UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.

                      For the period ended August 31, 2002

[ ] Transition report pursuant to Section 13 or 15(d)
    of the Securities Exchange Act of 1934.

For the transition period from ________ to __________

                         Commission file number 0-14401

                           SANDATA TECHNOLOGIES, INC.
              (Exact name of small business issuer in its charter)

        DELAWARE                                      11-2841799
(State or other jurisdiction of         (I.R.S. Employee Identification No.)
incorporation or organization)

                              26 Harbor Park Drive
                               Port Washington, NY
                    (Address of principal executive offices)
                                      11050
                                   (Zip Code)

         Issuer's telephone number, including area code: (516) 484-4400

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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
---------------- -------------

                               APPLICABLE ONLY TO
                   ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                           DURING THE PAST FIVE YEARS

     Check whether the issuer has filed all documents and reports required to be
filed by section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

Yes____       No____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         The number of shares outstanding of each of the issuer's classes of
common equity, as of October 8, 2002 was 2,481,808.

         Transitional Small Business Disclosure Format (check one):

Yes____     No    X
            -------



<PAGE>


                   SANDATA TECHNOLOGIES INC. AND SUBSIDIARIES
                                      INDEX
<TABLE>
<S>                                                                              <C>               <C>    <C>


                                                                                                          Page
                          PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements:
           Condensed Consolidated Balance  Sheets as of
           August 31, 2002 (Unaudited) and May 31, 2002  (Audited).........................................3

           Unaudited Condensed Consolidated Statements of Operations
            for the three months ended August 31, 2002 and August 31, 2001.................................4

           Unaudited Condensed Consolidated Statements of Cash Flows for
            the three months ended August 31, 2002 and August 31, 2001.....................................5

           Notes to Condensed Consolidated Financial Statements (Unaudited)................................6


Item 2.  Management's Discussion and Analysis
          or Plan of Operation ...........................................................................13

Item 3.  Procedures and Controls..........................................................................16

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings................................................................................17

Item 2.  Changes in Securities and Use of Proceeds........................................................17

Item 3.  Defaults Upon Senior Securities..................................................................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

              Signature...................................................................................

              Certifications..............................................................................

</TABLE>


<PAGE>
                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<S>                                                                              <C>                <C>

                                     ASSETS
                                                                               August 31, 2002      May 31, 2002
                                                                               ---------------      ------------
                                                                                 (unaudited)         (audited)
CURRENT ASSETS:
  Cash and cash equivalents                                                     $   2,162,312   $    1,630,617
  Accounts receivable, net of allowance for doubtful accounts
   of $260,974 and $202,746 at 2002 and 2001, respectively                          2,527,353        2,182,963
  Receivables from affiliates                                                         359,771          280,297

  Notes receivable - officer                                                               --          100,000
  Inventories                                                                          48,250           45,342
  Prepaid expenses and other current assets                                           235,140          345,349

  Deferred income taxes                                                               226,536          207,595
                                                                                -------------     ------------

         Total Current Assets                                                       5,559,362        4,792,163

FIXED ASSETS, NET                                                                   6,587,269        6,820,596

DEFERRED INCOME TAXES                                                                 141,349          171,579

OTHER ASSETS
  Notes receivable                                                                     23,821           25,190
  Cash surrender value of officer's life insurance, security
   deposits and other assets                                                        1,115,398        1,105,502
                                                                                -------------   --------------

         Total Assets                                                           $  13,427,199   $   12,915,030
                                                                                =============   ==============

                                       LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                         $   4,071,298     $  2,781,550
  Deferred/unearned revenue                                                            38,100           16,367
  Deferred income                                                                      71,650          103,258
  Short term debt                                                                   3,750,000               --
                                                                                -------------    -------------

         Total Current Liabilities                                                  7,931,048        2,901,175

LONG-TERM DEBT                                                                             --        4,500,000

DEFERRED INCOME                                                                        10,572           21,142
                                                                                -------------     ------------

         Total Liabilities                                                          7,941,620        7,422,317
                                                                                -------------     ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
  Common stock, $.001 par value, 6,000,000 shares
   authorized; 2,481,808 shares issued and
   outstanding                                                                          2,482            2,482
  Additional paid in capital                                                        5,765,766        5,765,766
  Retained earnings                                                                 1,186,621        1,193,755
  Notes receivable - officers                                                      (1,469,290)      (1,469,290)
                                                                                -------------       ----------

         Total Shareholders' Equity                                                 5,485,579        5,492,713
                                                                                -------------      -----------

         Total Liabilities and Shareholders'
           Equity                                                               $  13,427,199   $   12,915,030
                                                                                =============   ==============

