================================================================================

                       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 December 31, 2002

[ ]      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: 001-10382

                          VALLEY FORGE SCIENTIFIC CORP.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                             23-2131580
-------------------------------                              -------------------
(State or other jurisdiction of                                (I.R.S. employer
incorporation or organization)                               identification no.)

                  136 Green Tree Road, Oaks, Pennsylvania 19456
              -----------------------------------------------------
              (Address of principal executive offices and zip code)

                            Telephone: (610) 666-7500

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

                               Yes [X]     No [ ]

Indicate by check mark [X] whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                               Yes [ ]     No [X]

At February 10, 2003 there were 8,004,712 shares outstanding of the Registrant's
no par value Common Stock.

================================================================================
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

                               INDEX TO FORM 10-Q

                                December 31, 2002



                                                                           Page
                                                                          Number
                                                                          ------

Part I - Financial Information

         Item 1.  Financial Statements:

         Balance Sheets - December 31, 2002 and September 30, 2002.          1

         Statements of Operations for the three months
         ended December 31, 2002 and December 31, 2001.                      2

         Statements of Cash Flows for the three months
         ended December 31, 2002 and  December 31, 2001.                     3

         Notes to Financial Statements.                                      4

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.                       6

         Item 4.  Controls and Procedures                                   13

Part II - Other Information                                                 13



                                       (i)
<PAGE>

Part I
Item 1.  Financial Statements
-----------------------------

                          VALLEY FORGE SCIENTIFIC CORP.

                           CONSOLIDATED BALANCE SHEETS


                                                     December 31,  September 30,
ASSETS                                                   2002           2002
------                                               -----------    -----------
                                                     (Unaudited)     (Audited)
Current Assets:
  Cash and cash equivalents                          $ 2,300,620    $ 2,543,898
  Accounts receivable, net                               508,761        337,939
  Inventory                                              803,629        882,832
  Prepaid items and other current assets                 181,434        140,784
  Deferred tax assets                                     62,178         76,293
                                                     -----------    -----------
       Total Current Assets                            3,856,622      3,981,746

Property, Plant and Equipment, Net                       135,106        136,131
Goodwill                                                 153,616        153,616
Intangible Assets, Net                                   284,296        294,371
Other Assets                                               3,480          4,171
                                                     -----------    -----------

       Total Assets                                  $ 4,433,120    $ 4,570,035
                                                     ===========    ===========


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

Current Liabilities:
  Accounts payable and accrued expenses              $   258,185    $   200,972
  Income taxes payable                                        --        152,309
                                                     -----------    -----------
       Total Current Liabilities                         258,185        353,281

Deferred Tax Liability                                    14,030         14,357
                                                     -----------    -----------

       Total Liabilities                                 272,215        367,638
                                                     -----------    -----------

Commitments and Contingencies

Stockholders' Equity:
  Preferred stock                                             --             --
  Common stock (no par, 20,000,000 shares
   authorized, shares issued and outstanding
   at December 31, 2002 - 7,986,412 and
   at September 30, 2002 - 8,041,312)                  3,620,215      3,701,846
  Retained earnings                                      540,690        500,551
                                                     -----------    -----------
                                                       4,160,905      4,202,397
                                                     -----------    -----------

       Total Liabilities and Stockholders' Equity    $ 4,433,120    $ 4,570,035
                                                     ===========    ===========


--------------------

See accompanying notes.

