**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 March 31, 2003.[   ]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 [  ]
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).   Yes [  ] No [X]

As of May 15, 2003 there were 7,292,425 shares of the Registrant's Common Stock outstanding.

**INDEX**
**PAGE****PART I.****FINANCIAL INFORMATION**   ITEM 1.FINANCIAL STATEMENTS (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2003 andDecember 31, 20023-4Condensed Consolidated Statements of Operations for the three monthsended March 31, 2003 and 20025Condensed Consolidated Statements of Cash Flows for the three monthsended March 31, 2003 and 20026-7Notes to Condensed Consolidated Financial Statements8   ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS17   ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK21   ITEM 4.CONTROLS AND PROCEDURES22**PART II.**OTHER INFORMATION**   ITEM 1.LEGAL PROCEEDINGS23   ITEM 2.CHANGES IN SECURITIES23   ITEM 3.DEFAULTS UPON SENIOR SECURITIES23   ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS23   ITEM 5.OTHER INFORMATION23   ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K23**SIGNATURES AND CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER AND THECHIEF FINANCIAL OFFICER24
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**PART I - FINANCIAL INFORMATION**
**ITEM 1.     FINANCIAL STATEMENTS (Unaudited)**
**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS**

**ASSETS**

March 31,2003December 31,2002(Unaudited)**Current assets:Cash and cash equivalents$       453,240$       791,020Accounts receivable, net of allowance for doubtful accounts     of $344,175 at March 31, 2003 and $399,610 at     December 31, 20026,090,7755,155,877Costs and estimated earnings in excess of billings on     uncompleted contracts1,393,874740,650Inventories, net5,506,9536,187,196Prepaid expenses and other current assets465,257427,904     Total current assets13,910,09913,302,647**Property and equipment, net4,005,8544,076,265**Goodwill241,371241,371**Other intangible assets, net238,390253,575**Other assets270,502274,853Total assets$	18,666,216$	18,148,711
The accompanying notes are an integral part of these condensed consolidated financial statements.

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**TELTRONICS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS - ContinuedLIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)**

March 31,2003December 31,2002(Unaudited)**Current liabilities:**     Current portion of long-term debt$  3,306,753 $  2,193,401      Current portion of capital lease obligations22,790 ---      Accounts payable5,556,502 4,356,985      Billings in excess of costs and estimated earnings          on uncompleted contracts432,869 1,347,685      Accrued expenses and other current liabilities2,524,631 2,479,300      Deferred revenue1,648,084 1,738,201           Total current liabilities13,491,629 12,115,572 **Long-term liabilities:     Long-term debt, net of current portion8,565,910 8,641,785      Capital lease obligations, net of current portion106,312 ---           Total long-term liabilities8,672,222 8,641,785 **Commitments and contingencies**Shareholders' deficiency:     Common stock, $.001 par value, 40,000,000 shares          authorized, 6,930,241 and 5,930,241 issued and          outstanding at March 31, 2003 and December 31, 2002,          respectively6,930 5,930      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 outstanding100 100      Preferred Series B Convertible stock, $.001 par value, 25,000          shares authorized, 12,625 shares issued and outstanding13 13      Preferred Series C Convertible stock, $.001 par value, 50,000          shares authorized, 40,000 shares issued and outstanding40 40      Additional paid-in capital24,011,232 23,812,232      Deferred compensation(150,000)---      Accumulated other comprehensive loss(66,586)(72,560)     Accumulated deficit(27,299,364)(26,354,401)          Total shareholders' deficiency(3,497,635)(2,608,646)          Total liabilities and shareholders' deficiency$ 18,666,216 $ 18,148,711 
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 Ended March 31,20032002**Net sales**     Product sales and installation$  9,207,079 $ 11,759,865      Maintenance and service2,373,427 1,913,153 11,580,506 13,673,018 Cost of sales6,873,586 8,504,801 **Gross profit**4,706,920 5,168,217 **Operating expenses:**     General and administrative1,509,151 1,438,221      Sales and marketing2,167,999 3,166,014      Research and development1,124,387 1,115,371      Depreciation and amortization323,855 349,786 5,125,392 6,069,392 Loss from operations(418,472)(901,175)**Other income (expense):**     Interest(298,366)(370,327)     Financing(78,600)(45,598)     Litigation costs--- (15,500)     Other4,875 (2,362)(372,091)(433,787)Loss before income taxes(790,563)(1,334,962)Provision for income taxes(3,900)(6,891)**Net loss**(794,463)(1,341,853)**Dividends on Preferred Series B and C Convertible stock**150,500 42,259 **Net loss available to common shareholders**$(944,963)$(1,384,112)**Net loss per share:**     Basic$   (0.16)$   (0.26)     Diluted$   (0.16)$   (0.26)
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)**

