UNITED STATES

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

[Mark One]

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

               For the quarterly period ended September 30, 2003.
                                       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 [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
determined in Rule 12b-2 of the Exchange Act).
                                        Yes [ ] No [x]

                      Applicable Only to Corporate Issuers

The  number  of shares  of the  Registrant's  common  stock,  $.001  par  value,
outstanding as of September 30, 2003 was 5,597,244 shares.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.
                                    FORM 10-Q
                                      INDEX
                                      -----

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

       Item 1. Condensed Consolidated Balance Sheets at September 30, 2003
                (unaudited) and December 31, 2002............................1-2

               Condensed Consolidated Statements of Operations (unaudited)
                 for the nine months ended September 30, 2003 and 2002.........3

               Condensed  Consolidated Statements of Operations (unaudited)
                 for the three months ended September 30, 2003 and 2002........4

               Condensed Consolidated Statements of Stockholders' Equity for
                 the nine months ended September 30, 2003  (unaudited)
                 and for the year ended December 31, 2002......................5

               Condensed Consolidated Statements of Cash Flows (unaudited)
                 for the nine months ended September 30, 2003
                 and 2002......................................................6

               Notes to Condensed Consolidated Financial Statements
                 (unaudited)................................................7-16

               Forward-looking Statement Disclosure...........................17

      Item 2.  Management's Discussion and Analysis of Financial Condition
                 and Results of Operations.................................18-23

      Item 3.  Quantitative and Qualitative Disclosures about
                 Market Risk..................................................24

      Item 4.  Controls and Procedures.....................................24-25

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...............................26

               Signatures..................................................27-31


<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
                                     ------


                                                      --------------------------
                                                      September 30, December 31,
                                                          2003          2002
                                                      --------------------------
                                                       (unaudited)
Investments:
-----------
   Debt securities available-for-sale at fair value    $ 5,242,096   $ 7,758,657
   Debt securities held-to-maturity at amortized
     cost (fair value, September 30, 2003 -
     $100,000 and December 31, 2002 -
     $367,681), respectively........................       100,000       359,898
   Mortgage loans on real estate, at unpaid
     principal .....................................       676,322       716,413
   Short-term investments ..........................       433,993       433,993
                                                       -----------   -----------
     Total investments .............................     6,452,411     9,268,961

Cash and cash equivalents ..........................       189,700       593,259
Accrued investment income ..........................        87,642       123,894
Reinsurance recoverable ............................    13,310,057    12,089,177

Accounts receivable:
   Nonaffiliate less allowance for doubtful
     accounts of $77,122 and $116,323
     at September 30, 2003 and December 31,
     2002, respectively ............................     1,498,775     2,518,187
Income tax recoverable .............................        98,981     1,073,686
Deferred income tax asset ..........................       410,800       401,738
Deferred policy acquisition costs ..................     1,613,609     1,665,694
Intangibles, net ...................................       223,126       288,473
Goodwill ...........................................       152,780       152,780
Other investment ...................................       700,124       700,124
Other assets .......................................       185,990       302,515
                                                       -----------   -----------
                                                       $24,923,995   $29,178,488
                                                       ===========   ===========





            See notes to condensed consolidated financial statements.


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------


                                                   -----------------------------
                                                   September 30,    December 31,
                                                       2003            2002
                                                   -----------------------------
                                                   (unaudited)
Policy liabilities and accruals:
-------------------------------
   Loss and loss adjustment expense reserves ....   $  6,615,059    $ 8,895,470
   Derivative instruments .......................      4,130,558      4,346,285
   Unearned premiums ............................      4,312,521      4,587,175

Ceded reinsurance payable .......................           --           26,883
Drafts outstanding ..............................        575,282           --
Accounts payable and other liabilities ..........      1,981,676      3,775,924
Long-term debt:
   Nonaffiliate .................................        401,417        455,417
   Affiliate ....................................        604,055        604,055
                                                    ------------    ------------
   Total liabilities ............................     18,620,568     22,691,209
                                                    ------------    ------------

