INDEX  
  
PART I      FINANCIAL INFORMATION  
  
Item 1      FINANCIAL STATEMENTS:  
  
            UNAUDITED CONSOLIDATED CONDENSED  
            BALANCE SHEETS as of November 30, 1995  
            and AUDITED CONSOLIDATED CONDENSED  
            BALANCE SHEETS as of May 31, 1995  
  
            UNAUDITED CONSOLIDATED CONDENSED  
            STATEMENTS OF OPERATIONS for the three  
            and six months ended November 30, 1995 and   
            November 30, 1994  
  
            UNAUDITED CONSOLIDATED CONDENSED  
            STATEMENTS OF CASH FLOWS for the six  
            months ended November 30, 1995 and   
            November 30, 1994  
  
            NOTES TO CONSOLIDATED CONDENSED  
            FINANCIAL STATEMENTS  
  
Item 2      MANAGEMENT'S DISCUSSION AND  
            ANALYSIS OR PLAN OF OPERATION  
  
PART II     OTHER INFORMATION  
  
Item 1  -   LEGAL PROCEEDINGS  
  
Item 2  -   CHANGES IN SECURITIES  
  
Item 3  -   DEFAULTS UPON SENIOR SECURITIES  
  
Item 4  -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  
  
Item 5  -   OTHER INFORMATION  
  
Item 6  -   EXHIBITS AND REPORTS ON FORM 8-K  
<TABLE>  
  
                       PART I - FINANCIAL INFORMATION  
  
Item 1- FINANCIAL STATEMENTS  
  
                   SANDATA, INC. AND SUBSIDIARIES  
               CONSOLIDATED CONDENSED BALANCE SHEETS  
<CAPTION>  
                                                      UNAUDITED     AUDITED  
                                                     November 30,    May 31,   
                                                         1995        1995  
                                                     ------------   ---------  
<S>                                                  <C>           <C>  
ASSETS:   
CURRENT ASSETS  
     Cash and cash equivalents                       $  117,678     $  102,613  
     Accounts receivable - net of allowance for   
       doubtful accounts of $284,000 and $304,000,  
       respectively                                     997,341       784,808  
     Receivables from affiliates                        440,718     1,058,757  
     Receivable from former affiliate                    73,485        77,459  
     Note receivable from former affiliate -   
       net of allowance for doubtful accounts   
       of $119,000 and $-0-, respectively               149,829       240,000  
     Note receivable - officer (Note 2)                  21,000       150,000  
     Inventories                                         10,388        26,222  
     Income taxes receivable                             24,715        66,000  
     Prepaid expenses and other current assets          158,915        88,153  
                                                      ---------     ---------  
TOTAL CURRENT ASSETS                                  1,994,069     2,594,012  
  
FIXED ASSETS, NET                                     8,877,441     3,564,208  
  
OTHER ASSETS  
     Note receivable from former affiliate -   
       net of allowance for doubtful accounts   
       of $-0- and $119,000, respectively                    -0-       58,199  
     Advances to affiliates                              61,000        61,000  
     Notes receivable - officers                        102,867       102,867  
     Cash surrender value of officer's life   
       insurance, security deposits and other           339,757       327,766  
                                                    -----------   -----------  
TOTAL ASSETS                                        $11,375,134   $ 6,708,052  
                                                    -----------   -----------  
                                                    -----------   -----------  
            See notes to consolidated condensed financial statements  
</TABLE>  
  
<TABLE>  
  
                          SANDATA, INC. AND SUBSIDIARIES  
                      CONSOLIDATED CONDENSED BALANCE SHEETS  
<CAPTION>  
                                                      UNAUDITED        AUDITED  
                                                     November 30,      May 31,  
                                                         1995           1995  
                                                     ------------    ---------  
<S>                                                    <C>             <C>  
LIABILITIES AND SHAREHOLDERS' EQUITY:  
CURRENT LIABILITIES  
     Accounts payable and accrued expenses             $ 839,893     $ 601,106  
     Current portion of long-term debt                   728,690       250,000  
     Deferred/unearned revenue                            19,013        34,751  
     Due to affiliate                                     13,000             -  
     Deferred income                                     217,927       143,821  
                                                       ---------     ---------  
          TOTAL CURRENT LIABILITIES                    1,818,523     1,029,678  
  
