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

                                   (Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
            ACT OF 1934 For the quarterly period ended July 31, 2003

                                       OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934 For the transition period from ______ to _______.

                          Commission file number 0-8006


                             COX TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        NORTH CAROLINA                                           86-0220617
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

          69 McADENVILLE ROAD
        BELMONT, NORTH CAROLINA                                   28012-2434
(Address of principal executive offices)                          (Zip Code)

                                 (704) 825-8146
              (Registrant's telephone number, including area code)

                                      NONE
     (Former name, former address and former fiscal year, if changed since
                                  last report)

Indicated  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 the latest practicable date.

Number of shares of Common Stock, no par value, outstanding at
  September 10, 2003..................................................38,339,094


<PAGE>


                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES
                                    FORM 10-Q

                                TABLE OF CONTENTS

FACE SHEET                                                                     1
TABLE OF CONTENTS                                                              2
PART I.   FINANCIAL INFORMATION
Item 1.     Financial Statements
       Consolidated Balance Sheets
           July 31, 2003 and April 30, 2003                                    3
       Consolidated Statements of Income
           Three Months Ended July 31, 2003 and 2002                           4
       Consolidated Statements of Changes in Stockholders' Equity
           Three Months Ended July 31, 2003 and 2002                           5
       Consolidated Statements of Cash Flows
            Three Months Ended July 31, 2003 and 2002                          6
       Notes to Consolidated Financial Statements                           7-10
Item 2.     Management's Discussion and Analysis
                 of Financial Condition and Results of Operations          10-12
Item 3.     Quantitative and Qualitative Disclosure About Market Risks        13
Item 4.     Controls and Procedures                                           13

PART II.   OTHER INFORMATION AND SIGNATURES
Item 2.     Changes in Securities and Use of Proceeds                         14
Item 6.     Exhibits and Reports on Form 8-K                                  14
             1.  Exhibits
                31.1 - Certification by Co-Chief Executive Officer            15
                31.2 - Certification by Co-Chief Executive Officer            16
                31.3 - Certification by Chief Financial Officer               17
                32.1 - Certificate of Co-Chief Executive Officers             18
                32.2 - Certificate of Chief Financial Officer                 19

             2. Report on Form 8-K

Signatures                                                                    14


                                        2

<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements

COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                     July 31, 2003   April 30, 2003
                                                                     -------------   --------------
<S>                                                                  <C>             <C>
ASSETS                                                                (Unaudited)
------
CURRENT ASSETS:
      Cash and cash equivalents                                      $    716,147    $    572,149
      Accounts receivable, less allowance for doubtful accounts           938,119         964,078
      Inventory, net                                                    1,300,789       1,182,270
      Notes receivable - current portion                                     --            75,000
      Prepaid expenses                                                     17,466          17,733
                                                                     ------------    ------------
          TOTAL CURRENT ASSETS                                          2,972,521       2,811,230

Property and equipment, net                                               438,284         505,688
Due from officer, net                                                       8,928           8,928
Other assets                                                               71,280          71,510
Patents                                                                   105,275         114,845
                                                                     ------------    ------------
          TOTAL ASSETS                                               $  3,596,288    $  3,512,201
                                                                     ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
       Accounts payable and accrued expenses                         $    449,511    $    291,948
       Current portion of long-term debt                                  403,695         530,778
                                                                     ------------    ------------
           TOTAL CURRENT LIABILITIES                                      853,206         822,726

OTHER LIABILITIES:
       Long-term debt                                                     510,832         862,393
       Long-term debt - related parties                                 3,410,688       3,327,500
                                                                     ------------    ------------
          TOTAL OTHER LIABILITIES                                       3,921,520       4,189,893
                                                                     ------------    ------------
          TOTAL LIABILITIES                                             4,774,726       5,012,619
                                                                     ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
      Common stock, no par value; authorized 100,000,000 shares;
         issued andoutstanding; 39,339,094 shares at July 31, 2003
         and 39,339,094 at April 30, 2003                              23,252,804      23,252,804
      Accumulated other comprehensive (loss)                              (36,314)        (32,591)
      Accumulated deficit                                             (24,369,127)    (24,696,452)
      Less - Notes receivable for common stock                            (25,801)        (24,179)
                                                                     ------------    ------------
          TOTAL STOCKHOLDERS' DEFICIT                                  (1,178,438)     (1,500,418)
                                                                     ------------    ------------
          TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                $  3,596,288    $  3,512,201
                                                                     ============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                        3
<PAGE>


COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                                      Three Months Ended July 31,
                                      ---------------------------
                                           2003            2002
                                           ----            ----
REVENUE:
   Sales                             $  2,440,940    $  2,265,907
                                     ------------    ------------
COSTS AND EXPENSES:
   Cost of sales                        1,230,290       1,274,968
   General and administrative             457,368         516,877
   Selling                                263,936         237,069
   Depreciation                            69,192          77,521
   Amortization of patents                  9,570          10,994
                                     ------------    ------------
     TOTAL COSTS AND EXPENSES           2,030,356       2,117,429
                                     ------------    ------------
INCOME  FROM OPERATIONS                   410,584         148,478
                                     ------------    ------------

OTHER INCOME (EXPENSE):
   Other income (expense)                  15,880          58,555
   Interest expense                       (99,139)       (125,353)
                                     ------------    ------------
     TOTAL OTHER INCOME (EXPENSE)         (83,259)        (66,798)
                                     ------------    ------------

INCOME BEFORE INCOME TAXES                327,325          81,680
Provisions for income taxes                  --              --
                                     ------------    ------------
NET INCOME                           $    327,325    $     81,680
                                     ============    ============
BASIC AND DILUTED:
NET INCOME PER SHARE                 $        .01             .00
WEIGHTED AVERAGE NUMBER
  OF COMMON SHARES OUTSTANDING         38,339,094      25,831,949


                 See Notes to Consolidated Financial Statements.


                                        4
<PAGE>


COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED)
<TABLE>
<CAPTION>

                                                    Accumulated                         Subscribed
                                                       Other                               Stock
                                     Common        Comprehensive      Accumulated        Less Note
                                      Stock        Income (Loss)        Deficit          Receivable           Total
                                      -----        -------------        -------          ----------           -----
<S>                               <C>              <C>               <C>               <C>               <C>
Balance, April 30, 2002           $ 22,593,724     ($    66,168)     ($24,806,900)     ($    24,179)     ($ 2,305,523)
Comprehensive income-
     Net income                           --               --              81,680              --              81,680
     Foreign currency
       translation adjustment             --             12,037              --                --              12,037
Total comprehensive                                                                                          --------
   income                                 --               --                --                --              93,717
Change in subscribed stock, net           --               --                --                 (23)              (23)
Common stock issued                     12,274             --                --                --              12,274
                                  ------------     ------------      ------------      ------------      ------------
Balance, July 31, 2002            $ 22,605,998     ($    56,131)     ($24,725,220)     ($    24,202)     ($ 2,199,555)
                                  ============     ============      ============      ============      ============

Balance, April 30, 2003           $ 23,252,804     ($    32,591)     ($24,696,452)     ($    24,179)     ($ 1,500,418)
Comprehensive income -
      Net income                          --               --             327,325              --             327,325
      Foreign currency
        translation adjustment            --             (3,723)             --                --              (3,723)
Total comprehensive                                                                                          --------
   income                                 --               --                --                --             323,602
Change in subscribed stock, net           --               --                --              (1,622)           (1,622)
                                  ------------     ------------      ------------      ------------      ------------
Balance, July 31, 2003            $ 23,252,804     ($    36,314)     ($24,369,127)     ($    25,801)     ($ 1,178,438)
                                  ============     ============      ============      ============      ============
</TABLE>


                 See Notes to Consolidated Financial Statements.

                                        5
<PAGE>


COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                   Three Months Ended July 31,
                                                                   ---------------------------
                                                                       2003         2002
                                                                       ----         ----
<S>                                                                 <C>          <C>
CASH FLOW FROM OPERATING ACTIVITIES:
       Net income                                                   $ 327,325    $  81,680
       Adjustments to reconcile net income to net cash
             used by operating activities:
           Depreciation and depletion                                  69,192       77,521
           Amortization of patents                                      9,570       10,994
           Increase (decrease) in allowance for doubtful accounts        (750)         316
           Other                                                          231       (5,655)
           Decrease in valuation adjustment                              --         19,641
                                                                    ---------    ---------
                                                                      405,568      184,497
       Changes in assets and liabilities:
          (Increase) decrease in current assets:
               Accounts receivable                                     26,709       65,672
               Inventory                                             (118,519)     (12,853)
               Prepaid expenses                                           267       21,100
          Increase (decrease) in current liabilities:
               Accounts payable and accrued expenses                  157,562      (34,950)
                                                                    ---------    ---------
CASH PROVIDED BY OPERATING ACTIVITIES                                 471,587      223,466
                                                                    ---------    ---------
CASH FLOW FROM INVESTING ACTIVITIES:
        Purchase of property and equipment                             (1,788)     (38,769)
        Payment received on note receivable
                                                                       75,000         --
                                                                    ---------    ---------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                        73,212      (38,769)
                                                                    ---------    ---------
CASH FLOW FROM FINANCING ACTIVITIES:
       Issuance of common stock, net                                     --         12,274
       Repayment on debt                                             (395,456)    (285,841)
       Subscriptions receivable                                        (1,622)         (23)
                                                                                  (273,590)
                                                                    ---------    ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                (3,723)      12,037
                                                                    ---------    ---------
NET INCREASE (DECREASE) IN CASH                                       143,998      (76,856)
CASH AND CASH EQUIVALENTS, beginning of period                        572,149      216,042
                                                                    ---------    ---------
CASH AND CASH EQUIVALENTS, end of period                            $ 716,147    $ 139,186
                                                                    =========    =========
Supplemental Cash Flow Information
Interest paid                                                         $16,660      $49,728
Income taxes paid                                                   $    --      $    --
</TABLE>


