,000)**Segment assets     Teltronics$	21,550,000 $	30,690,000 $	21,550,000 $	30,690,000      Mexico133,000 201,000 133,000 201,000      ISI39,000 321,000 39,000 321,000      Total segment assets$	21,722,000 $	31,212,000 $	21,722,000 $	31,212,000 **Acquisition of property and equipment**     Teltronics$     	189,000 $     	186,000 $     	478,000 $ 	1,095,000      Mexico--- --- --- 43,000      ISI--- 4,000 --- 18,000      Total acquisition of property and          equipment$     	189,000 $     	190,000 $     	478,000 $ 	1,156,000 
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**NOTE 10 - SUBSEQUENT EVENTS**
On October 16, 2002, the Company entered into the Thirteenth Amendment to Loan and Security Agreement (the "Amendment") with The CIT Group/Business Credit, Inc. ("CIT").   This Amendment extended the term from October 28, 2002 to October 28, 2004 and modified the interest rate from prime plus 2.0% to prime plus 2.5%.  The applicable margin (2.5%) may vary from 2.0% to 3.0% depending on the Company's financial results for the year ending December 31, 2002 and 2003.  In connection with this Amendment, CIT has released a director of the Company from any and all obligations under any guaranty agreement or arrangement in favor of CIT.  The Companyincurred an annual renewal loan fee of $55,000 with respect to this Amendment.

On October 31, 2002, the Company and Tri-Link Technologies Inc. ("Tri-Link") entered into an Agreement of Purchase and Sale ("Agreement") with a closing date on the earlier of May 1, 2003 or the fifth business day following the earliest day on which Tri-Link and the Company have agreed in writing that the Developed Vortex Technology fully meets the specifications outlined in the Agreement.  The Agreement includes voice over internet protocol("VoIP") technology that is in the development stage.  The Company will continue the development of this technology and expects to release a VoIP product during the second quarter of next year.

The Company will be acquiring the existing Vortex Technology, the Developed Vortex Technology, and all tangible and intangible assets associated with the existing Vortex Technology and the Developed Vortex Technology.

The consideration for the assets to be purchased from Tri-Link will be $2,500,000, of which $250,000 will be paid at closing with the remaining balance of $2,225,000 being paid in quarterly installments of $187,500 with interest at 6.5%.  Tri-Link shall be entitled, at its sole option, to convert at any time and from time to time, increments of not less than $250,000 of the balance of the purchase price then remaining unpaid into shares of the Company's voting common stock at the rate of $1.00 per share.  The total of all amounts that can be converted is $750,000.

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**ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**FORWARD-LOOKING STATEMENTS**

A number of statements contained in this Quarterly Report on Form 10-Q are forward-looking statements which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, competitive market conditions, successful integration of acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses, the ability to comply with the rules for continued quotation on the Over the Counter Bulletin Board and other factors described in the Company's filings with the Securities and Exchange Commission.  The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties.

**Critical Accounting Policies**

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements that have been prepared under generally accepted accounting principles.  The preparation of financial statements in conformity with generally accepted accounting principles requires our management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could materially differ from those estimates because the estimates represent judgments made at specific dates for events that are ongoing.  Critical accounting policies have the potential to have the most significant impact on the consolidated financial statements.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, alladjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and nine month periods ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002.

Our critical accounting policies and estimates are as follows:

*Revenue recognition.  Teltronics generates revenues through different sources.-  Contract Manufacturing.  Revenues from sales of product including our contract manufacturing business are recognized when the product is shipped.  The Company's policy is to recognize revenue and related costs when the order has been shipped from our facilities, which is also the same point that title passes under the terms of the purchase order.  Based on the Company's history of providing contract manufacturing services, we believe that collectibility is reasonably assured.- Performance of Construction-Type Contracts.  The Company's policy is to recognize revenue and related costs on the construction-type contracts in accordance with Statement of Position 81-1 *Accounting for Performance of Construction-Type and Certain Production-Type Contracts*(SOP 81-1).  SOP 81-1 provides two generally accepted methods of accounting for construction or production type contracts: (1) the percentage of completion method and (2) the completed contract method.  The determination of which of the two methods is preferable should be based on a careful evaluation of circumstances because the two methods should not be acceptable alternatives for the same circumstances.  
The percentage of completion method recognizes revenue and related costs as work on a contract progresses.