                                       -1-
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                      For the Three Months Ended
                                                             December 31,
                                                         2002            2001
                                                      ----------      ----------

Net Sales                                             $1,019,942      $1,262,406

Cost of Sales                                            529,272         616,340
                                                      ----------      ----------

Gross Profit                                             490,670         646,066
                                                      ----------      ----------

Other Costs:
  Selling, general and administrative                    330,618         340,137
  Research and development                                89,338          78,358
  Amortization                                            10,075          15,795
                                                      ----------      ----------
       Total Other Costs                                 430,031         434,290
                                                      ----------      ----------

Income from Operations                                    60,639         211,776

Other Income (Expense), Net                                8,989           1,097
                                                      ----------      ----------

Income before Income Taxes                                69,628         212,873

Provision for Income Taxes                                29,489          85,400
                                                      ----------      ----------

Net Income                                            $   40,139      $  127,473
                                                      ==========      ==========


Net Income per Share:
  Basic net income per common share                   $     0.01      $     0.02
                                                      ==========      ==========
  Diluted net income per common share                 $     0.01      $     0.02
                                                      ==========      ==========

  Basic common shares outstanding                      8,013,875       8,067,812

  Diluted common shares outstanding                    8,043,858       8,152,917


--------------------

See accompanying notes.

                                       -2-
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)


<TABLE>
<CAPTION>
                                                           For the Three Months Ended
                                                                  December 31,
                                                               2002           2001
                                                           -----------    -----------

<S>                                                        <C>            <C>
Cash Flows from Operating Activities:
  Net income                                               $    40,139    $   127,473
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                             15,190         20,845
      Write-down of property, plant and equipment                   --          5,300
      Reduction of allowance for loans and advances
        to employees                                                --        (48,383)
      Interest accrued on loans and advances to
        employees                                                 (583)          (698)

  Changes in assets and liabilities, net of effect from:
    (Increase) decrease in accounts receivable                (170,822)       123,791
    Decrease in inventory                                       79,203          3,095
    Decrease in deferred tax assets                             14,115         15,050
    Increase in prepaid items and other current assets         (50,067)       (26,184)
    Decrease in other assets                                       691            319
    Increase (decrease) in accounts payable and accrued
      expenses and income taxes payable                        (95,096)        13,774
    Decrease in deferred tax liability                            (327)        (1,950)
                                                           -----------    -----------
        Net cash provided by (used in) operating
          activities                                          (167,557)       232,432
                                                           -----------    -----------

Cash Flows from Investing Activities:
  Purchase of property, plant and equipment                     (4,090)            --
  Proceeds from repayment of employee loans and advances        10,000         55,261
  Loans and advances to employees                                   --         (1,436)
                                                           -----------    -----------
        Net cash provided by investing activities                5,910         53,825
                                                           -----------    -----------

Cash Flows from Financing Activities:
  Repurchase of common stock                                   (81,631)            --
                                                           -----------    -----------
        Net cash used in financing activities                  (81,631)            --
                                                           -----------    -----------

Net Increase (Decrease) in Cash and Cash
  Equivalents                                                 (243,278)       286,257

Cash and Cash Equivalents, beginning of period               2,543,898      1,500,622
                                                           -----------    -----------

Cash and Cash Equivalents, end of period                   $ 2,300,620    $ 1,786,879
                                                           ===========    ===========


Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
    Interest                                               $        --    $        --
                                                           ===========    ===========
    Income taxes                                           $   190,000    $   100,075
                                                           ===========    ===========
</TABLE>


--------------------

See accompanying notes.

                                       -3-
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                DECEMBER 31, 2002


1.   DESCRIPTION OF BUSINESS

Valley Forge Scientific Corp. ("VFSC") was incorporated on March 27, 1980 in the
Commonwealth of Pennsylvania and is engaged in the business of developing,
manufacturing and selling medical devices and products. On August 18, 1994, VFSC
formed a wholly-owned subsidiary, Diversified Electronics Company, Inc. ("DEC"),
a Pennsylvania corporation, in order to continue the operations of Diversified
Electronic Corporation, a company which was merged with and into VFSC on August
31, 1994. Collectively, VFSC and DEC are referred to herein as the "Company".

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation
-----------------------------------------------------

The accompanying financial statements consolidate the accounts of VFSC and its
wholly-owned subsidiary. All significant intercompany accounts and transactions
have been eliminated in consolidation. Certain amounts from prior years have
been reclassified to conform to the current year presentation.

