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SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

|  |  |                                                         
|- |  | --------------------------------------------------------
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
|  |  | SECURITIES EXCHANGE ACT OF 1934                         
|  |  |                                                         
|  |  | For the Quarterly period Ended December 31, 2002        
|  |  |                                                         
|  |  | OR                                                      
|  |  |                                                         
|o |  | 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. 0-9407

COMPEX TECHNOLOGIES, INC.


(Exact name of registrant as specified in its charter)


|                                |  |                                     
|------------------------------- |  | ------------------------------------
|Minnesota                       |  | 41-0985318                          
|(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
|incorporation or organization)  |  |                                     

1811 Old Highway 8
New Brighton, Minnesota 55112
(Address of principal executive offices)

(651) 631-0590
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]    No[   ]

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of January 29, 2003 was:

|                             |  |                  
|---------------------------- |  | -----------------
|Common Stock, $.10 par value |  | 10,965,635 Shares





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TABLE OF CONTENTS



|                                                 |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                  
|                                                 | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                                                 | ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                 | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                                 | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION                     
|                                                 | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                                                 | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS  None                                     
|                                                 | ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None                                               
|                                                 | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                 | ITEM 5. OTHER INFORMATION                                                                    
|                                                 | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                      
|CERTIFICATION                                   
|EX-99.1 Certification of Chief Executive Officer
|EX-99.2 Certification of Chief Financial Officer



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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains a number of forward-looking
statements where we indicate that we anticipate, believe, expect or
estimate or use similar words to indicate what might happen in the future.
These forward looking statements represent our expectations about future
events, including anticipated product introductions; changes in markets,
customers and customer order rates; changes in third party reimbursement rates;
expenditures for research and development; growth in revenue; taxation levels;
and the effects of pricing decisions. When used in this 10-Q, the words
anticipate, believe, expect, estimate and similar expressions are
generally intended to identify forward-looking statements. You should evaluate
these forward-looking statements in the context of a number of factors that may
affect our financial condition and results of operations, including the
following:



| |  | Like many medical device companies that rely on third party reimbursement entities for
payment, we have a large balance of uncollected accounts receivable. We also have a reserve
for the portion of those receivables that we estimate will not be collected based on our
historical experience. The uncollectible portion of receivables includes both sales
allowances for contracted or negotiated selling prices and rental rates and bad debts. If
we cannot collect an amount of receivables that is consistent with historical collection
rates, we might be required to increase our reserve and charge off the portion of
receivables we cannot collect. This additional provision for uncollectible accounts could
significantly impact our operating results.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | In the United States, our products are subject to reimbursement by private and public
healthcare reimbursement entities that generally impose limits on reimbursement and strict
rules on applications for reimbursement. Changes in the rates, eligibility or requirements
for reimbursement, or failure to comply with reimbursement requirements, could cause a
reduction in our income from operations.                                                                                                                                                                                                                                                                                                                                                                 
| 
| |  | We maintain significant amounts of finished goods inventory on consignment at clinics for
distribution to patients. We may not be able to completely control losses of this inventory
and, if inventory losses are not consistent with historical experience, we might be required
to write off a portion of the carrying value of inventory.                                                                                                                                                                                                                                                                                                                                                                                                                               
| 
| |  | The clinical effectiveness of our electrotherapy products has periodically been challenged
and the effectiveness of electrotherapy products such as those offered by Compex SA for
fitness and health applications has sometimes been questioned. Publicity about the
effectiveness of electrotherapy for pain relief or other clinical applications and continued
questions about the effectiveness of electrotherapy for conditioning could negatively impact
revenue and income from operations.                                                                                                                                                                                                                                                                         
| 
| |  | We have periodically been the subject of litigation that has caused additional expense,
including a Medicare whistleblower suit settled in 2000 for approximately $1.6 million. The
costs of these actions have negatively affected, and the resolution of other actions that
may arise may continue to negatively affect, our operating results.                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| |  | Approximately 33% of our revenue for the six months ended December 31, 2002 was generated by
Compex SA, a subsidiary headquartered in Switzerland that does business primarily in Europe.
There are risks in doing business in international markets which could adversely affect our
business, including:                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



| |  |  | regulatory requirements;                                           
| | - |  | -------------------------------------------------------------------
|
| |  |  | export restrictions and controls, tariffs and other trade barriers;
|
| |  |  | difficulties in staffing and managing international operations;    
|
| |  |  | fluctuations in currency exchange rates;                           
|
| |  |  | reduced protection for intellectual property rights;               
|
| |  |  | seasonal reductions in business activity; and                      
|
| |  |  | potentially adverse tax assessments.                               

2



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PART I  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

Included herein is the following unaudited condensed financial information:



| |                                                                      
| | ---------------------------------------------------------------------
| | Consolidated Balance Sheets as of December 31, 2002 and June 30, 2002



| |                                                                                
| | -------------------------------------------------------------------------------
| | Consolidated Statements of Operations for the three months and six months ended

| |                           
| | --------------------------
| | December 31, 2002 and 2001



| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Consolidated Statements of Cash Flows for the six months ended December 31, 2002 and 2001



| |                                           
| | ------------------------------------------
| | Notes to Consolidated Financial Statements