16The completed contract method recognizes revenue and related costs when the contract is completed and all costs and related revenues are reported as deferred items in the balance sheet until that time.
Our primary construction-type contracts are with the Board of Education of the City of New York.  We accepted the assignment of a contract from Harris Corporation in connection with the Company's acquisition of Harris Corporation's 20-20® Switching Product Line in June 2000.  This contract, with the Board of Education of the City of New York ("the Board"), specified that the Contractor (Teltronics) would provide telephone systems and peripheral equipment and cabling including systems maintenance and support.
Installation is awarded on a fixed price and a school-by-school basis and maintenance is awarded for a group of schools.  The term is segmented between installation and maintenance and is of a two year and 10 year period, respectively.  Installation of each school requires between 4 to 16 weeks.  The requirements agreement also provides for the transfer of risk of loss for each school at the date that systems are operational with title passing upon final acceptance.
In applying this policy, estimates of project installation cost and the percentage of work completed are updated on a monthly basis for each school.  To the extent that billings exceed recognized revenues, deferred revenue is established.  To the extent actual costs incurred are less than or greater than recognized expenses, accrual or prepaid balances are established.  The Company evaluates each construction-type contract to determine the appropriate method of accounting.
-  Maintenance and service.  Revenue from support and maintenance activities is recognized ratably over the term of the maintenance period and the unrecognized portion is included in deferred revenue.
*Allowance for doubtful accounts.*A considerable amount of judgment is required when we assess the ultimate realization of receivables, including assessing the probability of collection and the current credit-worthiness of each customer.  For all customers, we recognize reserves for bad debts based on the length of time the receivables are past due.  We have evaluated our reserves based on the recent downturn in the economy and have increased them as necessary. We may record additional changes to our allowance for doubtful accounts in the future.

*Slow moving inventory.  We write down our slow moving inventory equal to the difference between the carrying value of the inventory and the estimated market value based on assumptions about future product life cycles, product demand and market conditions.  If actual product life cycles, product demand or market conditions are less favorable than those projected by management, additional inventory write-down may be required.
*Impairment of Intangible and Long Lived Assets.  Intangibles and long-lived assets consist primarily of goodwill and fixed assets.  We periodically evaluate the recovery of intangible and long lived assets when  impairment indicators are present.  Our judgments regarding the existence of impairment indicators are based on legal factors, market conditions and the operational performance of our business.  Future events could cause us to conclude that impairment indicators exist and that goodwill and other intangible or long lived assets associated with our business are impaired.  Beginning in 2002, the methodology for assessing potential impairments of intangible and long lived assets changed based on new accounting rules issued by the Financial Accounting Standards Board, and related practice implementation issues.  The Company has determined there is no effect of adopting the new accountingrules on its results of operations and financial position.
*Warranty and Service.  The Company provides a limited warranty on most of its products, for a period of 3 to 18 months (depending on the product), under which the Company agrees to repair or replace, at the Company's sole discretion, units defective in material or workmanship, provided the equipment has not been subjected to alteration or abuse.  The Company's technical service and engineering staff provide support services over the telephone to customers with installation or operational questions.  Warranty and other repair services are provided by the Company at its facility in Sarasota, Florida.
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*Contingencies and Litigation.*We are subject to proceedings, lawsuits and other claims related to class action lawsuits and other matters.  We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses.  A determination of the amount of loss accrual required, if any, for these contingencies are made after careful review of each individual issue.  The required accruals may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