                 See Notes to Consolidated Financial Statements.


                                        6
<PAGE>


COX TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   SIGNIFICANT ACCOUNTING POLICIES

     Nature of Operations

     Cox  Technologies,  Inc.,  and Cox  Recorders  Australia,  Ltd.,  Pty.,  an
Australian   distribution   company   95%  owned  by  Cox   Technologies,   Inc.
(collectively   "the  Company"),   engage  in  the  business  of  producing  and
distributing  temperature recording  instruments,  both in the United States and
internationally.

     The  accompanying  unaudited  consolidated  financial  statements and notes
should be read in conjunction with the audited consolidated financial statements
and notes  included in the Cox  Technologies,  Inc.  2003 Annual  Report on Form
10-K. In the opinion of management, all adjustments (consisting solely of normal
recurring  adjustments)  necessary  for a  fair  statement  of  the  results  of
operations  for  the  interim  periods  have  been  recorded.   Certain  amounts
previously  reported have been reclassified to conform with the current period's
presentation.


     Stock-based Compensation

     The Company  has  elected to follow  Accounting  Principles  Board  Opinion
("APB") No. 25,  "Accounting  for Stock Issued to  Employees"  (APB No. 25), and
related  interpretations  in  accounting  for its employee  stock  options.  The
Company has adopted the disclosure-only  provisions of SFAS No. 123, "Accounting
for  Stock-Based  Compensation."  This statement  defines a fair value method of
accounting for stock options or similar equity instruments. SFAS No. 123 permits
companies to continue to account for stock-based  compensation  awards under APB
No. 25, but requires disclosure in a note to the financial statements of the pro
forma net income and  earnings  per share as if the  Company had adopted the new
method of  accounting.  SFAS No. 123 has been  amended by  Financial  Accounting
Standards  Board  pronouncement  number  148 ("FASB No.  148),  "Accounting  for
Stock-based  Compensation  - Transition and  Disclosure".  FASB No. 148 requires
prominent  disclosure in the annual and  quarterly  statements of the Company on
stock-based compensation.

     The Company has two stock option plans, the Stock Option  Agreements By and
Between Cox Technologies, Inc. and Certain Executives ("Executive Plan") and the
2000 Stock Incentive Plan ("2000 Plan").  In accordance with the Executive Plan,
options to purchase an  aggregate  of up to  6,652,500  shares of the  Company's
Common  Stock  were  granted  to  certain  executives  of the  Company.  Options
generally  were granted at the fair market value of the  Company's  Common Stock
determined on the date of the grant. Certain options were granted at an exercise
price below fair market value and $600,000 of  compensation  expense was charged
to operations in fiscal 2000. Options from the Executive Plan are exercisable on
various dates and expire on various dates.  All options under the Executive Plan
have been granted.  In accordance with the 2000 Plan, up to 8,000,000  shares of
the  Company's  Common  Stock  can be  issued  through  the  use of  stock-based
incentives to employees,  consultants and  non-employee  members of the Board of
Directors. The exercise price of options granted through the 2000 Plan cannot be
less than 85% of the fair market value of the Company's Common Stock on the date
of the grant.  All  outstanding  options  have been  granted at the fair  market
value;  therefore,  no compensation expense has been recorded.  Options from the
2000 Plan are exercisable on various dates from the date of the grant and expire
on various  dates.  Exceptions  to the exercise  date for both plans are allowed
upon the retirement,  disability or death of a participant. An exception is also
allowed upon a change in control as defined in both plans.