</TABLE>


<PAGE>


                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE THREE MONTHS ENDED AUGUST 31,

<TABLE>
<S>                                                                                 <C>                 <C>
                                                                                    2002                2001
                                                                                    ----                ----

REVENUES
  Service fees                                                                  $4,398,826       $   4,392,328
  Other income                                                                      79,520              98,742
  Interest income                                                                   43,576              33,596
                                                                                ----------          ----------
                                                                                 4,521,922           4,524,666

COSTS AND EXPENSES
  Operating                                                                      2,696,630           2,714,083
  Selling, general and administrative                                            1,263,068           1,650,170
  Depreciation and amortization                                                    499,502             427,862
  Interest expense                                                                  45,759              77,679
                                                                                ----------         -----------
         TOTAL COSTS AND EXPENSES                                                4,504,959           4,869,794
                                                                                ----------         -----------

EARNINGS (LOSS) FROM OPERATIONS BEFORE INCOME TAX
   EXPENSE (BENEFIT)                                                                16,963            (345,128)
                                                                                ----------         -----------

  INCOME TAX EXPENSE (BENEFIT)                                                      24,097            (170,179)
                                                                                ----------         -----------

  NET (LOSS)                                                                    $   (7,134)         $ (174,949)
                                                                                ==========         ===========



  BASIC AND DILUTED LOSS PER SHARE                                              $     0.00              (0.07)
                                                                                ==========         ===========


  BASIC WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING                                                          2,481,808           2,506,475
                                                                                ==========         ===========



</TABLE>

<PAGE>


                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE THREE MONTHS ENDED AUGUST 31,

<TABLE>
<S>                                                                              <C>                        <C>

                                                                                       2002               2001
                                                                                       ----               ----
Cash flows from operating activities:
 Net (loss)                                                                      $  (7,134)          $  (174,949)
  Adjustments to reconcile net (loss) to net cash provided by operating
   activities:
    Depreciation and amortization                                                   499,502              427,862
    Gain on disposal of fixed assets                                                    --                (4,309)
    Provision for doubtful accounts                                                  58,228               17,101
    Recognition of deferred income                                                  (42,179)             (81,640)
    Recognition of deferred revenue                                                 (19,489)              23,643
    Deferred tax provision                                                           11,289             (170,179)
  (Increase) decrease in operating assets
     Accounts Receivable                                                           (402,618)              63,503
     Receivables from affiliates                                                    (79,474)             133,522
     Inventories                                                                     (2,908)             (14,006)
     Prepaid expenses and other current assets                                      110,209              171,354
     Other assets                                                                    (8,527)              (2,307)
  Increase (decrease) in operating liabilities
     Accounts payable and accrued expenses                                        1,289,748            1,298,374
     Deferred/unearned revenue                                                       41,223                   --
                                                                                -----------           ----------
            Net cash provided by operating activities                             1,447,870            1,687,969
                                                                                -----------           ----------

Cash flows from investing activities:
  Purchases of fixed assets                                                        (266,175)            (759,751)
                                                                                -----------           ----------

Net cash used in investing activities                                              (266,175)            (759,751)
                                                                                -----------           ----------
Cash flows from financing activities:
   Principal payments on note payable                                                    --             (500,000)
   Proceeds from note payable                                                            --              500,000
   Proceeds  from note receivable officer                                           100,000                   --
   Proceeds from line of credit                                                     500,000            1,450,000
   Principal payments on line of credit                                          (1,250,000)            (850,000)
                                                                                -----------            ---------
Net cash (used in) provided by financing activities                                (650,000)             600,000
                                                                                -----------            ---------


Net increase in cash and cash equivalents                                           531,695            1,528,218
Cash and cash equivalents at the beginning of the year                            1,630,617              475,578
                                                                                -----------         ------------
Cash and cash equivalents at the end of the year                                $ 2,162,312         $  2,003,796
                                                                                -----------         ------------

</TABLE>

<PAGE>



                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The  Condensed  Consolidated  Balance  Sheet as of  August  31,  2002,  the
Condensed  Consolidated  Statements  of  Operations  for the three month periods
ended August 31, 2002 and 2001,  and the  Condensed  Consolidated  Statements of
Cash Flows for the three month  periods ended August 31, 2002 and 2001 have been
prepared by Sandata Technologies,  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
August 31, 2002 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, 2002.  Results of operations  for the period ended August 31, 2002
are not necessarily  indicative of the operating  results  expected for the full
year.