**RESULTS OF OPERATIONS**

The following unaudited tables set forth certain data, expressed as a percentage of net sales, from the Company's unaudited condensed consolidated Statements of Operations for the three and nine month periods ended September 30, 2002 and 2001.
Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2002200120022001Net sales100.0% 100.0% 100.0% 100.0% Cost of sales61.3% 68.5% 62.8% 68.3%      Gross profit38.7% 31.5% 37.2% 31.7% Operating expenses:     General and administrative8.1% 14.8% 8.7% 8.4%      Sales and marketing17.3% 27.5% 18.2% 16.7%      Research and development8.3% 14.0% 7.3% 8.4%      Depreciation and amortization2.5% 2.7% 2.3% 2.0% 36.2% 59.0% 36.5% 35.5%      Income (loss) from operations2.5% (27.5%)0.7% (3.8%)Other income (expense):     Interest(1.9%)(3.8%)(2.1%)(2.2%)     Financing(0.6%)(1.0%)(0.6%)(0.5%)     Litigation costs--- --- --- ---      Other0.3% (0.5%)0.1% (0.1%)(2.2%)(5.3%)(2.6%)(2.8%)     Income (loss) before income taxes0.3% (32.8%)(1.9%)(6.6%)     Provision for income taxes (benefit)--- --- --- ---       Net income (loss)     0.3% (32.8%)(1.9%)(6.6%)
**Net Sales**
Net sales increased 41% for the three month period ended September 30, 2002, as compared to the same period in 2001.  Net sales decreased 18% for the nine month period ended September 30, 2002, as compared to the same period in 2001.  As noted in our Critical Accounting Policies, certain projects are accounted for on the percentage of completion or completed contract method.  The $20 million project with the City of New York Board of Education (the "Board") that commenced in early 2001 was accounted for on the percentage of completion method.  This project was also substantially completed by June 30, 2001.  In 2002, the projects with the Board have extended over a longer period of time than the $20 million project in 2001.  In addition, there were projects with IBM in 2002 that were accounted for on the completed contract method.  These projects with IBM also extend over a period of time in which net sales are not recognized until completion or acceptance of the projects.  The slow-down in the telecommunication market and the timing of net sales for projects on the percentage of completion and completed

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contract method with the Board and IBM are the primary factors for the fluctuation in net sales for the three month period and nine month period ended September 30, 2002, as compared to the same periods in 2001.  During the three month period and nine month period ended September 30, 2002, net combined sales to the Board and IBM totaled $4.9 million and $16.0 million, respectively.

**Gross Profit Margin**

The improvement in our gross profit margin is due to changes in product mix and an improvement in our project management over those projects that require more attention due to the extended nature of the project.

**Operating Expenses**

Operating expenses decreased $819,000 and $2.9 million for the three month period and nine month period ended September 30, 2002, respectively, as compared to the same periods in 2001.

General and administrative expenses decreased $350,000 and $673,000 for the three month period and nine month period ended September 30, 2002, respectively, as compared to the same periods in 2001.  The decreases wereprimarily related to a reduction in the operating expenses related to the 20-20 Switching Product Line in 2001.

Sales and marketing expenses decreased $321,000 and $905,000 for the three month period and nine month period ended September 30, 2002, respectively, as compared to the same periods in 2001.  The decreases were a result of the reductions in work force implemented during 2001 and reduced commissions in 2002 that were partially offset by personnel hired in December 2001 and January 2002, for our direct sales efforts in our new marketplaces located in Salt Lake City, Utah and Petaluma, California.

Research and development expenses decreased $237,000 and $1.3 million for the three month period and nine month period ended September 30, 2002, respectively, as compared to the same periods in 2001.  The decreaseswere primarily due to the reductions in work force implemented during 2001 that were partially offset by costsassociated with developing new products.

**Other Expenses**

Other expenses decreased $226,000 and $342,000 for the three month period and nine month period endedSeptember 30, 2002, respectively, as compared to the same periods in 2001.  The decreases resulted primarily fromreductions in interest expense due to prime rate reductions and overall decrease in debt.

**LIQUIDITY AND CAPITAL RESOURCES**

**Net cash flows provided by operating activities**

Net cash flows provided by operating activities were $2.9 million for the nine month period ended September 30, 2002.  The $2.9 million was comprised of the following items: (1) net loss of $882,000, (2) non-cash expenses of $3.5 million, (3) net increase in operating assets of $2.4 million, and (4) net decrease in operating liabilities of $2.1 million.  The net increase in operating assets was primarily a result of a decrease in accounts receivable of $1.8 million.  The net decrease in operating liabilities was primarily a result of a decrease in accounts payable of $2.4 million caused by projects commencing in 2001 and completed in 2002 for IBM and improved cash flow as a result of the reduction in accounts receivable.