The accompanying unaudited consolidated financial statements have been prepared
pursuant to rules and regulations of the Securities and Exchange Commission and,
therefore, do not include all information and footnote disclosures normally
included in audited financial statements. However, in the opinion of management,
all adjustments that are of a normal and recurring nature, necessary to present
fairly the results of operations, financial position and cash flows have been
made. It is suggested that these statements be read in conjunction with the
financial statements included in the Company's Annual Report on Form 10-K for
the year ended September 30, 2002.

The statements of operations for the three months ended December 31, 2002 and
2001 are not necessarily indicative of results for the full year.

Earnings (Loss) per Share
-------------------------

The Company computes earnings or loss per share in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). Basic
earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
Diluted earnings per share reflects the potential dilution that could occur if
securities or other agreements to issue common stock were exercised or converted
into common stock. Diluted earnings per share is computed based upon the
weighted average number of common shares and dilutive common equivalent shares
outstanding, which include convertible debentures, stock options and warrants.

                                       -4-
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                DECEMBER 31, 2002
                                   (Continued)


3.   GOODWILL AND INTANGIBLE ASSETS

In accordance with SFAS 142, Goodwill has been reflected on the balance sheet
separate from other intangible assets which continue to be amortized. No changes
were made to the carrying amount of goodwill for the quarter ended December 31,
2002. The Company completed its transitional impairment test during the quarter
ending March 31, 2002, indicating that goodwill was not impaired.

Information regarding the Company's other intangible assets is as follows:


<TABLE>
<CAPTION>
                                As of December 31, 2002               As of September 30, 2002
                         ------------------------------------   ------------------------------------
                            Gross                                  Gross
                          Carrying    Accumulated                Carrying    Accumulated
                           Amount    Amortization      Net        Amount    Amortization      Net
                         ----------   ----------   ----------   ----------   ----------   ----------

<S>                      <C>          <C>          <C>          <C>          <C>          <C>
Patents, trademarks,
  licensing agreements   $  569,009   $  485,760   $   83,249   $  569,009   $  483,224   $   85,785

Proprietary know-how        452,354      251,307      201,047      452,354      243,768      208,586

Acquisition costs            55,969       55,969           --       55,969       55,969           --
                         ----------   ----------   ----------   ----------   ----------   ----------

                         $1,077,332   $  793,036   $  284,296   $1,077,332   $  782,961   $  294,371
                         ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>


Amortization expense of intangible assets was $10,075 and $15,759 for the three
months ended December 31, 2002 and 2001, respectively. The annual estimated
amortization expense for intangible assets for the five year period ending
September 30, 2007 ranges from approximately $30,000 to $64,000.

4.   COMMITMENTS AND CONTINGENCIES

On September 19, 2002, the Company was served with a complaint that was filed in
the Superior Court of the State of Arizona, County of Maricopa, entitled Jeffrey
Turner and Cathryn Turner et al v. Phoenix Children's Hospital, Inc., et al, (CV
2002-010791) in which the Company was named as one of the defendants. The
plaintiffs seek an unspecified amount of damages for alleged injuries sustained
in a surgery that took place in June 2000. The Company's product liability
insurance carrier is providing the Company's defense in this matter. This
insurance coverage has a $10,000 deductible that applies to attorney fees and
damages which have been provided for in other costs under selling, general and
administrative expense for the year ended September 30, 2002. In an answer that
was filed on November 26, 2002, the Company denied any liability. The Company
believes the claim is without merit and will vigorously defend itself in this
action.

                                       -5-
<PAGE>

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

         The following is a discussion and analysis of Valley Forge Scientific
Corp.'s financial condition and results of operations for the three month
periods ended December 31, 2002 and 2001. This section should be read in
conjunction with the financial statements and related notes in Item 1 of this
report and Valley Forge Scientific Corp.'s Annual Report on Form 10-K for the
year ended September 30, 2002, which has been filed with the Securities and
Exchange Commission.