New Accounting Pronouncements and Policies

Cash and Cash Equivalents

     The Company considers all short-term  investments with an original maturity
of  three  months  or less  to be cash  equivalents.  Due to the  nature  of its
operations,  the Company  deposits,  on a monthly  basis,  amounts in  financial
institutions for the payment of payroll liabilities for certain customers.  Such
amounts are reduced  when the Company  pays such  liabilities.  Such  reductions
generally  occur over five to ten business days. At August 31, 2002, the Company
had amounts on deposit for these  liabilities of approximately  $1,800,000.  The
Company has cash  balances in banks in excess of the maximum  amount  insured by
the FDIC as of August 31, 2002.

     In October 2001, the Financial  Accounting  Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 144 ("SFAS No. 144"), "Accounting
for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses the
accounting  model for long-lived  assets to be disposed of by sale and resulting
implementation  issues.  This statement requires that those long-lived assets be
measured  at the  lower of  carrying  amount  or fair  value  less cost to sell,
whether  reported  in  continuing  operations  or  in  discontinued  operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value or include  amounts for operating  losses that have not yet  occurred.  It
also broadens the reporting of discontinued operations to include all components
of an entity  with  operations  that can be  distinguished  from the rest of the
entity and that will be eliminated from the ongoing  operations of the entity in
a disposal  transaction.  SFAS No. 144 is  effective  for the  Company in fiscal
2003. The provisions of the  interpretations  that are applicable to the Company
were  implemented  on a  prospective  basis  as of June 1,  2002,  which  had no
material effect on the Company's financial statements.

     On April 30, 2002 the Financial  Accounting Standards Board issued SFAS No.
145,  "Rescission  of  FASB  Statements  No.  4, 44 and  64,  Amendment  of FASB
Statement  No. 13, and  Technical  Corrections".  SFAS No.  145  eliminates  the
requirement that gains and losses from the  extinguishment of debt be aggregated
and, if material, classified as an extraordinary item, net of the related income
tax effect and  eliminates an  inconsistency  between the  accounting  for sale-
leaseback  transactions  and  certain  lease  modifications  that have  economic
effects that are similar to sale-leaseback transactions. Generally, SFAS No. 145
is effective for transactions occurring after May 15, 2002. The adoption of this
standard is expected to have no impact to the Company.

     Statement of Financial  Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS 146"),  provides guidance on
the recognition and measurement of liabilities for costs associated with exit or
disposal activities.  The provisions of this Statement are effective for exit or
disposal  activities  that are initiated after December 31, 2002. The Company is
currently reviewing SFAS 146 to determine the impact upon adoption.


2.  RELATED PARTY TRANSACTIONS

     a. Pursuant to an agreement (the "Agreement") involving the Company, Nassau
County  Industrial   Development   Agency  ("NCIDA"),   BFS  Realty,   LLC  (the
"Affiliate")  HSBC Bank USA (successor to Marine Midland Bank) ("the "Bank") and
the  U.S.  Small  Business   Administration   ("SBA"),  the  Affiliate  borrowed
$3,350,000 in Industrial  Development Revenue Bonds (the "Bonds") to finance the
acquisition of the Company's facility (the "Facility").

     Under the terms of the  Agreement,  the Company is jointly  and  separately
liable to the NCIDA for all obligations owed by the Affiliate to the NCIDA under
the lease  agreement  between NCIDA, as landlord,  and the Affiliate,  as Tenant
(the "Lease");  however,  the Affiliate has indemnified the Company with respect
to certain  obligations  relative  to the Lease and the  Agreement.  The Company
subleases  space from the Affiliate  (see below).  The  Affiliate's  obligations
under the Lease were  guaranteed  by Mr.  Brodsky,  the Company,  Sandsport  and
others. The Affiliate's  obligations respecting repayment of the Bonds were also
guaranteed  by Mr.  Brodsky,  the  Company,  Sandsport  and  others.  The  Bonds
currently  bear interest at the rate of 9%, and the  outstanding  balance due on
the Bonds as of August 31, 2002 was $1,401,111.

     The Company has also entered into a $750,000 loan  agreement  with the Long
Island Development Corporation ("LIDC"),  under a guarantee by the SBA (the "SBA
Loan").  The SBA Loan was assigned to the Affiliate in November  1996;  however,
repayment of the SBA Loan is guaranteed by the Company and various  subsidiaries
of the Company.  The SBA Loan is payable in 240 monthly  installments of $6,255,
which  includes  principal and interest at a rate of 7.015%.  The balance of the
SBA Loan as of August 31, 2002 was $592,036.

