UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                  FORM 10-KSB/A
                                 AMENDMENT NO. 3

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

                     For the fiscal year ended May 31, 2002

[  ]  Transition report under 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

         Securities registered under Section 12(b) of the Exchange Act:
                                      None


         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value
                                (Title of class)


     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
    -----    ------




<PAGE>


     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         The issuer's revenues for year ended May 31, 2002 were $17,852,710.

     The aggregate market value of the voting and non-voting  common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of August
16, 2002 was $1,536,918.

                   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 REGISTRANTS

     The number of shares  outstanding of each of the issuer's classes of common
equity, as of March 20, 2003 was 2,481,806.

         Transitional Small Business Disclosure Format  (check one):

Yes                 No     X
    ------------       ------------

                       DOCUMENTS INCORPORATED BY REFERENCE

         None.


<PAGE>



                           AMENDMENT TO ANNUAL REPORT
                                 ON FORM 10-KSB
                         FOR THE YEAR ENDED MAY 31, 2002



     The  Annual  Report on Form  10-KSB for  Sandata  Technologies,  Inc.  (the
"Company") for the year ended May 31, 2002 is hereby amended and restated to the
extent, and only to the extent, of the following amendments:


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The Company provides its computerized  information processing services to a
variety of users, although principally to the health care industry.  Many of the
Company's  software  programs are  adaptable  to customers in related  fields of
enterprise.  Thus,  the  components  of the SHARP system for the Home  Attendant
Program - Medicaid reimbursable billing, management reports, payroll processing,
tax reports - are being  developed for  utilization in other  settings,  such as
nursing homes, skilled nursing facilities, and rehabilitation facilities.

     The  Company's  telephone-based  data  collection  services  are  currently
principally used to monitor  off-site  workers in the home healthcare  industry.
The SANTRAX  proprietary  software could be used to monitor  off-site workers in
other industries,  and the Company is currently  exploring  opportunities in the
temporary staffing, security guard and building maintenance industries.

     Technology  infrastructure and outsourcing  services are currently utilized
in-house and within  affiliate  companies.  The Company intends to take the core
competencies  that it has  developed in  supporting  its service  offerings  and
resell them into the business  community in the New York metropolitan  area. The
Company cannot assure its ability to resell such services.

     The Company believes it can leverage its in-house capabilities to develop a
new IT services  business,  and intends  that such IT services  will be marketed
primarily to businesses in the New York metropolitan  area, where it believes it
can support  professional  services with on-site  technical help. In the future,
the Company believes it will have the capability of rolling out such IT services
to a wider  geographical  audience.  The  Company  cannot  assure its ability to
develop a new IT service  business and cannot predict that such services will be
successful.

             Analysis of Operations

             Fiscal Years ended May 31, 2002 compared with May 31, 2001

     Service  fee  revenues  for fiscal  2002 were  $17,173,922  as  compared to
$17,769,069  for the  previous  fiscal  year,  a decrease of $595,147 or 3%. The
decrease is primarily  attributable  to a decrease in service fee revenues  from
Health Card of  approximately  $1,300,000 due to a reduction of programming  and
technical services provided by the company. Previously, Health Card did not have
its own  programming  and  technical  services and  therefore  outsourced  these
services to the company. However, as Health Card has grown, it has developed its
own  programming  and  technical  services  and  therefore  the  demand  for the
Company's  outsourcing  services has  decreased.  In  addition,  the decrease is
partially  attributable  to the sale of a customer  list to a third party,  as a
result of which the Company is no longer able to  recognize  the  revenues  from
such  customers.  The decrease in revenues is  partially  offset by increases in
revenue from SandataNet  Consulting of  approximately  $1,266,000 due to several
consulting contracts with customers.

