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 February 28, 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 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. Employer 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 April 10, 2003 was 2,481,808.

         Transitional Small Business Disclosure Format (check one):

Yes____     No__X____



<PAGE>
                   SANDATA TECHNOLOGIES INC. AND SUBSIDIARIES
                                      INDEX

                                                                          Page
                          PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements:
         Condensed Consolidated Balance Sheets as of
         February 28, 2003 (Unaudited) and May 31, 2002  (Audited)............3

         Unaudited Condensed Consolidated Statements of Operations
         for the three and nine months ended February 28, 2003 and
         February 28, 2002....................................................4

         Unaudited Condensed Consolidated Statements of Cash Flows for
         the nine months ended February 28, 2003 and February 28, 2002........5

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


Item 2.  Management's Discussion and Analysis
         or Plan of Operation ...............................................16

Item 3.  Procedures and Controls.............................................20

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings...................................................21

Item 2.  Changes in Securities and Use of Proceeds...........................21

Item 3.  Defaults Upon Senior Securities.....................................21

Item 4.  Submission of Matters to a Vote of Security Holders.................21

Item 5.  Other Information...................................................21

Item 6.  Exhibits and Reports on Form 8-K....................................21

              Signature......................................................22

              Certifications.................................................23







                                        2



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


                                              February 28, 2003     May 31, 2002
                   ASSETS                        (unaudited)         (audited)
CURRENT ASSETS:
  Cash and cash equivalents..............      $ 2,638,226         $  1,630,617
  Accounts receivable, net of allowance for
  doubtful accounts of $250,704 and
  $202,746 at 2003 and 2002, respectively....... 1,965,011            2,182,963
  Receivables from affiliates......................245,350              280,297
  Notes receivable - officer....................       ---              100,000
  Inventories.......................................59,064               45,342
  Prepaid expenses and other current assets........301,808              345,349
  Deferred income taxes............................627,000              207,595
                                               --------------     -------------
         Total Current Assets....................5,836,459            4,792,163

FIXED ASSETS, NET................................6,319,986            6,820,596

DEFERRED INCOME TAXES............................      --               171,579

OTHER ASSETS
  Notes receivable..................................21,371               25,190
  Cash surrender value of officer's life
  insurance,security deposits and other assets...1,126,980            1,105,502
                                                ------------     --------------

         Total Assets.......................  $ 13,304,796         $ 12,915,030
                                              ==============       ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses........$ 4,307,900         $  2,781,550
  Deferred/unearned revenue - maintenance...........18,676               16,367
  Deferred income - sales-leaseback................ 31,713              103,258
  Short-term debt............................... 3,000,000               --
                                              ---------------       -----------

         Total Current Liabilities...........    7,358,289            2,901,175

LONG-TERM DEBT.................................        --             4,500,000

DEFERRED INCOME TAXES..........................    339,000               --


DEFERRED INCOME...............................          --               21,142
                                                 -----------       ------------
         Total Liabilities.....................  7,697,289            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..............................1,308,549            1,193,755
  Notes receivable - officers.................. (1,469,290)          (1,469,290)
                                                -------------      -------------

         Total Shareholders' Equity..............5,607,507            5,492,713
                                                -------------     --------------

         Total Liabilities and Shareholders'
          Equity.........                     $ 13,304,796         $ 12,915,030
                                              ============         ============


            See notes to condensed consolidated financial statements
<PAGE>

                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                  Three Months Ended     Nine months Ended
                                     February 28,           February 28,

                                  2003        2002         2003        2002
                                  ----        ----         ----        ----

REVENUES
  Service fees................$3,929,042  $4,275,727  $12,234,392   $12,805,633
  Other income...............     75,376      80,444      222,439       347,653
  Interest income.............    39,799      49,797      124,889       128,236
                                --------    --------  -----------   -----------
                               4,044,217   4,405,968   12,581,720    13,281,522
                               ---------   ---------   ----------    ----------

COSTS AND EXPENSES
  Operating....................2,098,358   2,346,442     6,980,706    7,388,560
  Selling, general and
   administrative..............1,213,664   1,118,258     3,742,666    4,097,567
  Depreciation and
   amortization................  524,837     460,721     1,534,717    1,344,458
  Interest expense............    26,486      36,119       104,337      185,866
                               ---------   ---------     ---------    ---------
  TOTAL COSTS AND EXPENSES.... 3,863,345   3,961,540    12,362,426   13,016,451
                               ---------   ---------    ----------   ----------