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COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                       |  |                                                                                                                                   |                 |                                      |            |           |            |              |            |           |            | 
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- | --------------- | ------------------------------------ | ---------- | --------- | ---------- | ------------ | ---------- | --------- | ---------- | 
|                       |  |                                                                                                                                   |                 |                                      |            | June 30,  |            | December 31,
|                       |  |                                                                                                                                   |                 |                                      |            | 2002      |            | 2002        
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | ASSETS                               |            |           |            |              |            |           |            | 
|Current Assets:        |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | Cash and cash equivalents                                                                                                         |                 | $                                    | 2,086,650  |           |            | $            | 3,608,560  |          
|                       |  | Receivables, less reserve of $12,891,864
and $12,921,387                                                                          |                 |                                      | 23,629,117 |           |            |              | 23,002,787 |          
|                       |  | Inventories                                                                                                                      |                 |                                      |            |           |            |              |            |          
|                       |  |                                                                                                                                   | Raw materials   |                                      |            | 2,368,203 |            |              |            | 2,196,369 |           
|                       |  |                                                                                                                                   | Work in process |                                      |            | 80,265    |            |              |            | 76,837    |           
|                       |  |                                                                                                                                   | Finished goods  |                                      |            | 6,522,790 |            |              |            | 6,173,597 |           
|                       |  | Deferred tax assets                                                                                                               |                 |                                      | 4,655,631  |           |            |              | 4,655,631  |          
|                       |  | Prepaid expenses                                                                                                                  |                 |                                      | 1,641,378  |           |            |              | 964,173    |          
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | Total current assets                 |            |           | 40,984,034 |              |            |           | 40,677,954 | 
|                       |  | Property, plant and equipment, net                                                                                                |                 |                                      | 4,679,778  |           |            |              | 5,035,378  |          
|                       |  | Goodwill, net                                                                                                                     |                 |                                      | 9,833,090  |           |            |              | 9,833,090  |          
|                       |  | Other intangible assets, net                                                                                                      |                 |                                      | 1,150,652  |           |            |              | 1,017,143  |          
|                       |  | Deferred tax assets                                                                                                               |                 |                                      | 702,567    |           |            |              | 740,004    |          
|                       |  | Other assets                                                                                                                      |                 |                                      | 127,615    |           |            |              | 120,234    |          
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | $                                                                                                                                 | 57,477,736      |                                      |            | $         | 57,423,803 |             
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | LIABILITIES AND STOCKHOLDERS EQUITY |            |           |            |              |            |           |            | 
|Current Liabilities:   |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | Current maturities of long-term debt                                                                                              |                 | $                                    | 2,520,775  |           |            | $            | 2,521,892  |          
|                       |  | Note payable                                                                                                                      |                 |                                      |           |           |            |              | 700,000    |          
|                       |  | Accounts payable                                                                                                                  |                 |                                      | 3,312,767  |           |            |              | 2,680,798  |          
|                       |  | Accrued liabilities                                                                                                              |                 |                                      |            |           |            |              |            |          
|                       |  |                                                                                                                                   | Payroll         |                                      |            | 607,409   |            |              |            | 576,398   |           
|                       |  |                                                                                                                                   | Commissions     |                                      |            | 437,530   |            |              |            | 430,186   |           
|                       |  |                                                                                                                                   | Income taxes    |                                      |            | 2,670,766 |            |              |            | 2,158,850 |           
|                       |  |                                                                                                                                   | Other           |                                      |            | 5,656,988 |            |              |            | 4,782,323 |           
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | Total current liabilities            |            |           | 15,206,235 |              |            |           | 13,850,447 | 
|Long-Term Liabilities: |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | Long-term debt                                                                                                                    |                 |                                      | 6,455,209  |           |            |              | 5,179,183  |          
|                       |  | Deferred tax liabilities                                                                                                          |                 |                                      | 535,102    |           |            |              | 574,421    |          
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | Total liabilities                    |            |           | 22,196,546 |              |            |           | 19,604,051 | 
|Stockholders Equity:  |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | Common stock, $.10 par value; 30,000,000 shares authorized;
issued and outstanding 10,922,618 and 10,965,635 shares,
respectively |                 |                                      | 1,092,262  |           |            |              | 1,096,563  |          
|                       |  | Preferred stock, no par value; 5,000,000 shares authorized; none
issued and outstanding                                           |                 |                                      |           |           |            |              |           |          
|                       |  | Additional paid-in capital                                                                                                        |                 |                                      | 21,564,096 |           |            |              | 21,695,679 |          
|                       |  | Unearned compensation on restricted stock                                                                                         |                 |                                      | (77,813    | )         |            |              | (23,438    | )        
|                       |  | Accumulated other non-owner changes in equity                                                                                     |                 |                                      | 735,564    |           |            |              | 1,154,608  |          
|                       |  | Retained earnings                                                                                                                 |                 |                                      | 11,967,081 |           |            |              | 13,896,340 |          
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  |                                                                                                                                   |                 | Total stockholders equity           |            |           | 35,281,190 |              |            |           | 37,819,752 | 
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             
|                       |  | $                                                                                                                                 | 57,477,736      |                                      |            | $         | 57,423,803 |             
|                       |  |                                                                                                                                   |                 |                                      |            |           |            |             