Three Months Ended March 31,20032002**OPERATING ACTIVITIES:     Net loss$   (794,463)$ (1,341,853)     Adjustments to reconcile net loss to net cash     provided by (used in) operating activities:          Provision for doubtful accounts59,935 86,414           Provision for slow moving inventories92,890 150,000           Depreciation and amortization467,298 533,739           Amortization of other intangible assets15,185 16,684           Amortization of deferred financing costs6,750 21,200           Fair value of Common stock issued for 401(k) match--- 56,850           Amortization of deferred compensation costs50,000 ---      Changes in operating assets and liabilities:          Accounts receivable(994,833)230,479           Costs and estimated earnings in excess of billings on               uncompleted contracts(653,224)(245,800)          Inventories587,353 366,439           Prepaid expenses and other current assets(37,353)(189,970)          Other assets(2,399)39,708           Accounts payable1,199,517 (76,800)          Billings in excess of costs and estimated earnings on               uncompleted contracts(914,816)(202,161)          Accrued expenses and other current liabilities45,331 969,086           Deferred revenue(90,117)63,632 Net cash flows provided by (used in) operating activities(962,946)477,647 **INVESTING ACTIVITIES:     Acquisition of property and equipment(264,061)(145,915)Net cash flows used in investing activities(264,061)(145,915)**FINANCING ACTIVITIES:     Net borrowings (repayments) on line of credit1,280,844 (184,356)     Net principal repayments on loans, notes and capital leases (247,091)(10,846)     Proceeds from issuance of Common stock--- 74,091      Dividends paid on Preferred Series B and C Convertible stock(150,500)(37,875)Net cash flows provided by (used in) financing activities883,253 (158,986)Effect of exchange rate changes on cash5,974 (245)Net increase (decrease) in cash and cash equivalents(337,780)172,501 Cash and cash equivalents - beginning of period791,020 63,307 Cash and cash equivalents - end of period$    453,240 $    235,808 
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)**

Three Months Ended March 31,20032002**Supplemental noncash financing and investing activities:     Capital lease obligation incurred$   132,826 ---      Fair value of Common stock issued for compensation of          $200,000 less amortization expense of $50,000,          included in deferred compensation	150,000 ---      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 stock--- 255,645     Unpaid dividends on Preferred Series C Convertible stock          included in accrued expenses--- 4,384
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 andmarkets electronic hardware and application software products, and engages in electronic manufacturing services primarily in 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.  In connection with the sale of ISI, the Company's common stock 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 fair presentation have been included.  Operating results for the three month period ended March 31, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003.

The balance sheet at December 31, 2002 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, 2002.

*Seasonality*The Company has experienced seasonality due in part to purchasing tendencies of our customers during the fourth and first quarters of each calendar year.  Consequently, results for the fourth and first quarters of each calendar year are typically not as strong as results during the other quarters.  The revenues of the Company continued to be impacted by the general slowdown of telecommunications expenditures.

*Reclassifications*Certain amounts in our prior period condensed consolidated financial statements have been reclassified from sales and marketing to cost of sales in order to conform with the current period's presentation.

**NOTE 2 - ACCOUNTING FOR STOCK-BASED COMPENSATION**
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation, encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans based on the fair value of options granted.  The Company has chosen to account for stock based compensation using the intrinsic value method prescribed in Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations.  Accordingly, because the grant price equals the market price on the date of grant for options issued by the Company, no compensation expense is recognized for stock options issued to employees.

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In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, Accounting for Stock Based Compensation - Transition and Disclosure, which amends SFAS No. 123.  SFAS No. 148 requires more prominent and frequent disclosures about the effects of stock-based compensation.