Stockholders' equity:
--------------------
   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 .......        171,303        210,574
   Accumulated deficit ..........................       (880,389)      (735,808)
   Less treasury stock, at cost, 318,112 shares .       (263,719)      (263,719)
                                                    ------------    ------------
   Total stockholders' equity ...................      6,303,427      6,487,279
                                                    ------------    ------------
       Total liabilities and stockholders' equity   $ 24,923,995    $29,178,488
                                                    ============    ============



            See notes to condensed consolidated financial statements.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
           -----------------------------------------------------------


                                                 -------------------------------
                                                 Nine Months Ended September 30,
                                                     2003             2002
                                                 -------------------------------

Revenue:
-------
Direct premiums earned.........................  $ 7,610,770     $   10,734,758
Reinsurance premiums earned....................      436,904          2,828,414
Less reinsurance ceded.........................   (1,963,616)        (2,458,760)
                                                 -----------     ---------------
Net premium income.............................    6,084,058         11,104,412

Net investment income..........................      209,039            373,411
Net realized investment gains .................       70,835             14,851
Other income...................................    1,535,702          1,611,878
                                                 ------------    ---------------
Total revenue..................................    7,899,634         13,104,552
                                                 ------------    ---------------

Benefits and Expenses:
---------------------
Losses and loss adjustment expenses............    1,774,383          6,253,934
Derivative expense.............................      428,218          2,505,923
Amortization of deferred policy acquisition
    costs......................................    1,781,801          3,294,236
Operating expenses.............................    4,109,396          4,781,024
Interest expense...............................       24,917             27,369
                                                  ----------     ---------------
Total expenses.................................    8,118,715         16,862,486
                                                  ----------     ---------------

Loss before income tax benefit.................     (219,081)        (3,757,934)
Income tax benefit.............................      (74,500)        (1,179,304)
                                                  ----------     ---------------
Net loss.......................................   $ (144,581)    $   (2,578,630)
                                                  ==========     ===============

Weighted average shares outstanding - basic....    5,597,244          5,597,244
                                                  ==========     ===============
Net loss per share - basic.....................   $    (0.03)    $        (0.46)
                                                  ==========     ===============



            See notes to condensed consolidated financial statements.


<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
           -----------------------------------------------------------


                                                --------------------------------
                                                Three Months Ended September 30,
                                                      2003              2002
                                                --------------------------------

Revenue:
-------
Direct premiums earned .........................    $ 2,490,831     $ 3,723,222
Reinsurance premiums earned ....................         25,560         959,831
Less reinsurance ceded .........................       (609,448)       (583,365)
                                                    -----------     -----------
Net premium income .............................      1,906,943       4,099,688

Net investment income ..........................         53,504         126,927
Net realized investment gains ..................         29,576          27,708
Other income ...................................        453,796         540,419
                                                    -----------     -----------
Total revenue ..................................      2,443,819       4,794,742
                                                    -----------     -----------

Benefits and Expenses:
---------------------
Losses and loss adjustment expenses ............        316,989       2,284,615
Derivative expense .............................         (6,054)      1,464,451
Amortization of deferred policy acquisition
    costs ......................................        771,679         978,582
Operating expenses .............................      1,369,746       1,455,660
Interest expense ...............................          7,928           8,306
                                                    -----------     -----------
Total expenses .................................      2,460,288       6,191,614
                                                    -----------     -----------

Loss before income tax benefit .................        (16,469)     (1,396,872)
Income tax expense (benefit) ...................          1,682        (297,307)
                                                    -----------     -----------
Net loss .......................................    $   (18,151)    $(1,099,565)
                                                    ===========     ===========

Weighted average shares outstanding - basic ....      5,597,244       5,597,244
                                                    ===========     ===========
Net loss per share - basic .....................    $      0.00     $     (0.20)
                                                    ===========     ===========




            See notes to condensed consolidated financial statements.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 (UNAUDITED) AND
                      FOR THE YEAR ENDED DECEMBER 31, 2002
                      ------------------------------------


<TABLE>
<CAPTION>

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

Balance at January 1, 2002 ........    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 .................                                              139,845                                    139,845

   Net loss .......................                                                         (1,569,169)                  (1,569,169)

   Comprehensive loss .............                                                                                      (1,429,324)
                                     -----------    --------   -----------    ----------    -----------    -----------   -----------