Net cash flows provided by operating activities were $2.1 million for the nine month period ended September 30, 2001.  The $2.1 million was comprised of the following items: (1) net loss of $3.6 million, (2) non-cash expenses of $2.1 million, (3) net decrease in operating assets of $2.4 million, and (4) net increase in operating liabilities of $6.1 million.  The net decrease in operating assets was primarily a result of an increase in accounts receivable of $4.7 million, which was partially offset by a decrease in inventories of $2.3 million.  The net increase in operating liabilities was primarily a result of an increase in accounts payable of $4.1 million and accrued expenses of $1.2 million.  The

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increases in accounts receivable, accounts payable and accrued expenses were caused by the substantial completion of a $20 million project with the City of New York Board of Education as of June 30, 2001.

**Net cash flows used in investing activities**

Net cash flows used in investing activities were $453,000 for the nine month period ended September 30, 2002.  The Company acquired property and equipment of $478,000, which was offset by $25,000 of proceeds from the sale of property and equipment.

Net cash flows used in investing activities were $1.2 million for the nine month period ended September 30, 2001.  The Company acquired property and equipment of $1.2 million.

**Net cash flows used in financing activities**

Net cash flows used in financing activities were $2.4 million for the nine month period ended September 30, 2002.  The $2.4 million was comprised of the following items: (1) net repayments of $1.8 million on the line of credit, (2) net repayments of $481,000 on loans, notes and capital leases, (3) proceeds of $114,000 related to the Employee Stock Purchase Plan, and (4) dividends paid of $293,000 on Preferred Series B and C Convertible stock.

Net cash flows used in financing activities were $931,000 for the nine month period ended September 30, 2001.  The $931,000 was comprised of the following items: (1) net borrowings of $14,000 on the line of credit, (2) net repayments of $1.0 million on loans, notes and capital leases, (3) proceeds of $183,000 related to the EmployeeStock Purchase Plan, and (4) dividends paid of $114,000 on Preferred Series B Convertible stock.

**Liquidity**

As of September 30, 2002, the Company had cash and cash equivalents of $46,000 as compared to $63,000 as of December 31, 2001.  Working capital as of September 30, 2002 and December 31, 2001 was $5,067,000 and $4,737,000, respectively.  Principal obligations as of September 30, 2002 were comprised primarily of the following items: (1) Promissory note payable to Harris Corporation of $8,980,000 in which $420,000 is expected to be paidwithin the next twelve months, (2) Bank line of credit payable to CIT of $1,391,000, and (3) Senior Secured Promissory Note payable to Finova of $831,000 that matures on August 13, 2003.

The credit facility with CIT is further described in Note 5, as well as Note 10 with respect to the Amendment executed on October 16, 2002, to the unaudited condensed consolidated financial statements.

We believe that our cash balances and the cash flows generated by operations should be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next twelve months; however, since our operating results may fluctuate significantly as a result of a decrease in customer demand or the acceptance of our products, our ability to generate positive cash flows from operations may be jeopardized.  As a result, we may require additional funds through public or private equity financings or from other sources.  We may not be able to obtain adequate or favorable financing at that time.  Any financing we obtain may dilute your ownership interests.  In addition, if our cash flows were to substantially decrease, our long-lived assets or goodwill may become impaired and we would have to record a charge for impairment, which may be material to our financial position and results of operations.

A portion of our cash may be used to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies.  From time to time, in the ordinary course of business, we may evaluate potential acquisitions of such businesses, products or technologies.  We anticipate that our cash requirements for investing activities for the remainder of 2002 should not be significant.

The Company has engaged the investment banking firm of Atlantic American Capital Advisors, LLC, as financial advisor to assist the Company in developing and exploring strategic opportunities, which may include raising capital, mergers, acquisitions, strategic partnerships or joint ventures, and various other services, all ultimately designedto maximize shareholder value.  There can be no assurances that any strategic alternative will be consummated.

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**ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We have no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, 2001.

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**PART II - OTHER INFORMATION**

**ITEM 1.     LEGAL PROCEEDINGS**

There have been no changes to the legal proceedings as previously reported on Form 10-K.  Management is not aware of the commencement of any new legal proceedings.