     b. The Company derived  revenue from National  Medical Health Card Systems,
Inc.  ("Health  Card")  a  company  affiliated  with  the  Company's   Chairman,
principally  for data  base and  operating  system  support,  hardware  leasing,
maintenance and related administrative services. No revenues were generated from
Health Card for the three months ended August 31, 2002.  The revenues  generated
from Health Card amounted to  approximately  $367,000 for the three months ended
August 31,  2001 for various  services.  In  addition  the  Company  resells its
telephone  services to Health Card.  The billings  for such  telephone  services
amounted to  approximately  $6,000 and $61,000 for the three months ended August
31, 2002 and 2001,  respectively  and are  recorded as a reduction  of operating
expense.  The Company was owed approximately  $43,000 from Health Card at August
31, 2002.  Subsequent  to August 31, 2002,  the Company  received  approximately
$28,000 from Health Card.

     c. The Company makes lease and rent payments to affiliates of the Company's
Chairman.  The payments for leased equipment were made to P.W. Capital Corp. and
P.W. Medical  Management,  Inc., and were approximately  $54,000 and $95,000 for
the three months ended August 31, 2002 and 2001  respectively.  The payments for
the Facility  were made to the  Affiliate,  and were  approximately  $68,000 and
$143,000 for the three months ended August 31, 2002 and 2001 respectively.

     d. Medical Arts Office  Services,  Inc.  ("MAOS"),  of which the  Company's
Chairman  is  the  sole  shareholder,  provided  the  Company  with  accounting,
bookkeeping and legal  services.  For the three months ended August 31, 2002 and
2001 the total payments made by the Company to MAOS were approximately  $115,000
and $89,000, respectively.

3.       NET EARNINGS (LOSS) PER COMMON SHARE

     The Company  computes  earnings per share in accordance  with  Statement of
Financial  Accounting Standards No. 128 "Earnings per Share". Basic earnings per
share has been computed  using the weighted  average  number of shares of common
stock outstanding.

     Options  and  warrants to purchase  1,388,599  shares of common  stock were
outstanding  at August 31, 2002,  which were not included in the  computation of
diluted  earnings  per  share  because  the  exercise  effect  would  have  been
anti-dilutive.

4.       SHAREHOLDERS' EQUITY

Stock Options

     On July 14, 1998, the Chairman,  certain officers,  directors, and a former
director  and the spouse of an officer  (who is an  employee of  Sandsport  Data
Services,  Inc. ("Sandsport") the Company's wholly owned subsidiary),  exercised
their respective options and warrants to purchase an aggregate of 921,334 shares
of Common Stock. The exercise prices ranged from $1.38 to $2.61 per share for an
aggregate cost of $1,608,861. Payment for such shares was made to the Company in
the amount of $921  representing  the par value of the shares,  and a portion in
the form of  non-recourse  promissory  notes due in July 2001,  with interest at
eight and one-half percent (8 1/2%) per annum, payable annually,  and secured by
the number of shares  acquired  ("Non-recourse  Notes").  On July 14, 2001,  the
Company agreed to extend the due dates of the Non-recourse Notes for one hundred
twenty  days.  On  November 9, 2001,  the due date of the notes was  extended to
November 9, 2004 and the Company  agreed to substitute  full recourse  unsecured
notes ("Recourse Notes") for the Non-recourse Notes it had previously  accepted.
The Recourse Notes will bear interest at the rate of eight and one-half  percent
(8 1/2%) per annum, payable annually, with the principal amount of each Recourse
Note, plus any accrued and unpaid interest, due and payable on November 9, 2004.

     Effective  December 1, 2001,  the interest  rate on the Recourse  Notes was
changed to six percent (6%) per annum,  and the shares and Recourse  Note of the
spouse of the officer were both transferred to the officer.

     During  the year ended May 31,  2002,  24,667  shares of common  stock were
surrendered by a former  director and an employee in settlement of  Non-recourse
Notes in the amount of $37,962.  As of August 31, 2002, the outstanding balance
on Recourse  Notes,  including  principal and accrued but unpaid  interest,  was
$1,512,679.  During the  period  ended  August 31,  2002,  the  Chairman  repaid
$100,000 of his Recourse Note.


5.       COMMITMENTS AND CONTINGENCIES

         Litigation

     a. In August of 1999, the Company's wholly-owned subsidiary,  Sandsport was
named as a defendant in Greater Bright Light Home Care Services,  Inc. et al. v.
Joseph Jeffries-El, El Equity Corporation,  Sandsport Data Services, Inc. et al.
(Supreme Court of the State of New York, Kings County).  Sandsport's contractual
obligation  to  Greater   Bright  Light   involved  the  depositing  of  certain
government-issued  checks into a specific bank account.  Upon receiving  written
notification  from the agency issuing the checks to stop depositing them in that
account,  Sandsport  ceased  depositing  them. The plaintiff  brought the action
against Joseph Jeffries-El and El Equity, and El Equity  counterclaimed  against
the plaintiff,  each basing its claims on the financing  agreement between them.
El  Equity  also  cross-claimed  against  Sandsport,  asserting  that  Sandsport
converted the  government-issued  checks to its own use.  Although  Sandsport is
named  as a  defendant,  the  Complaint  seeks  no  affirmative  relief  against
Sandsport.  Co-defendant  Citibank has asserted  indemnification  claims against
Sandsport and all of the other  defendants.  Sandsport  disputes all  liability.
However,  the  Company is unable to  predict  the  outcome  of these  claims and
accordingly,  no  adjustments  have  been  made  in the  consolidated  financial
statements in response to these claims.

