UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------
                                    FORM 10-Q

[Mark One]

[x]  Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities
     Exchange Act of 1934

                  For the quarterly period ended June 30, 2002.

                                       or

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

              For the transition period from ________ to ________.

                           Commission File No. 0-19727

                          CUMBERLAND TECHNOLOGIES, INC.

             (Exact name of registrant as specified in its charter)

Florida                                                59-3094503
------------------------------------------------       -------------------------
(State  or other  jurisdiction  of incorporation)      (I.R.S. Employer
                                                        Identification No.)

4311 West Waters Avenue, Suite 501
Tampa, Florida                                         33614
------------------------------------------------       -------------------------
(Address of principal executive office)                (Zip code)

                                 (813) 885-2112
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
              (Former name, former address and formal fiscal year,
                          if changed since last report)

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 and (2) has been subject to such filing requirements for
the past 90 days.

                                 Yes [x] No [ ]

               Applicable Only to Insurers Involved in Bankruptcy
                   Proceedings During the Preceding Five Years

Indicate by a check mark  whether the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                 Yes [ ] No [ ]

                      Applicable Only to Corporate Issuers

The  number  of shares  of the  Registrant's  common  stock,  $.001  par  value,
outstanding as of June 30, 2002 was 5,915,356 shares.

<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                                    FORM 10-Q
                                      INDEX

PART I   FINANCIAL INFORMATION
------   ---------------------
                                                                            Page
                                                                            ----

         Item 1.  Condensed Consolidated Balance Sheets at June 30, 2002
                    (unaudited) and December 31, 2001 .......................1-2

                  Condensed Consolidated Statements of Operations (unaudited)
                    for the six months ended June 30, 2002 and 2001 ...........3

                  Condensed Consolidated Statements of Operations (unaudited)
                    for the three months ended June 30, 2002 and 2001 .........4

                  Condensed Consolidated Statements of Stockholders' Equity for
                    the six months ended June 30, 2002  (unaudited) and
                    for the year ended December 31, 2001 ......................5

                  Condensed Consolidated Statements of Cash Flows (unaudited)
                    for the six months ended June 30, 2002 and 2001 ...........6

                  Notes to Condensed Consolidated Financial Statements
                    (unaudited).............................................7-18

        Item 2.   Management's Discussion and Analysis of Financial Condition
                    and Results of Operations..............................19-24

        Item 3.   Quantitative and Qualitative Disclosures about
                    Market Risk...............................................25

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

        Item 1.   Legal proceedings...........................................26

        Item 2.   Changes in securities.......................................26

        Item 3.   Defaults upon senior securities ............................26

        Item 4.   Submission of matters to a vote of security holders ........26

        Item 5.   Other information ..........................................26

        Item 6.   Exhibits and Reports of Form 8-k ...........................27

                  Signatures...............................................28-30


<PAGE>


           UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                         PART I - FINANCIAL INFORMATION


Item 1.        FINANCIAL STATEMENTS
------         --------------------

                          CUMBERLAND TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------


                                                       -------------------------
                                                        June 30,    December 31,
                                                          2002          2001
                                                       -------------------------
                                                      (unaudited)
Investments:
-----------
   Securities available-for-sale at fair value:
     Debt securities ...............................   $10,022,619   $ 9,339,353
   Debt securities held-to-maturity at amortized
     cost (fair value, 2002 - $371,257
     2001 - $374,436) ..............................       359,700       359,475
   Mortgage loans on real estate, at unpaid
     principal .....................................       717,745       681,790
   Short-term investments ..........................       433,993       433,993
                                                       -----------   -----------
     Total investments .............................    11,534,057    10,814,611

Cash and cash equivalents ..........................          --       2,654,131
Accrued investment income ..........................       159,562       154,527

Reinsurance recoverable ............................     3,959,638     3,124,052

Accounts receivable:
-------------------
   Nonaffiliate less allowance for doubtful
     accounts of $60,089 and $13,750 at
     June 30, 2002 and December 31, 2001,
     respectively ..................................     3,315,202     4,615,327
   Affiliate .......................................        85,463        72,201
Income tax recoverable .............................       888,868          --
Deferred income tax asset ..........................       586,694       499,145
Deferred policy acquisition costs ..................     2,128,153     1,903,547
Intangibles, net ...................................       332,038       380,951
Goodwill ...........................................       134,000       152,780
Other investment ...................................       640,872       640,872
Other assets .......................................       678,013       371,893
                                                       -----------   -----------
                                                       $24,442,560   $25,384,037
                                                       ===========   ===========


            See notes to condensed consolidated financialstatements.


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY



                                                    ----------------------------
                                                      June 30,      December 31,
                                                       2002            2001
                                                    ----------------------------
                                                     (unaudited)
Policy liabilities and accruals:
-------------------------------
   Loss and loss adjustment expenses ............   $  3,160,601    $ 4,113,232
   Derivative instruments .......................      2,904,658      1,978,891
   Unearned premiums ............................      6,123,048      5,582,640
Ceded reinsurance payable .......................        198,150      1,035,123
Accounts payable and other liabilities ..........      4,447,343      3,388,269
Income tax payable ..............................           --          113,284
Debt:
----
   Nonaffiliate .................................        491,417        651,940
   Affiliate ....................................        604,055        604,055
                                                    ------------    ------------
   Total liabilities ............................     17,929,272     17,467,434
                                                    ------------    ------------
Stockholders' equity:
--------------------
   Preferred stock, $.001 par value; 10,000,000
       shares authorized, no shares issued ......           --              --
   Common stock, $.001 par value; 10,000,000
       shares authorized; 5,915,356 shares issued          5,916          5,916
   Capital in excess of par value ...............      7,270,316      7,270,316
   Accumulated other comprehensive income .......        146,478         70,729
   Retained earnings (deficit) ..................       (645,703)       833,361
                                                    ------------   -------------
                                                       6,777,007      8,180,322
   Less treasury stock, at cost, 318,112 shares         (263,719)      (263,719)
                                                    ------------   -------------
   Total stockholders' equity ...................      6,513,288      7,916,603
                                                    ------------   -------------
                                                    $ 24,442,560   $ 25,384,037
                                                    ============   =============




            See notes to condensed consolidated financial statements.




<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                     ---------------------------
                                                     Six Months Ended June 30,
                                                         2002           2001
                                                    ----------------------------

Revenue:
-------
Direct premiums earned ..........................   $  7,011,536    $ 6,958,863
Assumed premiums earned .........................      1,868,583      1,531,775
Less ceded premiums .............................     (1,875,395)    (2,231,004)
                                                    ------------    ------------
Net premium income ..............................      7,004,724      6,259,634
Net investment income ...........................        246,485        299,596
Net realized investment losses ..................        (12,857)       (16,440)
Other income ....................................      1,071,459      1,073,073
                                                    ------------    ------------
Total revenue ...................................      8,309,811      7,615,863
                                                    ------------    ------------

Benefits and Expenses:
---------------------
Losses and loss adjustment expenses .............      3,969,319        962,693
Derivative expense ..............................      1,041,472        869,048
Amortization of deferred policy acquisition
    costs .......................................      2,315,653      2,038,957
Operating expenses ..............................      3,325,365      3,293,745
Interest expense ................................         19,063         87,979
                                                    ------------    ------------
Total expenses ..................................     10,670,872      7,252,422
                                                    ------------    ------------

(Loss) income before income tax (benefit) expense     (2,361,061)       363,441
Income tax  (benefit) expense ...................       (881,997)       114,826
                                                    ------------    ------------
Net (loss) income ...............................   $ (1,479,064)   $   248,615
                                                    ============    ============
Weighted average shares outstanding - basic .....      5,597,244      5,580,957
                                                    ============    ============
Net (loss) income per share - basic .............   $      (0.26)   $      0.04
                                                    ============    ============
Weighted average shares outstanding - diluted ...      5,597,244      5,650,457
                                                    ============    ============
Net (loss) income per share - diluted ...........   $      (0.26)   $      0.04
                                                    ============    ============




            See notes to condensed consolidated financial statements.