Balance at December 31, 2002 ......    5,915,356       5,916     7,270,316       210,574      (735,808)      (263,719)    6,487,279

   Net unrealized depreciation
       of available-for-sale
       securities, net of
       income tax..................                                              (39,271)                                   (39,271)

   Net loss .......................                                                           (144,581)                    (144,581)
                                                                                                                         -----------

   Comprehensive loss .............                                                                                        (183,852)
                                     -----------    --------   -----------    ----------   -----------    -----------    -----------

Balance at
  September 30,2003 5,915,356...... $ 5,915,356        5,916   $ 7,270,316    $  171,303   $  (880,389)   $  (263,719)   $6,303,427
                                    ===========     ========   ===========    ==========   ===========    ===========    ===========
</TABLE>



            See notes to condensed consolidated financial statements.


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
           -----------------------------------------------------------


                                                 -------------------------------
                                                 Nine Months Ended September 30,
                                                      2003             2002
                                                 -------------------------------
Operating activities:
--------------------
Net loss ............................................  $  (144,581) $(2,578,630)
Adjustments to reconcile net loss to cash used in
   operating activities:
       Accretion of investment discounts and premiums       17,729       23,414
       Policy acquisition costs amortized ...........    1,781,801    3,294,236
       Policy acquisition costs deferred ............   (1,729,716)  (3,355,732)
       Amortization .................................       65,347       89,476
       Net realized (gain) loss on disposal of
           investments ..............................      (70,835)     (14,851)
       (Increase) decrease in:
           Accrued investment income ................       36,252       21,266
           Reinsurance recoverable ..................   (1,220,880)  (1,936,921)
           Accounts receivable ......................    1,019,412    2,144,592
           Income tax recoverable ...................      974,705   (1,056,625)
           Deferred income tax asset ................       14,631     (271,623)
           Other assets .............................      116,525       16,864
       (Decrease) increase in:
           Policy liabilities and accruals ..........   (2,555,065)    (443,475)
           Derivative liability .....................     (215,727)   2,350,409
           Ceded reinsurance payable ................      (26,883)    (933,414)
           Accounts payable and other liabilities ...   (1,794,248)   1,468,770
           Drafts outstanding .......................      575,282         --
           Income tax payable .......................          --      (113,284)
                                                       -----------   -----------
Net cash used in operating activities ...............   (3,156,251)  (1,295,528)
                                                       -----------   -----------

Investing activities:
--------------------
Securities available-for-sale:
       Purchases - fixed maturities .................   (1,324,158)  (3,172,826)
       Proceeds from fixed maturities ...............    3,830,759    3,840,296
Securities held-to-maturity:
       Proceeds from sales - debt securities ........      260,000         --
Proceeds (purchases) of mortgage loans ..............       40,091      (35,339)
                                                        ----------   -----------
Net cash provided by investing activities ...........    2,806,692      632,131
                                                        ----------   -----------
Financing activities:
--------------------
Payments on long-term debt ..........................      (54,000)    (176,606)
Net change in advances to affiliates ................         --        (29,650)
                                                        ----------   -----------
Net cash used in financing activities ...............      (54,000)    (206,256)
                                                        ----------   -----------

Decrease in cash and cash equivalents ...............      (403,559)   (869,653)
Cash and cash equivalents, beginning of period ......       593,259   2,654,131
                                                        -----------  -----------
Cash and cash equivalents, end of period ............   $   189,700  $1,784,478
                                                        ===========  ===========

Supplemental cash flows disclosure:
----------------------------------
Cash paid for interest ..............................   $      --    $    2,451
                                                        -----------  -----------
Cash paid for income taxes ..........................   $      --    $  214,300
                                                        ===========  ===========





            See notes to condensed consolidated financial statements.


<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (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 nine  months  ended  September  30, 2003 are not
     necessarily  indicative  of the results that may be expected for any future
     quarters or the year ending  December  31, 2003.  For further  information,
     refer to consolidated  financial  statements and notes thereto for the year
     ended December 31, 2002,  included in the Company's Form 10-K as filed with
     the United States Securities and Exchange Commission on May 5, 2003.



<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (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 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 nine months when purchased.  These  investments are
     reported at cost, which approximates fair value.

