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

                       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 March 31, 2003

[ ]      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 [X]     No [ ]

At May 5, 2003 there were 7,951,712 shares outstanding of the Registrant's no
par value Common Stock.
================================================================================
<PAGE>

                          VALLEY FORGE SCIENTIFIC CORP.

                               INDEX TO FORM 10-Q

                      For the Quarter Ended March 31, 2003



                                                                           Page
                                                                          Number
                                                                          ------

Part I - Financial Information

     Item 1. Financial Statements:

     Balance Sheets - March 31, 2003 and September 30, 2002. .............     1

     Statements of Operations for the three and six months
     ended March 31, 2003 and March 31, 2002. ...........................      2

     Statements of Cash Flows for the six months ended
     March 31, 2003 and March 31, 2002. .................................      3

     Notes to Financial Statements. .....................................      4

     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations. .......................      9

     Item 4. Controls and Procedures ....................................     16

Part II - Other Information .............................................     17

     Item 4. Submission of Matters to a Vote of Security Holders ........     17

     Item 5. Other Information ..........................................     17

     Item 6. Exhibits and Reports on Form 8-K ...........................     17

Signatures ..............................................................     18

Certification of Chief Executive Officer/Chief Financial Officer ........     19


                                       (i)
<PAGE>

Item 1.

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                                       March 31,   September 30,
ASSETS                                                   2003          2002
------                                               ------------  ------------
                                                     (Unaudited)     (Audited)
Current Assets:
  Cash and cash equivalents                          $  2,152,406  $  2,543,898
  Accounts receivable, net                                625,538       337,939
  Inventory                                               800,772       882,832
  Prepaid items and other current assets                  221,362       140,784
  Deferred tax assets                                      73,702        76,293
                                                     ------------  ------------
          Total Current Assets                          3,873,780     3,981,746

Property, Plant and Equipment, Net                        138,597       136,131
Goodwill                                                  153,616       153,616
Intangible Assets, Net                                    274,221       294,371
Other Assets                                               38,790         4,171
                                                     ------------  ------------
          Total Assets                               $  4,479,004  $  4,570,035
                                                     ============  ============

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

Current Liabilities:
  Accounts payable and accrued expenses              $    311,056  $    200,972
  Income taxes payable                                         --       152,309
                                                     ------------  ------------
          Total Current Liabilities                       311,056       353,281

Deferred Tax Liability                                     15,576        14,357
                                                     ------------  ------------

          Total Liabilities                               326,632       367,638
                                                     ------------  ------------
Commitments and Contingencies

Stockholders' Equity:
  Preferred stock                                              --            --
  Common stock (no par, 20,000,000 shares
    authorized, shares issued and outstanding
    at March 31, 2003 - 7,954,312 and
    at September 30, 2002 - 8,041,312)                  3,582,089     3,701,846
  Retained earnings                                       570,283       500,551
                                                     ------------  ------------
                                                        4,152,372     4,202,397
                                                     ------------  ------------

       Total Liabilities and Stockholders' Equity    $  4,479,004  $  4,570,035
                                                     ============  ============

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

See accompanying notes.

                                       -1-
<PAGE>

<TABLE>
<CAPTION>
                        VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

                            CONSOLIDATED STATEMENTS OF OPERATIONS
                                         (UNAUDITED)


                                        For the Three Months Ended   For the Six Months Ended
                                                March 31,                   March 31,
                                            2003          2002          2003          2002
                                        -----------   -----------   -----------   -----------
<S>                                     <C>          <C>             <C>          <C>
Net Sales                               $ 1,289,136   $ 1,457,798   $ 2,309,078   $ 2,720,204

Cost of Sales                               623,403       697,210     1,156,990     1,313,550
                                        -----------   -----------   -----------   -----------

Gross Profit                                665,733       760,588     1,152,088     1,406,654
                                        -----------   -----------   -----------   -----------
Other Costs:
  Selling, general and administrative       489,747       452,021       816,050       792,158
  Research and development                  120,169        93,695       209,507       172,053
  Amortization                               10,075        15,795        20,150        31,590
                                        -----------   -----------   -----------   -----------
          Total Other Costs                 619,991       561,511     1,045,707       995,801
                                        -----------   -----------   -----------   -----------

Income from Operations                       45,742       199,077       106,381       410,853