Earnings before income
 taxes........................  180,872      444,428       219,294      265,071

     Income tax expense.....     68,150      232,286       104,500      143,848
                              ---------     --------    -----------    --------

  NET INCOME..............  $   112,722    $ 212,142     $ 114,794   $  121,223
                             ===========   =========     =========   ==========

EARNINGS PER SHARE OF
COMMON STOCK:
  Basic income per share.....$    0.05     $    0.09     $   0.05     $    0.05
                              =========      =======        ========    =======
  Dilutive income per share..$    0.04     $    0.09     $   0.04     $    0.05
                              ========       =======        ========  =========

  Basic weighted average
   common shares
   outstanding.............. 2,481,808      2,481,808    2,481,808    2,498,343
                             =========     ============  ==========   =========
  Dilutive weighted average
   common shares and common
   stock equivalents
   outstanding...............2,771,612      2,481,808    2,644,528    2,498,343
                            ==========     ===========   ==========   =========







            See notes to condensed consolidated financial statements



<PAGE>
                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED FEBRUARY 28,

                                                 2003                2002
                                                 ----                ----
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income............................   $  114,794           $  121,223
   Adjustments to reconcile net income to
         net cash provided by operating
         activities:
         Depreciation and amortization.....  1,534,717            1,344,458
         Gain on disposal of fixed assets...       --                (4,309)
         Provision for doubtful accounts.....   47,958               63,097
         Recognition of deferred
          income - sales - leaseback.......... (92,688)             146,082
         Recognition of deferred
          revenue - maintenance.............   (54,025)             (10,789)
         Deferred income taxes................  91,174              131,853
    (Increase) decrease in operating assets
          Accounts receivable................. 169,994             (224,945)
          Receivables from affiliates.......... 34,947              490,099
          Inventories......................... (13,722)               3,281
          Prepaid expenses and other current
           assets..........................     43,541              116,422
          Other assets.....................    (17,659)            (183,144)
          Change in costs in excess of
           billing & estimated earnings on
           uncompleted contract.............        --             (337,000)
    Increase (decrease) in operating liabilities
          Accounts payable and accrued
          expenses...........................1,526,351             (175,618)
          Deferred/unearned revenue -
           maintenance........................  56,334                  --
                                               --------           ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES... 3,441,716            1,480,710
                                             ---------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of fixed assets.............  (1,034,107)          (2,177,392)
                                            -----------          -----------
NET CASH USED IN INVESTING ACTIVITIES.....  (1,034,107)          (2,177,392)
                                            -----------          -----------
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............1,650,000            2,900,000
     Principal payments on line of credit...(3,150,000)          (2,250,000)

NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES..............................    (1,400,000)             650,000
                                            -----------           ----------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS.......................     1,007,609              (46,682)

CASH AND CASH EQUIVALENTS, BEGINNING
 OF PERIOD..............................     1,630,617              475,578
                                              ---------              -------

CASH AND CASH EQUIVALENTS, END OF
 THE PERIOD...........................    $  2,638,226         $    428,896
                                          =============        ==============

            See notes to condensed consolidated financial statements
<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 February 28,  2003,  the
Condensed  Consolidated  Statements of Operations  for the three and nine months
ended February 28, 2003 and 2002, and the Condensed  Consolidated  Statements of
Cash Flows for the nine month periods ended February 28, 2003 and 2002 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
February 28, 2003 and the results of operations  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,  as amended for
the year ended May 31, 2002. Results of operations for the period ended February
28, 2003 are not necessarily  indicative of the operating  results  expected for
the full year.

Selected Accounting Policies and New Pronouncements

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 February  28,  2003,  the
Company  had  amounts  on  deposit  for  these   liabilities  of   approximately
$2,000,000.  The  Company  has cash  balances  in banks in excess of the maximum
amount insured by the FDIC as of February 28, 2003.

     In October 2001, the Financial  Accounting  Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("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.



<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

     In July 2001, the FASB issued SFAS No. 141,  "Business  Combinations,"  and
SFAS No. 142, "Goodwill and Other Intangible  Assets." SFAS No. 141 requires the
use of the purchase  method of accounting  for business  combinations  initiated
after June 30, 2001, and eliminates the  pooling-of-interests  method.  SFAS No.
142 requires,  among other things,  the use of a  non-amortization  approach for
purchased goodwill and certain intangibles.  Under a non-amortization  approach,
goodwill and certain intangibles will not be amortized in earnings,  but instead
will be reviewed for impairment at least annually.  On June 1, 2002, the Company
implemented  SFAS  No.142.  The  implementation  of SFAS No.  142 did not have a
material impact on its financial statements,  since the Company did not have any
goodwill or intangibles subject to SFAS No. 142 at the date of implementation.