     Investments  in which the Company has a 20% - 50%  ownership  interest  are
     accounted for using the equity method.

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

     The Company  considers all highly liquid  investments  having a maturity of
     twelve 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.

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

     Intangible  assets are stated at cost and principally  represent  purchased
     customer  accounts  and  the  excess  of  costs  over  the  fair  value  of
     identifiable  net assets acquired  ("Goodwill").


<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


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

     Intangibles (continued)
     ----------------------

     Purchased customer accounts,  noncompete agreements, and purchased contract
     agreements are being  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.

     In accordance with SFAS 142,  "Goodwill and Other Intangible  Assets",  the
     Company  discontinued  the  amortization of goodwill  effective  January 1,
     2002.  At  September  30, 2003 and  December  31,  2002,  goodwill,  net of
     accumulated amortization, was $152,780.

     In accordance with SFAS 144,  "Accounting for the Impairment or Disposal of
     Long-Lived Assets", which became effective for the Company as of January 1,
     2002,  the Company  periodically  reviews the carrying  value of long-lived
     assets to determine if impairment has occurred.  Impairment losses, if any,
     are recorded in the period identified.  Significant judgment is required to
     determine whether or not impairment has occurred. The determination is made
     by evaluating  expected future  undiscounted  cash flows or the anticipated
     recoverability of costs incurred and, if necessary,  determining the amount
     of the loss, if any, by evaluating the fair value of the assets.

     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 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.



<PAGE>

                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


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

     Derivative Instruments
     ----------------------

     The Company adopted SFAS No. 133 "Accounting for Derivative Instruments and
     Hedging  Activities"  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 for periods prior to January 1, 2001 and
     on 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 September 30, 2003 and December 31, 2002 is $4,130,558  and  $4,346,285,
     respectively. At September 30, 2003 and December 31, 2002 the fair value of
     the derivative  instrument  was determined by using a financial  model that
     incorporates  market data and other  assumptions.  Due to the volatility in
     the marketplace,  the Company suspended marketing of this product effective
     September 2001. The Company is not involved in any hedging activities.

     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 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

                         SEPTEMBER 30, 2003 (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  $410,800  and
     $401,738  at  September  30,  2003 and  December  31,  2002,  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 39,500 and 54,700  outstanding  stock  options at
     September 30, 2003 and 2002, respectively,  had an immaterial effect on the
     results of the  calculations of earnings per share.  The outstanding  stock
     options were not included in the loss per share calculations, as the effect
     would be anti-dilutive to the Company's net loss for the nine-month periods
     ended September 30, 2003 and 2002.



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


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

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

     The  majority of the  Company's  business  relates to surety  bonds,  which
     provide  performance  and  payment  bonds  for  individual  and  commercial
     contractors,  and  market  performance  products,  which  provide  specific
     liability  coverage  for  professional   services  rendered  by  registered
     investment  advisors.  Accordingly,  the  occurrence  of  adverse  economic
     conditions could have a material adverse effect on the Company's  business,
     although for surety bonds, no such conditions have been  encountered in the
     Company's  past  experience.  For  surety  bonding,  the  Company  requires
     collateral from surety bond customers if the customer fails to meet 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 August 2001, the FASB issued SFAS 143,  "Accounting for Asset Retirement
     Obligations".  SFAS 143  requires  entities  to record  the fair value of a
     liability  for an asset  retirement  obligation  in the  period in which it
     occurred.  The  standard is  effective  for fiscal  years  beginning  after
     September  15, 2002.  The  adoption of SFAS 143 did not have a  significant
     impact on the Company's financial position or results of operations.

     In  September  2002,  the FASB  issued  SFAS  146,  "Accounting  for  Costs
     Associated with Exit or Disposal Activities".  SFAS 146 addresses financial
     accounting  and  reporting  for  costs  associated  with  exit or  disposal
     activities and nullifies EITF Issue No. 94-3,  "Liability  Recognition  for
     Certain Employee  Termination  Benefits and Other Costs to Exit an Activity
     (including  Certain  Costs  Incurred  in a  Restructuring)".  SFAS No.  146
     requires costs associated with exit or disposal activities to be recognized
     when the costs are incurred, rather than at a date of commitment to an exit
     or disposal. The adoption of SFAS 146 does not have a significant impact on
     the Company's financial position or results of operations.