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COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |            |            |            | 
|------------------------------------------------- | ----------------------------------- | -------------------------- | ------------------------ | --------- | ------------------ | --------- | ---------------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | 
|                                                  |                                     |                            |                          |           | Three Months Ended |           | Six Months Ended
|                                                  |                                     |                            |                          |           | December 31        |           | December 31     
|                                                  |                                     |                            |                          |           |                    |           |                 
|                                                  |                                     |                            |                          |           | 2001               |           | 2002             |            | 2001       |            | 2002      
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |           
|Net sales and rental revenue                      |                                     | $                          | 17,831,717               |           |                    | $         | 18,735,080       |            |            | $          | 34,330,221 |            |            | $          | 36,472,820 |           
|Cost of sales and rentals                         |                                     |                            | 6,145,886                |           |                    |           | 5,777,255        |            |            |            | 11,438,709 |            |            |            | 11,224,682 |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Gross profit               |                          |           | 11,685,831         |           |                  |            | 12,957,825 |            |            |            | 22,891,512 |            |            |            | 25,248,138 |           
|Operating expenses:                               |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  | Selling, general and administrative |                            |                          | 8,650,676 |                    |           |                  | 10,749,933 |            |            |            | 16,929,388 |            |            |            | 20,710,537 |           
|                                                  | Research and development            |                            |                          | 459,957   |                    |           |                  | 517,503    |            |            |            | 1,102,263  |            |            |            | 1,041,576  |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     |                            | Total operating expenses |           |                    | 9,110,633 |                  |            |            | 11,267,436 |            |            |            | 18,031,651 |            |            |            | 21,752,113 | 
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Income from operations     |                          |           | 2,575,198          |           |                  |            | 1,690,389  |            |            |            | 4,859,861  |            |            |            | 3,496,025  |           
|Other income (expense):                           |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  | Interest expense                    |                            |                          | (180,049  | )                  |           |                  | (101,647   | )          |            |            | (415,200   | )          |            |            | (214,115   | )         
|                                                  | Other                               |                            |                          | 5,815     |                    |           |                  | 35,510     |            |            |            | 10,326     |            |            |            | 43,349     |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Income before income taxes |                          |           | 2,400,964          |           |                  |            | 1,624,252  |            |            |            | 4,454,987  |            |            |            | 3,325,259  |           
|Income tax provision                              |                                     |                            | 1,009,000                |           |                    |           | 682,000          |            |            |            | 1,872,000  |            |            |            | 1,396,000  |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Net income                 |                          | $         | 1,391,964          |           |                  | $          | 942,252    |            |            | $          | 2,582,987  |            |            | $          | 1,929,259  |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|Net income per common and
common equivalent share |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Basic                      |                          | $         | 0.13               |           |                  | $          | 0.09       |            |            | $          | 0.24       |            |            | $          | 0.18       |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Diluted                    |                          | $         | 0.12               |           |                  | $          | 0.08       |            |            | $          | 0.23       |            |            | $          | 0.17       |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|Weighted average number of
shares outstanding     |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Basic                      |                          |           | 10,825,500         |           |                  |            | 10,965,635 |            |            |            | 10,820,723 |            |            |            | 10,951,112 |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           
|                                                  |                                     | Diluted                    |                          |           | 11,183,703         |           |                  |            | 11,145,024 |            |            |            | 11,105,191 |            |            |            | 11,095,913 |           
|                                                  |                                     |                            |                          |           |                    |           |                  |            |            |            |            |            |            |            |            |           

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COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |            |   |         |            |  
|------------------------------------------------ | ----------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | - | ---------------- | ---------- | ---------- | - | ------- | ---------- | -
|                                                 |                                                       |                                                                                  |                                            |                                           |   | Six Months Ended
|                                                 |                                                       |                                                                                  |                                            |                                           |   | December 31     
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                 
|                                                 |                                                       |                                                                                  |                                            |                                           |   | 2001             |            | 2002      
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|Operating Activities:                            |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 | Net income                                            |                                                                                  | $                                          | 2,582,987                                 |   |                  | $          | 1,929,259  |  
|                                                 |                                                       | Adjustments to reconcile net income to net cash
provided by operating activities |                                            |                                           |   |                  |            |            |   |        
|                                                 |                                                       |                                                                                  | Depreciation and amortization              |                                           |   | 764,991          |            |            |   | 882,243 |           
|                                                 |                                                       |                                                                                  | Amortization of unearned compensation      |                                           |   | 54,375           |            |            |   | 54,375  |           
|                                                 |                                                       |                                                                                  | Change in deferred taxes                   |                                           |   | 10,045           |            |            |   | 4,688   |           
|                                                 |                                                       |                                                                                  | Change in current assets and liabilities  |                                           |   |                  |            |            |   |         |           
|                                                 |                                                       |                                                                                  |                                            | Receivables                               |   |                  | (1,094,505 | )          |   |         | 1,102,576  |  
|                                                 |                                                       |                                                                                  |                                            | Inventories                               |   |                  | (608,950   | )          |   |         | 796,139    |  
|                                                 |                                                       |                                                                                  |                                            | Prepaid expenses                          |   |                  | 787,341    |            |   |         | 728,974    |  
|                                                 |                                                       |                                                                                  |                                            | Accounts payable                          |   |                  | (840,533   | )          |   |         | (754,563   | )
|                                                 |                                                       |                                                                                  |                                            | Accrued liabilities                       |   |                  | 56,479     |            |   |         | (1,581,076 | )
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Net cash provided by operating activities |   |                  | 1,712,230  |            |   |         | 3,162,615  |  
|Investing Activities:                            |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 | Purchases of property and equipment                   |                                                                                  |                                            | (430,552                                  | ) |                  |            | (1,035,049 | )
|                                                 | Change in other assets, net                           |                                                                                  |                                            | 4,803                                     |   |                  |            | 15,508     |  
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Net cash used in investing activities     |   |                  | (425,749   | )          |   |         | (1,019,541 | )
|Financing Activities:                            |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 | Principal payments on long-term obligations           |                                                                                  |                                            | (1,870,768                                | ) |                  |            | (1,274,909 | )
|                                                 | Proceeds from line of credit, net                     |                                                                                  |                                            | 2,000,000                                 |   |                  |            | 700,000    |  
|                                                 | Proceeds from exercise of stock options               |                                                                                  |                                            | 73,494                                    |   |                  |            | 114,975    |  
|                                                 | Proceeds from employee stock purchase plan            |                                                                                  |                                            | 50,875                                    |   |                  |            | 20,909     |  
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Net cash provided by financing activities |   |                  | 253,601    |            |   |         | (439,025   | )
|                                                 | Effect of exchange rates on cash and cash equivalents |                                                                                  |                                            | 264,868                                   |   |                  |            | (182,139   | )
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Net increase in cash and cash equivalents |   |                  | 1,804,950  |            |   |         | 1,521,910  |  
|Cash and Cash Equivalents at Beginning of Period |                                                       |                                                                                  | 759,611                                    |                                           |   |                  | 2,086,650  |           
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|Cash and Cash Equivalents at End of Period       |                                                       | $                                                                                | 2,564,561                                  |                                           |   | $                | 3,608,560  |           
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|Supplemental Cash Flow Information:              |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Interest paid                             |   | $                | 415,200    |            |   | $       | 209,435    |  
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           
|                                                 |                                                       |                                                                                  |                                            | Income taxes paid                         |   | $                | 1,601,019  |            |   | $       | 1,600,200  |  
|                                                 |                                                       |                                                                                  |                                            |                                           |   |                  |            |           

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COMPEX TECHNOLOGES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

1. Accounting Policies

The amounts set forth in the preceding financial statements are unaudited as
of and for the periods ended December 31, 2002 and 2001 but, in the opinion
of management, reflect all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of the results for the periods
presented. Such results are not necessarily indicative of results for the
full year. The accompanying financial statements of the Company should be
read in conjunction with the audited consolidated financial statements for
the year ended June 30, 2002 included in the Companys Annual Report on Form
10-K.