              Cautionary Note Regarding Forward Looking Statements

         This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains, in addition to historic information, "forward
looking" statements or statements which arguably imply or suggest certain things
about our future. Statements which express that we "believe", "anticipate",
"expect", or "plan to" as well as other statements which are not historical
fact, are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward looking statements
include, but are not limited to statements about: any competitive advantage we
may have as a result of our installed base of electrosurgical generators in the
field of neurosurgery; our belief that our products exceed industry standards or
favorably compete with other companies' new technological advancements; the
future success of products and disposable instrumentation in the field of
neurosurgery; and our ability to attract distributors for our products outside
of neurosurgery and in the dental market, and the acceptance and continued
acceptance of our products in those markets. These statements are based on
assumptions that we believe are reasonable, but a number of factors could cause
our actual results to differ materially from those expressed or implied by these
statements. We do not intend to update these forward looking statements after
the date of this report. You are advised to review the "Additional Cautionary
Statements" section below and our Annual Report on Form 10-K for the year ended
September 30, 2002 for more information about risks and uncertainties that could
affect the financial results of Valley Forge Scientific Corp.

Overview

         We design, develop, manufacture and sell medical and dental devices.
Our core business is in our bipolar electrosurgical generators and related
instrumentation, based on our DualWave(TM) technology. Our bipolar systems allow
a surgeon or dentist to cut tissue in a manner that minimizes collateral damage
to surrounding healthy tissue and to coagulate blood vessels quickly, safely and
efficiently. By essentially eliminating damage to surrounding healthy tissue,
the surgeon can work safely in direct contact with nerves, blood vessels, bone
and metal implants. Our bipolar systems are designed to replace other surgical
tools, such as monopolar systems, lasers and conventional instruments, used in
soft tissue surgery.

         Our DualWave(TM) technology is applicable to many surgical markets. Our
bipolar systems are currently used to perform many types of neurosurgery, spine
surgery and dental surgery. We have entered into a worldwide exclusive
distribution agreement with Codman & Shurtleff, Inc., a subsidiary of Johnson &
Johnson, Inc., to market our neurosurgery bipolar systems.

         Historically, we have derived a significant portion of our sales from
our neurosurgery bipolar system. Sales revenue from our Bident(R) bipolar dental
system commenced in the 2000 fiscal year. Our strategy is to increase sales of

                                       -6-
<PAGE>

our Bident(R) bipolar dental system by directly selling our products to an
expanded base of national dental product dealers, expand the offerings of
products in the field of neurosurgery and broaden the market for our products in
other clinical and surgical markets that have a need for bipolar electrosurgery.
Our strategy also includes using our DualWave(TM) technology and sales of our
bipolar generators to drive sales of complementary disposable hand-held
instruments and products.

Critical Accounting Policies and Estimates

         The following "Management's Discussion and Analysis of Financial
Condition and Results of Operations", as well as disclosures included elsewhere
in this Form 10-Q, are based upon our unaudited consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingencies. On an on-going basis, we evaluate the estimates used, including
those related to product returns, bad debts, inventory valuation, impairments of
tangible and intangible assets, income taxes, warranty obligations, other
accruals, contingencies and litigation. We base our estimates on historical
experience, current conditions and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources as well as identifying and
assessing our accounting treatment with respect to commitments and
contingencies. Actual results may differ from these estimates under different
assumptions or conditions. We believe the following critical accounting policies
involve more significant judgments and estimates used in the preparation of the
consolidated financial statements.

         We maintain an allowance for doubtful accounts for estimated losses
resulting from the potential inability of our customers to make required
payments. If the financial condition of our customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.

         We provide for the estimated cost of product returns based upon
historical experience and any known conditions or circumstances. Our warranty
obligation is affected primarily by product that does not meet specifications
and performance requirements within the applicable warranty period and any
related costs of addressing such matters. Should actual incidences of product
not meeting specifications and performance requirements differ from our
estimates, revisions to the estimated warranty liability may be required.