<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


2.   Summary of Significant Accounting Policies (continued)

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

     In April of 2003,  the FASB  issued  SFAS No. 149  entitled  "Amendment  of
     Statement 133 on Derivative  Instruments and Hedging Activities" ("SFAS No.
     149"),  SFAS  No.  149  amends  and  clarifies  accounting  for  derivative
     instruments,  including certain  derivative  instruments  embedded in other
     contracts,   and  for  hedging  activities  under  SFAS  No.  133  entitled
     "Accounting for Derivative  Instruments and Hedging  Activities" ("SFAS No.
     133"),  SFAS No. 149 is effective  for  contracts  entered into or modified
     after June 30, 2003 and for hedging relationships designated after June 30,
     2003. The adoption of SFAS No. 149 did not have a significant impact on the
     Company's financial position or results of operations.

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

     Certain  amounts in the 2002 condensed  consolidated  financial  statements
     have  been  reclassified  to  conform  to the 2003  condensed  consolidated
     financial statement presentation.

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

     In 1988,  CCS issued a surplus  debenture to KC in exchange for  $3,000,000
     which  bore  interest  at 10  percent  per annum.  Interest  and  principal
     payments  were 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
     September  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.  At January 1, 2003, CTI forgave the $2,048,734  balance of the
     surplus note increasing CCS's paid in capital to $3,048,734.

     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.

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

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

                                          --------------------------------------
                                          September 30, 2003   December 31, 2002
                                          --------------------------------------
       Fixed maturities, net of
         income tax ...............                 $171,303           $ 210,574
                                                   =========           =========



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


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

     The  Company  has  recorded a deferred  income  tax asset of  $410,800  and
     $401,738 at September 30, 2003 and December 31, 2002, respectively.

     The Company's  provision for income taxes for the  nine-month  period ended
     September 30, 2003 and 2002 have been calculated using an effective rate of
     approximately 34% and 31%, 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, 2003 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  outstanding  balance  on 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
     nine-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 was due March 1, 2002 bearing  interest at 8% through February 28,
     2001 and 10%  thereafter.  Principal  payments of $125,000 are due annually
     beginning  March 1, 2000. On March 1, 2002, a final payment of $125,000 was
     made on the note due March 1,  2002.  The other note is due  September  30,
     2010 and bears  interest  at 9%.  Principal  payments  of $40,000  were due
     annually  for nine 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.

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

     The Company's Consolidated Balance Sheet includes reinsurance  recoverables
     of  $13,310,057  at  September  30,  2003.  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 for unpaid losses are presented as an asset in the  accompanying
     condensed consolidated financial statements.



<PAGE>



                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


7.   Reinsurance (continued)
     -----------------------

     The  components  of the  recoverables  include  amounts  due on paid claims
     subject to reinsurance  treaties and amounts  recoverable on unpaid losses.
     Amounts  recoverable  from  reinsurers  on unpaid losses are estimated in a
     manner  consistent  with the  future  policy  benefit  and claim  liability
     associated  with  the  reinsured  policies  and  are  subject  to  inherent
     uncertainties.  Due  to  the  inherent  uncertainties  in  the  process  of
     establishing  these amounts,  the actual  ultimate amount could differ from
     the currently recorded amount.

     Reinsurance  contracts do not relieve the ceding company of its obligations
     to indemnify its own policyholders.

8.   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 income taxes of ($294,298) for the nine months ended
     September  30,  2003.  Statutory  surplus  (shareholders'  equity) of these
     operations  was  $4,166,400  and  $4,734,899  as of September  30, 2003 and
     December 31, 2002, respectively.