Had compensation cost for the Company's stock options been recognized based upon the estimated fair value on the grant date under the fair value methodology prescribed by SFAS No. 123, as amended by SFAS No. 148, the Company's net loss and net loss per share would have been as follows:

Three Months Ended March 31,20032002Net loss - as reported$ (794,463)$ (1,341,853)Net loss - pro forma$ (850,323)$ (1,397,125)Net loss per share:     Basic - as reported$ (0.16)$ (0.26)     Basic - pro forma$ (0.17)$ (0.28)     Diluted - as reported$ (0.16)$ (0.26)     Diluted - pro forma$ (0.17)$ (0.28)
The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's experience.

**NOTE 3 - COMPREHENSIVE LOSS**

Total comprehensive loss is as follows:

Three Months Ended March 31,20032002Net loss$ (794,463)$ (1,341,853)Foreign currency translation5,974 (245)Total comprehensive loss$ (788,489)$ (1,342,098)
**NOTE 4 - 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 2003 and 2002 were anti-dilutive and were not included in the calculation of diluted net loss per share.

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The following table sets forth the computation of basic and diluted net loss per share:

Three Months Ended March 31,20032002**Basic**Net loss$    (794,463)$ (1,341,853)Preferred dividends(150,500)(42,259)     Net loss available to common          shareholders$     (944,963)$ (1,384,112)Weighted average shares outstanding6,052,463 5,229,992      Net loss per share$  (0.16)$  (0.26)**Diluted**Net loss$    (794,463)$ (1,341,853)Preferred dividends(150,500)(42,259)     Net loss available to common          shareholder$ (944,963)$ (1,384,112)Weighted average shares outstanding6,052,463 5,229,992 Effect of dilutive securities     Employee stock options---  ---       Convertible preferred stock---  ---       Warrants---  ---       Dilutive potential common shares6,052,463 5,229,992      Net loss per share$  (0.16)$  (0.26)

**NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS**
March 31,2003December 31,2002(Unaudited)Costs incurred on uncompleted contracts$ 2,065,675 $   967,379 Estimated earnings680,613 950,926 2,746,288 1,918,305 Less: Billings to date1,785,283 2,525,340 $   961,005 $  (607,035)Included in accompanying condensed consolidated balance          sheets under the following captions:Costs and estimated earnings in excess of billings on          uncompleted contracts$ 1,393,874 $ 740,650 Billings in excess of costs and estimated earnings on          uncompleted contracts(432,869)(1,347,685)$    961,005 $   (607,035)
Costs and estimated earnings on uncompleted contracts includes unbilled revenue of approximately $234,000 and $321,000 as of March 31, 2003 and December 31, 2002, respectively.

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**NOTE 6 - INVENTORIES**

The major classes of inventories are as follows:

March 31,2003December 31,2002(Unaudited) Raw materials$    3,041,262$    3,195,656Work-in-process814,452979,036Finished goods1,651,2392,012,504$    5,506,953$    6,187,196
The valuation allowance for slow moving inventories was $1,417,000 and $2,151,000 as of March 31, 2003 and December 31, 2002, respectively.

**NOTE 7 - OTHER INTANGIBLE ASSETS**

The Company's other intangible assets are as follows:

  March 31, 2003 (Unaudited) LifeGrossCarryingAmountAccumulatedAmortizationTotalCustomer list5 years$  202,332$  126,203$  76,129Patent14 years, 7 months239,89977,638162,261     Total $  442,231$  203,841$  238,390
  December 31, 2002 LifeGrossCarryingAmountAccumulatedAmortizationTotalCustomer list5 years$  202,332$  114,646$  87,686Patent14 years, 7 months239,89974,010165,889     Total $  442,231$  188,656$  253,575
Amortization is provided over the estimated useful lives of the respective assets using the straight-line method.  Amortization expense related to intangible assets was $15,185  and $16,684 for the three months ended March 31, 2003 and 2002, respectively.  Estimated amortization expense related to other intangible assets for each of the five years in the period ending December 31, 2007 and thereafter is: 2003 - $45,555;  2004 - $44,396;  2005 - $26,079;  2006 - $14,510;  2007 - $14,510;  thereafter - $93,340.