LONG-TERM DEBT                                         5,446,214     1,679,166  
DEFERRED INCOME                                          300,284       205,642  
DEFERRED INCOME TAXES                                     99,911       140,444  
                                                       ---------     ---------  
     TOTAL LIABILITIES                                 7,664,932     3,054,930  
                                                       --------     ----------  
  
SHAREHOLDERS' EQUITY   
     Common stock                                            816         816  
     Additional paid in capital                        1,279,710   1,279,710  
     Retained earnings                                 2,566,562   2,509,482  
     Treasury stock                                     (136,886)   (136,886)  
                                                       ---------   ---------  
     TOTAL SHAREHOLDERS' EQUITY                        3,710,202   3,653,122  
                                                       ---------   ---------  
     TOTAL LIABILITIES AND SHAREHOLDERS'  
       EQUITY                                        $11,375,134  $6,708,052  
                                                      ----------   ---------  
                                                      ----------   ---------  
  
               See notes to consolidated condensed financial statements  
</TABLE>  
  
<TABLE>  
  
                         SANDATA, INC. AND SUBSIDIARIES  
           UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF 
OPERATIONS  
<CAPTION>  
                                  THREE MONTHS ENDED         SIX MONTHS ENDED  
                                     NOVEMBER 30,             NOVEMBER 30,  
                                  1995         1994        1995        1994  
                                ---------   ---------    ---------   ---------  
<S>                            <C>         <C>          <C>         <C>  
REVENUES:  
  Service fees                 $2,162,135  $1,760,666   $4,236,135  $3,380,796  
  Real estate rental income        81,897          --      118,939          --  
  Other Income                     66,104       6,480      118,091      12,960  
  Interest income from officer      5,555      19,424       19,697      38,858  
                                ---------   ---------    ---------   ---------  
                                2,315,691   1,786,570    4,492,862   3,432,614  
                                ---------   ---------    ---------   ---------  
COSTS AND EXPENSES:  
  Service Fees:  
    Operating                   1,155,888   1,095,865    2,376,532   2,139,670  
    Selling, general and   
       administrative             557,019     457,735    1,086,938     888,975  
    Depreciation and   
      amortization                239,953     155,485      460,426     270,590  
    Interest expense               51,503      40,666      103,800      72,256  
                                ---------   ---------    ---------   ---------  
                                2,004,363   1,749,751    4,027,696   3,371,491  
                                ---------   ---------    ---------   ---------  
  Real Estate:  
    Operating                     204,077          --      242,985          --  
    Depreciation and amortization  13,064          --       17,584          --  
    Interest expense               77,024          --      107,655          --  
    Real estate taxes              33,000          --       43,000          --  
                                ---------   ---------    ---------   ---------  
  
                                  327,165          --      411,224          --  
                                ---------   ---------    ---------   ---------  
  
TOTAL COSTS AND EXPENSES        2,331,528   1,749,751    4,438,920   3,371,491  
                                ---------   ---------    ---------   ---------  
Earnings (loss) from continued   
  operations before income taxes  (15,837)     36,819       53,942      61,123  
  
  Income tax expense (benefit)    (31,050)     16,000       (3,138)     25,000  
                                ---------   ---------    ---------   ---------  
NET EARNINGS                    $  15,213   $  20,819    $  57,080   $  36,123  
                                ---------   ---------    ---------   ---------  
                                ---------   ---------    ---------   ---------  
  
EARNINGS PER COMMON SHARE       $    0.02   $    0.02    $    0.07   $    0.04  
                                ---------   ---------    ---------   ---------  
Weighted average common shares  
  outstanding                     763,955   1,007,757      763,955   1,007,757  
                                ---------   ---------    ---------   ---------  
                                ---------   ---------    ---------   ---------  
  