     On April  30,  2002 the FASB  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 had no
material impact to the Company.

     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities"  ("SFAS  No.  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 adoption of this
standard had no material impact to the Company.


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"
or "BFS") 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

<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

currently  bear interest at the rate of 9%, and the  outstanding  balance due on
the Bonds as of February 28, 2003 was  $1,314,445.  The term of the Bonds extend
through March 2005.  Management believes that the value of the premises that are
pledged as collateral for the guaranteed  obligation are in excess of the future
amount  of the  payments  that  may be  required  pursuant  to the  terms of the
guarantee.

     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 February 28, 2003 was $577,687.

     b. The Company derived  revenue from National  Medical Health Card Systems,
Inc.  ("Health  Card")  a  company  affiliated  with  the  Company's   Chairman,
principally  for  database  and  operating  system  support,  hardware  leasing,
maintenance and related administrative services. No revenues were generated from
Health Card for the three and nine months ended  February 28, 2003.  In addition
the Company resells its telephone services to Health Card. The billings for such
telephone  services amounted to approximately  $10,000 and $124,000 for the nine
months  ended  February  28, 2003 and 2002,  respectively  and are recorded as a
reduction of operating expense.  The Company was owed approximately  $1,000 from
Health Card at February 28, 2003.  Subsequent to February 28, 2003,  the Company
received approximately $1,000 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 $163,000 for
the three and nine months ended  February 28, 2003 as compared to  approximately
$64,198 and $216,638 for the three and nine months ended  February 28, 2002. The
payments for the Facility  were made to the  Affiliate,  and were  approximately
$71,000 and $208,000  for the three and nine months  ended  February 28, 2003 as
compared to  approximately  $47,878 and  $328,691  for the three and nine months
ended February 28, 2002.

     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 and nine months ended February 28,
2003 and 2002 the total payments made by the Company to MAOS were  approximately
$89,000 and $366,000,  as compared to approximately $46,591 and $270,803 for the
three and nine months ended February 28, 2002.

     e. At  February  28,  2003,  the Company had  receivables  from  affiliated
companies in the amount of $245,350.  The  receivable are primarily due from BFS
in the amount of $214,000 and MAOS in the amount of $21,000.  These  amounts are
repayable in the normal course of business.



<PAGE>
                  SANDATA TECHNOLOGIES, INC., AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

3. DEBT

   Credit Agreement

     The  Company's  wholly owned  subsidiary,  Sandsport  Data  Services,  Inc.
("Sandsport"),  has a revolving credit  agreement (the "Credit  Agreement") with
the Bank  which  allows  Sandsport  to borrow  amounts up to  $4,500,000,  which
expires on June 14,  2003.  Interest  accrues on amounts  outstanding  under the
Credit Agreement at a rate equal to the London Interbank  Offered Rate ("LIBOR")
plus 2% and  will be paid  quarterly  in  arrears  or,  at  Sandsport's  option,
interest may accrue at the Bank's prime rate. At February 28, 2003, the interest
rate was 4.25%.  The Credit Agreement  requires Sandsport to pay a fee equal to
1/4% per annum 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 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 the  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. In addition, the Company is restricted in its ability
to declare  and pay  dividends  pursuant  to the Credit  Agreement.  The Group's
guaranty  to the Bank was  subsequently  modified  to include  all  indebtedness
incurred by the Company under the amended Credit Agreement dated August 24, 2001
(see below).

     On 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.  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  certain  financial  covenants in the future.
The outstanding  balance on the Credit Agreement with the Bank was $3,000,000 at
February 28, 2003.

4. NET EARNINGS (LOSS) PER COMMON SHARE

     The Company  computes  earnings per share in  accordance  with SFAS No. 128
"Earnings  per Share".  Basic  earnings per share have been  computed  using the
weighted average number of shares of common stock outstanding.
<PAGE>

                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

     During the three and nine  months  ended  February  28,  2003,  289,804 and
87,287 options and warrants to purchase shares of common stock, were included in
the dilutive  earnings per share  calculation.  Options and warrants to purchase
470,389 shares of common stock, for the three and nine months ended February 28,
2003 were  outstanding  and were not  included  in the  computation  of  diluted
earnings  per share  because  the  options  were not in the  money,  during  the
aforementioned periods.