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**NOTE 8 - DEBT**

Debt consists of the following:

March 31,2003December 31,2002
(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 $7,196,801 due May 2006.$ 8,754,922$ 8,868,717
Bank line of credit - On December 22, 1998, the Company's principal lender, The CIT Group/Business Credit, Inc. ("CIT") amended the Company's existing Line of Credit Facility and Term Loan whereby, the interest rate was 2.0% above prime rate, maximum credit was $5,500,000 and an early termination fee was assessed at 1.5%.  On October 28, 2000, the Line of Credit Facility was extended to October 28, 2002.  A director of the Company had personally guaranteed a portion of the facility.  On October 16, 2002, the Company entered into the Thirteenth Amendment to Loan and Security Agreement (the "Amendment") with 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 ended December 31, 2002 and the year ending December 31, 2003.  At March 31, 2003, the Company's interest rate was 6.75%.  The maximum credit remained at $5,500,000 while the early termination fee was modified from 1.5% to 1.0% of the maximum credit.  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.
Substantially all of the Company's present and future assets, except for fixed assets, are pledged as collateral with borrowings limited to certain gross availability formulas based on accounts receivable and inventory as defined in the agreement.  The facility provides for minimum loan fees, unused line fees and renewal term fees.  The outstanding borrowings are classified as a current liability.  At March 31, 2003, the Company had $433,000 available,  pursuant to this facility.  The availability of this unused line of credit is restricted based on availability formulas.2,294,2601,013,416
Senior Secured Promissory Note - On September 30, 2002, the Company entered into a Fourth Amended and Restated Senior Secured Promissory Note with a revised maturity date of August 13, 2003, interest at 14% and monthly principal and interest payments of $55,000, commencing October 1, 2002.502,644693,477
Notes payable to finance companies, payable in monthly installments of $7,000 with interest at approximately 5%.  The notes mature through March 2008 and are collateralized by vehicles.320,837259,576Total11,872,66310,835,186Less current portion3,306,7532,193,401Long-term portion$ 8,565,910$ 8,641,785
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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.  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 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 services provided 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 a balloon payment of the remaining unpaid balance of $303,000 will be due.  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 Senior Secured Promissory Note, Finova and the Company entered into an Amended and Restated Stock Purchase 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.  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 $160,200 in May 2002.  This fee was expensed as a financing cost in our condensed consolidated statements of operations in 2002.

The covenants in the Secured Promissory Note, Loan and Security Agreement and the Senior Secured Promissory Note 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 9 - EXIT ACTIVITY**

In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146 *Accounting for Costs Associated with Exit or Disposal Activities* (SFAS No. 146).  SFAS No. 146 required recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan.  Costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing or other exit or disposal activity.

The Company leases office space for a research and development facility in Dallas, Texas.  The lease expires in December 2006.  In December 2002, the Company closed its facility in Dallas, Texas.  Teltronics will continue to incur rental costs under the Dallas lease agreement without receiving any future economic benefit.

Teltronics early adopted the provisions of SFAS No. 146 in 2002, and as a result, the Company recorded an expense of approximately $437,000 in December 2002 that represented the present value of our liability (lease obligation) as of December 31, 2002.  This expense was reported as a general and administrative expense in our consolidated statements of operations for 2002.  Prior to the closing of our Dallas facility, our Dallas rental expenses were reported as a research and development expense.  Commencing January 1, 2003, our Dallas rental expenses are reported as a general and administrative expense.

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The changes in the Company's lease obligation for the three months ended March 31, 2003 are as follows:

Balance, beginning of the period$ 437,000 Accretion in present value of lease obligation during the period8,400 Other rental expenses2,000 Payments made during the period(10,500)Balance, end of the period$ 436,900 
**NOTE 10 - WARRANTY**
The Company provides currently for the estimated cost that may be incurred under product warranties.  Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim.  The Company provides a limited warranty on its products, for a period from 3 to 18 months (depending on the product), under which the Company agrees to repair or replace, in the Company's sole discretion, units defective in material or workmanship, provided the equipment has not been subjected to alteration or abuse.

Changes in the Company's product liability during the period are as follows:

Balance, beginning of the period$ 315,000 Warranties issued during the period64,686 Payments made during the period(53,686)Changes in liability for pre-existing warranties during the period11,000 Balance, end of the period$ 337,000 
**NOTE 11 - 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, whereby the annual dividend rate increased from $12 per share to $16 per share, payable quarterly, effective February 26, 2002.  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.  Commencing 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 Preferred Series B Convertible stock contains certain financial covenants.