         We value inventory at the lower of cost or market and write down the
value of inventory for estimated obsolescence or unmarketable inventory. An
inventory reserve is maintained based upon historical data of actual inventory
written off and for known conditions and circumstances. Should actual product
marketability be affected by conditions that are different from those projected
by management, revisions to the estimated inventory reserve may be required.

         In accordance with the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"), we have elected to account for stock-based compensation plans in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"), and related interpretations.

                                       -7-
<PAGE>

Results of Operations

         Results of Operations for the Three Months Ended December 31, 2002
compared to the Three Months Ended December 31, 2001.

Summary

         Sales of $1,019,942 for the three months ended December 31, 2002 were
19% less than sales of $1,262,406 for the three months December 31, 2001. Net
income for the three months ended December 31, 2002 was $40,139 as compared to
$127,473 for the three months ended December 31, 2001.

Revenues

         Sales of $1,019,942 for the three months ended December 31, 2002
reflect an increase in sales volume to Codman & Shurtleff, the distributor of
our products in the neurosurgery market, and a decrease in sales volume of our
dental products. For the three months ended December 31, 2002, Codman &
Shurtleff accounted for $1,012,000, or 99% of our sales, as compared to
$972,050, or 77% of sales, for the three months ended December 31, 2001.

         In December 2002, we began to implement a new marketing plan for our
Bident(R) bipolar dental system that focuses on direct marketing and sales of
our dental products to national dental product dealers. We feel that the new
marketing plan will achieve greater market penetration of our dental products in
the dental market. We are in the early stages of establishing the infrastructure
to support our dental dealer marketing effort and we have planned a marketing
campaign for the first half of calendar 2003 targeting dentists, periodontists
and oral surgeons. As a result of this transition, sales of the Bident(R)
bipolar dental system made only a minimal contribution to sales during the three
months ended December 31, 2002 as compared to sales of $280,000 during the three
months ended December 31, 2001.

          For the three months ended December 31, 2002, 49% of our sales related
to sales of bipolar electrosurgical generators, irrigators and accessories as
compared to approximately 65% of our sales for the corresponding period in
fiscal 2001. Sales of disposable products, primarily cord and tubing sets,
accounted for approximately 42% of our sales, in the three months ended December
31, 2002 as compared to approximately 30% of our sales, for the corresponding
period in fiscal 2001.

Cost of Product Sales

         Cost of sales was $529,272, or 52% of sales, for the three months ended
December 31, 2002, as compared with $616,340, or 49% of sales, for the three
months ended December 31, 2001. Gross margin was 48% for the three months ended
December 31, 2002 as compared to 51%, for the three months ended December 31,
2001.

         The difference in gross margin as a percentage of sales is attributable
to changes in product mix and sales levels. We cannot be sure that gross margins
will remain at current levels or show improvement in the future due to the
distribution channels used, product mix, and fluctuation in manufacturing

                                       -8-
<PAGE>

production levels and overhead costs as new products are introduced. In
addition, inefficiencies in manufacturing new products and the distribution
channels utilized to sell those products may adversely impact gross margin.

Operating Expenses

         Selling, general and administrative expenses decreased to $330,618, or
32% of sales, for three months ended December 31, 2002, from $340,137, or 27% of
sales, for the three months ended December 31, 2001.

         Research and development expenses for the three months ended December
31, 2002 were $89,338, or 9% of sales, as compared to $78,358, or 6% of sales,
for the three months ended December 31, 2001. We continue to invest in research
and development to expand our technological base for use in both existing and
additional clinical areas.

Other Income/Expense, net

         Other income and expense, net, increased to $8,989 for the three months
ended December 31, 2002 as compared to $1,097 for the three months ended
December 31, 2001. At December 31, 2002, we had $2,300,620 in cash and cash
equivalents as compared to $1,786,879 at December 31, 2001.