5. SHAREHOLDERS' EQUITY

         Stock Options

     On July 14, 1998,  the  Chairman,  certain  officers and  directors,  and a
former  director  (who is also 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.  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
originally  due in July 2001,  bearing  interest at eight and  one-half  percent
(8-1/2%)  per  annum,  payable  annually,  and  secured  by the number of shares
exercised. The Company has earned interest income on such notes in the amount of
$124,889 and $128,236  during the nine months ended  February 28, 2003 and 2002.
As of  February  28,  2003 and 2002,  the  outstanding  balance  on such  notes,
including  principal  and  accrued  but  unpaid  interest,  was  $1,541,454  and
$1,654,646, respectively. On July 14, 2001, the Company agreed to extend the due
dates of the promissory  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  for the  notes  it had
previously  accepted.  Effective December 1, 2001, the interest rate was changed
from 8-1/2% to 6%.  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.  Certain of the above  options and warrants were
accounted  for utilizing  variable  accounting,  with no material  impact on the
Company's financial  statements for either of the years ended May 31, 2002, 2001
or 2000.  In  accordance  with EITF 95-16,  "Accounting  for Stock  Compensation
Arrangements  with  Employer  Loan  Features  under APB Opinion  No.  25",  upon
substitution of the full recourse notes for the non recourse notes, the terms of
the options and  warrants  became fixed and  variable  accounting  was no longer
required.

6. 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).  Greater Bright Light

<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Home Care  Services,  Inc.  ("GBL")  is a  not-for-profit  corporation  that was
organized  to render home care  attendant  services to  individuals  selected as
eligible  recipients  by the City of New York acting  through the  Department of
Social Services of the Human Resources  Administration ("HRA").  Pursuant to its
agreement with HRA, GBL was entitled to  reimbursement  checks from the New York
State  Department  of Health  Medicaid  Management  Information  System  for the
services  it  provided  ("MMIS  Checks").  Before  GBL could  provide  home care
attendant services it was required to demonstrate to HRA that it obtained a $1.2
million  line of credit.  Joseph  Jeffries El  represented  to GBL that he would
provide it with the $1.2  million  line of credit that HRA  required in exchange
for an annual fee of $120,000  payable in twelve equal monthly  installments  of
$10,000.  GBL and Joseph  Jeffries  El's  company,  El Equity  Corporation  ("El
Equity"),  thereafter  entered  into an Escrow  Agreement  pursuant  to which El
Equity was to receive a portion of the funds received from MMIS. The MMIS checks
were to be deposited in a specified  account at Marine Midland Bank. GBL alleged
that El Equity  misappropriated  the MMIS  funds.  GBL further  alleged  that El
Equity breached the Escrow  Agreement  because it failed to provide GBL with the
$1.2 million line of credit.

     Sandsport  had been  retained by GBL to pick up its MMIS checks and deposit
them in a designated  account at Marine  Midland  Bank.  El Equity  alleged that
Sandsport's agreement with GBL prohibited it from depositing the MMIS funds into
any other account absent written  instructions signed by both GBL and El Equity.
El Equity  alleged that  Sandsport,  pursuant to GBL's  instructions,  deposited
certain MMIS checks into an account other than the designated account. El Equity
therefore  asserted  cross-claims  against  Sandsport for breach of contract and
conversion.  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 and has denied any  wrongdoing.  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 and nine months
ended February 28, 2003, the Company has  recognized  approximately  $45,000 and
$135,000 respectively,  of income. In addition, the Company 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.
<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

     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 9.

         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 City  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.


7. 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 and nine month  periods  ended  February 28, 2003 and
2002:


                                  For the three months     For the nine months
                                   ended February 28,       ended February 28,

                                    2003       2002         2003       2002
                                    ----       ----         ----       ----
Computerized information
 processing                      $1,611,166  $1,542,295  $4,612,293  $4,549,494
Telephone-based data collection   2,183,931   1,889,577   6,404,642   5,635,923
Technology infrastructure and
  outsourcing                         9,823      90,457      30,426     711,876
Information technology              124,122     752,614   1,186,517   1,768,093
Other                                   --          784         514     140,247
                                ----------- ------------  ---------   --------
                                 $3,929,042  $4,275,727 $12,234,392 $12,805,633
                                 ==========  ========== =========== ===========



<PAGE>

                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

8. 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  February  28, 2003 and 2002,  the Company  received  revenues  from these
customers amounting to approximately $2,874,000,  and $2,647,000,  respectively.
For the nine  months  ended  February  28, 2003 and 2002,  the Company  received
revenues  from these  customers for  approximately  $8,473,000  and  $7,933,000,
respectively. The Company was owed approximately $1,403,000 from these customers
at February 28, 2003.