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 option to convert to the Company's Common stock at $2.75 per share subject to adjustment.  The Company has the right to

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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)   Common stock** - The Company recorded the issuance of 1.0 million shares of Common stock with a fair value of $200,000 as deferred compensation for 2003 services by its Board of Directors.  The deferred compensation will be expensed as a general and administrative expense in our condensed consolidated statements of operations commencing January 1, 2003 through December 31, 2003.  As of March 31, 2003, the deferred compensation of $150,000 is included in shareholders' deficiency of our condensed consolidated balance sheets.

**(C)   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 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.

In connection with our financial advisory and investment banking agreement entered into in September 2002 with Atlantic American Capital Advisors, LLC, the Company issued warrants to purchase 300,000 shares of its Common stock at an exercise price of $1.00 per share.  The exercise period of the warrants is five years.

**NOTE 12 - COMMITMENTS**

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.  As of May 15, 2003, the transaction had not closed.  The Agreement includes voice over internet protocol ("VoIP") technology that is in the development stage.  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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**NOTE 13 - 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.  Company management evaluates performance based on segment profit (loss), which is net income (loss) before taxes, excluding nonrecurring gains or losses.

The following table presents information about reportable segment operations and assets.

Three Months Ended March 31,20032002**Net Sales     Teltronics$ 11,522,000 $ 13,370,000      Mexico59,000 228,000      ISI--- 75,000      Total net sales$ 11,581,000 $ 13,673,000 **Depreciation and Amortization     Teltronics$    465,000 $    523,000      Mexico2,000 3,000      ISI--- 8,000      Total depreciation and amortization$    467,000 $    534,000 **Interest and Financing Costs     Teltronics$    377,000 $    416,000      Mexico--- ---      ISI--- ---      Total interest and financing costs$    377,000 $    416,000 **Segment Profit (Loss)     Teltronics$   (755,000)$ (1,402,000)     Mexico(36,000)56,000      ISI--- 11,000      Income (loss) before income taxes$   (791,000)$ (1,335,000)**Segment Assets     Teltronics$ 18,580,000      Mexico86,000      ISI---       Total segment assets$ 18,666,000  **Acquisition of Property and Equipment**     Teltronics$    264,000 $    146,000      Mexico--- ---      ISI--- ---      Total acquisition of property and          equipment$    264,000 $    146,000 
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**ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                 OPERATIONS**

**FORWARD-LOOKING STATEMENTS**

*References in this report to the "Company," "Teltronics," "we." or "us" mean Teltronics, Inc. together with itssubsidiaries, except where the context otherwise requires.  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 can generally be identified as such because the context of the statement will include words such as we "believe," "anticipate," "expect," or words of similar import.  Similarly, statements that describe our future plans, objectives, strategies or goals are also forward-looking statements.  These forward-looking statements involve a number of risks and uncertainties that may materially adversely affect the anticipated results.  Such risks and uncertainties include, but are not limited to, the timely development and market acceptance of products and technologies, competitive market conditions, our ability to consummate the acquisition agreement with Tri-Link Technologies, successful integration of acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements.  The forward-looking statements made herein are only made as of the date of this Form 10-Q and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.*

**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 make estimates 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.  We have identified the following critical accounting policies that affect the more significant judgments and estimates used in preparing our consolidated financial statements.  The consolidated financial statements and the related notes thereto should be read in conjunction with the following discussion of our critical accounting policies.
Our critical accounting policies and estimates are as follows:

*Revenue recognition*.  The revenue recognition process requires management to make assumptions based on historical results, future expectations, changes in credit-worthiness of customers, and other relevant factors.  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 at March 31, 2003 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.

17The percentage of completion method recognizes revenue and related costs as work on a contract progresses.  The progress of a contract in terms of recognizing revenue and related costs is based on satisfying the milestones for the specified contract.
The 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.
- 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.  Costs from support and maintenance activities are recognized when the related revenue is recognized or when those costs are incurred, whichever occurs first.

*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.  We maintain an allowance for doubtful accounts based on management's assessment of the age of the receivables and financial stability of the customer.  We evaluated our allowance for doubtful accounts based on the recent downturn in the economy and increased them as we saw necessary.  If the financial condition of any of our customers deteriorates, we may record additions 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.*  Long-lived assets consist primarily of fixed assets.  We periodically evaluate the recovery of long-lived assets when impairment indicators are present.  Our judgments regarding the existence of impairment indicators are based on legal factors, market conditions, estimated future cash flows, expected useful life of long-lived assets and the operational performance of our business.  Future events could cause us to conclude that impairment indicators exist and that long-lived assets associated with our business are impaired.