                   See notes to consolidated condensed financial statements  
</TABLE>  
  
<TABLE>  
  
                      SANDATA, INC. AND SUBSIDIARIES  
   UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  
<CAPTION>  
                                                        SIX MONTHS ENDED   
                                                          NOVEMBER 30,  
                                                      1995            1994  
                                                   --------         --------  
<S>                                               <C>              <C>  
OPERATING ACTIVITIES:  
  Net earnings                                    $  57,080        $  36,123  
Adjustments to reconcile net earnings to net cash  
  provided by (used in) operating activities:  
  Depreciation and amortization                     478,010          270,590  
  Provision for losses on accounts receivable            --            3,000  
  Decrease in allowance for doubtful accounts  
    receivable                                      (20,000)              --  
  Increase (decrease) in deferred income            153,010         (102,012)  
  Change in operating assets and liabilities:  
  Increase (decrease) in operating assets           400,869          (79,528)  
  Increase (decrease) in operating liabilities      198,254         (231,729)  
                                                  ---------         ---------  
Net cash provided by (used in) operating   
  activities                                      1,267,223         (103,556)  
                                                  ---------         ---------  
INVESTING ACTIVITIES:  
  Payments received on note receivable   
    from officer                                    129,000          240,000  
  Purchases of fixed assets                      (1,648,098)        (707,676)  
  Increases in advances to affiliates                13,000          101,305  
  Collections of note receivable-former affiliates  148,370          145,905  
                                                  ---------        ---------  
  
Net cash used in investing activities            (1,357,728)        (220,466)  
                                                  ---------         ---------  
FINANCING ACTIVITIES:  
  Proceeds from term loan                           750,000               --  
  Payments on term loans                           (999,430)              --  
  Proceeds from line of credit                    1,390,000          725,000  
  Principal payments on line of credit           (1,035,000)        (550,000)  
                                                  ---------         ---------  
Net cash provided by financing activities           105,570          175,000  
                                                  ---------         ---------  
Increase (decrease) in cash and cash  
     equivalents                                     15,065         (149,022)  
  Cash and cash equivalents at beginning   
     of period                                      102,613          271,595  
  Cash and cash equivalents at end of period     $  117,678       $  122,573  
                                                  ---------         ---------  
  
                 See notes to consolidated condensed financial statements  
  
</TABLE>  
  
                    SANDATA, INC. AND SUBSIDIARIES  
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS  
                             (Unaudited)  
  
1.  CONSOLIDATED CONDENSED FINANCIAL STATEMENTS  
  
The Consolidated Condensed Balance Sheet as of November 30, 1995, the  
Consolidated Condensed Statements of Operations for the three and six-month  
periods ended November 30, 1995 and 1994 and the Consolidated Condensed  
Statement of Cash Flows for the six-month periods ended November 30, 1995 and  
1994 have been prepared by Sandata, Inc. and Subsidiaries (the "Company")  
without audit.  In the opinion of Management, all adjustments (which include  
only normal, recurring adjustments) necessary to present fairly the financial  
position as of November 30, 1995 and for all periods presented have been made.  
  
For information concerning the Company's significant accounting policies,  
reference is made to the Company's Annual Report on Form 10-KSB for the year  
ended May 31, 1995.  Results of Operations for the period ended November 30,  
1995 are not necessarily indicative of the operating results expected for the  
full year.  
  
2.  RELATED PARTY TRANSACTIONS  
  
A)  On July 1, 1992, the Company loaned $1,000,000 to the Company's Chairman,  
bearing interest at the prime rate plus 1-1/4% and was due July 1, 1995. On  
September 1, 1993, the Company issued a new note for the then outstanding  
balance of $490,000, bearing interest at prime plus 1-1/4% and was due April  
30, 1994. On May 1, 1994, the Company extended the due date of the note to the  
earlier of April 30, 1995 or as the Company may demand at any time after the  
effective date of the then proposed privatization transaction. The Chairman  
paid $340,000 of the outstanding loan to the Company during the year ended May  
31, 1995. On May 1, 1995, the Company extended the due date of the note to  
October 31, 1995. On July 31, 1995, the Chairman, as a result of the  
assignment of the lease with the Nassau County Industrial Development Agency  
("NCIDA") from BFS Sibling Realty Inc., formerly known as Brodsky Sibling  
Realty Inc. ("BFS"), an affiliate substantially owned by the Company's  
Chairman, to Sandata, Inc., repaid $129,000. Accordingly, the note receivable,  
in the amount of $21,000 has been classified as a current asset in the  
accompanying consolidated balance sheet as of November 30, 1995. Subsequent to  
the end of the quarter ending November 30, 1995, the remaining balance of the  
note was repaid by the Chairman.  
  