     b. On March 1, 2000,  Dataline,  Inc.  ("Dataline") began a lawsuit against
MCI WorldCom  Network  Services,  Inc. ("MCI") and the Company for alleged trade
libel and related  counts,  in the United States District Court for the Southern
District of New York. The court dismissed that lawsuit,  with prejudice,  on May
23, 2002. On May 4, 2001 MCI had brought a patent  infringement  lawsuit against
Dataline,  alleging that it was  infringing  three MCI patents,  under which the
Company  has an  exclusive  license in New York City.  Shortly  thereafter,  the
Company  joined  MCI in the suit  against  Dataline.  Pursuant  to a  Settlement
Agreement  dated  January  1, 2002 among MCI,  its  parent  (MCI  Communications
Corporation),  the Company, and Dataline, Dataline acknowledged the validity and
enforceability of the 3 MCI-owned patents that were the subject of the lawsuits.
There were no payments  from either MCI or the Company to  Dataline.  As part of
the settlement, Dataline agreed to pay the Company $100,000 in cash and issue an
8%  promissory  note  in the  amount  of  $721,000.  Due to the  uncertainty  of
realization of the note receivable, the Company is recognizing the income on the
note using the  installment  method of  accounting.  For the three  months ended
August 31, 2002, the Company has recognized  approximately $45,000 of income. In
addition,  Sandata and Dataline entered into an Exclusive  Service  Agreement by
which Dataline agreed to use the Company's "call capture infrastructure" for all
of Dataline's time and attendance  systems,  and to pay royalties to the Company
for such use. The terms of the settlement also included mutual releases.

     c. By letter dated June 26, 2002, a former employee of the Company asserted
claims for back wages of $410,000.  The letter,  from the  employee's  attorney,
also contained allegations of age discrimination and retaliatory discharge.  The
letter also  contained an offer of  settlement.  No formal  litigation  has been
started and the Company intends to pursue settlement  negotiations.  A provision
of  $200,000 is included in accrued  expenses  relating to the  asserted  claim,
which represents the Company's best estimate of costs to be incurred. The amount
of the ultimate cost may vary from this estimate.

     d.  For  description  of  the  going  private   transaction,   and  of  the
class-action lawsuits initiated in connection with such transaction, see Note 8.

Royalty Agreement

     The Company has been granted a license under certain of MCI's patents which
permits  the  Company  to  continue  to  market  and sell its  SANTRAX  time and
attendance verification product non-exclusively  nationwide,  and exclusively in
the home health care  industries  for the five New York  boroughs,  and that the
Company will pay MCI certain royalties, on a per call basis. The license remains
in  effect  until the last to expire  of  various  patents  held by MCI or until
October 19, 2010, whichever is later.


6.       REVENUE BY PRODUCT LINE

The Company derives its revenue from several product lines that are similar in
nature. The following table provides the service fee revenues for the product
lines earned for the three month periods ended August 31, 2002 and 2001:

                                                          For the three months
                                                              ended August 31,
                                                        2002              2001
                                                        ----              ----
Computerized information processing                 $1,564,344       $1,522,247
Telephone-based data collection                      2,085,888        1,892,151
Technology infrastructure and outsourcing               11,150          402,292
Information technology                                 736,930          564,075
Other                                                      514           11,563
                                                    ----------       ----------
                                                    $4,398,826       $4,392,328

7.       ECONOMIC DEPENDENCE

     A  significant  number of the  Company's  customers  (both  for-profit  and
not-for-profit  companies) receive some or all of their funding from Federal and
State  agencies.  These  customers'  contracts  with the  Company are subject to
review and approval by a New York City governmental agency. For the three months
ended  August 31,  2002,  the Company  received  revenues  from these  customers
amounting to approximately  $2,836,279,  as compared to $2,667,000 for the three
months ended August 31, 2001. The Company was owed approximately $1,481,000 from
these customers at August 31, 2002.