9. GOING PRIVATE TRANSACTION

     The Company entered into a Merger Agreement dated as of October 28, 2002 by
and among the Company,  Sandata  Acquisition  Corp.  and Bert E.  Brodsky,  Hugh
Freund and Gary Stoller. The Merger Agreement provides for the merger of Sandata
Acquisition Corp. with and into the Company,  with the Company continuing as the
surviving  corporation.  Prior  to the  effective  time of the  merger,  Messrs.
Brodsky,  Freund and Stoller and members of their immediate families have agreed
to contribute  all of the Company's  stock owned by them to Sandata  Acquisition
Corp. and at the effective  time of the merger,  (i) each share of the Company's
common stock, other than stock owned by Messrs.  Brodsky, Freund and Stoller and
members of their  immediate  families  and Sandata  Acquisition  Corp.,  will be
converted  into the right to receive the merger  consideration  of $1.91 in cash
and (ii) each outstanding  share of Sandata  Acquisition Corp. will be converted
into one share of common  stock of the  surviving  corporation.  Pursuant to the
Merger  Agreement,  all  outstanding  options to  purchase  common  stock of the
Company will be cancelled and converted into the right to receive a cash payment
equal to the  product  of the  number of shares  subject  to the  option and the
difference between the merger  consideration of $1.91 and the per share exercise
price of the option.  Under the Merger  Agreement,  options  held by the Messrs.
Brodsky,  Freund and  Stoller and members of their  immediate  families  will be
cancelled  and the holders of those  options will not be entitled to receive any
consideration.  The Board of Directors of the Company, acting upon the unanimous
recommendation  of  a  Special   Committee  of  the  Board,   comprised  of  two
non-management  directors who are not materially  interested in the transaction,
unanimously  approved the merger.  In reaching  its  decision to  recommend  the
merger to the full Board, the Special Committee received a fairness opinion from
the Committee's financial advisor, Brean Murray & Co., Inc.

     Completion  of the  merger is  subject  to  customary  closing  conditions,
including,  among others,  stockholder approval,  that no actions or proceedings
are pending seeking to prevent consummation of the merger and that no injunction
preventing the consummation of the merger is in effect.

     On September 11, 2002, a shareholder  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

<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

duties to the Company and the Company's  public  shareholders 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 a preliminary and permanent  injunction  against
the proposed transaction, and rescission if it is not enjoined. On September 13,
another  shareholder of the Company filed a separate  lawsuit in the same court,
making substantially  identical allegations and seeking substantially  identical
remedies.  These actions were  consolidated by the Delaware Chancery Court in an
order dated October 22, 2002 (Civil Action No. 19886-NC).

     On December 23, 2002 the Company  entered into a nonbinding  Memorandum  of
Understanding  among the Company,  the members of its Board of Directors and the
plaintiffs in these actions.  Pursuant to the  Memorandum,  Sandata  Acquisition
Corp. agreed to increase its offer set forth in the Merger  Agreement,  to $2.21
for each  outstanding  share of the Company common stock.  The  Memorandum  also
provides  for the  parties to the  lawsuits  to use their best  efforts to agree
upon,  execute,  and present to the Court a formal  Stipulation of Settlement in
order to obtain the approval of the Court of the  settlement  and release of the
consolidated actions. The parties agreed that the Stipulation of Settlement will
provide,  among other things,  (i) that Sandata  Acquisition Corp. will increase
its offer  contained  in the Merger  Agreement to $2.21 per share of the Company
common  stock and (ii) for a  complete  release  and  settlement  of all  claims
against the Company,  the members of its Board,  Sandata  Acquisition  Corp. and
their respective predecessors,  successors,  assignees,  parents,  subsidiaries,
counsel,  accountants,   attorneys,   affiliates,  agents  and  representatives,
including  without  limitation,  investment banks or bankers or commercial banks
and any past, present, or future officers, directors, or employees of defendants
and their predecessors,  successors, assignees, parents, subsidiaries,  counsel,
accountants, attorneys, affiliates, agents and representatives, which have been,
or could have been,  asserted relating to Sandata  Acquisition Corp.'s proposal.
The Memorandum  further  provides that the parties to the  consolidated  actions
will petition the Court for final  certification  of a non-opt out class defined
as all  holders  of  Company  common  stock as of August 5,  2002,  through  and
including the closing date of the Merger Agreement.  The settlement contemplated
by the  Memorandum  is  subject to the  execution  of a formal  Stipulation  and
Settlement,  the consummation of the merger transaction with Sandata Acquisition
Corp. for $2.21 per share of Company  common stock,  final approval of the Court
of the settlement,  including certification of a class, and the dismissal of the
consolidated actions by the Court. The Memorandum also provides that, subject to
approval of the Court,  none of the defendants  will object to an application by
plaintiffs'  counsel for attorneys' fees and expenses in an amount not to exceed
$60,000.