*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.

*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.  These estimates are often initially developed substantially earlier than when the ultimate loss is known.  In each accounting period, a determination of the amount of loss accrual required, if any, for these contingencies is made after careful review of each individual issue.  We are often initially unable to develop a best estimate of loss, and therefore, the minimum amount, which could be zero, is recorded.  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.  Occasionally, a best estimate is changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected.

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**Seasonality**

The Company has experienced seasonality due in part to purchasing tendencies of our customers during the fourth and first quarters of each calendar year.  Consequently, results for the fourth and first quarters of each calendar year are typically not as strong as results during the other quarters.  The revenues of the Company continued to be impacted by the general slowdown of telecommunications expenditures.

**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 months ended March 31, 2003 and 2002.

**RESULTS OF OPERATIONS**

Three Months EndedMarch 31,20032002Net sales100.0% 100.0% Cost of sales59.4    62.2    Gross profit40.6    37.8    Operating expenses:     General and administrative13.0    10.5         Sales and marketing18.7    23.2         Research and development9.7    8.2         Depreciation and amortization2.8    2.5    44.2    44.4    Loss from operations(3.6)   (6.6)   Other income (expense):     Interest(2.6)   (2.7)        Financing(0.7)   (0.4)        Litigation costs---    (0.1)        Other---    ---    (3.3)   (3.2)        Loss before income taxes(6.9)   (9.8)        Provision for income taxes---    ---         Net loss(6.9%)(9.8%)
**Net Sales**

Net sales decreased 15.3% to $11.6 million for the three months ended March 31, 2003 from $13.7 million for the same period in 2002.  The decrease in net sales from 2002 to 2003 is primarily attributable to a slow down in the telecommunications market as evidenced by a decrease in net sales from our five largest customers in the three months ended March 31, 2003 as compared to the same period in 2002 of approximately $1.1 million or 9.8%.

**Gross Profit Margin**

Our gross profit margin for the three months ended March 31, 2003 and 2002 was 40.6% and 37.8%, respectively.  The increase in our gross profit margin for the three months ended March 31, 2003, as compared to the same period in 2002, is caused by changes in product mix and an improvement in our project management of certain projects that require additional attention due to the nature and extended time of the project.

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**Operating Expenses**

Operating expenses were $5.1 million for the three months ended March 31, 2003 as compared to $6.1 million for the same period in 2002.

General and administrative expenses increased $71,000 or 4.9% for the three months ended March 31, 2003, as compared to the same period in 2002. The increase was primarily related to operating expenses of our former research and development facility in Dallas, Texas that was closed in December 2002.  The Company recorded an expense of approximately $437,000 that represented the present value of our liability for the building lease obligation as of December 31, 2002; however, we continue to incur rental costs under the Dallas lease agreement.  Prior to 2003, our operating expenses associated with the Dallas facility were reported as a research and development expense in our consolidated statements of operations.

Sales and marketing expenses decreased $998,000 or 31.5% for the three months ended March 31, 2003, as compared to the same period in 2002.  The decrease was primarily a result of severance benefits associated with two employees terminated in the first quarter of 2002 of approximately $280,000 and reductions in work force implemented during the fourth quarter of 2002. 

Research and development expenses increased $9,000 or 0.8% for the three months ended March 31, 2003, as compared to the same period in 2002.  The increase was primarily due to the increased costs associated with developing new products, which were offset by the reduction in workforce related to closing the Dallas office in December 2002.

**Other Expenses**

Other expenses decreased $62,000 or 14.2% for the three months ended March 31, 2003, as compared to the same period in 2002.  The net decrease of $62,000 in other expenses was comprised primarily of a $72,000 decrease in interest expense, as a result of an overall decrease in debt, and a $16,000 decrease in litigation costs, which were partially offset by a $33,000 increase in financing expenses as a result of services performed by Atlantic American Capital Advisors, LLC.