     The Company  applies APB No. 25 in accounting for both Plans.  Accordingly,
compensation  cost is determined  using the intrinsic value method under APB No.
25. For the  periods  ended  July 31,  2003 and 2002,  there was no  stock-based
compensation  expense  recorded.  Had  compensation  cost  for both  Plans  been
determined  consistent  with the fair  value  method  for  compensation  expense
encouraged  under SFAS No. 123, the  Company's net income and earnings per share
(EPS) would have been the pro forma amounts shown below for the fiscal  quarters
ended July 31, 2003 and 2002.

                                       7
<PAGE>


                                                July 31, 2003      July 31, 2002
                                                -------------      -------------
Net income, as reported                            $327,325          $  81,680
Proforma stock-based compensation - net of tax    ( 131,987)          (127,310)
                                                -----------        -----------
Net income (loss), proforma                        $195,338          $( 45,630)

Basic and diluted EPS, as reported                     $.01               $.00
Basic and diluted EPS, proforma                        $.01               $.00


     Restricted  stock  was  issued  out of the  2000  Plan to  consultants  and
employees in lieu of cash payments totaling zero and 12,274 shares, respectively
for the  quarters  ended July 31, 2003 and 2002.  At July 31,  2003,  there were
2,028,972 shares reserved for issuance under the 2000 Plan.

     Accounts Receivable


     The balance in the allowance  for doubtful  accounts is $45,000 and $45,750
at July 31, 2003 and April 30, 2003, respectively.

     Recent Accounting Pronouncements

     SFAS No. 143 addresses  financial  accounting and reporting for obligations
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  The  provisions  of SFAS No. 143 are  required  to be
applied  starting with fiscal years  beginning  after June 15, 2002. The Company
has  adopted  the  provisions  of SFAS No. 143  effective  May 1, 2003,  and the
adoption of the provisions of SFAS No. 143 did not have a significant  effect on
its financial position or results of operations.

     SFAS No. 150 addresses the  accounting  for certain  financial  instruments
with  characteristics  of both  liabilities  and equity,  and is  effective  for
interim periods beginning after June 15, 2003. The Company believes the adoption
of the  provisions  of SFAS No.  150 will not have a  significant  effect on its
financial position or results of operations.

2.   INVENTORY

     Inventory at July 31, 2003 and April 30, 2003 consists of the following:

                               July 31, 2003         April 30, 2003
                             -----------------     ------------------
Raw materials                   $   396,598            $   328,744
Work-in-process                     209,320                103,059
Finished goods                      744,871                800,467
                               ------------           ------------
                                  1,350,789              1,232,270
Less reserve                         50,000                 50,000
                               ------------           ------------
      Total                     $ 1,300,789             $1,182,270
                               ============           ============

3.   DEBT

     On May 19,  2003,  the Company  executed a note  modification  agreement to
modify the note dated March 19, 2003. The effective date of the modification was
established when the Company made a principal  payment on the note for $355,000.
The payment was made to Centura on May 21, 2003. The results of the modification
is to reduce the monthly  principal  payment to $21,000  plus  accrued  interest
beginning on June 15, 2003 and continuing  until July 15, 2006 on which date the
balance of the note will mature.  Also,  beginning on the effective  date of the
modification, the interest rate on the outstanding principal shall be calculated
at the  bank's  30-day  LIBOR  base rate plus 2.5% per annum.  The  Company  has
calculated  the borrowing  base as of July 31, 2003 and such  calculation  would
support a loan of  approximately  $844,000  and the  outstanding  balance of the
Centura loan at July 31, 2003 is $756,566.


                                        8
<PAGE>

4.   RELATED PARTY TRANSACTIONS

     On January 20, 2003, the Company  entered into a Stock  Purchase  Agreement
(the "TI Stock Purchase  Agreement") with Technology  Investors,  LLC ("TI"), an
affiliate of Brian Fletcher and Kurt Reid, who are officers and directors of the
Company,  pursuant to which TI agreed to purchase and the Company agreed to sell
12,500,000  shares of the Company's  Common Stock at a price of $0.06 per share,
for a total purchase price of $750,000.  This  transaction  was submitted to the
Company's   shareholders  for  their  approval  at  a  special  meeting  of  the
shareholders on March 12, 2003. With a quorum of shareholders  present, a motion
was made and seconded to approve the TI Stock Purchase Agreement, and the motion
was passed by a  unanimous  vote of those  present in person or  represented  by
proxy.  The transaction was consummated on March 19, 2003. TI, together with Mr.
Fletcher and Mr. Reid and their  affiliates,  now  collectively  own and control
beneficially an aggregate of 15,661,516 shares of the Company's Common Stock, or
approximately  38% of the Company's issued and outstanding  common stock.  These
figures include the 2,728,550  shares of the Company's  Common Stock that TI may
obtain by converting its existing  promissory note, but exclude the options that
Mr. Fletcher and Mr. Reid own to purchase, in the aggregate, 3,000,000 shares of
the Company's Common Stock,  which options are exercisable in varying increments
through September 9, 2009.