Certain previously reported amounts have been reclassified to conform to
classifications adopted in fiscal year 2002. These reclassifications had no
effect on net income, cash flows or stockholders equity.

2. Goodwill and Intangibles

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001, with early adoption permitted for companies with
fiscal years beginning after March 15, 2001. Under the new rules, goodwill
and intangible assets deemed to have indefinite lives are no longer
amortized but will be subject to annual impairment tests in accordance with
the statements. Other intangible assets will continue to be amortized over
their useful lives.

The Company adopted the new rules on accounting for goodwill and other
intangible assets effective July 1, 2001. Amounts previously recorded as
separately identifiable intangibles for acquired work force and customer
list have been subsumed to goodwill in accordance with FAS 141, increasing
goodwill by $1.6 million as of the date of adoption. Effective with the
adoption of FAS 142, goodwill is no longer amortized but is instead subject
to an annual impairment test. The transitional and annual impairment tests
conducted in connection with the adoption of FAS 142 resulted in no required
provision for impairment.

Goodwill and other intangible assets resulting from acquisitions of business
and the formation of the Company consist of the following:

|                              |                              |   |               |            |                   |   |            |            | 
|----------------------------- | ---------------------------- | - | ------------- | ---------- | ----------------- | - | ---------- | ---------- | 
|                              |                              |   | June 30, 2002 |            | December 31, 2002
|                              |                              |   |               |            |                  
|Goodwill                      |                              | $ | 11,504,520    |            |                   | $ | 11,504,520 |           
|Less accumulated amortization |                              |   | 1,671,430     |            |                   |   | 1,671,430  |           
|                              |                              |   |               |            |                   |   |            |           
|                              | Net goodwill                 |   |               | 9,833,090  |                   |   |            | 9,833,090  | 
|Other intangible assets:      |                              |   | 1,783,686     |            |                   |   | 1,783,686  |           
|Less accumulated amortization |                              |   | 633,034       |            |                   |   | 766,543    |           
|                              |                              |   |               |            |                   |   |            |           
|                              | Net other intangible assets  |   |               | 1,150,652  |                   |   |            | 1,017,143  | 
|                              |                              |   |               |            |                   |   |            |           
|                              | Total intangible assets, net |   | $             | 10,983,742 |                   |   | $          | 10,850,233 | 
|                              |                              |   |               |            |                   |   |            |           

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3. Note Payable and Long Term Debt

The Company has a $20,000,000 credit facility which provides for both term
and revolving borrowings at varying rates based either on the banks prime
rate or LIBOR. As of December 31, 2002, there were borrowings outstanding
of $6,197,000 on the long-term note and $700,000 on the revolving credit
line.

Borrowings under the credit facility are secured by substantially all assets
of the Company other than those pledged as collateral on existing lease or
mortgage obligations. The interest rate on the term loan was 3.813% at
December 31, 2002 and the weighted average rate on borrowings under the
revolving line of credit was 4.64%.

The Company was in compliance with all financial covenants in its credit
agreement as of December 31, 2002 and for the period then ended.

4. Segment Information

Compex Technologies, Inc. and its consolidated subsidiaries operate in one
reportable segment, manufacture and distribution of electrical stimulation
products for pain management, rehabilitation and fitness applications. The
Companys chief operating decision makers use consolidated results to make
operating and strategic decisions. Net revenue from the United States and
foreign sources (primarily Europe) are as follows:

|                |  |                          |            |      |  |   |            | 
|--------------- |  | ------------------------ | ---------- | ---- |  | - | ---------- | 
|                |  | For the Six Months Ended
|                |  | December 31             
|                |  |                         
|                |  | 2001                     |            | 2002
|                |  |                          |            |     
|U.S. revenue    |  | $                        | 22,480,856 |      |  | $ | 24,103,382 | 
|Foreign revenue |  |                          | 11,849,365 |      |  |   | 12,369,438 | 
|                |  |                          |            |      |  |   |            | 
|                |  | $                        | 34,330,221 |      |  | $ | 36,472,820 | 
|                |  |                          |            |      |  |   |            | 

Net revenue by product line was as follows:

|                         |  |                          |            |      |  |   |            | 
|------------------------ |  | ------------------------ | ---------- | ---- |  | - | ---------- | 
|                         |  | For the Six Months Ended
|                         |  | December 31             
|                         |  |                         
|                         |  | 2001                     |            | 2002
|                         |  |                          |            |     
|Rehabilitation products  |  | $                        | 7,111,768  |      |  | $ | 7,613,711  | 
|Pain management          |  |                          | 6,918,857  |      |  |   | 7,739,827  | 
|Consumer Products        |  |                          | 8,711,270  |      |  |   | 8,879,219  | 
|Accessories and supplies |  |                          | 11,588,326 |      |  |   | 12,240,063 | 
|                         |  |                          |            |      |  |   |            | 
|                         |  | $                        | 34,330,221 |      |  | $ | 36,472,820 | 
|                         |  |                          |            |      |  |   |            | 

During the first six months of fiscal 2003 and 2002, one customer accounted
for approximately 10% and 16%, respectively, of consolidated revenue. This
customer represented approximately 5% of total accounts receivable at
December 31, 2002.