8.       GOING PRIVATE TRANSACTION

     The  Company  has  received  a  proposal  to  engage  in  a  going  private
transaction.  The proposed  transaction  is  anticipated  to be in the form of a
merger with an entity owned by an investor  group to be led by Bert E.  Brodsky,
the Company's Chief Executive Officer,  and to include Directors Hugh Freund and
Gary Stoller as well as other investors (the "Acquiring Group"). Pursuant to the
proposal,  the Company's  shareholders  (other than Mr.  Brodsky,  and the other
shareholders  that shall  comprise the  "Acquiring  Group")  would receive $1.50
(subsequently  revised to $1.91) per share of Common  Stock of the Company  (the
"Shares"), in cash. The proposal may be amended, modified or supplemented at any
time.

     The Board of Directors has appointed a Special Committee (the "Committee"),
comprised of Ronald Fish and Martin Bernard, to review the proposed transaction.
The  Committee has retained  Brean Murray & Co., Inc. as its financial  advisor,
and has retained its own legal counsel.

     The  proposed  transaction  would result in the  acquisition  of all of the
outstanding  Shares  other than the Shares  owned by Mr.  Brodsky  and the other
shareholders  that shall  comprise the Acquiring  Group.  The final terms of any
acquisition  will be based on  negotiations  between the Acquiring Group and the
Committee.  The proposed acquisition will be subject to, among other things, (1)
the negotiation, execution, and delivery of a definitive agreement, (2) approval
of the proposed  transaction by the  Committee,  the full Board of Directors and
the Company's shareholders,  (3) receipt of a fairness opinion by the Committee,
(4) applicable regulatory approval,  and (5) obtaining any necessary third-party
consents  or  waivers.  There  can  be no  assurance  that a  definitive  merger
agreement will be executed and delivered,  or that the proposed transaction will
be  consummated.

     On September 11, 2002, a stockholder  of the Company filed a lawsuit in the
Delaware  Chancery  Court  against  the  Company and the members of its Board of
Directors.  (Eva Seitler v. Sandata Technologies,  Inc., Bert E. Brodsky, Ronald
L. Fish,  Martin  Bernard,  Hugh  Freund,  and Gary  Stoller,  Civil  Action No.
19886-NC).  The plaintiff  alleges that the defendants  breached their fiduciary
duties to the Company and the Company's  public  stockholders in connection with
Sandata  Acquisition  Corp.'s proposal to acquire all of the outstanding  public
shares of the Company.  The plaintiffs also allege, among other things, that the
directors  serving on the special  committee are not  independent,  and that the
merger  consideration  is inadequate.  The complaint seeks  certification of the
action as a class action, both preliminary and permanent  injunction against the
proposed  transaction,  and  rescission if it is not enjoined.  On September 13,
another  stockholder of the Company filed a separate  lawsuit in the same court,
making substantially  identical allegations and seeking substantially  identical
remedies.  The Company and the individual  directors intend to vigorously defend
themselves. However, the Company is unable to predict the outcome of this matter
and,  accordingly,  no adjustments have been made in the condensed  consolidated
financial statements in response to this matter.

 ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations

     Revenues  were  $4,521,922  for the three  months  ended August 31, 2002 as
compared to $4,524,666 for the three months ended August 31, 2001, a decrease of
$2,744 or .06%.

     Service  fee  revenue  for the  three  months  ended  August  31,  2002 was
$4,398,826 as compared to $4,392,328  for the three months ended August 31, 2001
an increase of $6,498. or .15%.

     Other  income for the three  months  ended  August 31,  2002 was $79,520 as
compared to $98,742 for the three months ended August 31, 2001.  The decrease is
attributable to a decrease in income recognized on sales/leaseback transactions,
offset by payments received on notes receivable.

Expenses Related to Services

     Operating  expenses were  $2,696,630  for the three months ended August 31,
2002 as compared to  $2,714,083  for the three  months  ended August 31, 2001, a
decrease  of  $17,453 or .6%.  Costs  associated  with  payroll  decreased  this
quarter, offset by an increase in purchases for resale.

     Selling,  general and administrative expenses were $1,263,068 for the three
months  ended August 31, 2002,  as compared to  $1,650,170  for the three months
ended  August 31, 2001, a decrease of $387,102 or 23%. The decrease is primarily
due to a decrease in payroll.

     On  August  9,  2001  the  Company  announced  that it had  terminated  the
employment  of  Stephen  Davies  as  President  of the  Company,  and  would  be
terminating  approximately  30 other  employees.  Under the terms of Mr. Davies'
Employment  Agreement,  he is entitled to a severance  payment  equal to six (6)
months' base salary,  or $100,000,  and has 90 days from the date of termination
to exercise the 66,673 options that were vested on that date. The elimination of
approximately  30  positions  from within the Company  and its  subsidiaries  is
expected to generate between $1.7 million and $2 million in reduced expenses. In
addition,  the Company  paid  approximately  $47,000 in  severance  payments for
approximately 30 terminated employees.