     In March 2000,  the Company  entered into an agreement  with TI whereby the
Company  issued  to TI a 10%  subordinated  convertible  promissory  note in the
amount of $2,500,000 (the "TI Note"), the entire principal and interest of which
are due on March 10, 2005.  Alternatively,  the principal  amount of the TI Note
and interest  accrued  thereon may be converted,  at the option of holder,  into
shares of the Company's  Common Stock at a conversion  price of $1.25 per share.
As of July 31, 2003, the principal and accrued  interest of $3,410,688  could be
converted into 2,728,550  shares of the Company's Common Stock. Mr. Fletcher and
Mr.  Reid serve as the sole  managers  of TI and share  voting and  dispositions
power with respect to the Common Stock issuable upon  conversion of the TI Note.
See Note 5 below for further discussion of this transaction and the consequences
to  the  Company  if it  fails  to  meet  its  principal  and  accrued  interest
obligations under the TI Note when they become due on March 10, 2005.

     In addition, Mr. Fletcher and Mr. Reid were named directors of the Company.
The  Company  has  agreed  to  nominate  Mr.  Fletcher  and Mr.  Reid for  three
consecutive terms on the Board of Directors. Mr. Fletcher and Mr. Reid were also
both retained as consultants to the Company.  In connection  with their services
they each would  receive  compensation  of $1 annually  and a one-time  grant of
immediately  exercisable  options to purchase  300,000  shares of the  Company's
Common  Stock at an exercise  price of $1.25 per share for a period of up to ten
years.

     In fiscal 2001,  Mr.  Fletcher and Mr. Reid each received  stock options to
purchase  2,000,000 shares of the Company's Common Stock at an exercise price of
$.59 per share for a period of up to ten years.

     In fiscal 2002,  Mr.  Fletcher and Mr. Reid each received  stock options to
purchase  800,000  shares of the Company's  Common Stock at an exercise price of
$.11 per share for a period of up to seven years.  Also,  the Board of Directors
approved an increase in compensation  for Mr. Fletcher and Mr. Reid  retroactive
to January 1, 2001,  whereby  they each would  receive  annual  compensation  of
$100,000, payable quarterly in unrestricted shares of the Company's Common Stock
valued at the average  daily  closing  price during the quarter.  During  fiscal
2002,  Mr.  Fletcher  and Mr. Reid were paid  $75,000 of salary in  unrestricted
shares of the  Company's  Common  Stock at an average  market  price of $.35 per
share  under this  structure.  On December 7, 2001,  Mr.  Fletcher  and Mr. Reid
agreed to a decrease in their annual  compensation  to $1  effective  October 1,
2001. On March 15, 2002,  the  Compensation  Committee of the Board of Directors
approved a compensation structure, effective March 1, 2002, whereby Mr. Fletcher
and Mr.  Reid would be  compensated  based on the actual  monthly  cash flow and
quarterly net income generated by the Company.  The maximum annual  compensation
would be capped at $210,000 each.  During fiscal 2002, Mr. Fletcher and Mr. Reid
were compensated $7,500 each under this structure.

     During fiscal 2003, Mr.  Fletcher and Mr. Reid were each granted options to
purchase  200,000  shares of the Company's  Common Stock at an exercise price of
$.11 per share for a period of up to seven  years.  Effective  November 1, 2002,
the Board of Directors ratified the recommendation of the Compensation Committee
to change the compensation  structure for both Mr. Fletcher and Mr. Reid and set
the annual salary rate at $100,000 per year.


                                        9
<PAGE>


On April 1, 2003, the Board of Directors  modified the compensation plan for Mr.
Fletcher and Mr. Reid increasing  their annual salary rate to $120,000 per year,
effective April 15, 2003, and establishing a quarterly bonus plan beginning with
the first quarter of fiscal 2004 based on the profitability of the Company.  The
quarterly  bonus is limited to 50% of the  Company's  net income for the quarter
and Mr. Fletcher and Mr. Reid can earn a non-cumulative  bonus up to $10,000 per
quarter.  During fiscal 2003,  Mr.  Fletcher and Mr. Reid were each  compensated
approximately $99,000 as a payout from the fiscal 2002 compensation  arrangement
and approximately $50,000 from the fiscal 2003 compensation arrangement. At July
31, 2003,  a bonus of $10,000  each was accrued for payment to Mr.  Fletcher and
Mr. Reid.