  B)  On June 1, 1994, BFS, an affiliate substantially owned by the Company's  
Chairman, borrowed $3,350,000 in the form of Industrial Development Revenue  
Bonds ("Bonds") to finance costs incurred in connection with the acquisition,  
renovation and equipping of the Company's new office space located at 26  
Harbor Park Drive, Port Washington, New York (the "Facility" or the  
"Building") from the NCIDA.  These Bonds were subsequently purchased by a bank  
(the "Bank").  The aggregate cost incurred by BFS in conjunction with such  
acquisition, renovation and equipping was approximately $4,376,405.  In  
addition, the Company expended approximately $499,848 in connection with  
additional capital improvements. The Bonds bore interest at prime plus 3/4 of  
1% until August 11, 1995, at which time the interest rate became fixed at 9%  
for a five-year term through September 1, 2000.  At that time, the interest  
rate will be adjusted (at the Company's option) to a rate of either prime plus  
3/4 of 1%, or the applicable fixed rate if offered by the Bank. Commencing  
October 1, 1995, principal, together with interest, is being repaid in equal  
monthly installments over a 15 year amortization period, with the balance of  
unpaid principal due September 1, 2005.  
  
C)  On June 21, 1994 (as of June 1, 1994), the Company and its Chairman  
guaranteed the full and prompt payment of principal and interest of the Bonds  
and the Company granted the Bank a security interest and lien on all the  
assets of the Company. In connection with the issuance and sale of the Bonds,  
the Company entered into a lease agreement (the "Sublease") with BFS, whereby  
the Company leased the Facility for the conduct of its business and, in  
consideration therefor, was obligated to make lease payments that at least  
equal amounts due to satisfy the underlying Bond obligations.  
  
  D)  As of July 1, 1995, by an Assignment and Assumption and First Amendment  
to Lease between the Company and BFS, the Company became the beneficial owner  
of and leases the Facility from the NCIDA (collectively the "Assignment  
Transaction"). In connection with the Assignment Transaction, the Sublease was  
terminated.  The Company currently pays rent for the Facility to the NCIDA in  
the amount of $48,600 per month, subject to adjustment based upon the then  
effective interest rate, among other things, for a term expiring in September,  
2005. The expiration of the lease term coincides with the maturity date of the  
existing Bond financing through the NCIDA. Upon the expiration of such term,  
the Company currently intends to exercise its rights to become record owner of  
the Facility. The Company's facilities are adequate for current purposes.  In  
connection with the Assignment Transaction, the Company assumed certain  
indebtedness owed by affiliates of the Company's Chairman as follows: (i) the  
$364,570 remaining balance of a 48-month term loan bearing interest at 8.7%  
per annum, and (ii) the $428,570 remaining balance of a 42-month term loan at  
8.91%.  Each of the foregoing loans were incurred in connection with the  
construction of improvements to the Building and are collateralized by the  
assets of the primary obligor and are guaranteed by the Company's Chairman.  
  
  E)  On August 11, 1995, the Company entered into a $750,000 loan agreement  
with the Long Island Development Corporation, under a guarantee by the U.S.  
Small Business Administration ("SBA").  The entire $750,000 proceeds have been  
used to repay a portion of the Bond indebtedness to the Bank.  The Company  
entered into the Assignment Transaction primarily to satisfy certain  
requirements of the SBA.  
  
3.  NET EARNINGS PER COMMON SHARE  
  
The effect of outstanding options and warrants was antidilutive for the three  
and six-months ended November 30, 1995.  Accordingly, the outstanding options  
and warrants were not included in the calculation of earnings per share for  
the three and six months ended November 30, 1995. Earnings per share for the  
three and six months ended November 30, 1994 include the dilutive effect of  
outstanding stock options and warrants.  The number of common stock  
equivalents determined by applying the treasury stock method included in the  
calculation of earnings per share for the three and six months ended November  
30, 1994 was 243,802.  
  
4.  SALE/LEASEBACK TRANSACTION  
  
In June 1995, the Company consummated a sale/leaseback of certain fixed assets  
(principally furniture, fixtures, computer hardware and software and  
equipment).  The fixed assets, which had a net book value of approximately  
$332,000, were sold for $475,000.  The resulting gain of approximately  
$143,000 was recorded as deferred income and is being recognized over the life  
of the lease, which is thirty-eight (38) months.  Approximately $18,800 and  
$27,700 of deferred gain was recognized for the three and six months ended  
November 30, 1995.  
  