**ITEM 2.     CHANGES IN SECURITIES** - None

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

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

At the annual meeting of stockholders on August 13, 2002, the stockholders of the Company:
- Elected the following directors to serve until the 2003 annual meeting ofthe stockholders:Norman R. Dobiesz (5,011,900 Common stock votes and all of the Series A Preferred in favor, 35,527 votes withheld);  Ewen R. Cameron (5,011,900 Common stock votes and all of the Series A Preferred in favor, 35527 votes withheld);  Carl S. Levine (5,012,833 Common stock votes and all of the Series A Preferred in favor, 34,594 votes withheld);  Gregory G. Barr ((5,012,833 Common stock votes and all of the Series A Preferred in favor, 34,594 votes withheld) and Richard L. Stevens (5,011,833 Common stock votes and all of the Series A Preferred in favor, 35,594 votes withheld).  
Ratified the appointment of Ernst & Young LLP as the Company's independent auditors for the 2002 fiscal year with 4,986,076 Common stock votes and all of the Series A Preferred in favor,  45,198 votes opposed and 16,153 abstentions.
Ratified the Amendment to the Company's Employee Stock Purchase Plan with 2,312,129 Commonstock votes and all of the Series A Preferred in favor, 143,295 votes opposed and 17,294 abstentions.
**ITEM 5.     OTHER INFORMATION
**CONTROLS AND PROCEDURES**
(a)     Evaluation of Disclosure Controls and Procedures.

          We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.

          We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date").

          Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

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(b)     Changes in Internal Controls.

          There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date.

**ITEM 6A.     EXHIBITS10.1 
Employment Agreement between the Company and Patrick G. Min dated September 9, 2002.10.2 
Employment Agreement between the Company and Robert B. Ramey dated September 9, 2002.10.3 
Thirteenth Amendment to Loan and Security Agreement dated October 16, 2002 between The CIT Group/Business Credit, Inc. and Teltronics, Inc.10.4 
First Amendment to Loan and Security Agreement, Fourth Amended and Restated Senior Secured Promissory Note and Pledge and Security Agreement dated September 30, 2002 between Finova Mezzanine Capital Inc. and Teltronics, Inc.10.5 
Agreement of Purchase and Sale of Vortex Technology dated October 31, 2002 between Tri-Link Technologies Inc. and Teltronics, Inc.99.1 Written Statement of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.99.2 Written Statement of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. 
**ITEM 6B.     REPORTS ON FORM 8-K** - None

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**SIGNATURES, AND CERTIFICATIONSOF THE CHIEF EXECUTIVE OFFICERAND THE CHIEF FINANCIAL OFFICER OF THE COMPANY**

The following pages include the Signatures page for this Form 10-Q, and two separate Certifications of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) of the Company.

The first form of Certification is required by Rule 13a-14 under the Securities Exchange Act of 1934 (the Exchange Act) in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). The Section 302 Certification includes references to an evaluation of the effectiveness of the design and operation of the company's "disclosure controls and procedures" and its "internal controls and procedures for financial reporting".  Item 5 of Part II of this Quarterly Report presents the conclusions of the CEO and the CFO about the effectiveness of such controls based on and as of the date of such evaluation (relating to Item 4 of the Section 302 Certification), and contains additional information concerning disclosures to the company's Audit Committee and independent auditors with regard to deficiencies in internal controls and fraud (Item 5 of the Section 302 Certification) and related matters (Item 6 of the Section 302  Certification). 

The second form of Certification is required by section 1350 of chapter 63 of title 18 of the United States Code.

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          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.TELTRONICS, INC. November 14, 2002/s/ Patrick G. MinPatrick G. MinVice President Finance and Chief Financial Officer
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**CERTIFICATIONS**
I, Ewen R. Cameron, certify that:
- I have reviewed this quarterly report on Form 10-Q of Teltronics, Inc.;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;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;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:- 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;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 presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):- all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; andany fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; andThe registrant's other certifying officer and I have indicated in this quarterly report whether 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 14, 2002/s/ Ewen R. CameronEwen R. CameronPresident and Chief Executive Officer
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**CERTIFICATIONS**
I, Patrick G. Min, certify that:- I have reviewed this quarterly report on Form 10-Q of Teltronics, Inc.;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;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;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:- 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;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 presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):- all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; andany fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; andThe registrant's other certifying officer and I have indicated in this quarterly report whether 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 14, 2002/s/ Patrick G. MinPatrick G. MinVice President Finance and Chief Financial Officer
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