5.    LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash flow from operations is currently not adequate to retire
the TI Note,  and it is  unlikely  that  cash flow  will  increase  in an amount
sufficient  for the Company to meet its  obligations  under the TI Note when the
principal  and accrued  interest  become due on March 10, 2005. TI has indicated
that, in the event the Company becomes unable to meet its obligations  under the
TI Note,  TI may be  willing  to  explore  alternative  financing  arrangements,
including a restructuring  of the TI Note prior to its due date.  Alternatively,
the  Company  may seek a cash  infusion  elsewhere,  through a separate  debt or
equity offering, a strategic  partnership or some form of business  combination.
The  Company  may  consider  any or all of these  alternatives  in the  event it
becomes unable to meet its debt  obligation to TI, but there can be no assurance
that any deal will be consummated on terms acceptable to both the Company and TI
or another third party.  Without such an  arrangement,  it is highly likely that
the Company would default on its obligations under the TI Note, at which time TI
would be entitled to exercise any and all remedies  available to it under the TI
Note and  applicable  law,  including  bringing suit against the Company and its
assets.  Should TI seek to enforce its right to timely repayment of the TI Note,
there  is a risk  that  the  Company  will  not be able to  continue  as a going
concern.

Item 2.    Management's Discussion And Analysis of Financial Condition
           And Results of Operations

     Comparison of Operations for 2004 and 2003

     The Company operates in one reporting  segment that involves the production
and distribution of temperature recording and monitoring devices,  including the
Cox1 graphic temperature  recorder,  DataSource(R) and Tracer(R) electronic data
loggers, Vitsab(R) visual indicator labels and probes and related products.

     Revenues from sales  increased by  approximately  $175,000,  or 8%, for the
three-month  period  ended July 31,  2003 as compared to the same period as last
year.   This  increase  is  primarily  due  to  an  increase  in  the  sales  of
DataSource(R),  Tracer(R) and Vitsab(R)  products,  offset by a decrease in Cox1
product  sales.  Unit  sales  of Cox1  decreased  by  approximately  11% for the
three-month  period ended July 31, 2003 as compared to the same period last year
and the average sales price decreased 8%. Unit sales of DataSource(R)  increased
approximately 76% for the three-month  period ended July 31, 2003 as compared to
the same period last year. Unit sales of Tracer(R)  increased  approximately 37%
for the  three-month  period  ended July 31, 2003 as compared to the same period
last  year.  Unit  sales  of  Vitsab(R)  increased  approximately  235%  for the
three-month period ended July 31, 2003 as compared to the same period last year.

     The revenue from the sale of graphic  recorders  represented  approximately
$1,356,300 or 56% of total  revenues for the  three-month  period ended July 31,
2003 as  compared  to  approximately  $1,651,300  or 73% in the same period last
year. The sales of electronic data loggers represented approximately $841,200 or
34% of total revenues for the three-month period ended July 31, 2003 as compared
to $492,400 or 22% in the same period last year. The sale of Vitsab(R)  products
represented  approximately  $106,900 or 4% of total revenues for the three-month
period ending July 31, 2003 as compared to $45,204 or 2% in the same period last
year. The sale of probes and related products  represented $36,800 or 2% for the
three-month  period ended July 31, 2003 as compared to $30,500 or 2% in the same
period  last year.  The sale of other  miscellaneous  products  represented  the
balance.  Management  believes  that the Company will  continue to  experience a
decrease  in average  sales price for some  products  due to  competitive  price
pressure,  but expects units sales for its primary  products to remain constant,
or in the case of electronic data loggers, increase in future periods.

                                       10
<PAGE>


Cost of  sales  for  the  three-month  period  ended  July  31,  2003  decreased
approximately  $44,700 or 4% as  compared  to the same  period  last  year.  The
decrease is due to  decreasing  labor and benefit  costs,  supplies  used in the
manufacturing process and a reduction in the price that the Company now pays for
raw material  components and labor costs,  offset slightly by increased shipping
expenses and retriever fees.

     The Company  continues to contract  with a third party to  manufacture  and
assemble certain base versions of the Cox1 units at an offshore location. During
fiscal 2003,  this location  supplied  approximately  40% of the total number of
units utilized by the Company.  Because of this manufacturing  arrangement,  the
Company has realized  significant cost savings on units manufactured in both the
offshore and Belmont, North Carolina facilities. The Company's current plans are
to  continue  assembling  special-use  Cox1 units in the Belmont  facility.  The
Belmont  facility  will also  continue  to  manufacture  and  assemble a certain
percentage of the base Cox1 units. If necessary,  the production capabilities of
the  Belmont  facility  can be  expanded  to meet the total  demand for all Cox1
units.  The Company has  identified  certain  risks and  uncertainties  that are
associated  with  offshore  production  that  include,  but are not  limited to,
political  issues,  transportation  risks and the availability of raw materials.
The  Company  will  not  experience  foreign  currency  exchange  risks  as  all
transactions are denominated in U.S. dollars.