     Depreciation and amortization expense increased $71,640 to $499,502 for the
three  months ended August 31, 2002 as compared to $427,862 for the three months
ended August 31, 2001. The increase was primarily  attributable to the write-off
of  developed  software  that  occurred  in the year ended May 31,  2001,  which
resulted in decreased amortization expense in last year's quarter.

     Interest  expense was $45,759 for the three months ended August 31, 2002 as
compared to $77,679 for the three months ended August 31, 2001. The decrease was
a result of decreased borrowings on the Company's Credit Agreement.

Income Tax Expenses (Benefit)

     Income tax expense for the three  months  ended August 31, 2002 was $24,097
as compared to income tax benefit of $170,179  for the three months ended August
31, 2001. The increase in income tax expense is due to higher pretax income.

Liquidity and Capital Resources

     The  Company  has a  working  capital  deficit  as of  August  31,  2002 of
$2,371,686,  as compared to working  capital of $1,890,988 at May 31, 2002.  The
primary  factor is a result of the  revolver  becoming  short-term  liability of
which $3,750,000 is due in June 2003.

     For the three months ended August 31, 2002, the Company spent approximately
$266,000  in  fixed  asset  additions,   of  which  $229,000  was  for  software
capitalization   costs  in  connection  with  revenue  growth  and  new  product
development.  The Company expects the current levels of capital  expenditures to
continue.

     On July 14, 1998, the Chairman,  certain  officers,  directors and a former
director  and the  spouse  of an  officer  and an  employee  of  Sandsport  Data
Services, Inc. ("Sandsport"),  the Company's wholly owned subsidiary,  exercised
their respective options and warrants to purchase an aggregate of 921,334 shares
of Common Stock at exercise  prices ranging from $1.38 to $2.61 per share for an
aggregate cost of $1,608,861. Payment for such shares was made to the Company in
the amount of $921  representing  the par value of the shares,  and a portion in
the form of  non-recourse  promissory  notes due in July 2001,  with interest at
eight and one-half percent (8-1/2%) per annum, payable annually,  and secured by
the number of shares  exercised.  On July 14, 2001, the Company agreed to extend
the due dates of such notes for one hundred twenty days until November 11, 2001.
On November 9, 2001,  the Company agreed to substitute  full recourse  unsecured
Notes for the Notes it had previously  accepted in connection  with these option
and warrant  exercises.  Such notes will bear  interest at the rate of eight and
one-half percent (8 1/2%) per annum, payable annually, with the principal amount
of each such Note,  plus any  accrued  and unpaid  interest,  due and payable on
November 9, 2004.

     As of December 1, 2001,  the interest  rate on the notes was changed to six
percent  (6%) per annum,  and the  shares and note of the spouse of the  officer
were both transferred to the officer. During the year ended May 31, 2002, 24,667
shares of common stock were  surrendered by a former director and an employee in
settlement  of notes in the  amount of  $37,962.  As of  August  31,  2002,  the
outstanding  balance on such notes,  including  principal and accrued but unpaid
interest, was $1,512,679.

     On April 18,  1997,  the  Company's  wholly  owned  subsidiary,  Sandsport,
entered into a revolving  credit  agreement (the "Credit  Agreement")  with HSBC
Bank USA, which allows  Sandsport to borrow  amounts up to $3,000,000.  Interest
accrues on amounts outstanding under the Credit Agreement at a rate equal to the
London Interbank  Offered Rate plus 2% and will be paid quarterly in arrears or,
at Sandsport's option,  interest may accrue at the Bank's prime rate. The Credit
Agreement requires Sandsport to pay a fee equal to 1/4% per annum payable on the
unused average daily balance of amounts under the Credit Agreement. In addition,
there are other  fees and  charges  imposed  based upon  Sandsport's  failure to
maintain certain minimum balances.  The Credit Agreement has been amended by the
Bank to permit  Sandsport to borrow amounts up to $4,500,000  until February 14,
2003.  Interest accrues at the same rate as the original Credit  Agreement.  The
indebtedness  under the  Credit  Agreement  is  guaranteed  by the  Company  and
Sandsport's  sister  subsidiaries  (the "Group").  All of the Group's assets are
pledged to the Bank as  collateral  for amounts due under the Credit  Agreement,
which pledge is secured by a first lien on all equipment owned by members of the
Group,  as well as a  collateral  assignment  of  $2,000,000  of life  insurance
payable on the life of the Company's Chairman.  The Group's guaranty to the Bank
was  modified to include  all  indebtedness  incurred  by the Company  under the
Credit  Agreement.  On April 11, 2002,  the Bank  approved the  extension of the
termination  date of the Credit  Agreement  to June 14, 2003 (from  February 14,
2003).