8



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##### Table of Contents






ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Overview

We discuss the factors that significantly affected our financial results and
our financial condition in this Managements Discussion and Analysis of
Financial Condition and Results of Operations. For a more complete
understanding of these factors, you should also review our consolidated balance
sheets at June 30, 2001 and June 30, 2002, our consolidated statements of
operations, statements of shareholders equity and statements of cash flows for
the three years ended June 30, 2002, and the notes to those financial
statements. These financial statements and the report of Ernst & Young LLP on
our financial statements are included at Item 8 of our Form 10-K for the year
ended June 30, 2002.

Critical Accounting Policies

We prepare our financial statements in accordance with generally accepted
accounting principles as in effect in the United States. The preparation of
these financial statements requires that we make estimates and judgments that
affect the reported amounts of our assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities. We base these
estimates on historical experience and on various other assumptions that we
believe are reasonable under the circumstances. It is our policy to evaluate
and update these estimates on an ongoing basis. The judgments and policies
that we believe would have the most significant impact on the presentation of
our financial position and results are as follows:

Revenue Recognition and Provisions for Credit Allowances and Returns. In our
U.S. direct distribution electrotherapy business, we recognize revenue upon
notification from a health care provider that equipment has been prescribed and
provided to a patient and approved by the patient or his/her insurance
provider. Many providers reimburse at rates which differ from our invoice rate
based on contracts, buying agreements or negotiated rate adjustments. In
addition, patients sometimes return units after initial acceptance when they
determine that their responsibilities for co-payments, deductibles or other
charges are more than expected. We provide for these credit allowances and
returns by reducing gross revenue by a portion of the invoiced amount and by
recording such amount as part of the reserve for uncollectible accounts
receivable. We estimate the amount of this provision for credit allowances and
returns based on our historical experience with the various reimbursement
entities, any recent notifications of changes in reimbursement rates and our
historic rates of product returns. Possible changes in the number of units
returned by patients or the rates of reimbursement could cause this provision
for credit allowances and the reserve for uncollectible accounts to be
inadequate.

Reserve for Uncollectible Accounts Receivable.Managing our accounts
receivable represents one of our biggest business challenges. The process of
determining what products will be reimbursed by third party payors and the
amounts that they will reimburse is very complex and the reimbursement
environment is constantly changing. We maintain a reserve for uncollectible
receivables and provide for additions to the reserve to account for the risk of
nonpayment. We set the amount of the reserve and adjust the reserve at the end
of each reporting period based on a number of factors, including historical
rates of collection, trends in the historical rates of collection and current
relationships and experience with insurance companies or other third party
payors. If the rates of collection of past-due receivables recorded for
previous fiscal periods changes, or if there is a trend in the rates of
collection on those receivables, we may be required to change the rate at which
we provide for additions to the reserve. Such a change can significantly
affect operating results in current periods. A change in the rates of our
collection can result from a number of factors, including turnover in
personnel, changes in the reimbursement policies or practices of payors, or
changes in industry rates of reimbursement. Further, the reserve may be
affected by significant charge-offs if a related group of receivables become
doubtful. Accordingly, the provision for uncollectible accounts recorded in
the income statement has fluctuated and may continue to fluctuate significantly
from quarter to quarter as such trends change.

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Carrying Value of Inventory.We maintain a large balance of electrotherapy
products on consignment at clinics and other health care providers that are not
under our control. In the course of our business, some of this product is
lost. Although we have the right in most cases to seek reimbursement for the
lost product from our sales representatives or the health care providers, in
many instances we forgo that right in order to maintain favorable
relationships. We maintain a reserve for the amount of consignment inventory
that may be lost based on our experience as developed through periodic field
audits. We cannot be certain that future rates of product loss will be
consistent with our historical experience and we could be required to increase
the rate at which we provide for such lost inventory, thus adversely affecting
our operating results.

Carrying Value of Intangible Assets.We had a balance of intangible assets of
approximately $11 million at December 31, 2002, most of which constituted
goodwill and the value of acquired technology from several acquisitions. We are
required to charge-off the carrying value of identifiable intangibles,
long-lived assets and related goodwill to the extent it may not be recoverable.
We annually assess the impairment of identifiable intangibles, long lived
assets and related goodwill or whenever events or changes in circumstances
indicate the carrying value may not be recoverable. Factors we consider
important which could trigger an impairment provision include the following:



| |  |  | significant under-performance relative to expected historical or projected future operating results;                   
| | - |  | -----------------------------------------------------------------------------------------------------------------------
|
| |  |  | significant changes in the manner of use of the acquired assets or our overall business strategy;                      
|
| |  |  | significant negative industry or economic trends;                                                                      
|
| |  |  | significant decline in our stock price for a sustained period and
our market capitalization relative to net book value.

If we determine that the carrying value of intangibles, long-lived assets and
related goodwill might not be recoverable based upon the existence of one or
more of the above indicators of impairment, we would measure any impairment
based on a projected discounted cash flow method using a discount rate we
determine to be commensurate with the risk inherent in our current business
model.