9.   Comprehensive Loss
     ------------------

     Comprehensive loss is defined as any change in equity from transactions and
     other events originating from nonowner sources. The Company's comprehensive
     loss is  comprised  of  reported  net loss and  changes  in the  unrealized
     appreciation of available-for-sale securities. The following summarizes the
     components of comprehensive loss:



<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         SEPTEMBER 30, 2003 (UNAUDITED)
                         ------------------------------


9.   Comprehensive Loss (continued)
     ------------------------------

                                                    Consolidated Statements of
                                                       Comprehensive Loss
                                                --------------------------------
                                                 Nine Months Ended September 30,
                                                      2003             2002
                                                --------------------------------
Net loss ...................................         $  (144,581)   $(2,578,630)
Other comprehensive income:
    Unrealized appreciation of available-
       for-sale securities arising during
       period, net of income tax ...........              16,792        176,324
    Reclassification adjustment for (losses)
gains included in net income, net of
       income tax ..........................             (56,063)        32,535
                                                     -----------    -----------
Comprehensive loss .........................        $   (183,852)   $(2,369,771)
                                                    ============    ============




<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 liability for
loss  and loss  adjustment  expenses,  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 Financial Services, the Company is permitted to write net premiums
up to an amount equal to three times its  statutory  surplus,  or  approximately
$14,200,000  at December 31, 2003.  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  $4,100,000  in the year 2003 subject to
risk-based capital limitations.

     At September 30, 2003, $24,923,995 of the Company's total assets calculated
based on  accounting  principles  generally  accepted  in the  United  States of
America were comprised as follows: 27 percent in cash and investments (including
accrued   investment   income),   59  percent  in  receivables  and  reinsurance
recoverables, 2 percent in income tax recoverable and deferred income tax asset,
8 percent in intangibles and deferred policy  acquisition costs and 4 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 operating activities was $3,156,251 and $1,295,528 for the
nine  months  ended  September  30,  2003 and 2002,  respectively.  Cash used in
operating  activities  is the result of a  decrease  in policy  liabilities  and
accounts payable and is offset by income tax recovered.

     Net cash provided by investing  activities  was $2,806,692 and $632,131 for
the nine  months  ended  September  30, 2003 and 2002,  respectively.  Investing
activities consist of purchases, sales, and maturities of investments.

     Net cash used in financing activities was $54,000 and $206,256 for the nine
months ended  September 30, 2003 and 2002,  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, collection of reinsurance
recoverable 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  or  liabilities  under the  derivative
instrument.  However,  if policy claims are significantly  higher than expected,
the Company may require additional capital.

     As of  September  30, 2003,  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
                 ---------------------------------------------

                   LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
                   -------------------------------------------

     Management  of the  Company  is  considering  a  possible  "going  private"
transaction,  which might  involve a reverse  stock split or a stock  repurchase
program.  Any such  transaction  would be reviewed  and approved by the Board of
Directors  of the  Company  prior to  completion,  and may  require  shareholder
approval.  The actual amount of funds needed to implement a  transaction  is not
known,  but management  believes that it would not have a material impact on the
financial condition of the Company.  However,  any such transaction may have the
effect of  enabling  the Company to  terminate  the  registration  of its common
stock, and its reporting obligations, under the Securities Exchange Act of 1934.

     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.




<PAGE>





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


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

     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 September 30, 2003 and December
31, 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.

     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.  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 liability 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.



<PAGE>



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


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

     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 certain insurance  liabilities,  deferred policy
acquisition costs and intangible  assets. The effect on deferred income taxes of
a change in tax rates is  recognized  in income in the  period of  enactment.  A
valuation  allowance to reduce  deferred  income tax assets is established  when
deemed appropriate.



<PAGE>


Item 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ---------------------------------------------
                              RESULTS OF OPERATIONS
                              ---------------------
           COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
           -----------------------------------------------------------

     Direct,  assumed and ceded premiums for the nine months ended September 30,
2003  decreased  $5,020,354 or 45% when compared to the same period in 2002. The
decrease is  attributed to the  Company's  marketing  decision to write small to
medium size bonds and the  discontinuance  of assuming  premiums  under a former
reinsurance  program. Net premium income for the period ended September 30, 2003
and 2002, was $6,084,058 and $11,104,412, respectively.

     Net  investment  income  for the  nine  months  ended  September  30,  2003
decreased  by  $164,372 or 44% when  compared  to the same  period in 2002.  The
decrease is attributed to a decrease in bond holdings and an overall decrease in
interest rates earned on the bond and money market portfolio. Bond holdings were
liquidated in the previous twelve months to meet the demand of claim payments.