Other Income (Expense), Net                   6,823         3,435        15,812         4,532
                                        -----------   -----------   -----------   -----------
Income before Income Taxes                   52,565       202,512       122,193       415,385

Provision for Income Taxes                   22,972        84,878        52,461       170,279
                                        -----------   -----------   -----------   -----------
Net Income                              $    29,593   $   117,634   $    69,732   $   245,106
                                        ===========   ===========   ===========   ===========


Earnings per Share:
  Basic earnings per common share       $      0.00   $      0.01   $      0.01   $      0.03
                                        ===========   ===========   ===========   ===========
  Diluted earnings per common share     $      0.00   $      0.01   $      0.01   $      0.03
                                        ===========   ===========   ===========   ===========

  Basic common shares outstanding         7,976,926     8,067,812     7,995,604     8,067,812

  Diluted common shares outstanding       7,992,841     8,160,894     8,018,553     8,156,906
</TABLE>

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

See accompanying notes.


                                       -2-
<PAGE>

<TABLE>
<CAPTION>
                      VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (UNAUDITED)


                                                               For the Six Months Ended
                                                                       March 31,
                                                                  2003           2002
                                                              -----------    -----------
<S>                                                           <C>            <C>
Cash Flows from Operating Activities:
  Net income                                                  $    69,732    $   245,106
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                                30,845         41,831
      Write-down of property, plant and equipment                      --          5,300
      Reduction of allowance for loans and advances
        to employees                                                   --        (47,790)
      Interest accrued on loans and advances to
        employees                                                    (576)        (1,386)

  Changes in assets and liabilities, net of effect from:
    Increase in accounts receivable                              (287,599)      (250,830)
    Decrease in inventory                                          82,060         86,785
    Decrease in deferred tax assets                                 2,591         19,710
    Increase in prepaid items and other current assets            (90,002)       (24,676)
    (Increase) decrease in other assets                           (34,619)           638
    Increase (decrease) in accounts payable and accrued
    expenses and income taxes payable                             (42,225)        85,952
    Increase (Decrease) in deferred tax liability                   1,219         (9,641)
                                                              -----------    -----------
        Net cash provided by (used in) operating
          activities                                             (268,574)       150,999
                                                              -----------    -----------

Cash Flows from Investing Activities:
  Purchase of property, plant and equipment                       (13,161)        (5,675)
  Purchase of intangible assets                                        --         (8,622)
  Proceeds from repayment of employee loans and advances           10,000         57,261
  Loans and advances to employees                                      --         (1,436)
                                                              -----------    -----------
        Net cash provided by (used in) investing activities        (3,161)        41,528
                                                              -----------    -----------

Cash Flows from Financing Activities:
  Repurchase of common stock                                     (119,757)            --
                                                              -----------    -----------
        Net cash used in financing activities                    (119,757)            --
                                                              -----------    -----------

Net Increase (Decrease) in Cash and Cash
  Equivalents                                                    (391,492)       192,527

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

Cash and Cash Equivalents, end of period                      $ 2,152,406    $ 1,693,149
                                                              ===========    ===========


Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                  $        --    $        --
                                                              ===========    ===========
    Income taxes                                              $   217,000    $   146,050
                                                              ===========    ===========
</TABLE>

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

See accompanying notes.


                                       -3-
<PAGE>

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2003


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 and six months ended March 31,
2003 and 2002 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.

Recently Issued Accounting Standards
------------------------------------

In January 2003, the Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46,  "Consolidation  of  Variable  Interest  Entities - an
interpretation of ARB No. 51, " which provides guidance on the  identification
of and  reporting  for  variable  interest  entities.  Interpretation  No.  46
expands the  criteria  for  consideration  in  determining  whether a variable
interest  entity should be  consolidated.  Interpretation  No. 46 is effective
immediately  for variable  interest  entities  created after January 31, 2003,
and to variable interest  entities in which an enterprise  obtains an interest
after that date.  The Company is required to adopt the  interpretation  in the
first quarter of 2004 for variable  interest entities acquired before February
1, 2003.  The Company  does not expect the adoption of  Interpretation  No. 46
to have a material effect on its results of operations and financial position.