In September 1995, the Company consummated a sale/leaseback of certain fixed  
assets (principally computer hardware).  The fixed assets, which had a net  
book value of approximately $193,000, were sold for approximately $326,000.   
The resulting gain of approximately $133,000 was recorded as deferred income  
and is being recognized over the life of the lease which is sixty (60) 
months.  Approximately $8,900 of deferred gain was recognized for the three 
and six months ended November 30, 1995.  
  
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 
OPERATION  
  
Management's Discussion and Analysis of Financial Condition and Results of  
Operations  
  
Results of Operations  
  
Revenues from continuing operations were $2,315,691 and $4,492,862 for the  
three and six months ended November 30, 1995 as compared to $1,786,570 and  
$3,432,614 for the three and six months ended November 30, 1994, increasing  
$529,121 and $1,060,248, respectively.  
  
Service fee revenue for the three and six months ended November 30, 1995 was  
$2,162,135 and $4,236,135, an increase of $401,469 and $855,339, which is  
partially attributable to revenue derived from a new product called TimeTrax.  
  
Real estate rental income of $81,897 and $118,939 for the three and six months  
ended November 30, 1995 is derived from the rental of space to companies  
affiliated with the Company's Chairman.  
  
Other income for the three and six-month period ended November 30, 1995 was  
$66,104 and $118,091, respectively as compared to $6,480 and $12,960 for the  
three and six month-period ending November 30, 1994. This increase is  
partially due from the gain realized upon the sale of assets in connection  
with the following sale/leaseback transaction.  
  
In June 1995, the Company consummated a sale/leaseback of certain fixed assets  
(principally furniture, fixtures, computer hardware and software and  
equipment).  The fixed assets, which had a net book value of approximately  
$332,000, were sold for $475,000.  The resulting gain of approximately  
$143,000 was recorded as deferred income and is being recognized over the life  
of the lease, which is thirty-eight (38) months.  Approximately $18,800 and  
$27,700 of deferred gain was recognized for the three and six months ended  
November 30, 1995.  
  
In September 1995, the Company consummated a sale/leaseback of certain fixed  
assets (principally computer hardware).  The fixed assets, which had a net  
book value of approximately $193,000, were sold for approximately $326,000.   
The resulting gain of approximately $133,000 was recorded as deferred income  
and is being recognized over the life of the lease which is sixty (60) 
months.  Approximately $8,900 of deferred gain was recognized for the three 
and six months ended November 30, 1995.  
  
Expenses Related to Services  
  
Operating expenses increased $60,023 or 5% and $236,862 or 11% for the three  
and six months ended November 30, 1995 as compared to the three and six months  
ended November 30, 1994.  Programming costs relating to existing applications  
including TimeTrax and the expenses related to equipment used for TimeTrax,  
were the primary causes for the increase in operating expenses. There was an  
increase in selling, general and administrative expenses to $557,019 and  
$1,086,938 for the three and six months ended November 30, 1995, compared to  
$457,735 and $888,975 for the three and six months ended November 30, 1994, an  
increase of $99,284 and $197,963, respectively.  The increase is partially due  
to costs related to TimeTrax of approximately $69,000 and $126,000 for the  
three and six months ended November 30, 1995, respectively.  The increase was  
partially offset by decreased selling expenses of approximately $90,000 and  
$121,000 due to the granting of an exclusive license to an unaffiliated third  
party to market its Home Health(Pro system.  
  
Depreciation and amortization expense increased $84,468 and $189,836 to  
$239,953 and $460,426 for the three and six months ended November 30, 1995 as  
compared to $155,485 and $270,590 for the three and six months ended November  
30, 1994.  The increase was primarily attributable to fixed asset additions,  
including software capitalization costs.  
  
Interest expense was $51,503 and $103,800 for the three and six months ended  
November 30, 1995 as compared to $40,666 and $72,256 for the three and six  
months ended November 30, 1994.  The increases are attributable to additional  
borrowing against the Company's revolving credit agreement and commensurate  
interest expense increases.  
  
Expenses Related to Real Estate Operations  
  
Expenses include all expenses related to the operation of the Facility,  
including real estate taxes, depreciation expense and interest expense.  
  
Income tax benefit for the three and six months ended November 30, 1995 was  
$31,050 and $3,138, respectively.   For the three and six months ended  
November 30, 1994, the Company incurred tax expense of $16,000 and $25,000,  
respectively. The tax benefit arose from the filing of amended tax returns for  
prior years which has resulted in a refund of an overpayment.  
  