     Other  income for the year ended May 31,  2002 was  $514,999 as compared to
$368,502  for the year ended May 31,  2001,  an increase of $146,497 or 40%. The
increase is attributable  to $115,000 in payments  received in connection with a
litigation  settlement  and the sale of a customer  list for  $79,000 to a third
party. This increase is partially offset by a decrease in revenue recognition on
sales/leasebacks  transactions  as some of the leases  have  expired  and no new
sales/leasebacks were entered into during fiscal 2002.

              Expenses Related to Services

     Operating  expenses  were  $9,877,651  for the year ended May 31, 2002,  as
compared to $10,372,524  for the year ended May 31, 2001, a decrease of $494,873
or 5%. Decreased payroll expenses (approximately $875,000) due to a reduction in
workforce,  and decreased  equipment rental expenses  (approximately  $373,000),
partially offset by increases in purchases for resale  (approximately  $945,000)
were the primary factors for the decrease in operating expenses.

     Selling,  general and  administrative  expenses  for the year ended May 31,
2002 were $5,502,264  compared to $5,004,255 for the year ended May 31, 2001, an
increase of $498,099 or 9%. The  increases  were  primarily  due to increases in
consulting and legal expenses, and additional insurance premiums.

     Depreciation and  amortization  expenses were $1,839,959 for the year ended
May 31,  2002,  as compared to  $2,748,411  for the year ended May 31,  2001,  a
decrease of $908,452 or 33%.  The  decrease was  primarily  attributable  to the
write off of impaired  software in 2001,  as  described  below under the heading
"Impairment of Developed Software."

     Interest  expense for the year ended May 31, 2002 was  $241,729 as compared
to $189,240 for the year ended May 31, 2001,  an increase of $52,489 or 28%. The
increase  was a result  of  higher  overall  average  daily  balances  under the
Company's  revolving  credit  agreement.  The higher overall daily balances were
primarily  due to increased  borrowings  to fund working  capital  requirements,
specifically  to fund the  Company's  increased  accounts  payable  and  accrued
expenses.

             Impairment of Developed Software

     During the fourth  quarter of the year ended May 31, 2001, the Company shut
down  certain  operating  systems and  hardware  configurations,  which had been
capitalized  in  previous  years.  The  Company  had  determined  that the older
system's  architecture  had become  obsolete and too costly to maintain,  so the
Company  coordinated  placing  several new systems in  production  after running
parallel  with  pre-existing  systems  resulting in the  retirement of the older
systems during the fourth quarter.  The Company further determined that there is
no net realizable value remaining since no future revenue would be recognized in
the retired systems because the architecture was completely  replaced by the new
systems.  As such the Company  recognized  an impairment  loss of  approximately
$3,300,000 for the year ended May 31, 2001.

             Impairment of Goodwill

     On April 27, 2001,  the Company  acquired  certain assets of North American
Internet Services,  Inc. ("NAIS"),  a provider of broadband  services,  Internet
access, and co-location  services for approximately  $201,000.  NAIS had entered
bankruptcy  proceedings  and,  under the auspices of the Bankruptcy  Court,  the
Company  was  permitted  to "credit  bid"  approximately  $124,000  of  expenses
(including salaries) it had incurred on behalf of NAIS as the purchase price for
the assets,  and was given 180 days to exploit the assets it had  acquired.  The
Company  incurred  approximately  $77,000  in  additional  costs  related to the
acquisition  of these  assets.  The tangible  assets were  determined to have no
significant  fair  value.  Therefore,   all  the  expenditures  related  to  the
acquisition  were  allocated to goodwill.  The Company has the option to abandon
the  exploitation  of these  assets  within the 180 day  period.  If the Company
continues to use the NAIS assets, 10% of the profits (defined as earnings before
interest expense and taxes) generated by such use must be paid to the bankruptcy
estate for the first three years.