     During the nine months ended  September 30, 2003,  loss and loss adjustment
expenses  decreased  by  $4,479,551  or 72% when  compared to the same period in
2002.  The  decrease  is  attributed  to a decline in  incurred  losses and loss
adjustment expenses on direct and assumed business. Consequently,  reserves were
utilized in reducing  incurred expenses while cash was utilized in meeting claim
payments.

     During  the nine  months  ended  September  30,  2003,  derivative  expense
decreased  $2,077.705  or 83% when  compared  to the same  period  in 2002.  The
fluctuation  of  market  values,  cancellations  and  maturities  resulted  in a
reduction of the valuation and expense.

     During the nine months ended  September 30, 2003,  amortization of deferred
policy  acquisition  costs was $1,781,801 as compared to $3,294,236 for the same
period in 2002. The decrease is primarily attributed to the decrease in premiums
written and earned. The amortization of deferred policy acquisition costs is 25%
and 29% of written premiums representing commissions paid on direct, assumed and
ceded  premiums  for  the  nine  months  ended  September  30,  2003  and  2002,
respectively.

     Operating  expenses  for the nine  months  ended  September  30,  2003 when
compared to the same period in 2002  decreased  by $671,628 or 14%. The decrease
is attributed to downsizing operations.

     The decrease in interest  expense for the nine months ended  September  30,
2003 is due to a decrease in the interest rate on the long-term debt.

     Income  taxes in the nine  months  ended  September  30, 2003 and 2002 were
calculated using an effective rate of 34% and 31.4%, respectively.



<PAGE>





Item 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
-------         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ---------------------------------------------
                              RESULTS OF OPERATIONS
                              ---------------------
          COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
          ------------------------------------------------------------

     Direct,  assumed and ceded premiums for the third quarter of 2003 decreased
$2,192,745  or 53% when  compared  to the same period in 2002.  The  decrease is
attributed to the Company's decision to write small to medium size bonds and the
discontinuance  of assuming  premiums under a former  reinsurance  program.  Net
premium income for the period ended  September 30, 2003 and 2002, was $1,906,943
and $4,099,688, respectively.

     Net  investment  income  for the three  months  ended  September  30,  2003
decreased by $73,423 when  compared to the same period in 2002.  The decrease is
attributed  to a decrease in bond  holdings and an overall  decrease in interest
rates earned on the bond and money market  portfolio and liquidation of bond and
cash holdings to meet the demand of claim payments.

     During the three months ended  September 30, 2003, loss and loss adjustment
expenses  decreased  by  $1,967,626  or 86% when  compared to the same period in
2002.  The  decrease  is  attributed  to a decline in  incurred  losses and loss
adjustment expenses on direct and assumed business.

     During the three  months  ended  September  30,  2003,  derivative  expense
decreased by $1,470,505  when compared to the same period in 2002. The change is
attributed to changes in the market values, maturities and cancellations.

     During the three months ended September 30, 2003,  amortization of deferred
policy  acquisition  costs was  $771,679 as  compared  to $978,582  for the same
period in 2002. The decrease is directly  related to the decrease in written and
earned premiums.

     Operating  expenses  for the three  months  ended  September  30, 2003 when
compared to the same period in 2002  decreased by $85,914 or 6%. The decrease is
attributed to downsizing operations.

     Income taxes in the three months ended  September 30, 2003 and 2002 have an
effective rate of 10.2% and 21.3%,  respectively.  Annual income tax expense was
calculated  utilizing  an  effective  rate of 34% and 31.4% for the nine  months
ended  September 30, 2003. For the six month period ended June 30, 2003, the tax
benefit  was  calculated  using an  effective  rate of 37.6%.  The  change to an
effective  rate of 34% for the nine month  period ended  September  30, 2003 has
resulted  in the  recognition  of an income tax  expense of $1,682 for the three
month period ended September 30, 2003.



<PAGE>




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

     The Company had  approximately  $6.5 million of investments as of September
30, 2003. These investments  largely consist of 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 million at an average interest rate of 8.6%.