     On January 27, 2003, the Company, the members of its Board of Directors and
the  plaintiffs  in the  consolidated  actions  entered  into a  Stipulation  of
Settlement  in  connection  with this  action.  The  Stipulation  of  Settlement
provides generally for the dismissal of the consolidated  actions and release of
any and all  causes of action or claims,  among  other  things,  that any of the
plaintiffs  or  members  of the  class  have  against  any  defendant  or  their
affiliates,   including,  among  others,  any  of  their  associates,  officers,
directors,  attorneys,  investment  bankers,  investment  advisors and valuation
experts,  including Sandata  Acquisition  Corp. and Brean Murray,  among others,
arising out of any of the proposals to take the Company private, the merger, the
Merger  Agreement,  the  transactions   contemplated  thereby,  the  negotiation

<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

thereof, and any public filings or statements by the defendants contained in any
of the above. In consideration for the dismissal of the consolidated  action and
release of all causes of action and claims,  Sandata Acquisition Corp. agreed to
increase the merger  consideration  from $1.91 to $2.21 per share of the Company
common  stock.   The  Stipulation  of  Settlement   further  provides  that  the
consolidated  action will be  maintained  as a class  action by the  plaintiffs,
without  the right of any of the  members of the class to opt out.  The  parties
agreed to file the Stipulation of Settlement with the Delaware Chancery Court as
soon as  practicable.  The  Company  agreed to mail notice to the members of the
class who were  stockholders of record at any time from August 5, 2002,  through
the date of the merger.  The defendants to the  consolidated  action also agreed
not to oppose an application  by the  plaintiffs to the Delaware  Chancery Court
for attorneys' fees and expenses not to exceed $60,000. If the Delaware Chancery
Court approves the settlement, the parties agreed to move the Court for an Order
and Final  Judgment (i) approving the settlement as fair,  reasonable,  adequate
and in the  best  interests  of the  class  and  directing  consummation  of the
settlement in accordance  with its terms,  (ii) formally  certifying  the class,
(iii)  dismissing  the  consolidated   action  with  prejudice  as  against  the
plaintiffs and all members of the class, (iv) permanently  barring and enjoining
the members of the class from  instituting any action or other proceeding in any
court in any  jurisdiction  that in any way relates to the settled  claims,  (v)
authorizing plaintiffs' counsel to execute a release of settled claims on behalf
of the members of the class,  (vi)  awarding  plaintiffs'  counsel such fees and
expenses as the Court deems  appropriate and (vii) reserving  jurisdiction  over
all matters relating to the  administration  and consummation of the settlement.
The  Stipulation of Settlement is subject to final approval of the settlement by
the Delaware Chancery Court of which there can be no assurances.  The parties to
the lawsuit  anticipate  that a hearing  with the Delaware  Chancery  Court will
occur as soon as practicable after consummation of the merger  transaction.  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.

     Pursuant  to the  Stipulation  of  Settlement,  on January  27,  2003,  the
Company,  Sandata  Acquisition  Corp.  and Messrs.  Brodsky,  Freund and Stoller
executed a First  Amendment to the Agreement  and Plan of Merger.  The Amendment
increased the merger  consideration to be paid to the unaffiliated  stockholders
of Sandata in the merger from $1.91 to $2.21 per share of Sandata common stock.





<PAGE>
                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES

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

Results of Operations

     Revenues  were  $4,044,217  and  $12,581,720  for the three and nine months
ended February 28, 2003 as compared to $4,405,968 and  $13,281,522 for the three
and nine  months  ended  February  28,  2002,  a decrease  of $361,751 or 8% and
$699,802 or 5% respectively. The decreases are primarily due to the decreases in
service fee revenue and other income.