<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                     ---------------------------
                                                     Three Months Ended June 30,
                                                         2002           2001
                                                     ---------------------------

Revenue:
-------
Direct premiums earned ...........................   $ 3,643,392    $ 3,573,710
Assumed premiums earned ..........................     1,076,037        780,760
Less ceded premiums ..............................      (799,866)    (1,179,533)
                                                     -----------    -----------
Net premium income ...............................     3,919,563      3,174,937
Net investment income ............................       118,000        143,662
Net realized investment losses ...................        (8,531)       (16,440)
Other income .....................................       468,895        473,635
                                                     -----------    -----------
Total revenue ....................................     4,497,927      3,775,794
                                                     -----------    -----------

Benefits and Expenses:
---------------------
Losses and loss adjustment expenses ..............     2,319,623        291,864
Derivative expense ...............................       965,418        657,485
Amortization of deferred policy acquisition
    costs ........................................     1,305,000        942,336
Operating expenses ...............................     1,864,815      1,827,445
Interest expense .................................         1,510         25,660
                                                     -----------    -----------
Total expenses ...................................     6,456,366      3,744,790
                                                     -----------    -----------

(Loss) income before income tax (benefit) expense     (1,958,439)        31,004
Income tax  (benefit) expense ....................      (745,097)         4,406
                                                     -----------    -----------
Net (loss) income ................................   $(1,213,342)   $    26,598
                                                     ===========    ===========
Weighted average shares outstanding - basic ......     5,597,244      5,597,244
                                                     ===========    ===========
Net (loss) income per share - basic ..............   $     (0.22)   $      0.01
                                                     ===========    ===========
Weighted average shares outstanding - diluted ....     5,597,244      5,666,744
                                                     ===========    ===========
Net (loss) income per share - diluted ............   $     (0.22)   $      0.01
                                                     ===========    ===========




            See notes to condensed consolidated financial statements.



<PAGE>

                           CUMBERLAND TECHNOLOGIES, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    FOR THE YEAR ENDED DECEMBER 31, 2001 AND
                 THE SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)

<TABLE>
<CAPTION>


                                                             Capital in      Accumulated
                                       Common Shares         Excess of         Other        Retained                        Total
                                       -------------            Par         Comprehensive   Earnings      Treasury     Stockholders'
                                  Stock            Amount      Value          Income       (Deficit)       Stock          Equity
                                  ---------    -----------    -----------   -----------   -----------    -----------   -------------

<S>                              <C>           <C>            <C>           <C>           <C>           <C>             <C>

Balance at January 1, 2001        5,871,356    $     5,872    $ 7,264,860   $   104,485   $   774,993    $  (263,719)   $ 7,886,491

   Exercise of 44,000 shares
       under 1991 stock
       option plan.............      44,000             44          5,456                                                     5,500

   Net unrealized depreciation
       of available-for-sale
       securities, net of
       income tax .............                                                 (33,756)                                    (33,756)

   Net income .................                                                                58,368                        58,368
                                                                                                                         -----------

   Comprehensive income .......                                                                                              24,612
                                  -----------    -----------   -----------   -----------    -----------    -----------   -----------
Balance at December 31, 2001      5,915,356          5,916      7,270,316        70,729       833,361       (263,719)     7,916,603

   Net unrealized appreciation
       of available-for-sale
       securities, net of
       income tax..............                                                  75,749                                      75,749

   Net loss ...................                                                            (1,479,064)                   (1,479,064)
                                                                                                                        -----------

   Comprehensive loss..........                                                                                          (1,403,315)
                                -----------    -----------    -----------   -----------   -----------    -----------    -----------
Balance at June 30, 2002 ......  5,915,356     $    5,916     $ 7,270,316   $   146,478   $  (645,703)   $  (263,719)   $ 6,513,288
                                ===========    ===========    ===========   ===========   ===========    ===========    ============

</TABLE>



            See notes to condensed consolidated financial statements.




<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                       -------------------------
                                                       Six Months Ended June 30,
                                                          2002           2001
                                                       -------------------------
Operating activities:
--------------------
Net (loss) income .................................   $(1,479,064)   $   248,615
Adjustments to reconcile net (loss) income to cash
   (used in) provided by operating activities:
       (Amortization) accretion of investment
            discounts and premiums ................        18,300       (16,729)
       Policy acquisition costs amortized .........     2,315,653     2,038,957
       Policy acquisition costs deferred ..........    (2,540,259)   (2,344,824)
       Amortization ...............................        67,693        72,305
       Net realized loss on disposal of
           investments ............................        12,857        16,440
       (Increase) decrease in:
           Accrued investment income ..............        (5,035)       (5,104)
           Reinsurance recoverable ................      (835,586)      783,338
           Accounts receivable ....................     1,300,125    (1,665,749)
           Deferred income tax asset ..............       (87,549)          --
           Income tax recoverable .................      (914,092)      (67,800)
           Other assets ...........................      (306,120)     (143,247)
       Increase (decrease) in:
           Policy liabilities and accruals ........      (412,223)     (276,307)
           Derivative liability ...................       925,767     1,004,087
           Ceded reinsurance payable ..............      (836,973)      577,004
           Accounts payable and other liabilities .     1,059,075       433,548
           Income tax payable .....................      (113,284)          --
                                                      -----------    -----------
Net cash (used in) provided by operating activities    (1,830,715)      654,534
                                                      -----------    -----------
Investing activities:
--------------------
Securities available-for-sale:
       Purchases - fixed maturities ...............    (3,172,826)   (1,228,810)
       Proceeds from fixed maturities .............     2,559,150       154,912
Securities held-to-maturity:
       Proceeds from sales - fixed maturities .....          --         865,000
       Purchase of - mortgage loan ................       (35,955)          --
       Short-term assets ..........................          --             649
Other investment ..................................          --         (22,629)
                                                      -----------    -----------
Net cash used in investing activities .............      (649,631)     (230,878)
                                                      -----------    -----------
Financing activities:
--------------------
Payments on debt, affiliate and
   non-affiliate ..................................      (160,523)     (156,793)
Stock options exercised ...........................          --           5,500
Net change in advances from affiliates ............       (13,262)       (6,865)
                                                      -----------    -----------
Net cash used in financing activities .............      (173,785)     (158,158)
                                                      -----------    -----------
Increase (decrease) in cash and cash equivalents ..    (2,654,131)      265,498
Cash and cash equivalents, beginning of period ....     2,654,131       693,778
                                                      -----------    -----------
Cash and cash equivalents, end of period ..........   $      --      $  959,276
                                                      ===========    ===========

Supplemental cash flows disclosure:
Cash paid for interest ............................   $     2,451    $   27,611
                                                      -----------    -----------
Cash paid for income taxes ........................   $   185,000    $   64,000
                                                      ===========    ===========



            See notes to condensed consolidated financial statements.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