     In  addition,  pursuant to the Credit  Agreement,  the Group is required to
maintain  certain  levels  of net  worth and meet  certain  financial  ratios in
addition to various other affirmative and negative  covenants.  As of August 24,
2001,  Sandsport,  the Company and the other members of the Group, and the Bank,
entered  into the Third  Amendment  and Waiver  (the "Third  Amendment")  to the
Credit Agreement. Pursuant to the Third Amendment,  Sandsport's covenants to the
Bank to maintain a certain net worth and to maintain  certain  financial  ratios
were revised, on a going-forward  basis, and the noncompliance with the existing
covenants  was waived by the Bank.  In addition,  in  connection  with the Third
Amendment,  Sandsport and each member of the Group executed and delivered to the
Bank a Collective Amended and Restated Security Agreement, pursuant to which the
Bank's security  interest was extended to include a security  interest in all of
the personal and fixture  property of Sandsport,  the Company and the members of
the Group. On October 23, 2001 the Credit  Agreement was amended with respect to
one of the financial  ratios, at the Company's  request.  At August 31, 2002 the
Group  met the  net  worth  and  financial  ratios  requirements  of the  Credit
Agreement.  In the past,  the Group has failed to meet certain of the  financial
ratios,  and the Bank has granted the Group a waiver.  There can be no assurance
that the Bank will  continue to grant waivers if the Group fails to meet the net
worth and financial ratios in the future.  If such waivers are not granted,  any
loans outstanding under the Credit Agreement become immediately due and payable,
which  may have an  adverse  effect on the  Company's  business,  operations  or
financial  condition.  As of August 31,  2002,  the  outstanding  balance on the
Credit Agreement with the Bank was $3,750,000.

     The Company believes the results of its continued operations, together with
the  available  credit line,  should be adequate to fund  presently  foreseeable
working capital requirements.

ITEM 3  - PROCEDURES AND CONTROLS

    Within the 90 days prior to the date of this  report,  the Company  carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management,  primarily the Company's Chief Executive Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls  and  procedures  pursuant to Exchange  Act Rule
13a-14.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are effective.  There were no  significant  changes in the Company's
internal  controls or in other  factors  that could  significantly  affect these
controls subsequent to the date of their evaluation.


                          PART II - OTHER INFORMATION


ITEM 1  - LEGAL PROCEEDINGS

     Reference is made to Notes 5 and 8 to the Condensed  Consolidated Financial
Statements comprising Part I, Item 1 of this Form 10-QSB.

ITEM 2  - CHANGES IN SECURITIES

     The Company's  ability to declare and pay dividends is restricted  pursuant
to the terms of a Revolving  Credit  Agreement  dated April 18, 1997 between the
company and HSBC Bank USA,  formerly Marine Midland Bank (the "Bank"),  and also
under the terms of the  Guaranty  Agreement  dated June 1, 1994 by and among the
Company  (as a  guarantor),  BFS  Realty,  LLC (an  affiliate  of the  Company's
Chairman), and the Bank (among others). The Guarantee Agreement was entered into
in  connection  with the  IDA/SBA  Financing  discussed  in Item 6 of the Annual
Report on Form  10-KSB  for the year ended May 31,  2002,  filed with the SEC on
August 27, 2002.

ITEM 3  - DEFAULTS UPON SENIOR SECURITIES

None

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

None

Item 5  - OTHER INFORMATION

None

ITEM 6  - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

99.1     Certification Pursuant to Sarbanes Oxley Act, Section 302

99.2     Certification Pursuant to Sarbanes Oxley Act, Section 906

         (b)      Reports on Form 8-K

                  1. Current Report on Form 8-K filed August 23, 2002 reporting
                  under Item 5 the Company's regaining compliance with certain
                  Nasdaq Marketplace Rules, as detailed in the press release
                  comprising an Exhibit to the Report.

                  2. Current Report on Form 8-K filed September 18, 2002
                  reporting under Item 5 the Company's acceptance of a proposal
                  to engage in a going private transaction, subject to the
                  conditions specified in the press release comprising an
                  Exhibit to the Report.


<PAGE>
                                   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 TECHNOLOGIES, INC.
                                                     --------------------------
                                                     (Registrant)



Date: October 15, 2002                          By: /s/ Bert E. Brodsky
                                                    -------------------------
                                                        Bert E. Brodsky
                                                        Chairman of the Board,
                                                        Chief Executive Officer,
                                                        Chief Financial Officer


<PAGE>