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Results of Operations

The following table sets forth information from the statements of
operations as a percentage of revenue for the periods indicated:

|                             |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |       |       |  
|---------------------------- | ----------------------------------- | ------------------------ | ----- | ------------------ | ----- | ---------------- | ----- | ----- | ----- | ---- | ----- | ----- | ----- | - | ----- | ----- | ----- | -
|                             |                                     |                          |       | Three Months Ended |       | Six Months Ended
|                             |                                     |                          |       | December 31        |       | December 31     
|                             |                                     |                          |       |                    |       |                 
|                             |                                     |                          |       | 2001               |       | 2002             |       | 2001  |       | 2002
|                             |                                     |                          |       |                    |       |                  |       |       |       |     
|Net sales and rental revenue |                                     |                          | 100.0 | %                  |       |                  | 100.0 | %     |       |      | 100.0 | %     |       |   | 100.0 | %    
|Cost of sales and rentals    |                                     |                          | (34.5 | )                  |       |                  | (30.8 | )     |       |      | (33.3 | )     |       |   | (30.8 | )    
|Gross profit                 |                                     |                          | 65.5  |                    |       |                  | 69.2  |       |       |      | 66.7  |       |       |   | 69.2  |      
|Operating expenses           |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                             | Selling, general and administrative |                          |       | (48.5              | )     |                  |       | (57.4 | )     |      |       | (49.3 | )     |   |       | (56.7 | )    
|                             | Research and development            |                          |       | (2.6               | )     |                  |       | (2.8  | )     |      |       | (3.2  | )     |   |       | (2.9  | )    
|                             |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                             |                                     | Total operating expenses |       |                    | (51.1 | )                |       |       | (60.2 | )    |       |       | (52.5 | ) |       |       | (59.6 | )
|                             |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                             | Income from operations              |                          |       | 14.4               |       |                  |       | 9.0   |       |      |       | 14.2  |       |   |       | 9.6   |      
|                             | Other expense, net                  |                          |       | (1.0               | )     |                  |       | (0.4  | )     |      |       | (1.2  | )     |   |       | (0.5  | )    
|                             | Income tax provision                |                          |       | (5.7               | )     |                  |       | (3.6  | )     |      |       | (5.5  | )     |   |       | (3.8  | )    
|                             |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                             | Net income                          |                          |       | 7.8                |       |                  |       | 5.0   |       |      |       | 7.5   |       |   |       | 5.3   |      
|                             |                                     |                          |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      

Our revenue increased by 5% to $18,735,000 during the quarter ended December
31, 2002 from $17,832,000 during the quarter ended December 31, 2001, and
increased 6% to $36,472,000 during the six months ended December 31, 2002 from
$34,330,000 during the six months ended December 31, 2001. Most of the increase
resulted from our direct sales business in the United States, which posted
revenue increases of 8% during the quarter and 7% during the six months as
compared to our results last year. Our direct sales and rental business in the
United States continues to grow, while our wholesale business, which has been
declining because of competition from inexpensive imports, was relatively
stable in fiscal 2003 as compared to fiscal 2002.

Although our European operations, conducted under our Compex SA subsidiary,
also contributed to our growth, that growth did not live up to our
expectations, increasing only 3% to $6,341,000 during the quarter ended
December 31, 2002 and 7% to $12,073,000 during the six months ended December
31, 2002 compared to the same periods in the prior year. Although operations in
most of our markets in Europe recorded healthy increases in revenue throughout
the six month period, revenue from our Italian distributor, our largest market
in Europe, declined. We expect Italian sales, which have been affected by the
weakened economy and market for consumer goods, a large balance of inventory at
the Italian distributor and the entry of competitive products, to stabilize and
increase slightly during the balance of the fiscal year. Our revenue from
Compex SA was also favorably impacted by changing exchange rates and the
strength of the Euro versus the dollar. For the quarter ended December 31,
2002, increased volumes in both Europe and domestically accounted for 4% of the
5% sales increase with 1% due to favorable exchange rates.

Our gross profit was $12,958,000 or 69.2% of revenue during the quarter, and
$25,348,000 or 69.3% of revenue during the six months ended December 31, 2002.
This compares to gross profit of $11,686,000 or 65.5% of revenue in the quarter
and $22,892,000 or 66.7% of revenue during the six months ended December 31,
2001. Our Compex SA operations, which have generated proportionately larger
sales of higher margin sport and fitness products, contributed most of the
increases in gross margins. We expect gross margin percentages to stabilize in
the mid to upper 60% range.

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Our gains from revenue growth and improved gross margin during the six months
ended December 31, 2002 were offset by significantly higher sales, general and
administrative expenses. These expenses increased 23%
to $10,750,000 or 57% of revenue during the quarter ended December 31, 2002,
compared to $8,651,000 or 49% of revenue during the quarter ended December 31,
2001. Our sales, general and administrative expenses increased 21% to
$20,711,000 or 57% of revenue during the six months ended December 31, 2002,
compared to $16,929,000 or 49% of revenue during the six months ended December
31, 2001. Several factors contributed to the increase in expense. We had
significantly increased staffing in all departments at our Compex SA subsidiary
during the second half of fiscal 2002 to accommodate anticipated growth,
resulting in a $1.7 million or 35% increase in selling, general and
administrative expense. Because of the economic slowdown there, we reduced
staffing in our European operations again during January 2003 and expect to
continue to maintain the reduced level of staffing until revenue growth
recovers. We also continued to reduce our dependence in the United States on
independent sales representatives during the first half of fiscal 2003 by
hiring additional employee sales agents. Although such representatives do not
immediately generate revenue proportionate to their salaries, we believe they
will generate proportionately more revenue after an initial start-up period.
Additionally, we accrued $233,000 of separation expense in the second quarter
of fiscal 2003 for executive compensation payable to an officer. Finally, we
provided an additional $375,000 to our reserve for uncollectible receivables
during the quarter because of decreased Medicare reimbursements and continued
difficulty collecting receivables during a period in 2001.

Our research and development expense increased 13% to $518,000 in the second
quarter of fiscal 2003 from $460,000 during the quarter ended December 31,
2001. This is primarily due to increased new product development expenses of
our fitness lines at Compex SA. For the six months ended December 31, 2002,
research and development costs decreased 5% to $1,042,000 from $1,102,000 for
the same period ended December 31, 2001. This decrease is primarily
attributable to a reduction of development expenses in the U.S. and fewer new
product introductions as compared to prior year. We anticipate that research
and development expenses will continue to remain relatively constant as a
percentage of revenue in future periods.