1.   Ownership and Organization
     --------------------------

     Cumberland  Technologies,  Inc. ("CTI" or "the Company")  f/k/a  Cumberland
     Holdings, Inc., a Florida Corporation,  was formed on November 18, 1991, to
     be a Holding Company and a wholly-owned subsidiary of Kimmins Corp. ("KC").
     Effective  October 1, 1992, KC contributed  all of the  outstanding  common
     stock of two of its other wholly-owned subsidiaries,  Cumberland Casualty &
     Surety Company ("CCS") and Surety Specialists, Inc. ("SSI") to CTI. KC then
     distributed  to its  stockholders  CTI's  common  stock on the basis of one
     share of common  stock of CTI for each five  shares of KC common  stock and
     Class B common  stock  owned (the  "Distribution".)  Effective  January 30,
     1997,   Cumberland   Holdings,   Inc.   changed  its  name  to   Cumberland
     Technologies,  Inc. CTI conducts  its  business  through five  wholly-owned
     subsidiaries.  CCS,  a Florida  corporation  formed  in May 1988,  provides
     underwriting  for specialty  surety and  performance  and payment bonds for
     contractors.  The surety services  provided  include direct surety and to a
     lesser extent,  assumed  reinsurance.  SSI, a Florida corporation formed in
     August 1988,  is a general  lines agency which  operates as an  independent
     agent.  Surety  Group  ("SG"),  a  Georgia   corporation,   and  Associates
     Acquisition  Corp.  d/b/a  Surety  Associates   ("SA"),  a  South  Carolina
     corporation, purchased in February and July 1995, respectively, are general
     lines  agencies which operate as independent  agencies.  Qualex  Consulting
     Group,  Inc.  ("Qualex"),  a Florida  corporation  formed in November 1994,
     provides claim and contracting consulting services.

2.   Summary of Significant Accounting Policies
     ------------------------------------------

     Principles of Consolidation
     ---------------------------

     The consolidated  financial  statements include the accounts of CTI and its
     wholly-owned  subsidiaries.  All  material  intercompany  transactions  and
     balances have been eliminated in consolidation.

     Basis of Presentation
     ---------------------

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in conformity with accounting  principles  generally accepted
     in the United States of America for interim financial  information and with
     the instructions to Form 10-Q. Accordingly,  they do not include all of the
     information and notes required by accounting  principles generally accepted
     in the United States of America 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 and six months ended June 30, 2002 are not
     necessarily  indicative  of the results that may be expected for any future
     quarters or the year ending  December  31, 2002.  For further  information,
     refer to consolidated  financial  statements and notes thereto for the year
     ended December 31, 2001,  included in the Company's Form 10-K as filed with
     the United States Securities and Exchange Commission on April 1, 2002.


<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     Investments
     -----------

     The Company accounts for marketable securities in accordance with Statement
     No.  115,   "Accounting   for  Certain   Investments  in  Debt  and  Equity
     Securities."

     Debt  securities  that the Company has both the positive intent and ability
     to hold to maturity are classified as "held-to-maturity" securities and are
     reported at  amortized  cost.  The  amortized  cost of debt  securities  is
     adjusted for  amortization  of premiums and accretion of discounts from the
     date of purchase to maturity.  Such  amortization  and accretion,  which is
     calculated under the interest method, is included in investment income.

     Marketable   equity  securities  and  debt  securities  not  classified  as
     "held-to-maturity"  or "trading" are  classified  as  "available-for-sale."
     Available-for-sale  securities are reported at estimated  fair value,  with
     the unrealized gains and losses, net of any related income taxes,  reported
     as a separate component of stockholders'  equity and of other comprehensive
     income (loss). Realized gains and losses and declines in value judged to be
     other-than-temporary are included in income. The cost of securities sold is
     based on the specific  identification  method.  Interest  and  dividends on
     securities are included in investment income.

     Short-term  investments  primarily  include  certificates of deposit having
     maturities of more than three months when purchased.  These investments are
     reported at cost, which approximates fair value.

     Cash Equivalents
     ----------------

     The Company  considers all highly liquid  investments  having a maturity of
     three months or less when purchased to be cash equivalents.

     Deferred Policy Acquisition Costs
     ---------------------------------

     To the  extent  recoverable  from  future  policy  revenues,  the  costs of
     acquiring new surety business,  principally  commissions,  are deferred and
     amortized  in a manner  which  charges  each  year's  operations  in direct
     proportion to the premium revenue recognized.



<PAGE>





                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     Intangibles
     -----------

     As of January 1, 2002,  the Company  adopted  SFAS No. 142,  "Goodwill  and
     Other  Intangible  Assets,"  which  addresses the financial  accounting and
     reporting  standards for the acquisition of intangible  assets outside of a
     business   combination  and  for  goodwill  and  other  intangible   assets
     subsequent to their  acquisition.  This accounting  standard  requires that
     goodwill  be  separately  disclosed  from  other  intangible  assets in the
     statement of financial position,  and no longer be amortized but tested for
     impairment on a periodic basis. The provisions of this accounting  standard
     also require the  completion of a transitional  impairment  test within six
     months of adoption, with any impairments identified treated as a cumulative
     effect of a change in accounting principle.

     In accordance with SFAS No. 142, the Company  discontinued the amortization
     of goodwill  effective  January 1, 2002.  A  reconciliation  of  previously
     reported net income and earnings per share to the amounts  adjusted for the
     exclusion  of goodwill  amortization  net of the related  income tax effect
     follows:

                                                     Three Months Ended June 30,
                                                    ----------------------------
                                                          2002            2001
                                                    ----------------------------

     Reported net (loss) earnings ...............   $   (1,213,342)   $   26,598
       Add: Goodwill amortization, net of tax ...             --          13,953
                                                    --------------    ----------
       Adjusted net (loss) earnings .............   $   (1,213,342)   $   40,551
                                                    --------------    ----------

     Basic earnings per common share:
       Reported net (loss) earnings .............   $        (0.22)   $     0.01
       Goodwill amortization, net of tax ........             --             --
                                                    --------------    ----------
       Adjusted net (loss) earnings .............   $        (0.22)   $     0.01
                                                    ==============    ==========

     Diluted earnings per common share:
       Reported tax (loss) earnings .............   $        (0.22)   $     0.01
       Goodwill amortization, net of tax ........             --             --
                                                    --------------    ----------
       Adjusted net (loss) earnings .............   $        (0.22)   $     0.01
                                                    ==============    ==========




<PAGE>




                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)

     Intangibles (continued)
     ----------------------
                                                       Six Months Ended June 30,
                                                      --------------------------
                                                            2002         2001
                                                      --------------------------

     Reported net (loss) earnings ...............     $  (1,479,064) $   248,615
       Add: Goodwill amortization, net of tax ...             --          27,907
                                                      -------------  -----------
       Adjusted net (loss) earnings .............     $  (1,479,064) $   276,522
                                                      -------------  -----------

     Basic earnings per common share:
       Reported net (loss) earnings ..............    $       (0.26) $      0.05
       Goodwill amortization, net of tax .........            --             --
                                                      -------------  -----------
       Adjusted net (loss) earnings ..............    $       (0.26) $      0.05
                                                      =============  ===========

     Diluted earnings per common share:
       Reported tax (loss) earnings ..............    $       (0.26) $      0.05
       Goodwill amortization, net of tax .........            --             --
                                                      -------------  -----------
       Adjusted net (loss) earnings ..............    $       (0.26) $      0.05
                                                      =============  ===========

     The Company  completed the  transitional  impairment  tests and the results
     indicated that the fair value of goodwill was not materially different than
     the carrying value.