Income Tax Provision

         The provision for income taxes was $29,489 for the three months ended
December 31, 2002 as compared to a provision of $85,400 for the three months
ended December 31, 2001.

Net Income

         As a result of the foregoing, for the three months ended December 31,
2002 our net income was $40,139, or a 69% decrease from net income of $127,473
for the three months ended December 31, 2001. Basic and diluted income per share
was $.01 for the three months ended December 31, 2002 as compared to $.02 for
the three months ended December 31, 2001. Although we have been profitable on a
quarterly basis since the third quarter of fiscal 2000, due to our operating
history and numerous other factors, we cannot be sure that we can sustain
revenue growth or profitability.

Liquidity and Capital Resources

         At December 31, 2002, we had $3,598,437 in working capital compared to
$3,628,465 at September 30, 2002. The primary measures of our liquidity are
cash, cash equivalents, accounts receivable and inventory balances, as well as
our borrowing ability. The cash equivalents are highly liquid with original
maturities of ninety days or less.

         Cash used in operating activities was $167,557 for the three months
ended December 31, 2002, as compared to cash provided by operating activities of
$232,432 for the three months ended December 31, 2001. The cash used by
operating activities for the three months ended December 31, 2002 was mainly
attributable to an increase in accounts receivable of $170,822, a decrease in
accounts payable, accrued expenses and income taxes payable of $95,096, and an
increase in prepaid items and other current assets of $50,067. This was
partially offset by a decrease in inventory of $79,203 and our operating profit
of $40,139.

                                       -9-
<PAGE>

         During the three months ended December 31, 2002, inventories decreased
by $79,203 to a total of $803,629 at December 31, 2002 compared to $1,196,441 at
December 31, 2001. The decrease was primarily due to improved inventory
management and reduced sales levels for the three months ended December 31,
2002. Inventories were kept at these levels primarily to support anticipated
future sales activities.

         In the first quarter of fiscal 2003, accounts receivable net of
allowances increased by $170,822 to a total of $508,761 at December 31, 2002 as
compared to $337,939 at September 30, 2002. At December 31, 2001, our accounts
receivable net of allowances was $481,359. The increase in accounts receivable
in the first quarter of 2003 was primarily due to timing of sales during the
quarter.

         During the three months ended December 31, 2002, we received net
proceeds of $10,000 from the repayment of employee loans. We also used $4,090
for the purchase of property and intangible assets. Net property and equipment
decreased slightly to $135,106 at December 31, 2002 as compared to $135,450 at
December 31, 2001.

         During the three months ended December 31, 2002, we purchased 54,900
shares of our common stock for an aggregate cost of $81,631 pursuant to our
stock repurchase plan approved by our Board of Directors in August 2002. All
54,900 shares repurchased were retired or were in the process of being retired
as of December 31, 2002. As of December 31, 2002, we repurchased an aggregate of
81,400 shares under the repurchase plan, leaving a balance of 118,600 shares
available for repurchase under the repurchase plan.

         At December 31, 2002, we had cash and cash equivalents of $2,300,620.
We plan to finance our operating and capital needs principally with cash flows
from operations and existing balances of cash and cash equivalents, which we
believe will be sufficient to fund our operations in the near future. However,
should it be necessary, we believe we could borrow adequate funds at competitive
rates and terms. Our future liquidity and capital requirements will depend on
numerous factors, including the success in commercializing our existing
products, development and commercialization of products in other clinical
markets, the ability of our suppliers to continue to meet our demands at current
prices, the status of regulatory approvals and competition.

         We have a line of credit of $1,000,000 with First Union National Bank,
which calls for interest to be charged at the bank's national commercial rate.
The credit accommodation is unsecured and requires us to have a tangible net
worth of no less than $3,000,000. Our current tangible net worth exceeds
$3,000,000 at December 31, 2002. There was no outstanding balance on this line.