Our interest expense decreased 44% to $102,000 in the second quarter of fiscal
2003 from $180,000 in the second quarter of fiscal 2002 and decreased 48% to
$214,000 in fiscal 2003 from $415,000 in the first six months of fiscal 2002.
This is primarily due to lower interest rates and overall lower borrowing
levels under our credit facility. If our borrowing levels do not increase and
interest rates remain at current levels we expect interest expense to continue
to decline in future periods.

Our provision for income taxes was 42% of pre-tax income for the second quarter
and first six months of fiscal 2003 and 2002. We believe that 42% is a
reasonable estimate of the effective rate for fiscal 2003 based on our most
recent estimates of tax liabilities in the U.S. and in the various European tax
authorities for the entire fiscal year. The Internal Revenue Service has
recently completed their examination of our federal income tax returns for the
years ended June 30, 1997 and 1998. We received notification that the proposed
adjustments were resolved, and that we owe approximately $25,000.

As a result of the above activity, our net income decreased to $942,000 in the
second quarter of fiscal 2003 from $1,392,000 in the second quarter of fiscal
2002. For the six months ended December 31, 2002, net income decreased to
$1,929,000 from $2,583,000 during the same period in fiscal 2002. Diluted
earnings per share decreased to $.08 from $.12 for the second quarter and to
$.17 from $.23 per share for the six month period.

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Liquidity and Capital Resources

For the first six months ended December 31, 2002, our operations provided
cash of $3,163,000, due primarily to net income of $1,929,000 plus
depreciation and amortization. Accounts receivable decreased $1,103,000, as
a result of higher collections in both the United States and by Compex SA.
Prepaid expenses declined due to lower value added tax prepayments by Compex
SA. The decrease in accounts payable and accrued liabilities relates to
year-end June 30, 2002 timing differences and the payment of estimated
income taxes.

We used $1,020,000 in investing activities in the first six months of fiscal
2003 for net purchases of property and equipment, primarily clinical and
rental equipment.

Our financing activities used $439,000 of cash during the first six months
of fiscal 2003, mainly from the repayment of $1,275,000 of long-term debt
under our $20,000,000 credit facility partially offset by borrowing $700,000 under our
credit line. At December 31, 2002, a total of $6,897,000 remains
outstanding under this facility. Our credit facility has a maturity date of
June 30, 2004, and we expect that all or substantially all of the borrowings
under this credit facility will be repaid prior to the maturity date. If
any borrowings remain outstanding at maturity, we believe that the agreement
could be extended, with similar terms, with the current financial
institution or another facility could be put in place.

We currently have no material commitment for capital expenditures. We
expect, however, to invest in sales and marketing, and in inventory and
infrastructure, over the following twelve months to introduce Compex SA
sport products to the United States markets. We started this process in a
single state and intend to invest more based on our experience in that
market. We may also apply cash to acquisitions during future periods.

We believe that available cash and borrowings under our credit line will be
adequate to fund cash requirements for the current fiscal year and the
foreseeable future.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the quarter ended December 31, 2002, our revenue originating outside
the U.S. was 33% of total revenue, substantially all of which was
denominated in the local functional currency. Currently, we do not employ
currency hedging strategies to reduce the risks associated with the
fluctuation of foreign currency exchange rates.

Our international business is subject to risks typical of an international
business, including, but not limited to: differing economic conditions,
changes in political climate, differing tax structures, other regulations
and restrictions, and foreign exchange rate volatility. Accordingly, our
future results could be materially adversely impacted by changes in these or
other factors.

We are exposed to market risk from changes in the interest rates on certain
outstanding debt. The outstanding loan balance under our $20 million credit
facility bears interest at a variable rate based on the banks prime rate or
LIBOR. Based on the average outstanding bank debt for fiscal 2002, a 100
basis point change in interest rates would not change interest expense by a
material amount.

13



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ITEM 4. CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-14(c) under the Exchange Act) as of a date
(the Evaluation Date) within 90 days prior to the filing date of this report.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures are effective in timely alerting them to the material information
relating to us (or our consolidated subsidiaries) required to be included in
our periodic SEC filings.

(b)  Changes in internal controls.

There were no significant changes made in our internal controls during the
period covered by this report or, to our knowledge, in other factors that could
significantly affect these controls subsequent to the date of their evaluation.

14



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PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

In late January 2001, we were served with documents in connection with a
product liability case brought in the California Superior Court for Solano
County. Although we had no record of the proceedings, the action had
progressed to the entry of a default judgment on January 11, 2001. We appealed
the default judgment to the California Court of Appeals in March 2001. On May
10, 2002, the appeals court overturned the default judgment holding that there
was no valid complaint against us. The case has been remanded to district
court and we have filed a motion to dismiss based on failure to timely file an
amended complaint. The plaintiff has since filed an amended complaint and
served requests for delivery.

From time to time, we have also been a party to other claims, legal actions and
complaints arising in the ordinary course of our business. We do not believe
that the resolution of such matters has had or will have a material impact on
our results of operations or financial position.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS  None




ITEM 3. DEFAULTS UPON SENIOR SECURITIES None




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

Our annual meeting of shareholders was held on January 10, 2002.
Shareholders holding 8,814,831 shares, or approximately 81.4% of
outstanding shares, were represented at the meeting by proxy or in person.
Two matters were submitted for vote by the shareholders as follows:

|                         
|-------------------------
|(a) Election of Directors

|                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The following nominees were elected to serve as members of the
Board of Directors until the annual meeting of shareholders in
2003 or until such time as a successor may be elected.

|                   |  |          |           |          |  |  |         | 
|------------------ |  | -------- | --------- | -------- |  |  | ------- | 
|                   |  | In Favor |           | Withheld
|                   |  |          |           |         
|Frederick H. Ayers |  |          | 8,852,622 |          |  |  | 172,309 | 
|Richard E. Jahnke  |  |          | 8,258,042 |          |  |  | 766,889 | 
|Dan W. Gladney     |  |          | 8,766,944 |          |  |  | 257,987 | 
|John H.P. Maley    |  |          | 8,850,488 |          |  |  | 174,443 | 
|Richard Nigon      |  |          | 8,926,635 |          |  |  | 98,296  | 
|William R. Floyd   |  |          | 8,929,698 |          |  |  | 95,233  | 

|                                             
|---------------------------------------------
|(b) Amendment to Employee Stock
Purchase Plan

|                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|An amendment to our employee stock purchase plan to extend the
termination date through 2012 and to increase the number of
shares reserved for issuance by 200,000 was approved by a vote
of 8,760,784 shares in favor, 214,260 shares against, 49,887
shares abstaining, and no broker non-votes.