                                       -4-
<PAGE>

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2003
                                   (Continued)


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Standards (Continued)
------------------------------------

In December 2002, the FASB issued Statement of Financial Accounting Standards
(SFAS") No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure - an amendment of FASB Statement No. 123." SFAS No. 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 (see Note 4) to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. SFAS No. 148 is effective for the Company as of
January 1, 2003. The Company has not elected a voluntary change in accounting to
the fair value based method, and, accordingly, the adoption of SFAS No. 148 did
not have a significant impact on the Company's results of operations or
financial position.


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 March 31,
2003. The Company completed its transitional impairment test during the quarter
ending March 31, 2002, indicating that goodwill was not impaired. An additional
annual test was performed during the second quarter ending March 31, 2003 and no
impairment adjustment was required.

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

<TABLE>
<CAPTION>
                                    As of March 31, 2003                       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   $    488,295   $     80,714   $    569,009   $    483,224   $     85,785

Proprietary know-how          452,354        258,847        193,507        452,354        243,768        208,586

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

                         $  1,077,332   $    803,111   $    274,221   $  1,077,332   $    782,961   $    294,371
                         ============   ============   ============   ============   ============   ============
</TABLE>

Amortization expense of intangible assets was $10,075 and $15,759 for the three
months ended March 31, 2003 and 2002, respectively, and $20,150 and $31,590 for
the six months ended March 31, 2003 and 2002, 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.

                                       -5-
<PAGE>

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2003
                                   (Continued)


4.  COMMITMENTS AND CONTINGENCIES

Litigation
----------

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.

Stock Option Plans
------------------

As referred to in Note 2, the Company has adopted the disclosure provisions of
SFAS 148, "Accounting for Stock Based Compensation - Transition and Disclosure -
an amendment of FASB Statement No. 123". As permitted under this statement, the
Company retained its current method of accounting for stock compensation in
accordance with APB 25.

Following is a summary of the Company's various stock option plans:

<TABLE>
<CAPTION>
                                                                                       Weighted
                                                                                        Average
                                                        Range of       Weighted        Remaining
                                                        Exercise        Average       Contractual
                                                         Prices        Exercise          Life
                                        Shares         Per Share         Price          (Years)
                                    -------------    -------------   -------------   -------------

<S>                                       <C>        <C>             <C>                      <C>
Options outstanding at
  September 30, 2002                      517,850    $1.13 - $4.25   $        2.30            6.31
Granted                                    40,000     1.06 -  1.70            1.22            9.88
Exercised                                      --               --              --              --
Surrendered, forfeited or
  expired                                 (56,000)            3.63            3.63              --
                                    -------------    -------------   -------------

Options outstanding at
  March 31, 2003                          501,850    $1.06 - $4.25   $        2.06            6.91
                                    =============    =============   =============
</TABLE>


As of March 31, 2003, options to purchase 352,090 shares are exercisable at
prices ranging from $1.06 to $4.25 which correspond to a weighted average
exercise price of $2.24 and a weighted average remaining contractual life of
8.07 years.

                                       -6-
<PAGE>

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2003
                                   (Continued)


4.  COMMITMENTS AND CONTINGENCIES (Continued)

Stock Option Plans (Continued)
------------------

Pro forma information regarding net income and earnings per share is required by
SFAS 148 and has been determined as if the Company had accounted for the
employee stock options under the fair value method of that statement. The fair
value for options granted during the three months and six months ended March 31,
2003 and 2002 was estimated at each date of grant. The fair value of these
options was estimated using a Black-Scholes option valuation model with the
following range of weighted average assumptions:

<TABLE>
<CAPTION>
                                         For the Three Months Ended             For the Six Months Ended
                                                  March 31,                             March 31,
                                           2003               2002               2003               2002
                                     ---------------    ---------------    ---------------    ---------------
<S>                                        <C>                <C>              <C>                  <C>
Risk-free interest (based on U.S.
Government strip bonds on the
date of grant with maturities
approximating the expected
option term)                                    3.65%              5.13%     3.65% - 4.00%              5.13%

Dividend yields                                    0%                 0%                0%                 0%

Volatility factors of the expected
market price of the Company's
common stock (based on
historical data)                               160.9%             169.7%   160.9% - 163.9%             169.7%

Expected life of options                    10 Years           10 Years          10 Years           10 Years
</TABLE>


The weighted average fair value of options granted during the three months and
six months ended March 31, 2003 and 2002 were as follows:

<TABLE>
<CAPTION>
                                         For the Three Months Ended           For the Six Months Ended
                                                  March 31,                           March 31,
                                           2003              2002              2003              2002
                                         --------          --------          --------          --------
<S>                                      <C>               <C>               <C>               <C>
Stock prices equal to exercise
  price                                  $   1.05          $   2.73          $   1.21          $   2.73

Stock prices in excess of
  exercise price                               --                --                --                --

Stock prices less than exercise
  price                                        --                --                --                --
</TABLE>

                                       -7-
<PAGE>

                  VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2003
                                   (Continued)


4.  COMMITMENTS AND CONTINGENCIES (Continued)

Stock Option Plans (Continued)
------------------

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in subjective input assumptions can
materially affect the fair value estimated, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options. In management's opinion existing stock option
valuation models do not provide a reliable single measure of the fair value of
employee stock options that have vesting provisions and are not transferable. In
addition, option pricing models require the input of highly subjective
assumptions, including expected stock price volatility.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. In accordance with
SFAS 123 and 148, only stock options granted after September 30, 1995 have been
included for the Company's pro forma information as follows:

<TABLE>
<CAPTION>
                                            For the Three Months Ended           For the Six Months Ended
                                                     March 31,                           March 31,
                                              2003              2002              2003              2002
                                            --------          --------          --------          --------
<S>                                         <C>               <C>               <C>               <C>
  Additional compensation expense,
    net of tax effect                       $ 21,900          $ 56,629          $ 35,126          $ 59,434

  Pro forma net income                      $  7,693          $ 61,005          $ 34,606          $185,672

  Pro forma income per share:
    Basic                                   $   0.00          $   0.01          $   0.00          $   0.02
    Diluted                                 $   0.00          $   0.01          $   0.00          $   0.02
</TABLE>

                                       -8-
<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 and six
month periods ended March 31, 2003 and 2002. 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 substantially reducing damage to surrounding healthy tissue, the
surgeon or dentist can work safely in close proximity with nerves, blood
vessels, bone and metal implants. Our bipolar systems are designed to replace
other surgical tools, such as monopolar electrosurgery 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 worldwide exclusive
distribution agreements with Codman & Shurtleff, Inc., a subsidiary of Johnson &
Johnson, Inc., to market our neurosurgery bipolar systems since 1982. The
current agreement expires on December 31, 2003, and is due for renewal prior to
that date.

         Historically, we have derived a significant portion of our sales from
our neurosurgery bipolar system. Sales revenue from our Bident(R) Bipolar Tissue
Management System for dental applications commenced in the 2000 fiscal year. Our
current strategy is to increase sales of our Bident(R) Bipolar Tissue Management
System by selling our dental products direct 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.

                                       -9-
<PAGE>

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.

                                      -10-
<PAGE>

Results of Operations

         Results of Operations for the Three and Six Months Ended March 31, 2003
compared to the Three and Six Months Ended March 31, 2002.

Summary

         Sales of $1,289,136 for the three months ended March 31, 2003 were 12%
less than sales of $1,457,798 for the three months ended March 31, 2002, and
sales of $2,309,078 for the six months ended March 31, 2003 were 15% less than
sales of $2,720,204 for the six months ended March 31, 2002. Net income for the
three months ended March 31, 2003 was $29,593 and net income for the six months
ended March 31, 2003 was $69,732 as compared to net income of $117,634 and
$245,106, respectively, for the comparable periods in fiscal 2002.

Revenues

         Sales of $1,289,136 for the three months ended March 31, 2003 reflect a
slight decrease in sales volume to Codman & Shurtleff, Inc. the distributor of
our products in the neurosurgery market, and a slight increase in sales volume
of our dental products. For the three months ended March 31, 2003, Codman &
Shurtleff, Inc. accounted for $1,180,525, or 92% of our sales, as compared to
$1,268,284, or 87% of sales, for the three months ended March 31, 2002. The
decrease in sales to Codman & Shurtleff, Inc. is principally due to normal
quarter-to-quarter fluctuations in shipment dates. For the first six months of
fiscal 2003, sales to Codman & Shurtleff, Inc. were $2,192,525 as compared to
$2,240,336 for the first six months of fiscal 2002. Sales for the second quarter
of fiscal 2002, reflected a special one-time sale to Boston Scientific
Corporation of $108,550.