     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 September 30, 2003 and December 31, 2002 is $4,130,558
and  $4,346,285,  respectively.  The  Company  is not  involved  in any  hedging
activities.  At  September  30, 2003 and December 31, 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 suspended marketing of this product effective September
2001.  The value of the  derivative  liability  increases in  proportion  to the
volatility in the marketplace.

Item 4.   CONTROLS AND PROCEDURES
-------   -----------------------

     The Company's management, including the Chief Executive Officer ("CEO") and
Chief Financial  Officer ("CFO"),  does not expect that its disclosure  controls
will  prevent  all error and all  fraud.  A control  system,  no matter how well
conceived and operated,  can provide only  reasonable,  not absolute,  assurance
that the  objectives  of the control  system are met.  Further,  the design of a
control  system must reflect the fact that there are resource  constraints,  and
the benefits of controls must be considered relative to their costs.  Because of
the inherent  limitations in all control systems,  no evaluation of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within the Company have been detected.  These inherent  limitations include
the  realities  that  judgments  in  decision-making  can be  faulty,  and  that
breakdown can occur because of simple error or mistake. The design of any system
of controls also is based in part upon certain  assumptions about the likelihood
of future events,  and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.


<PAGE>



Item 4.   CONTROLS AND PROCEDURES (CONTINUED)
-------   -----------------------------------

     Based upon the Company's  disclosure controls  evaluation,  the CEO and CFO
have  concluded  that,  subject to the  limitations  noted above,  the Company's
disclosure  controls as of September 30, 2003 are  effective to give  reasonable
assurance  that the  information  required to be disclosed by the Company in its
periodic  reports is accumulated and  communicated to management,  including the
CEO and CFO, as appropriate to allow timely decisions  regarding  disclosure and
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the Securities and Exchange Commission's rules and forms.

     There were no significant changes in the Company's internal controls or, to
the  knowledge of the  management  of the Company,  in other  factors that could
significantly affect these controls subsequent to the evaluation date.



<PAGE>


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


Item 1.        Legal proceedings
               -----------------
               None


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

               None

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

               None

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

               None

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

               None

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

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

                    3(a) Articles of Incorporation*

                    3(b) Bylaws*

                         31.1  Certification of Chief Executive Officer pursuant
                               to Section 302 of the Sarbanes-Oxley Act of 2002.

                         31.2  Certification of Chief Financial Officer pursuant
                               to Section 302 of the Sarbanes-Oxley Act of 2002.

                         32.1  Certification  of Chief  Executive  Officer under
                               Section 906 of the Sarbanes-Oxley Act of 2002.

                         32.2  Certification  of Chief  Financial  Officer under
                               Section 906 of the Sarbanes-Oxley Act of 2002.

               (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:    November 14, 2003          By:  /s/  Joseph M. Williams
                                    --------------------------------------------
                                    Joseph M. Williams
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)

Date:    November 14, 2003          By:  /s/  Carol S. Black
                                    --------------------------------------------
                                    Carol S. Black
                                    Secretary and Chief Financial Officer
                                    (Principal Accounting and Financial Officer)





<PAGE>




                          CUMBERLAND TECHNOLOGIES, INC.

                 CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q
                 -----------------------------------------------


I    Joseph M. Williams, certify that:

1.   I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  Cumberland
     Technologies, Inc.;

2.   Based on my knowledge, this 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
     report;

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

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

          (a)  Designed such disclosures controls and procedures, or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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 report is being prepared;

          (b)  Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          (c)  Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

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

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date:  November 14, 2003                            By:  /s/  Joseph M. Williams
                                                    ----------------------------
                                                    Joseph M. Williams
                                                    President and Treasurer


<PAGE>


                          CUMBERLAND TECHNOLOGIES, INC.

                 CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q
                 -----------------------------------------------


I Carol S. Black, certify that:

1.   I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  Cumberland
     Technologies, Inc.;

2.   Based on my knowledge, this 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
     report;

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

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

          (a)  Designed such disclosures controls and procedures, or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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 report is being prepared;

          (b)  Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          (c)  Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

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

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          (b)  Any fraud,  whether or not material,  that involves management or

               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date:  November 14, 2003                   By:  /s/  Carol S. Black
                                           -------------------------------------
                                           Carol S. Black
                                           Secretary and Chief Financial Officer