     Intangible  assets are stated at cost and principally  represent  purchased
     customer accounts,  noncompete  agreements,  purchased contract agreements,
     and the  excess of costs  over the fair  value of  identifiable  net assets
     acquired  ("Goodwill").  Prior  to the  implementation  of  SFAS  No.  142,
     Goodwill was amortized on a  straight-line  basis over 15 years.  All other
     intangible  assets are amortized on a straight-line  basis over the related
     estimated  lives and  contract  periods,  which  range  from 3 to 15 years.
     Purchased  customer  accounts are records and files  obtained from acquired
     businesses that contain  information on insurance  policies and the related
     insured parties that is essential to policy renewals.

     The  carrying  value of Goodwill and other  intangible  assets are reviewed
     periodically  for impairment.  If this review indicates that the intangible
     assets will not be  recoverable,  as determined  based on the fair value of
     the entity acquired over the remaining  amortization  period, the Company's
     carrying value of the Goodwill and other intangible  assets will be reduced
     to approximate fair value.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     Loss and Loss Adjustment Expenses
     ---------------------------------

     The liability for loss and loss adjustment  expenses including incurred but
     not reported losses is based on the estimated ultimate cost of settling the
     claim using traditional paid and incurred loss development  methods.  These
     estimates  are  subject  to the  effects  of  trends in loss  severity  and
     frequency. Although considerable variability is inherent in such estimates,
     management  believes  that the  liabilities  for  loss and loss  adjustment
     expenses are adequate.  The estimates are continually reviewed and adjusted
     as necessary as experience  develops or new information becomes known. Such
     adjustments are included in current  operations.  A liability for all costs
     expected to be incurred in  connection  with the  settlement of unpaid loss
     and loss  adjustment  expenses are accrued when the related  liability  for
     unpaid losses is accrued. Loss adjustment expenses include costs associated
     directly with specific claims paid or in the process of settlement, such as
     legal and  adjusters'  fees.  Loss  adjustment  expenses also include other
     costs that cannot be  associated  with  specific  claims but are related to
     losses paid or in the process of settlement,  such as internal costs of the
     claims function.

     The Company does not  discount its reserves for losses and loss  adjustment
     expenses.  The Company writes primarily surety contracts which are of short
     duration.

     The Company does not consider investment income in determining if a premium
     deficiency relating to short duration contracts exists.

     Unearned Premiums
     -----------------

     Unearned premiums are deferred and amortized on a pro-rata basis.

     Reinsurance
     -----------

     The  Company  assumes and cedes  reinsurance  and  participates  in various
     pools. The accompanying condensed consolidated financial statements reflect
     premiums, benefits and settlement expenses, and deferred policy acquisition
     costs, net of reinsurance  ceded.  Amounts  recoverable from reinsurers for
     unpaid losses are estimated in a manner consistent with the claim liability
     associated with the reinsured policies.

     Revenue Recognition
     -------------------

     Premiums earned on direct insurance and assumed  reinsurance are recognized
     on a pro-rata basis over the period of risk.  Commission  income,  which is
     earned  on ceded  premiums  and  premiums  written  for other  third  party
     insurance  carriers,  is  recognized  at the  effective  date of the  bonds
     issued.   Other  income,   consisting  primarily  of  consulting  fees,  is
     recognized   when  the   negotiated   services  are  provided.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     Stock-Based Compensation
     ------------------------

     The  Company  has  adopted  only the pro  forma  disclosure  provisions  of
     Statement  No. 123,  Accounting  for  Stock-Based  Compensation  ("SFAS No.
     123"). SFAS No. 123 encourages, but does not require companies to record at
     fair value compensation cost for stock-based  employee  compensation plans.
     The  Company  accounts  for  equity-based   compensation   arrangements  in
     accordance  with  the  intrinsic  value  method  prescribed  by  Accounting
     Principles Board Opinion No. 25,  Accounting for Stock Issued to Employees,
     and  related  interpretations.  Intrinsic  value is the amount by which the
     market price of the  underlying  stock  exceeds the  exercise  price of the
     stock option or award on the measurement date, generally the date of grant.

     Income Taxes
     ------------

     Deferred  income tax assets and  liabilities  are recognized for the future
     tax  consequences   attributable  to  differences   between  the  financial
     statement  carrying  amounts of existing  assets and  liabilities and their
     respective  tax basis.  Deferred  income tax  assets  and  liabilities  are
     measured using enacted tax rates expected to apply to taxable income in the
     years in which those temporary  differences are expected to be recovered or
     settled.  The effect on  deferred  income tax assets and  liabilities  of a
     change in tax rates is recognized in income in the period that includes the
     enactment date.

     The  Company  has  recorded a deferred  income  tax asset of  $586,694  and
     $499,145 at June 30, 2002 and December 31, 2001, respectively.  Realization
     of the asset is dependent on generating sufficient taxable income in future
     years. Although realization is not assured,  management believes it is more
     likely than not that all of the deferred income tax asset will be realized.

     The  Company  files a  consolidated  tax return  that  includes  all of its
     subsidiaries.

     Earnings Per Share
     ------------------

     The Company computes and discloses  earnings (loss) per share in accordance
     with the provisions of Statement of Financial Accounting Standards No. 128,
     Earnings Per Share. The Company excluded 54,700  outstanding  stock options
     at June 30, 2002 in the computation of earnings per share, as the effect of
     these  options  would  have been  anti-dilutive.  The  inclusion  of 45,300
     outstanding  stock options in the computation of earnings per share at June
     30, 2001 resulted in diluted  earnings per share that was the same as basic
     earnings per share.




<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     Business Concentration
     ----------------------

     The majority of the Company's  business  relates to surety and  performance
     bonds for  contractors.  Accordingly,  the  occurrence of adverse  economic
     conditions in the contracting business could have a material adverse effect
     on the Company's business. The Company only requires collateral from surety
     bond  customers if the customer  meets  between 80 percent to 99 percent of
     the Company's underwriting  criteria.  Customers that fail to meet at least
     80 percent of the requirements are denied surety bonding.

     Use of Estimates
     ----------------

     The preparation of the consolidated financial statements in conformity with
     accounting  principles  generally  accepted in the United States of America
     requires  management  to make  estimates  and  assumptions  that affect the
     amounts reported in the consolidated  financial statements and accompanying
     notes.  Such estimates and  assumptions  could change in the future as more
     information  becomes  known which would  affect the  amounts  reported  and
     disclosed herein.

     New Accounting Standards
     ------------------------

     In July 2001,  Statement of Financial  Accounting Standards (SFAS) No. 141,
     "Business  Combinations" was approved by the Financial Accounting Standards
     Board (FASB).  SFAS No.141  requires that the purchase method of accounting
     be used for all business combinations initiated after June 30, 2001.