15



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##### Table of Contents






ITEM 5. OTHER INFORMATION

Effective December 3, 2002, our former Executive Vice President and Chief
Financial Officer resigned. On December 9, 2002, Scott P. Youngstrom was
elected our new Vice President of Finance and Chief Financial Officer. Prior
to joining Compex Technologies, Inc., Mr. Youngstrom was Chief Financial
Officer of Acist Medical Systems, Inc., a manufacturer of high tech
cardiovascular devices. Mr. Youngstrom helped lead Acist from its start-up in
1996 through its sale to Bracco s.p.a. in July 2001. Prior to joining Acist
Medical Systems, Youngstrom worked for Cardiotronics Systems, Imed Corporation,
The Signal Companies and Coopers & Hybrand, earning his CPA in 1982.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

| |  |     |  |                     |  |                                                     
| |  | --- |  | ------------------- |  | ----------------------------------------------------
| |  | (a) |  | Exhibits            |  |                                                     
| |  |     |  |                     |  |                                                     
| |  |     |  | 99.1                |  | Certification of Chief Executive Officer pursuant to
| |  |     |  |                     |  | Section 906 of the Sarbanes-Oxley Act of 2002       
| |  |     |  |                     |  |                                                     
| |  |     |  | 99.2                |  | Certification of Chief Financial Officer pursuant to
| |  |     |  |                     |  | Section 906 of the Sarbanes-Oxley Act of 2002       
| |  |     |  |                     |  |                                                     
| |  | (b) |  | Reports on Form 8-K

|                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A Form 8-K, dated December 16, 2002, was filed during the quarter
ended December 31, 2002, to report the Company name change from
Rehabilicare Inc. to Compex Technologies, Inc.

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SIGNATURES

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

|                  |  |                                                                                           
|----------------- |  | ------------------------------------------------------------------------------------------
|                  |  | COMPEX TECHNOLOGIES, INC                                                                  
|                  |  |                                                                                           
|                  |  |                                                                                           
|February 12, 2003 |  | /s/ Dan W. Gladney                                                                        
|                  |  |                                                                                           
|Date              |  | Dan W. Gladney
President and Chief Executive Officer                                      
|                  |  |                                                                                           
|                  |  |                                                                                           
|February 12, 2003 |  | /s/ Scott P. Youngstrom                                                                   
|                  |  |                                                                                           
|Date              |  | Scott P. Youngstrom
Vice President of Finance
(Principal Financial and Accounting Officer)

17



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##### Table of Contents






CERTIFICATION

I, Dan W. Gladney, Chief Executive Officer of Compex Technologies, Inc.,
certify that:



| |                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. I have reviewed this quarterly report on Form 10-Q of Compex
Technologies, Inc.;                                                                                                                                                                                                                                              
|
| | 2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|
| | 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 Compex Technologies, Inc. as of, and for, the periods presented in
this quarterly report;        
|
| | 4. The other certifying officers of Compex Technologies, Inc. and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Compex
Technologies, Inc. and we have:                                                                          



| |                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to Compex Technologies, Inc., including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
|
| | b) evaluated the effectiveness of Compex Technologies, Inc.s
disclosure controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the Evaluation Date);
and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                                   



| |                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. The other certifying officers of Compex Technologies, Inc. and I have
disclosed, based on our most recent evaluation, to the auditors and the
audit committee of the board of directors of Compex Technologies, Inc. (or
persons performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the ability of Compex
Technologies, Inc. to record, process, summarize and report financial
data and have identified for the auditors of Compex Technologies, Inc.
any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the internal controls
of Compex Technologies, Inc.; and                                                                                                                                                        



| |                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. Other certifying officers of Compex Technologies, Inc. and I have
indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: February 12, 2003

| |                   
| | ------------------
| | /s/ Dan W. Gladney
| |                   
| | Dan W. Gladney    

18



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##### Table of Contents



CERTIFICATION

I, Scott P. Youngstrom, Chief Financial Officer of Compex Technologies, Inc.,
certify that:



| |                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. I have reviewed this quarterly report on Form 10-Q of Compex
Technologies, Inc.;                                                                                                                                                                                                                                              
|
| | 2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|
| | 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
Compex Technologies, Inc. as of, and for, the periods presented in this
quarterly report;         
|
| | 4. The other certifying officers of Compex Technologies, Inc. and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Compex
Technologies, Inc. and we have:                                                                          



| |                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to Compex Technologies, Inc., including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
|
| | b) evaluated the effectiveness of Compex Technologies, Inc.s
disclosure controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the Evaluation Date);
and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                                   



| |                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. The other certifying officers of Compex Technologies, Inc. and I have
disclosed, based on our most recent evaluation, to the auditors and the
audit committee of the board of directors of Compex Technologies, Inc. (or
persons performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the ability of Compex
Technologies, Inc. to record, process, summarize and report financial
data and have identified for the auditors of Compex Technologies, Inc.
any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the internal controls
of Compex Technologies, Inc.; and                                                                                                                                                        



| |                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. Other certifying officers of Compex Technologies, Inc. and I have
indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: February 12, 2003

| |                        
| | -----------------------
| | /s/ Scott P. Youngstrom
| |                        
| | Scott P. Youngstrom    

19