Liquidity and Capital Resources  
  
Working capital as of November 30, 1995 was $175,546, a decrease from May 31,  
1995 of $1,388,788 or 89%.  The decrease is partially attributable to the  
Company becoming the direct tenant of its Facility.  In addition, the Company  
has benefited from increasing its efforts in collecting outstanding  
receivables, including those owed by affiliated companies.  The Company has  
also experienced an increase in its accounts payable due in part to its  
increased expenses in connection with its revenue growth.  
  
On July 1, 1992, the Company loaned $1,000,000 to the Company's Chairman,  
bearing interest at the prime rate plus 1-1/4% and was due July 1, 1995. On  
September 1, 1993, the Company issued a new note for the then outstanding  
balance of $490,000, bearing interest at prime plus 1 1/4% and was due April  
30, 1994. On May 1, 1994, the Company extended the due date of the note to the  
earlier of April 30, 1995 or as the Company may demand at any time after the  
effective date of the then proposed privatization transaction. The Chairman  
paid $340,000 of the outstanding loan to the Company during the year ended May  
31, 1995. On May 1, 1995, the Company extended the due date of the note to  
October 31, 1995. On July 31, 1995, the Chairman, as a result of the  
assignment of the lease with the Nassau County Industrial Development Agency  
("NCIDA") from BFS Sibling Realty Inc., formerly known as Brodsky Sibling  
Realty Inc. ("BFS"), an affiliate substantially owned by the Company's  
Chairman, to Sandata, Inc., repaid $129,000. Accordingly, the note receivable,  
in the amount of $21,000 has been classified as a current asset in the  
accompanying consolidated balance sheet as of November 30, 1995.  Subsequent  
to the end of the quarter ending November 30, 1995, the remaining balance of  
the note was repaid by the Chairman.   
  
On July 31, 1993, the Company received a promissory note from Compuflight,  
Inc. ("Compuflight"), a former affiliate (the Company's Chairman was a  
principal stockholder and Chairman of Compuflight through December 1, 1993) to  
evidence the Company's accounts receivable from Compuflight.  The note was  
payable in increments of $20,000 per month including interest at the rate of  
one percent above prime on the unpaid balance and was due April 1, 1994.  On  
November 1, 1993, the note was amended.  The amended note is payable in  
minimum increments of $20,000 per month with interest at ten percent (10%) per  
annum and contains provisions for accelerated payments based upon Compuflight  
achieving certain results. Payments commenced on February 28, 1994 and are to  
continue until such time as the indebtedness and any accrued interest are paid  
in full.  In connection with the promissory note, the Company received a  
security interest in substantially all the then existing assets of  
Compuflight, which has been assigned to the Bank as collateral for the  
Company's Credit Agreement with the Bank.  At the present time, Compuflight is  
indebted to the Company in the amount of $196,089, of which $155,652  
represents the balance due on the note and $40,437 represents accounts  
receivable.  
  
On June 1, 1994, BFS borrowed $3,350,000 in the form of Industrial Development  
Revenue Bonds ("Bonds") to finance costs incurred in connection with the  
acquisition, renovation and equipping of the Company's new office space  
located at 26 Harbor Park Drive, Port Washington, New York (the "Facility" or  
the "Building") from the NCIDA.  These Bonds were subsequently purchased by a  
bank (the "Bank").  The aggregate cost incurred by BFS in conjunction with  
such acquisition, renovation and equipping was approximately $4,376,405.  In  
addition, the Company incurred approximately $499,848 in connection with  
additional capital improvements. The Bonds bore interest at prime plus 3/4 of  
1% until August 11, 1995, at which time the interest rate became fixed at 9%  
for a five-year term through September 1, 2000.  At that time, the interest  
rate will be adjusted (at the Company's option) to a rate of either prime plus  
3/4 of 1%, or the applicable fixed rate if offered by the Bank. Commencing  
October 1, 1995, principal, together with interest, is being repaid in equal  
monthly installments over a 15 year amortization period, with the balance of  
unpaid principal due September 1, 2005.  
  
On June 21, 1994 (as of June 1, 1994), the Company and its Chairman guaranteed  
the full and prompt payment of principal and interest of the Bonds and the  
Company granted the Bank a security interest and lien on all the assets of the  
Company. In connection with the issuance and sale of the Bonds, the Company  
entered into a lease agreement (the "Sublease") with BFS, whereby the Company  
leased the Facility for the conduct of its business and, in consideration  
therefor, was obligated to make lease payments that at least equal amounts due  
to satisfy the underlying Bond obligations.  
  