     Service fee revenue for the three and nine months  ended  February 28, 2003
was $3,929,042 and $12,234,392 as compared to $4,275,727 and $12,805,633 for the
three and nine months ended  February 28, 2002 a decrease of $346,685 or 8%, and
$571,241 or 4% respectively. The decrease in service fee revenue is attributable
to the following:  A decrease in technology  infrastructure  and  outsourcing of
$80,634 and $681,450,  due to a continuing  decrease of services  provided to an
affiliated party, National Medical Health Card. Decreased information technology
$628,492 and  $581,576,  due to the  continued  decline in hardware and software
sales;  effective  February  1, 2003,  the  Company is no longer  offering  this
product  line to its  customers.  These  decreases  are offset by  increases  in
telephone-based data collection of $294,372 and $768,719, due to the addition of
new customers,  and increased computerized information processing of $49,754 and
$62,801, for the three and nine months ended February 28, 2003, respectively.

     Other  income for the three and nine  months  ended  February  28, 2003 was
$75,376 and  $222,439 as compared to $80,444 and $347,653 for the three and nine
months  ended  February 28, 2002.  The decrease is primarily  attributable  to a
decrease in income recognized on sales/leaseback  transactions  totaling $53,588
for the three months and $144,731  for the nine  months,  and income  recognized
from the sale of certain  customer  accounts from SandataNet to a non-affiliated
company in the amount of $79,000 in the prior year  period,  offset by increases
primarily  from monies  received  from  Dataline  (see Note 6b to the  condensed
consolidated financial  statements),  $32,036 and $94,225 for the three and nine
months.

Expenses Related to Services

     Operating  expenses were  $2,098,358  and $6,980,706 for the three and nine
months ended  February 28, 2003 as compared to $2,346,442 and $7,388,560 for the
three and nine months  ended  February  28,  2002,  a decrease  of $248,084  and
$407,854,  respectively.  Decreased  equipment rentals of $700,000 and decreased
payroll costs of $669,000,  as discussed  further below, are the primary reasons
for the reduction in operating  expenses.  This decrease is partially  offset by
the  reduction  of  approximately  $1.1 million in  capitalized  software due to
increased systems maintenance rather than development programming.

     Selling, general and administrative expenses were $1,213,664 and $3,742,666
for the three and nine months ended February 28, 2003, as compared to $1,118,258
and  $4,097,567  for the three and nine  months  ended  February  28,  2002,  an
increase of $95,406 and a decrease of $354,901,  respectively. The decrease is
primarily due to a decrease in payroll,  as discussed  further below,  partially
offset by  approximately  $334,000  of  expenses  related to the  Company  going
private (see Note 9).
<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
      ITEM 2 - MANAGEMENTS'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     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 had 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
generated   approximately   $1.7  million   annually  in  reduced  expenses  and
capitalized  software.  In addition,  the Company paid approximately  $47,000 in
severance payments for approximately 30 terminated employees.

     Depreciation and amortization  expense were $524,837 and $1,534,717 for the
three and nine months  ended  February  28,  2003 as  compared  to $460,721  and
$1,344,458  for the three and nine months ended February 28, 2002 an increase of
$64,116 and $190,259,  respectively.  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,
as well as additional  fixed assets being amortized during the nine months ended
February 28, 2003.

     Interest  expense was $26,486  and  $104,337  for the three and nine months
ended  February  28, 2003 as compared to $36,119 and  $185,866 for the three and
nine months  ended  February  28,  2002.  The decrease was a result of decreased
borrowings on the Company's Credit  Agreement,  and the decrease in the rate due
to market conditions.

Income Tax Expenses

     Income tax expense for the three and nine months  ended  February  28, 2003
was $68,150  and  $104,500,  respectively,  as compared to income tax expense of
$232,286 and  $143,848  for the three and nine months  ended  February 28, 2002,
respectively.  The  decrease in income tax expense for the three and nine months
ended  February 28, 2003 as compared to the three and nine months ended February
28,  2002 is  primarily  due to the  decrease in pretax  income of $264,000  and
$46,000,  offset by a decrease in the net  deferred  tax assets and  increase in
deferred tax liability . The deferred tax asset  primarily  decreased due to the
decrease in the net operating loss utilized in the deferred tax calculation. The
Company had taxable  income that  utilized a portion of its net  operating  loss
during the nine months ended February 28, 2003.