**LIQUIDITY AND CAPITAL RESOURCES
**Cash flows for the three months ended March 31, 2003**

Operating Activities

Net cash flows used in operating activities were $963,000 for the three months ended March 31, 2003.  The $963,000 was comprised of the following items: (1) net loss of $794,000, (2) non-cash expenses of $692,000, (3) a net decrease in working capital of $861,000.  The reduction in working capital resulted primarily from the use of cash on uncompleted projects and timing of our collection on outstanding receivables during the first quarter of 2003 as compared with the fourth quarter of 2002. Generally, working capital requirements will increase or decrease with sequential changes in quarterly revenue levels and the timing of expenditures on uncompleted projects, collections on outstanding receivables and payments on payables. We are continuing to focus on reducing our working capital requirements through more favorable billing terms and our collection efforts.

Investing Activities

Net cash flows used in investing activities were $264,000 for the three months ended March 31, 2003.  The Company acquired property and equipment of $264,000 to support its operations including service vehicles and manufacturing equipment.

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Financing Activities

Net cash flows provided by financing activities were $883,000 for the three months ended March 31, 2003.  The $883,000 was comprised of the following items: (1) net borrowings of $1.3 million on the line of credit, (2) net repayments of $247,000 on loans, notes and capital leases, and (3) dividends paid of $151,000 on Preferred Series B and C Convertible stock.  We have historically used our asset based line of credit arrangement with CIT to help fund our operating requirements.

**Liquidity**

At March 31, 2003, our principal sources of liquidity consisted of cash and available borrowings under our line of credit.  As of March 31, 2003, the Company had cash and cash equivalents of $453,000 as compared to $791,000 as of December 31, 2002.  Working capital as of March 31, 2003 and December 31, 2002 was $418,000 and $1,187,000, respectively.

Principal obligations as of March 31, 2003 were comprised primarily of the following items: (1) Promissory note payable to Harris Corporation of $8.8 million in which $437,000 is expected to be paid within the next twelve months, (2) Bank line of credit payable to CIT of $2.3 million, and (3) Senior Secured Promissory Note payable to Finova of $503,000 that matures on August 13, 2003 with a balloon payment of $303,000.  Upon the closing of the Tri-Link transaction, we will also have a Promissory Note payable of $2.5 million related to our acquisition of the Vortex assets from Tri-Link with payments of $625,000 expected to be paid in 2003.

As of March 31, 2003, we had a credit facility with CIT as described in our notes to the condensed consolidated financial statements.  The credit facility has a maximum credit limit of $5.5 million with an interest rate of 2.5% above prime.  The applicable margin (2.5%) may vary from 2.0% to 3.0% depending on the Company's financial results for the year ended December 31, 2002 and the year ending December 31, 2003.  The amount available under this credit facility at March 31, 2003 was $433,000 subject to restrictions based on availability formulas.

We believe that our cash balances and the future cash flows expected to be 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 and we cannot assure that our actual cash requirements will not be greater than we currently expect.  As a result, we may require additional funds to support our working capital requirements, or for other purposes, and may seek to raise such 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.

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.  There can be no assurances that any such strategic alternative will be consummated.

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

We have no material changes to the disclosure under the caption "Quantitative and Qualitative Disclosures About Market Risks" in our Annual Report on Form 10-K for the year ended December 31, 2002, and incorporated herein by reference.

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**ITEM 4.     CONTROLS AND PROCEDURES**

**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.

**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.

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**PART II - OTHER INFORMATION**

**ITEM 1.       LEGAL PROCEEDINGS**

From time to time, the Company is a party to litigation, which arises, in the normal course of business.

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 AND USE OF PROCEEDS** - None

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

**ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None**

**ITEM 5.       OTHER INFORMATION
We have accelerated the proposed date of our 2003 Annual Meeting of Stockholders more than thirty (30) days from last year's annual meeting to June 26, 2003.  Because the deadline for submission of shareholder proposals pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as set forth in our proxy statement for our 2002 Annual Meeting, still allows us a reasonable time before we intend to print and mail our 2003 proxy materials, the deadline for submission of shareholder proposals for our 2003 Annual Meeting of Stockholders will remain March 11, 2003.

**ITEM 6(a).     EXHIBITS99.1 
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 6(b).     REPORTS ON FORM 8-K** - None

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          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.TELTRONICS, INC. May 15, 2003/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.May 15, 2003/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.May 15, 2003/s/ Patrick G. MinPatrick G. MinVice President Finance and Chief Financial Officer
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**EXHIBIT INDEX**
ExhibitNumberDescription 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. 
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