         Sales of our Bident(R) Bipolar Tissue Management System increased as we
commenced the marketing and sales of our dental products to national dental
product dealers in February 2003. We believe that the new marketing and sales
program will achieve greater market penetration of our dental products in the
dental market as the year progresses. We had sales of our Bident(R) Bipolar
Tissue Management System of $86,708 for the three months ended March 31, 2003 as
compared to sales of $66,798 for the three months ended March 31, 2002. Sales of
the Bident(R) Bipolar Tissue Management System for the six months ended March
31, 2003 were $86,708 as compared to sales of $396,298 for the six months ended
March 31, 2002.

         For the three months ended March 31, 2003, approximately 51% of our
sales related to sales of bipolar electrosurgical generators, irrigators and
accessories as compared to approximately 52% of our sales for the corresponding
period in fiscal 2002. Sales of disposable products, primarily cord and tubing
sets, accounted for approximately 44% of our sales, in the three months ended
March 31, 2003 as compared to approximately 57% of our sales for the
corresponding period in fiscal 2002.

         Sales of disposable instruments made only a minimal contribution to our
sales for the three and six months ended on March 31, 2003. We anticipate sales
of disposable instruments for our Bident(R) Bipolar Tissue Management System to
increase as we sell more generator units through our new dental sales program.
We have refined our disposable neurosurgery instruments and are developing a new
line of disposable neurosurgery instruments.

                                      -11-
<PAGE>

Cost of Product Sales

         Cost of sales was $623,403, or 48% of sales, for the three months, and
$1,156,990, or 50% of sales, for the six months ended March 31, 2003, as
compared with $697,210, or 48% of sales, for the three months ended March 31,
2002 and $1,313,550, or 48% of sales, for the six months ended March 31, 2002.
Gross margin was 52% and 50%, respectively, for the three months and six months
ended March 31, 2003 as compared to 52% for the three and six months ended March
31, 2002.

         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
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 increased to $489,747, or
38% of sales, for three months, and to $816,050, or 35% of sales, for the six
months, ended March 31, 2003, from $452,021, or 31% of sales, for the three
months, and $792,158, or 29% of sales for the six months, ended March 31, 2002.
The increase in selling, general and administrative expenses was due to
increased marketing and selling expenses associated with the Bident(R) dental
product line as we commenced our new marketing and selling program. We expect
that for the remainder of fiscal 2003 our selling and administrative expenses
will be at higher levels than in fiscal 2002 due to the increased marketing and
selling expenses for our Bident(R) dental product line.

         Research and development expenses for the three and six months ended
March 31, 2003 increased in absolute dollars and as a percentage of sales as
compared to the comparable periods in fiscal 2002. 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 $6,823 for the three
months, and $15,812 for the six months, ended March 31, 2003 as compared to
$3,435 for the three months, and $4,532 for the six months, ended March 31,
2002. At March 31, 2003, we had $2,152,406 in cash and cash equivalents as
compared to $1,693,149 at March 31, 2002.

Income Tax Provision

         The provision for income taxes was $22,972 for the three months, and
$52,461 for the six months, ended March 31, 2003 as compared to a provision of
$84,878 for the three months, and $170,279 for the six months, ended March 31,
2002.

                                      -12-
<PAGE>

Net Income

         As a result of the foregoing, our net income was $29,593 for the three
months, and $69,732 for the six months, ended March 31, 2003, which was 75% and
72%, respectively, less than net income of $117,634 and $245,106 for the three
and six months ended March 31, 2002. Basic and diluted income per share was $.00
for the three months, and $.01 for the six months, ended March 31, 2003 as
compared to $.01 for the three months, and $.03 for the six months, ended March
31, 2002. Although we have been profitable on a quarterly basis since the third
quarter of fiscal 2000, due to fluctuations in demand for our products,
fluctuations in prices for raw materials, the varying costs associated with new
product introductions and other variables, we cannot be sure that we can sustain
revenue growth or profitability.

Liquidity and Capital Resources

         At March 31, 2003, we had $3,562,724 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 $268,574 for the six months ended
March 31, 2003, as compared to cash provided by operating activities of $150,999
for the six months ended March 31, 2002. The cash used by operating activities
for the six months ended March 31, 2003 was mainly attributable to an increase
in accounts receivable of $287,599, a decrease in accounts payable, accrued
expenses and income taxes payable of $42,225, and an increase in prepaid items
and other current assets of $90,002. This was partially offset by a decrease in
inventory of $82,060 and our operating profit of $69,732.