Additional Cautionary Statements

We Face Intense Competition
---------------------------

         The markets for our current and future products are intensely
competitive. Some surgical procedures which utilize or could utilize our
products could potentially be replaced or reduced in importance by alternative
medical procedures or new drugs which could render our products obsolete or
uncompetitive in these markets.

                                      -10-
<PAGE>

Our Growth Depends on Introducing New Products and the Market Penetration by
----------------------------------------------------------------------------
Third Party Distributors
------------------------

         Our growth depends on the acceptance of our products in the
marketplace, the market penetration achieved by the companies that we utilize,
sell to, and rely on, to sell and distribute our products, and our ability to
introduce new and innovative products that meet the needs of medical
professionals. There can be no assurance that we will be able to continue to
introduce new and innovative products or that the products we introduce, or have
introduced, will be widely accepted by the marketplace, or that companies which
we contract with to distribute or sell our products will continue to achieve
market penetration in the field of neurosurgery and achieve market penetration
in the dental market and surgical disciplines and markets outside of
neurosurgery. Our failure to continue to introduce new products or gain wide
spread acceptance of our products would adversely affect our operations.

We Depend on Attracting New Distributors for Our Products
---------------------------------------------------------

         In order to successfully commercialize our products in new markets, we
will need to enter into distribution arrangements with companies who can
distribute our products in those markets successfully.

Our Products are Extensively Regulated Which Could Delay Product Introduction or
--------------------------------------------------------------------------------
Halt Sales
----------

         The process of obtaining and maintaining required regulatory approvals
is lengthy, expensive and uncertain. Although we have not experienced any
substantial regulatory delays to date, there is no assurance that delays will
not occur in the future, which could have a significant adverse effect on our
ability to introduce new products on a timely basis. Regulatory agencies
periodically inspect our manufacturing facilities to ascertain compliance with
"good manufacturing practices" and can subject approved products to additional
testing and surveillance programs. Failure to comply with applicable regulatory
requirements can, among other things, result in fines, suspensions of regulatory
approvals, product recalls, operating restrictions and criminal penalties. While
we believe that we are currently in compliance, if we fail to comply with
regulatory requirements, it could have an adverse effect on our results of
operations and financial condition.


A Significant Amount of Our Business Comes From One Customer.
------------------------------------------------------------

         Codman & Shurtleff, Inc. accounted for 99% of our sales in the quarter
ended December 31, 2002 and 90% of our sales in fiscal 2002. Any cancellation,
deferral or significant reduction in sales to Codman & Shurtleff, Inc. could
seriously harm our business, financial condition and results of operations.

We Face Uncertainty Over Reimbursement
--------------------------------------

         Failure by physicians, hospitals and other users of our products to
obtain sufficient reimbursement from health care payors for procedures in which

                                      -11-
<PAGE>

our products are used or adverse changes in governmental and private third-party
payors' policies toward reimbursement for such procedures would have a material
adverse effect on our business, financial condition, results of operations and
future growth prospects.

We May Be Unable to Effectively Protect Our Intellectual Property
-----------------------------------------------------------------

         Our ability to compete effectively depends in part on developing and
maintaining the proprietary aspects of our bipolar technology. We cannot assure
you that the patents we have obtained, or any patents we may obtain, will
provide any competitive advantages for our products, or that we will be able to
maintain a competitive advantage after our patents expire. We also cannot assure
you that those patents will not be successfully challenged, invalidated or
circumvented in the future. In addition, we cannot assure you that competitors,
many of which have substantial resources and have made substantial investments
in competing technologies, have not already applied for or obtained, or will not
seek to apply for and obtain, patents that will prevent, limit or interfere with
our ability to make, use and sell our products either in the United States or in
international markets. Patent applications are maintained in secrecy for a
period after filing. We may not be aware of all of the patents and patent
applications potentially adverse to our interests.