     In  August  2001,  the FASB  issued  SFAS No.  143,  Accounting  for  Asset
     Retirement  Obligations  ("SFAS  143").  SFAS 143 provides  accounting  and
     reporting  standards related to obligations  associated with the retirement
     of tangible  long-lived  assets.  SFAS 143 is effective on January 1, 2003,
     however,  earlier application is encouraged.  The Company has not evaluated
     the  effect,  if any,  that  the  adoption  of SFAS  143  will  have on the
     Company's consolidated financial statements.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
     Impairment or Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 provides
     accounting  and  reporting  standards  for the  impairment  or  disposal of
     long-lived  assets.  SFAS 144  supersedes  SFAS 121 but retains  SFAS 121's
     fundamental  provisions  for (a)  recognition/measurement  of impairment of
     long-lived  assets to be held and used and (b)  measurement  of  long-lived
     assets  to  be  disposed  of  by  sale.   SFAS  144  also   supersedes  the
     accounting/reporting  provisions of Accounting Principles Board Opinion No.
     30 ("APB 30") for  segments of a business to be disposed of but retains APB
     30's  requirement  to  report  discontinued   operations   separately  from
     continuing  operations  and extends  that  reporting  to a component  of an
     entity that either has been  disposed of or is classified as held for sale.
     SFAS 144 is  effective  January  1,  2002.  The  Company  adopted  SFAS 144
     effective January 1, 2002, and the adoption of this statement had no impact
     on the financial  condition,  results of  operations,  or cash flows of the
     Company.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


2.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     New Accounting Standards (continued)
     -----------------------------------

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
     No.  4, 44 and 64,  Amendment  of FASB  Statement  No.  13,  and  Technical
     Corrections."  SFAS No. 145 addresses the  accounting  for gains and losses
     from the extinguishment of debt, economic effects and accounting  practices
     of sale-leaseback  transactions and makes technical corrections to existing
     pronouncements.  The Company adopted SFAS No. 145 on April 1, 2002, and the
     adoption  did  not  have  a  material  effect  on the  Company's  financial
     position, results of operations or cash flows.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated  with Exit or Disposal  Activities."  This  Statement  addresses
     financial  accounting  and  reporting  for  costs  associated  with exit or
     disposal  activities and nullifies  Emerging Issues Task Force (EITF) Issue
     No. 94-3, "Liability Recognition for Certain Employees Termination Benefits
     and Other Costs to Exit an Activity  (including Certain Costs Incurred in a
     Restructuring)." Charges relating to the exit of an activity or disposal of
     long-lived  assets will be recorded when they are incurred and  measurable.
     Prior to SFAS No. 146 these  charges were accrued at the time of commitment
     to exit or dispose and  activity.  The Company has not yet  determined  the
     impact of the adoption of this statement.

     Reclassifications
     -----------------

     Certain  amounts in the 2001  consolidated  financial  statements have been
     reclassified  to  conform  to the  2002  consolidated  financial  statement
     presentation.

3.   Related Party Transactions
     --------------------------

     In 1988,  CCS issued a surplus  debenture to KC in exchange for  $3,000,000
     which  bears  interest  at 10 percent  per annum.  Interest  and  principal
     payments are subject to approval by the Florida Department of Insurance. On
     April 1, 1997, CTI forgave $375,000 of its $3,000,000 surplus debenture due
     to CCS. As a result, CCS increased paid in capital by $375,000. On June 30,
     1999,  CTI forgave  $576,266 of its $2,625,000  surplus  debenture due from
     CCS. As a result,  CCS increased paid-in capital to $1,000,000.  As of June
     30, 2002 and December 31, 2001,  no payments  could be made under the terms
     of the debenture.

     On March 8, 2002,  Cumberland purchased a residential mortgage from Francis
     M.  Williams.  Mr.  Williams is Chairman of the Board of the  Company.  The
     principal  balance on the loan was $36,906.  Interest  accrued  through the
     date of acquisition  was $129 at an annual  interest rate of 7.5%. No prior
     liens exist related to taxes, assessments or other similar charges.





<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


4.   Investments
     -----------

     The  components  of  unrealized  appreciation  of  investments  recorded in
     stockholders' equity are as follows:

                                              June 30, 2002    December 31, 2001
                                              -------------    -----------------
         Fixed maturities, net of
             income tax....................   $     146,478    $         70,729
                                              =============    =================

5.   Income Taxes
     ------------

     The Company's  provision  for income taxes for the quarters  ended June 30,
     2002 and 2001 has been calculated  using an effective rate of approximately
     37.4% and 31.6%, respectively.

6.   Debt
     ----

     Affiliate
     ---------

     Effective November 10, 1998, CTI entered into a $1,000,000 convertible term
     note agreement with TransCor Waste Services,  Inc., a subsidiary of KC. The
     note is due November 10, 2002 and bears  interest  equal to one half of one
     percent per annum in excess of the stated interest rate  established by the
     Bank of America.  On December 26, 2001,  the Company made a principal  note
     payment of $395,495  reducing the note to $604,055.  The lender may convert
     the principal  amount of the note or a portion thereof into common stock at
     $3.00 per share  subsequent  to a  six-month  anniversary  and prior to the
     maturity date.

     Nonaffiliate
     ------------

     In connection  with the  acquisition of certain  agencies  during 1995, the
     Company entered into two notes payable with the agencies'  previous owners.
     One note is due March 1, 2002 and bears interest at 8% through February 28,
     2001 and 10%  thereafter.  Principal  payments of $125,000 are due annually
     beginning  March 1,  2000.  The other  note is due June 30,  2010 and bears
     interest  9%.  Principal  payments of $40,000  were due  annually for three
     years beginning January 5, 1996.  Payments of $11,104  including  principal
     and interest were paid monthly from April 1, 1997 through June 30, 2001. On
     December  3, 2001,  SA reached  an  agreement  with the holder on this note
     payable,  whereby  the  terms  of the note  were  modified,  such  that the
     effective  interest rate was 6%, and principal  payments  became payable at
     $6,000 per month. On March 1, 2002, a final payment of $125,000 was made on
     the note due March 1, 2002.



<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


7.   Reinsurance
     -----------

     The  Company  assumes and cedes  reinsurance  and  participates  in various
     pools. The financial  statements reflect premiums,  benefits and settlement
     expenses,  and deferred policy acquisition costs, net of reinsurance ceded.
     Amounts  recoverable  from reinsurers are estimated in a manner  consistent
     with the future  policy  benefit and claim  liability  associated  with the
     reinsured policies.

     Accounts  recoverable from reinsurers for unpaid losses are presented as an
     asset in the accompanying consolidated financial statements.

8.   Accounting for Derivative Instruments
     -------------------------------------

     SFAS No. 133, Accounting for Derivative  Instruments and Hedging Activities
     is effective for all fiscal years  beginning  after June 15, 2000. SFAS No.
     133,  as  amended,  establishes  accounting  and  reporting  standards  for
     derivative  instruments,  including certain derivative instruments embedded
     in other contracts, and for hedging activities. Under SFAS No. 133, certain
     contracts that were not formerly  considered  derivatives  may now meet the
     definition  of a  derivative.  The Company  adopted SFAS No. 133  effective
     January  1,  2001.  The  Company  identified  one  product  that  meets the
     definition  of a  derivative  instrument  as defined in SFAS No.  133.  The
     policy  is issued  to  registered  investment  advisors  ("Advisors"),  and
     insures losses  suffered by the Advisors as a result of market  declines on
     covered investment principal,  provided that the Advisors have followed the
     investment guidelines required by the policy. The identified derivative was
     formerly   accounted  for  as  an  insurance  contract  within  the  policy
     liabilities  for  loss  and  loss  adjustment   expenses   account  in  the
     consolidated  balance  sheet  prior  to  January  1,  2001.  There  was  no
     cumulative  effect of change in  accounting  principal due to the fact that
     the  policy  liability  recorded  for this  policy  at  December  31,  2000
     approximated  the fair  value of the  derivative  instrument  at January 1,
     2001.  The fair value of the  derivative  instrument  at June 30,  2002 and
     December 31, 2001 is $2,904,658 and $1,978,891,  respectively.  The Company
     is not involved in any hedging activities.  At June 30, 2002 the fair value
     of the derivative instrument has been determined by using a financial model
     that incorporates market data and other assumptions.  Due to the volatility
     in the  marketplace,  the Company has  suspended  marketing of this product
     effective September 2001.