         During the six months ended March 31, 2003, inventories net of
allowance for obsolescence decreased by $82,060 to a total of $800,772 at March
31, 2003 compared to $882,832 at September 30, 2002. At March 31, 2002 our
inventory, net of allowance for obsolescence, was $1,112,751. The decrease was
primarily due to improved inventory management and reduced sales levels for the
six months ended March 31, 2003. Inventories are expected to be kept at these
levels primarily to support anticipated future sales activities.

         In the first six months of fiscal 2003, accounts receivable net of
allowances increased by $287,599 to a total of $625,538 at March 31, 2003 as
compared to $337,939 at September 30, 2002. At March 31, 2002, our accounts
receivable net of allowances was $855,980. The increase in accounts receivable
in the first six months of 2003 was primarily due to timing of shipments during
the quarter.

         During the six months ended March 31, 2003, we received net proceeds of
$10,000 from the repayment of employee loans. We also used $13,161 for the
purchase of property and intangible assets. Net property and equipment increased
slightly to $138,597 at March 31, 2003 as compared to $136,131 at September 30,
2002. Net property and equipment at March 31, 2002 was $135,934.

                                      -13-
<PAGE>

         During the six months ended March 31, 2003, we purchased 87,000 shares
of our common stock for an aggregate cost of $119,757 pursuant to our stock
repurchase plan approved by our Board of Directors in August 2002. All 87,000
shares repurchased were retired or were in the process of being retired as of
March 31, 2003. As of March 31, 2003, we have repurchased an aggregate of
113,500 shares under the repurchase plan, leaving a balance of 86,500 shares
available for repurchase under the repurchase plan.

         At March 31, 2003, we had cash and cash equivalents of $2,152,406. 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 March 31, 2003. 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.

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.

                                      -14-
<PAGE>

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 92% of our sales in the quarter
ended March 31, 2003, 95% of our sales for the six months ended March 31, 2003
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. Our current
distribution agreement with Codman & Shurtleff, Inc. expires on December 31,
2003. We are in the process of negotiating an extension to that agreement.

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
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.

                                      -15-
<PAGE>

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;
         o        timing of expenditures;
         o        manufacturing or supply delays;
         o        the time needed to educate and train a distributor's sales
                  force;
         o        costs associated with product introductions;
         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.

                                      -16-
<PAGE>

(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 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------

         At the Annual Meeting of Stockholders held on March 12, 2003, the
following directors were elected for a one year term until their successors are
duly elected and qualified:

                             Number of Share Votes:
                             ----------------------

                                 FOR               WITHHELD
                                 ---               --------

         Jerry L. Malis:         6,629,078         322,300
         Leonard I. Malis:       6,764,228         187,150
         Bruce A. Murray:        6,764,528         186,850
         Louis Uchitel:          6,764,228         186,850
         Robert H. Dick:         6,764,548         187,150


Item 5.  OTHER INFORMATION
------

         We want to remind stockholders that a stockholder proposal submitted
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended
("Rule 14a-8"), for inclusion in our proxy statement and form of proxy for the
2004 Annual Meeting of Stockholders must be received by us by October 2, 2003.
Such a proposal must also comply with the requirements as to form and substance
established by the Securities and Exchange Commission for such proposals. In
addition, a stockholder desiring to present a proposal, otherwise than pursuant
to Rule 14a-8, at the 2004 Annual Meeting must deliver written notice of the
proposal to us on or prior to December 16, 2003, or the persons named in proxies
solicited by the Board of Directors in connection with the Annual Meeting will
have discretionary authority to vote on the proposal.


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
                  On March 12, 2003, Valley Forge Scientific Corp. filed a
                  report on Form 8-K regarding a press release for its Annual
                  Meeting of Stockholders issued the same day.

                                      -17-
<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: May 13, 2003                     By: /s/ JERRY L. MALIS
                                           -----------------------------
                                           Jerry L. Malis, President and
                                           Chief Executive Officer
                                           (principal financial officer)


                                      -18-
<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

                                      -19-
<PAGE>

         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: May 13, 2003                    Jerry L. Malis, President,
                                       Chief Executive Officer, and
                                       Principal Financial Officer


                                      -20-