     At May 31, 2001, the Company performed an evaluation of the  recoverability
of the assets acquired from NAIS and concluded that a significant  impairment of
these assets had occurred  based on actual results during the year ended May 31,
2001 and on  estimated  future  cash flows not being  sufficient  to recover the
carrying  value of the  goodwill.  As such,  the carrying  value of goodwill was
written  down to its  estimated  fair  value,  which  was  determined  based  on
discounted  estimated cash flows. The Company  recognized an impairment loss and
write down of the goodwill of approximately  $201,000.  Considerable  management
judgment is necessary to estimate fair value; accordingly,  actual results could
vary significantly from such estimates.

             Income Tax Expenses

     Income tax expense  (benefit) was $249,067 and $(1,293,401) for fiscal 2002
and 2001,  respectively.  The  increase  in income tax  expense is due to higher
pretax  income.  The effective tax rates for fiscal 2002 and 2001 were 63.7% and
(37.0%), respectively.

             IDA/SBA Financing

     In November, 1996 the Company entered into an agreement with the Affiliate,
the Nassau County Industrial  Development  Agency ("NCIDA"),  and Marine Midland
Bank (the  "Bondholder")  (the  "Agreement").  Pursuant  to the  Agreement,  the
Affiliate (i) assumed all of the Company's rights and obligations  under a Lease
Agreement that was  previously  between the Company and the NCIDA (the "Lease"),
and (ii) entered into a Sublease Agreement with the Company for the premises the
Company  occupies.  Pursuant to the  Agreement,  the Affiliate also obtained the
right to become the owner of the premises upon  expiration  of the Lease.  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;
however,  the  Affiliate  has  indemnified  the Company  with respect to certain
obligations relative to the Lease and the Agreement.  In addition, the Agreement
provides that the Company is bound by all the terms and conditions of the Lease,
and that a security interest is granted to the Affiliate in all of the Company's
fixtures constituting part of the premises.

     The  foregoing  transactions  and  agreements  were the last in a series of
transactions involving the Company, the Affiliate, NCIDA, the Bondholder and the
U.S. Small Business  Administration.  Chief among these was the borrowing by the
Affiliate in June of 1994 of $3,350,000  in the form of  Industrial  Development
Revenue  Bonds  (the  "Bonds")  to  finance  the  acquisition  of the  Facility.
Simultaneously  with the issuance of the Bonds:  (1) NCIDA obtained title to the
Facility  and  leased  it to the  Affiliate,  (2) the  Affiliate  subleased  the
Facility to the Company, (3) the Bondholder bought the Bonds, (4) the Bondholder
received a mortgage and security  interest in the Facility to secure the payment
of the Bonds. 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 May 31,  2002 was  $1,444,445.  During the years
ended  May 31,  2002  and  2001,  the  Company  paid  rent to the  Affiliate  of
approximately $408,000 and $615,000, respectively.

     On August 11, 1995, the Company entered into a $750,000 loan agreement with
the Long Island Development Corporation ("LIDC"),  under a guarantee by the U.S.
Small  Business  Administration  ("SBA")  (the  "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 entire
proceeds  were used to repay a portion of the Bonds.  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 May 31, 2002 was $599,024.

             Liquidity and Capital Resources

     The Company's  working  capital  decreased as of May 31, 2002 to $1,890,988
from $1,956,661 as of May 31, 2001. The primary factors that  contributed to the
decrease  were  increases  in  accounts  payable,  accrued  expenses  and  notes
receivable-officer,  and decreases in receivables  from  affiliates and deferred
income, offset by an increase in cash and cash equivalents.

     The Company has spent  approximately  $2,620,049 for fixed asset additions,
including  software  capitalization  costs in connection with revenue growth and
new  product  development.  The  Company  expects a  reduction  in the levels of
capital expenditures in the future.