<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


9.   Statutory Accounting Practices
     ------------------------------

     CCS is  domiciled in Florida and  prepares  its  statutory-basis  financial
     statements in accordance with accounting  practices prescribed or permitted
     by the Florida  Insurance  Department.  "Prescribed"  statutory  accounting
     practices  include  state laws,  regulations,  and  general  administrative
     rules, as well as a variety of publications of the National  Association of
     Insurance   Commissioners   ("NAIC").   "Permitted"   statutory  accounting
     practices encompass all accounting practices that are not prescribed;  such
     practices  may differ  from  state to state,  may  differ  from  company to
     company  within a state,  and may change in the future.  In 1998,  the NAIC
     adopted the Codification of Statutory Accounting Principles  (Codification)
     for insurance  companies.  Codification,  which is intended to  standardize
     regulatory   accounting  and  reporting  for  the  insurance  industry,  is
     effective January 1, 2001. The Company implemented  codification at January
     1, 2001. On a statutory  accounting basis, CCS reported losses net of taxes
     of ($1,679,537) for the six months ended June 30, 2002.  Statutory  surplus
     (shareholders' equity) of these operations was $5,148,613 and $6,503,218 as
     of June 30, 2002 and December 31, 2001, respectively.

10.  Comprehensive Income
     --------------------

     Comprehensive  income is defined as any change in equity from  transactions
     and other events originating from nonowner sources.  In the Company's case,
     those changes are principally  comprised of reported net income and changes
     in  the  unrealized   appreciation   and   depreciation  of  the  Company's
     available-for-sale  securities.  SFAS No.  130  requires  that the  Company
     report all  components of  comprehensive  income.  The following  summaries
     present the components of comprehensive  income, other than net income, for
     the six months ended June 30, 2002 and June 30, 2001, respectively.

                                                     Consolidated Statements of
                                                        Comprehensive Income
                                                     ---------------------------
                                                       Six Months Ended June 30,
                                                       2002             2001
                                                     ---------------------------
     Net (loss) income ..........................    $(1,479,064)    $   248,615
     Other comprehensive income:
       Unrealized appreciation of available-
         for-sale securities arising during
         period, net of income tax ..............         83,800          81,955
       Reclassification adjustment for (gains)
         losses included in net income,
         net of income tax ......................         (8,051)          2,716
                                                     -----------     -----------
    Comprehensive (loss) income .................    $(1,403,315)    $   333,286
                                                     ===========     ===========





<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            JUNE 30, 2002 (UNAUDITED)


11.  Contingencies
     -------------

     CCS has been named in a class action lawsuit in the United States  District
     Court for the  District  of  Colorado.  The  plaintiffs  are  clients  of a
     registered  investment  advisor (the  "Advisor")  and have alleged that the
     Advisor,   a  registered   broker-dealer,   and  certain  other  defendants
     (excluding CCS) were negligent or otherwise responsible for losses suffered
     by  the  plaintiffs   resulting  from   embezzlement   of  the  plaintiffs'
     investments  by a third  party.  As a separate  count in the  lawsuit,  the
     plaintiffs  have  also  asserted  claims  against  CCS based on a policy of
     insurance  issued  by CCS to the  Advisor.  The  policy  does  not  provide
     coverage  for  embezzlement,  rather  it  insures  losses  caused by market
     declines, providing that the Advisor has followed the investment guidelines
     required by the policy.  On July 31, 2002, the District Court granted CCS's
     motion for summary judgment and dismissed the claims against CCS.








<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.


Forward-looking Statement Disclosure
------------------------------------

     All  statements,  other than  statements of historical  facts,  included or
incorporated by reference in this Form 10-Q which address activities,  events or
developments  which the Company expects or anticipates  will or may occur in the
future,  including  statements  regarding  the Company's  competitive  position,
changes  in  business   strategy  or  plans,   the  availability  and  price  of
reinsurance,  the Company's ability to pass on price increases, plans to install
the  Bond-Pro(R)  program  in  independent  insurance  agencies,  the  impact of
insurance laws and regulation,  the  availability of financing,  reliance on-key
management  personnel,  ability to manage  growth,  the  Company's  expectations
regarding the adequacy of current  financing  arrangements,  product  demand and
market  growth,  and other  statements  regarding  future plans and  strategies,
anticipated events or trends similar expressions concerning matters that are not
historical facts are forward-looking  statements.  These statements are based on
certain  assumptions and analysis made by the Company in light of its experience
and its perception of historical trends,  current conditions and expected future
developments   as  well  as  factors  it  believes   are   appropriate   in  the
circumstances.  However,  whether actual results and  developments  will conform
with the Company's  expectations and predictions is subject to a number of risks
and uncertainties  which could cause actual results to differ  significantly and
materially  from past results and from the Company's  expectations.  These risks
and uncertainties  include,  but are not limited to, changes in the market value
of the  Company's  investments,  increases  in  the  Company's  liability  under
derivative  securities,  losses on claims in excess of the  Company's  reserves,
competition in the insurance industry,  inability to recover from reinsurers for
unpaid  losses,  unanticipated  losses  from  litigation,  the effects of new or
existing   government   regulations,   and   the   impact   of  new   accounting
pronouncements. All of the forward-looking statements made in this Form 10-Q are
qualified by these cautionary  statements and there can be no assurance that the
actual  results or  development  anticipated by the Company will be realized or,
even if substantially  realized that they will have the expected consequences to
or effects on the Company or its business or operations.



<PAGE>


Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

     The capacity of a surety company to underwrite insurance and reinsurance is
based on maintaining  liquidity and capital  resources  sufficient to pay claims
and expenses as they become due. Based on standards  established by the National
Association  of Insurance  Commissioners  (NAIC) and  promulgated by the Florida
Department of Insurance, the Company is permitted to write net premiums up to an
amount equal to three times its statutory surplus, or approximately  $15,500,000
at December 31, 2002.  Statutory  guidelines impose an additional  limitation on
increasing net written  premiums to no more than 33% of prior year's net written
premiums.  Under  these  guidelines,  the  Company  could  increase  net written
premiums by  approximately  $1,900,000  in the year 2002  subject to  risk-based
capital limitations.

     At June 30, 2002,  $24,442,560  of the  Company's  total assets  calculated
based on generally accepted accounting  principles were comprised as follows: 48
percent  in cash and  investments  (including  accrued  investment  income),  30
percent in receivables  and  reinsurance  recoverables,  6 percent in income tax
recoverable  and  deferred  tax asset,  10 percent in  intangibles  and deferred
policy acquisition costs and 6 percent in other assets.

     The Company follows  investment  guidelines that are intended to provide an
acceptable return on investment while maintaining  sufficient  liquidity to meet
its obligations.