Liquidity and Capital Resources

     The  Company  has a working  capital  deficit as of  February  28,  2003 of
$1,521,830,  as compared to working  capital of $1,890,988 at May 31, 2002.  The
primary  factor  is a  result  of net  repayments  of the  Credit  Agreement  of
$1,500,000 and the Credit  Agreement  becoming a short-term  liability  versus a
long-term liability, of which $3,000,000 is due in June 2003.

     For the three and nine months ended  February 28, 2003,  the Company  spent
approximately  $363,000  and  $1,034,000  in  fixed  asset  additions,  of which
$210,000 and $667,000  respectively,  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.
<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
       ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     On July 14,  1998,  the  Chairman,  certain  officers,  directors  (Bert E.
Brodsky,  Hugh Freund and Gary Stoller) 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,  Carol Freund,  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, to reflect fair market value, and the shares and Note of
the spouse of the officer,  Carol Freund,  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 February 28,  2003,  the  outstanding  balance on such
notes, including principal and accrued but unpaid interest, was $1,529,185.  Had
the Company not extended the due dates of the Promissory Notes,  working capital
would have been  augmented by $1.6 million in July 2001.  Also the interest rate
reduction in the Notes will decrease accrued  interest by approximately  $30,000
per annum based on the current balance of such Notes at May 31, 2001.

     On April 18, 1997, Sandsport entered into a revolving credit agreement (the
"Credit  Agreement") with HSBC Bank USA (the "Bank"),  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).



<PAGE>
                  SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
       ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     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.  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.  Management  does not  anticipate  any  problems in renewing the line of
credit and/or  negotiating  alternative debt financing.  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 February 28, 2003,  the  outstanding
balance on the Credit Agreement with the Bank was $3,000,000.

     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.





<PAGE>

                   SANDATA TECHNOLIGIES, INC. AND SUBSIDIARIES

                         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 Bert Brodsky,  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.





<PAGE>
                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES


PART II - OTHER INFORMATION


Item 1  - LEGAL PROCEEDINGS

     Reference is made to Notes 6 and 9 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 January 3, 2003  reporting
                    under Item 5 the erroneous  filing of an amendment to a 10-Q
                    filed by National  Medical  Health Card  Systems,  Inc.,  an
                    affiliate of the Company.


<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: April 14, 2003                              By: /s/ Bert E. Brodsky
                                                      -------------------------
                                                        Bert E. Brodsky
                                                        Chairman of the Board,
                                                        Chief Executive Officer,
                                                        Chief Financial Officer


<PAGE>
                                                                Exhibit 99.1

                                  CERTIFICATION

I, Bert E. Brodsky, Chief Executive Officer and Chief Financial Officer, certify
that:

     1. I have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Sandata
Technologies, Inc. and its Subsidiaries;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state 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; and

     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
Sandata  Technologies,  Inc.  and its  Subsidiaries  as of, and for, the periods
presented in this quarterly report.

     4. As both  Chief  Executive  Officer  and Chief  Financial  Officer,  I am
responsible for establishing and maintaining  disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant,  and I
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 me by others  within those  entities,  particularly  during the
period in which this quarterly 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  my   conclusions   about  the
effectiveness  of the disclosure  controls and procedures based on my evaluation
as of the Evaluation Date;

     5. As both  Chief  Executive  Officer  and Chief  Financial  Officer I have
disclosed,  based on my most recent evaluation, to the registrant's auditors and
the audit  committee of registrant's  board of directors (or persons  performing
the equivalent function):

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

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

     6. As both Chief  Executive  Officer and Chief  Financial  Officer,  I have
indicated in this quarterly report whether or not there were significant changes
in  internal  controls  subsequent  to the  date of my most  recent  evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

Date: April 14, 2003                        /s/Bert E. Brodsky
                                            ------------------------------
                                            Bert E. Brodsky, Chief Executive
                                            Officer and Chief Financial Officer
<PAGE>

                                                                Exhibit 99.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Sandata Technologies,  Inc. (the
"Company")  on Form 10-QSB for the period ended  February 28, 2003 as filed with
the Securities and Exchange  Commission on the date hereof (the "Report"),  Bert
E. Brodsky,  Chief Executive Officer and Chief Financial Officer of the Company,
certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company.

/s/Bert E. Brodsky
-------------------------------------------
Bert E. Brodsky
Chief  Executive  Officer and Chief Financial Officer
April 14, 2003