We May Become Subject to a Patent Litigation
--------------------------------------------

         The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property rights, and
companies in the medical device industry have employed intellectual property
litigation to gain a competitive advantage. We cannot assure you that we will
not become subject to patent infringement claims or litigation or interference
proceedings declared by the United States Patent and Trademark Office to
determine the priority of invention.

We May have Product Liability Claims
------------------------------------

         Our products involve a risk of product liability claims. Although we
maintain product liability insurance at coverage levels, which we believe are
adequate, there is no assurance that, if we were to incur substantial liability
for product liability claims, insurance would provide adequate coverage against
such liability.


Our Operating Results May Fluctuate
-----------------------------------

         We have experienced operating losses at various times since our
inception. Our results of operations may fluctuate significantly from quarter to
quarter based on numerous factors including the following:

         o        the introduction of new product lines;
         o        the level of market acceptance of our products;
         o        achievement of research and development milestones;
         o        timing of the receipt of orders from, and product shipments
                  to, from distributors and customers;

                                      -12-
<PAGE>

         o        timing of expenditures;
         o        manufacturing or supply delays;
         o        the time needed to educate and train a distributor's sales
                  force;
         o        product returns; and
         o        receipt of necessary regulation approvals.

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

(a) Evaluation of Disclosure Controls and Procedures.

         The Company's Chief Executive Officer/Principal Financial Officer,
Jerry L. Malis, has reviewed the Company's disclosure controls and procedures
within 90 days prior to the filing of this report. Based upon this review, this
officer believes that the Company's disclosure controls and procedures are
effective in ensuring that material information related to the Company is made
known to him by others within the Company.

(b) Changes in Internal Controls.

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect these controls during the
quarter covered by this report or from the end of the reporting period to the
date of this Form 10-Q.

PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS
------

         From time to time we are subject to litigation claims. As of December
31, 2002, there are no material pending legal proceedings to which we are a
party or to which any of our property is the subject.

         On September 19, 2002, we were served with a Complaint that was filed
in the Superior Court of the State of Arizona, County of Maricopa entitled
Jeffrey Turner and Cathryn Turner, husband and wife, individually, and on behalf
--------------------------------------------------------------------------------
of Morgan Rose Turner, a Minor v. Phoenix Children's Hospital, Inc., Valley
---------------------------------------------------------------------------
Forge Scientific Corp., et al (CV 2002-010791) in which we are named as one of
---------------------------------------------
the defendants. The plaintiff seeks an unspecified amount of damages for alleged
injuries sustained in a surgery that took place in June 2000. Our products
liability insurance carrier is providing our defense in this matter. In an
answer that was filed on November 26, 2002, we deny any liability. We believe
the claims against us are without merit and we will vigorously defend ourselves
in this matter.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
------

         (a)      Exhibits
                  Exhibit 99.1 Certification of Chief Executive
                  Officer/Principal Financial Officer pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

         (b)      Current Reports on Form 8-K
                  None

                                      -13-
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

                                   SIGNATURES
                                   ----------


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




                                       VALLEY FORGE SCIENTIFIC CORP.



Date: February 12, 2003                By: /s/ JERRY L. MALIS
                                           -------------------------------------
                                           Jerry L. Malis, President and
                                           Chief Executive Officer
                                           (principal financial officer)


                                      -14-
<PAGE>

                                  CERTIFICATION
                                  -------------

         I, Jerry L. Malis, certify that:


         1.  I have reviewed this annual report on Form 10-Q of Valley Forge
Scientific Corp;

         2.  Based on my knowledge, this annual report does not contain any
untrue statement of 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 the registrant as of, and for, the periods presented in this quarterly
report;

         4.  The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                  a)  Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

                  b)  Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

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

                  a)  All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  b)  Any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and

         6.  The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



                                       /s/ JERRY L. MALIS
                                       -----------------------------------------
Dated: February 12, 2003               Jerry L. Malis, President,
                                       Chief Executive Officer, and
                                       Principal Financial Officer


                                      -15-