     General and  administrative  expenses  for the three  months ended July 31,
2003  decreased  approximately  $59,500,  or 11%, as compared to the same period
last year.  The net  decrease is due to the  elimination  of Vitsab  Sweden,  AB
expenses after the sale of that operation and decreases in legal expenses and is
partially offset by increased insurance costs and salary expenses.

     Selling  expense  increased  approximately  $26,900,  or 11% for the  three
months  ended July 31,  2003 as  compared  to the same  period  last  year.  The
increase in the three-month period is primarily due to increased advertising and
promotions  expenses and sales salaries and was partially offset by decreases in
travel expenses and commission expenses.

     Depreciation  expense  decreased  approximately  $8,300,  or  11%  for  the
three-month  period  as  compared  to  the  same  period  last  year  due to the
elimination of depreciation expenses associated with the Vitsab equipment.

     Amortization of patents and goodwill decreased approximately $1,400, or 13%
for the three  months  ended July 31,  2003 as  compared to the same period last
year.  The decrease is due to a nominal  change in the rate of  amortization  of
certain Vitsab patents owned by the Company.

     Other income decreased  approximately  $42,700, or 73% for the three months
ended July 31, 2003 as compared to the same period last year.  This  decrease is
primarily  related to the decrease in the amount of the  payments  received as a
result of a revision in the  agreement  between  the Company and its  Copenhagen
distributor  for an option  to  purchase  all of the  shares  and  assets of the
Company's wholly owned subsidiary, Vitsab Sweden, AB.

     Interest  expense  decreased   approximately   $26,200,   or  21%  for  the
three-month  period as compared to the same period last year.  Interest  expense
decreased on both bank debt and capitalized  leases and was partially  offset by
an  increase  in accrued  interest  related  to the  Technology  Investors  Note
described under "Liquidity and Capital Resources" below.

     The decrease in net property and  equipment of  approximately  $67,400,  is
primarily  due to  depreciation,  partially  offset by the  purchase of tooling,
machinery and equipment, and leasehold improvements.

     Liquidity and Capital Resources

     The Company derives cash from operations,  equity sales, and borrowing from
long- and short-term lending sources to meet its cash requirements.  At present,
the cash flow from operations  appears  adequate to meet cash  requirements  and
commitments of the Company during the 2004 fiscal year.

                                       11
<PAGE>


In March 2000, the Company entered into an agreement with TI whereby the Company
issued to TI a 10%  subordinated  convertible  promissory  note in the amount of
$2,500,000 (the "TI Note"),  the entire  principal and interest of which are due
on March  10,  2005.  Alternatively,  the  principal  amount  of the TI Note and
interest accrued thereon may be converted,  at the option of holder, into shares
of the Company's  Common Stock at a conversion  price of $1.25 per share.  As of
July 31,  2003,  the  principal  and  accrued  interest of  $3,410,688  could be
converted into 2,728,550  shares of the Company's Common Stock. Mr. Fletcher and
Mr.  Reid serve as the sole  managers  of TI and share  voting and  dispositions
power with respect to the Common Stock issuable upon conversion of the TI Note.

     The Company's cash flow from operations is currently not adequate to retire
the TI Note,  and it is  unlikely  that  cash flow  will  increase  in an amount
sufficient  for the Company to meet its  obligations  under the TI Note when the
principal  and accrued  interest  become due on March 10, 2005. TI has indicated
that, in the event the Company becomes unable to meet its obligations  under the
TI Note,  TI may be  willing  to  explore  alternative  financing  arrangements,
including a restructuring  of the TI Note prior to its due date.  Alternatively,
the  Company  may seek a cash  infusion  elsewhere,  through a separate  debt or
equity offering, a strategic  partnership or some form of business  combination.
The  Company  may  consider  any or all of these  alternatives  in the  event it
becomes unable to meet its debt  obligation to TI, but there can be no assurance
that any deal will be consummated on terms acceptable to both the Company and TI
or another third party.  Without such an  arrangement,  it is highly likely that
the Company would default on its obligations under the TI Note, at which time TI
would be entitled to exercise any and all remedies  available to it under the TI
Note and  applicable  law,  including  bringing suit against the Company and its
assets.  Should TI seek to enforce its right to timely repayment of the TI Note,
there  is a risk  that  the  Company  will  not be able to  continue  as a going
concern.