As of July 31, 1995, by an Assignment and Assumption and First Amendment to  
Lease between the Company and BFS, the Company became the beneficial owner of  
and leases the Facility from the NCIDA (collectively the "Assignment  
Transaction"). In connection with the Assignment Transaction, the Sublease was  
terminated.  The Company currently pays rent for the Facility to the NCIDA in  
the amount of $48,600 per month, subject to adjustment based upon the then  
effective interest rate, among other things, for a term expiring in September,  
2005. The expiration of the lease term coincides with the maturity date of the  
existing Bond financing through the NCIDA. Upon the expiration of such term,  
the Company currently intends to exercise its rights to become record owner of  
the Facility. The Company's facilities are adequate for current purposes.  In  
connection with the Assignment Transaction, the Company assumed certain  
indebtedness owed by affiliates of the Company's Chairman as follows: (i) the  
$364,570 remaining balance of a 48-month term loan bearing interest at 8.7%  
per annum, and (ii) the $428,570 remaining balance of a 42-month term loan at  
8.91%.  Each of the foregoing loans were incurred in connection with the  
construction of improvements to the Building and are collateralized by the  
assets of the primary obligor and are guaranteed by the Company's Chairman.  
  
On August 11, 1995, the Company entered into a $750,000 loan agreement with  
the Long Island Development Corporation ("LIDC"), under a guarantee by the  
U.S. Small Business Administration ("SBA").  The entire $750,000 proceeds have  
been used to repay a portion of the Bond indebtedness to the Bank.  The  
Company entered into the Assignment Transaction primarily to satisfy certain  
requirements of the SBA.  
  
The Company has a line of credit to borrow up to $2,000,000 and a two-year  
term loan in the amount of $500,000 with the Bank.  As of November 30, 1995  
there is a balance of $1,625,000 remaining on the line of credit and $354,162  
remaining on the term loan, respectively.  The Company believes the results of  
its continued operations, together with the available line of credit, term  
loan and financings from the IDA and SBA should be adequate for the Company's  
presently foreseeable working capital requirements.  
  
SANDATA, INC.   
  
AND SUBSIDIARIES  
  
PART II - OTHER INFORMATION  
  
Item 1  - LEGAL PROCEEDINGS:  
  
        None  
  
Item 2  - CHANGES IN SECURITIES:  
  
        None  
  
Item 3  - DEFAULTS UPON SENIOR SECURITIES:  
  
        None  
  
Item 4  - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:  
  
        A.  The Registrant held its Annual Meeting of Stockholders on December  
7, 1995.  
  
        B.  Three directors were elected at the Annual Meeting to serve until  
the Annual Meeting of Stockholders in 1996.  The names of these directors and  
votes cast in favor of their election and shares withheld are as follows:  
  
         Name                 Votes For                Votes Withheld  
  
    Bert E. Brodsky            612,888                      311  
    Hugh Freund                613,199                        0  
    Gary Stoller               613,088                      111  
  
Item 5  - OTHER INFORMATION:  
  
    None  
  
Item 6  - EXHIBITS AND REPORTS ON FORM 8-K:  
  
     None  
  
SIGNATURES  
  
  
Pursuant to the requirements of the Securities Exchange Act of 1934, the  
Registrant has duly caused this report to be signed on its behalf by the  
undersigned thereunto duly authorized.  
  
  
  
                                          SANDATA, INC.  
                                           (Registrant)  
  
  
  
                                          By:  
Date: January 19, 1996                    Bert E. Brodsky  
                                          Chairman of the Board  
                                          President, Chief Executive Officer,  
                                          Chief Financial Officer  
  
  
  
  
  
  
January 19, 1996  
  
  
  
Securities and Exchange Commission  
450 5th Street, N.W.  
Washington, D.C.  20549  
  
Re:  Sandata, Inc., File No. 0-14401  
  
Dear Sir or Madam,  
  
Transmitted herewith through the EDGAR system is Form 10-QSB for the quarter  
ending November 30, 1995  for Sandata Inc.  If you have any questions or  
comments, please contact me at (516)484-4400, extension 215.  
  
Very truly yours,  
  
  
  
Linda Scarpantonio  
Legal Coordinator