     Net cash (used in) provided by operating  activities was  ($1,830,715)  and
$654,534 for the six months ended June 30, 2002 and 2001, respectively. Net cash
used in  operating  activities  for the period  ended June 30, 2002 is primarily
attributed to loss from operations,  a decrease in ceded reinsurance payable, an
increase  in  reinsurance  recoverable  and is offset by  increases  in accounts
payable and policy and  derivative  liabilities.  Net cash provided by operating
activities  for the six months  ended June 30, 2001 is primarily  attributed  to
income from operations, a decrease in reinsurance recoverable and an increase in
derivative  liability  which are offset by an increase  in accounts  receivable,
derivative liability, and ceded reinsurance payable.

     Net cash used in investing activities was $649,631 and $230,878 for the six
months ended June 30, 2002, and 2001, respectively. Investing activities consist
of purchases, sales, and maturities of investments.

     Net cash used in financing activities was $173,785 and $158,158 for the six
months ended June 30, 2002 and 2001, respectively.  Financing activities consist
primarily of payments on long-term debt.

     It is anticipated  that the liquidity  requirements  of the Company will be
met primarily by funds  generated  from  operations.  The  principal  sources of
operating cash flows are premiums,  investment  income, and sales and maturities
of investments.  The Company believes that total invested assets, including cash
and  short-term  investments,  are sufficient in the aggregate and have suitably
scheduled   maturities  to  satisfy  all  policy  claims  and  other   operating
liabilities.

     As of June 30, 2002, the Company  believes that it has  sufficient  capital
resources to fund its present capital requirements.


<PAGE>


Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------            FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


     Critical Accounting Policies
     ----------------------------

     The  preparation of  consolidated  financial  statements in conformity with
accounting  principles  generally  accepted in the United  States  requires  the
Company 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 revenues and
expenses during the reporting period.  These estimates and assumptions are based
on  historical  experience  and various  other  factors  that are believed to be
reasonable  under the  circumstances.  Actual  results  could  differ from these
estimates under different assumptions or conditions.

     The  Company  believes  the  following  accounting  policies  are the  most
critical since these policies  require  significant  judgment or involve complex
estimations  that are  important  to the  portrayal of the  Company's  financial
condition and operating results:

     Asset Impairment
     ----------------

     The Company  reviews  long-lived  assets,  including  certain  identifiable
intangibles, for impairment whenever events or changes in circumstances indicate
that the carrying value of an asset may not be recoverable.  Upon  determination
that the carrying  value of the asset is impaired,  the Company  would record an
impairment  charge or loss.  Future adverse changes in market conditions or poor
operating  results of the  underlying  investment  could  result in losses or an
inability  to  recover  the  carrying  value of the  investment  that may not be
reflected  therein;  and  therefore,  might  require  the  Company  to record an
impairment charge in the future.

     Derivatives
     -----------

     Statement  of  Financial   Accounting  Standard  No.  133,  Accounting  for
Derivative  Instruments and Hedging  Activities ("SFAS No.133") is effective for
all fiscal  years  beginning  after June 15,  2000.  SFAS No.  133,  as amended,
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities. Under SFAS No. 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative.  The Company
adopted  SFAS No. 133  effective  January 1, 2001.  The Company  identified  one
product that meets the definition of a derivative  instrument as defined in SFAS
No. 133. The identified  derivative  was formerly  accounted for as an insurance
contract within the policy  liabilities  for loss and loss  adjustment  expenses
account in the  consolidated  balance  sheet.  At December 31, 2001 and June 30,
2002 the fair value of the derivative  instrument has been determined by using a
financial model that incorporates market data and other assumptions.  Due to the
volatility  in the  marketplace,  the Company has  suspended  marketing  of this
product effective September 2001.




<PAGE>



Item 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ---------------------------------------------


     Critical Accounting Policies (continued)
     ----------------------------------------

     Reserves for Unpaid Losses and Adjustment Expenses
     --------------------------------------------------

     The liability for loss and loss adjustment  expenses including incurred but
not  reported  losses is based on the  estimated  ultimate  cost of settling the
claim using  traditional  paid and  incurred  loss  development  methods.  These
estimates are subject to the effects of trends in loss  severity and  frequency.
Although  considerable  variability  is inherent in such  estimates,  management
believes  that  the  liabilities  for  loss and  loss  adjustment  expenses  are
adequate.  The estimates are  continually  reviewed and adjusted as necessary as
experience  develops or new  information  becomes known.  Such  adjustments  are
included  in  current  operations.  A  liability  for all costs  expected  to be
incurred in connection  with the  settlement of unpaid loss and loss  adjustment
expenses is accrued  when the related  liability  for unpaid  losses is accrued.
Loss adjustment  expenses include costs associated directly with specific claims
paid or in the process of settlement,  such as legal and adjusters'  fees.  Loss
adjustment  expenses  also include  other costs that cannot be  associated  with
specific  claims but are related to losses paid or in the process of settlement,
such as internal costs of the claims function. The Company does not discount its
reserves for losses and loss adjustment  expenses.  The Company writes primarily
surety  contracts  which are of short  duration.  The Company  does not consider
investment  income in  determining  if a premium  deficiency  relating  to short
duration contracts exists.

     Reinsurance
     -----------

     The Company  assumes and cedes insurance with other insurers and reinsurers
to limit  maximum loss,  provide  greater  diversification  of risk and minimize
exposure on larger risks.  Premiums and loss and loss  adjustment  expenses that
are ceded under  reinsurance  arrangements  reduce the  respective  revenues and
expenses.  Amounts  recoverable  from  reinsurers  are  estimated  in  a  manner
consistent with the claim liability associated with the reinsured policy and are
reported as reinsurance recoverable.

     Income Taxes
     ------------

     The Company accounts for income taxes under the liability method. Under the
liability  method,  deferred  income  taxes are  established  for the future tax
effects of temporary  differences  between the tax and financial reporting bases
of assets and  liabilities  using  currently  enacted tax rates.  Such temporary
differences primarily relate to insurance reserves,  deferred policy acquisition
costs and  intangible  assets.  The effect on deferred  taxes of a change in tax
rates is recognized in income in the period of enactment.




<PAGE>


Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

              COMPARISON OF SIX MONTHS ENDED JUNE 30, 2002 AND 2001
              -----------------------------------------------------

     Direct,  assumed and ceded  premiums  earned for the period  ended June 30,
2002  exceeded  premiums  earned for the same period in 2001 by $745,090 or 12%.
Net premium  income for the period ended June 30, 2002 and 2001,  was $7,004,724
and $6,259,634, respectively.

     Net  investment  income for the period  ending June 30, 2002  decreased  by
$53,111 when compared to the same period in 2001.  The decrease is attributed to
an  overall  decrease  in  interest  rates  earned on the bond and money  market
portfolio.  Other income for the period ended June 30, 2002 was consistent  when
compared to the same period of 2001.

     During  the six  months  ended  June 30,  2002,  loss  and loss  adjustment
expenses  increased by $3,006,626  when compared to the same period in 2001. The
increase  is  attributed  to  additional  incurred  losses  and loss  adjustment
expenses on direct business and assumed business in the amount of $1,235,655 and
$1,770,971,  respectively.  The increase in direct  losses is  attributed to one
large claim failing to meet the Company's  reinsurance  treaty  guidelines.  The
large volume of assumed losses  incurred  during the first six months of 2002 is
due to a change in estimates  based on  information  received from the Company's
reinsurer.  As a result of the unusually high volume of paid claims  ($5,037,654
in the six months  ended June 30, 2002 as compared  to  $2,006,861  for the same
period in 2001) reserves were strengthened.

     During the six months ended June 30, 2002,  derivative expense increased by
$172,424  or 20%  when  compared  to the same  period  in 2001.  The  change  is
attributed  to an  increase  in the  market  value of the  derivative  liability
requiring an increase in the liability for derivative valuation.