     On May 19, 2003, the Company  executed a note  modification  agreement with
Centura Bank to modify the note dated March 19, 2003.  The effective date of the
modification  was established  when the Company made a principal  payment on the
note for $355,000.  The payment was made to Centura on May 21, 2003. The results
of the modification is to reduce the monthly  principal  payment to $21,000 plus
accrued  interest  beginning on June 15, 2003 and continuing until July 15, 2006
on which  date the  balance  of the note will  mature.  Also,  beginning  on the
effective  date  of the  modification,  the  interest  rate  on the  outstanding
principal shall be calculated at the bank's 30-day LIBOR base rate plus 2.5% per
annum.  The Company has  calculated  the borrowing  base as of July 31, 2003 and
such  calculation  would  support  a loan  of  approximately  $825,000  and  the
outstanding balance of the Centura loan on July 31, 2003 is $756,566.

     Forward-Looking Statements

     Statements contained in this document,  which are not historical in nature,
are  forward-looking  within the  meaning of the Private  Securities  Litigation
Reform Act of 1995.  Forward-looking statements give our current expectations of
forecasts of future events.  You can identify these  statements by the fact that
they do not relate strictly to historical or current facts.  They use words such
as "estimate," "intend," "plan," and other words and terms of similar meaning in
connection  with any discussion of future  operating and financial  performance.
Forward-looking statements are subject to risks and uncertainties that may cause
future results to differ materially from those set forth in such forward-looking
statements.  Cox Technologies undertakes no obligation to update forward-looking
statements to reflect events or circumstances  after the date hereof. Such risks
and uncertainties with respect to Cox Technologies  include, but are not limited
to,  its  ability  to  successfully   implement   internal   performance  goals,
performance issues with suppliers, regulatory issues, competition, the effect of
weather  on  customers,   exposure  to  environmental  issues  and  liabilities,
variations in material costs and general and specific economic conditions.  From
time to time, Cox  Technologies may include  forward-looking  statements in oral
statements or other written documents.

                                       12
<PAGE>


Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

     There was no  material  change in the  Company's  market  risk  during  the
quarter ended July 31, 2003. For additional information on market risk, refer to
the "Quantitative  and Qualitative  Disclosure About Market Risk" section of the
Company's Annual Report on Form 10-K for the year ended April 30, 2003.

Item 4.    DISCLOSURE CONTROLS AND PROCEDURES

     The  Co-Chief  Executive  Officers and the Chief  Financial  Officer of the
Company have  concluded,  based on their  evaluation as of a date within 90 days
prior to the date of the filing of this Report,  that the  Company's  disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by the  Company in the  reports  filed or  submitted  by it under the
Securities  Act of 1934, as amended,  are recorded,  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commissions  rules and forms and include  controls  and  procedures  designed to
ensure that information  required to be disclosed by the Company in such reports
is  accumulated  and  communicated  to the Company's  management,  including the
Co-Chief Executive  Officers and the Chief Financial Officer of the Company,  as
appropriate to allow timely decisions regarding required disclosures.

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





                                       13
<PAGE>


                    PART II. OTHER INFORMATION AND SIGNATURE

Item 2.     Changes in Securities and Use of Proceeds

            No securities of the  Registrant were issued during the three months
ended July 31, 2003.

Item 6.     Exhibits and Reports on Form 8-K

(a)      Exhibits:

               31.1 - Certification by Co-Chief Executive Officer
               31.2 - Certification by Co-Chief Executive Officer
               31.3 - Certification by Chief Financial Officer
               32.1 - Certificate of Co-Chief Executive Officers
               32.2 - Certificate of Chief Financial Officer


         (b)   Reports on Form 8-K:

            The Company  filed on August 6,  2003 a Current  Report on  Form 8-K
disclosing the fiscal 2003 financial results.


                                   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.

                             COX TECHNOLOGIES, INC.
                             ----------------------
                                  (Registrant)


Date:    09-11-03                            /s/  Brian D. Fletcher
-----    --------                           -----------------------
                                            Brian D Fletcher
                                            Co-Chief Executive Officer


Date:    09-11-03                            /s/  Kurt C. Reid
         --------                           -----------------------
                                            Kurt C. Reid
                                            Co-Chief Executive Officer


Date:    09-11-03                           /s/ John R. Stewart
         --------                           -----------------------
                                            John R. Stewart
                                            Chief Financial Officer


                                       14