         During the six months ended June 30, 2002, amortization of deferred
policy acquisition costs was $2,315,653 as compared to $2,038,957 for the same
period in 2001. The amortization of deferred policy acquisition costs is 23% and
24% of written premiums for the six months ended June 30, 2002 and 2001,
respectively.

     Operating  expenses for the six months ended June 30, 2002 when compared to
the same period in 2001 increased by 1%. The Company's largest operating expense
is salary and related  expenses  representing 56% and 51% of the total operating
expense at June 30, 2002 and 2001,  respectively.  The Company  goal for 2002 is
maintaining consistency with prior year operating expenses without disruption of
its marketing goals.

     Interest expense  represents  payment to two subsidiary  agencies  previous
owners.  The decrease in interest expense for the six months ended June 30, 2002
is due to a decrease in the principal amount of the long-term debt.

     Income  taxes  in the six  months  ending  June  30,  2002  and  2001  were
calculated using effective rates of 37.4% and 31.6%, respectively. The variation
in the income tax rate is attributable to tax-exempt interest in the prior year.




<PAGE>




Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

             COMPARISON OF THREE MONTHS ENDED JUNE 30, 2002 AND 2001
             -------------------------------------------------------


     Direct, assumed and ceded premiums for the second quarter of 2002 increased
$744,626 or 23% when compared to the same period in 2001. Net premium income for
the  period  ended  June 30,  2002 and  2001,  was  $3,919,563  and  $3,174,937,
respectively.

     Net  investment  income for the period  ending June 30, 2002  decreased  by
$25,662 when compared to the same period in 2001.  The decrease is attributed to
an  overall  decrease  in  interest  rates  earned on the bond and money  market
portfolio.  Other income decreased  slightly  ($4,740) when compared to the same
period of 2001.

     During the three  months  ended  June 30,  2002,  loss and loss  adjustment
expenses  increased by $2,027,759  when compared to the same period in 2001. The
increase is primarily attributed to incurred losses and loss adjustment expenses
on direct and assumed  business.  Direct losses  increase of $1,146,056  for the
three  months  ended June 30,  2002 when  compared to the same period in 2001 is
primarily  the  result  of  an  incurred  claim  not  covered  and  the  Company
reinsurance  treaty.  Assumed losses  increased by $881,703 for the three months
ended June 30, 2002  representing  claims  incurred due to a change in estimates
received from the Company's reinsurers. As a result, reserves were strengthened.

     During the three months ended June 30, 2002,  derivative  expense increased
by $307,933 when  compared to the same period in 2001.  The change is attributed
to an increase in the market  value of the  derivative  liability  requiring  an
increase in the liability for derivative valuation.

     During the three  months  ended June 30,  2002,  amortization  of  deferred
policy  acquisition  costs was  $1,305,000  as compared to $942,336 for the same
period in 2001. The amortization of deferred policy acquisition costs is 29% and
26% of written  premiums  for the three  months  ended  June 30,  2002 and 2001,
respectively. The 3% variance is attributed to the mix of business.

     Operating  expenses for the three months ended June 30, 2002 when  compared
to the same period in 2001  increased  by 2%. The  Company's  largest  operating
expense is salary and  related  expenses  representing  58% and 51% of the total
operating expense at June 30, 2002 and 2001, respectively.  The Company goal for
2002 is  maintaining  consistency  with  prior  year  operating  expenses  while
maintaining its marketing goals.

     Interest expense  represents  payment to two subsidiary  agencies' previous
owners.  The  decrease in interest  expense for the three  months ended June 30,
2002 is due to a decrease in the principal amount of the long-term debt.

     Income  taxes  in the  three  months  ending  June 30,  2002 and 2001  were
calculated using annual effective rates of 38.0% and 14.2%, respectively.




<PAGE>



Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------    ----------------------------------------------------------

     The Company had  approximately  $11.5 million of investments as of June 30,
2002. These investments largely consist of state government obligations and have
either  variable rates of interest or stated interest rates ranging from 3.5% to
8.5%.  The Company's  investments  are exposed to certain  market risks inherent
with such assets.  The risk of defaults is mitigated by the Company's  policy of
investing in securities  with high credit  ratings and  investing  through major
financial  institutions with high credit ratings.  The Company has notes payable
of approximately $1.1 million at an average interest rate of 8.6%.






<PAGE>



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

Item 1.        Legal proceedings
------         -----------------

               CCS has been named in a class action lawsuit.  The plaintiffs are
               clients of a registered  investment  advisor (the  "Advisor") and
               have alleged that the Advisor,  a registered  broker-dealer,  and
               certain  other  defendants  (excluding  CCS)  were  negligent  or
               otherwise  responsible  for  losses  suffered  by the  plaintiffs
               resulting from  embezzlement of the plaintiffs'  investments by a
               third party.  As a separate count in the lawsuit,  the plaintiffs
               have  also  asserted  claims  against  CCS  based on a policy  of
               insurance  issued  by CCS to the  Advisor.  The  policy  does not
               provide  coverage  for  embezzlement,  rather it  insures  losses
               caused  by  market  declines,  providing  that  the  Advisor  has
               followed the  investment  guidelines  required by the policy.  On
               July 31, 2002, the District Court granted CCS' motion for summary
               judgment and dismissed the claims against CCS.

Item 2.        Changes in securities
------         ---------------------

               None

Item 3.        Defaults upon senior securities
------         -------------------------------

               None

Item 4.        Submission of matters to a vote of security holders
------         ---------------------------------------------------

               None

Item 5.        Other  Information
------         ------------------

               On April 19, 2002, the Company  received a letter from The Nasdaq
               Stock Market  indicating  that certain  financial  indicators  as
               reported in the Company's December 31, 2001 financial  statements
               were below applicable  minimum  requirements  issued by Nasdaq to
               maintain  listing on the Nasdaq  SmallCap  Market,  including its
               current trading price and market float.  Unless these  indicators
               do improve by  September  3, 2002,  the  Company's  stock will be
               de-listed  from  Nasdaq.  The Company  common  stock is currently
               eligible  to trade on the OTC  Bulletin  Board,  but will only be
               traded if a qualified member of NASD decides to sponsor the stock
               for trading.


<PAGE>




                     PART II - OTHER INFORMATION (CONTINUED)
                     ---------------------------------------

Item 6.        Exhibits and reports on Form 8-K
------         --------------------------------

               (a)  The  following  documents  are  filed  as  exhibits  to this
                    Quarterly Report on Form 10-Q:

                    3(a) Articles of Incorporation*

                    3(b) Bylaws*

                    99.1 Certification of Periodic Financial Reports

               (b)  No  reports on Form 8-K were filed  during the  quarter  for
                    which this report is filed.

               *    Incorporated  by referenced to the same exhibit number filed
                    with  the  Registrant's  Registration  Statement  on Form 10
                    (File No. 0-19727).



<PAGE>



                                   SIGNATURES
                                   ----------

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


                                    CUMBERLAND TECHNOLOGIES, INC.
                                    -----------------------------


Date:    August 14, 2002            By:  /s/  Joseph M. Williams
                                    --------------------------------------------
                                    Joseph M. Williams
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)

Date:    August 14, 2002            By:  /s/  Carol S. Black
                                    --------------------------------------------
                                    Carol S. Black
                                    Secretary and Chief Financial Officer
                                    (Principal Accounting and Financial Officer)