     On July 14, 1998 the  Chairman,  certain  officers and  directors  (Bert E.
Brodsky, Hugh Freund and Gary Stoller), and a former director, Carol Freund (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 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.  The Company has received  interest payments on
such notes in the amount of $131,994 and $162,110  during the fiscal years ended
May 31, 2002 and 2001. As of May 31, 2002 and 2001, the  outstanding  balance on
such notes,  including principal and accrued but unpaid interest, was $1,669,640
and $1,722,547,  respectively  (see item 7 "Financial  Statements" note 12d). 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% to
reflect fair market value, and the shares and note of the spouse of the officer,
Carol Freund, were both transferred to the officer. 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 the Bank which allowed  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 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 June 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  subsequently   modified  to  include  all
indebtedness  incurred by the Company under the amended Credit  Agreement  dated
August 24, 2001 (see below).

     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.  At May 31, 2001
the Group  failed to meet  these net worth and  financial  ratios,  and the Bank
granted the Group a waiver.  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 April 11,
2002 the Bank  approved  the  extension  of the  termination  date of the Credit
Agreement  to June 14,  2003.  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 May 31, 2002, the outstanding  balance on the Credit  Agreement with the Bank
was $4,500,000 and the Company was in compliance with the covenants.

     The  Company is a party to various  sale/leaseback  transactions  involving
certain fixed assets,  principally  computer  hardware,  software and equipment.
Gains on these transactions have been deferred and are being recognized over the
lives of the related leases, each of which is 36 months.  Approximately $297,000
and $344,000 of the deferred gains were recognized in other income for the years
ended May 31, 2002 and 2001,  respectively.  Included  in these  amounts are the
effects of the following sale/leaseback transactions:

     (a) In January 1998, the Company  consummated a  sale/leaseback  of certain
fixed assets which had a net book value of approximately $515,000, were sold for
$700,000.  The resulting gain of approximately $185,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $36,000
of the deferred gain was recognized  for the year ended May 31, 2001,  which was
the last year of the lease. An  unaffiliated  third party purchased the residual
rights in such lease.

     (b) In January 1999, the Company  consummated a  sale/leaseback  of certain
fixed assets which had a net book value of approximately $830,000, were sold for
$1,100,000.  The  resulting  gain of  approximately  $270,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $60,000 and $90,000 of deferred gain was recognized for the years
ended May 31, 2002 and 2001, respectively. An unaffiliated third party purchased
the residual rights in such lease.

     (c) In May 1999, the Company entered into a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $896,000  were  sold for
$1,100,000.  The  resulting  gain of  approximately  $204,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $68,000 of  deferred  gain was  recognized  for each of the years
ended May 31, 2002 and 2001. An unaffiliated  third party purchased the residual
rights in such lease.

     (d) In October 1999, the Company  consummated a  sale/leaseback  of certain
fixed assets which had a net book value of approximately $895,000, were sold for
$1,115,000.  The  resulting  gain of  approximately  $220,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $73,000 of the deferred gain was recognized for each of the years
ended May 31, 2002 and 2001. An unaffiliated  third party purchased the residual
rights in such lease.

     (e) In January 2000, the Company  consummated a  sale/leaseback  of certain
fixed assets which had a net book value of approximately $442,000, were sold for
$561,000.  The resulting gain of approximately $119,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $40,000
of  deferred  gain was  recognized  for each of the years ended May 31, 2002 and
2001. An unaffiliated third party purchased the residual rights in such lease.

     (f) In February 2000, the Company entered into a sale/leaseback  of certain
fixed assets which had a net book value of approximately $237,000, were sold for
$277,000.  The resulting gain of approximately  $40,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $14,000
of  deferred  gain was  recognized  for each of the years ended May 31, 2002 and
2001. An unaffiliated third party purchased the residual rights in such lease.

     (g) In November 2000, the Company entered into a sale/leaseback  of certain
fixed assets which had a net book value of approximately $421,500, were sold for
$548,300.  The resulting gain of approximately $126,800 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $42,000
and $21,000 of the deferred gain was recognized for the years ended May 31, 2002
and 2001,  respectively.  An  unaffiliated  third party  purchased  the residual
rights in such lease.

     Until  January of 2002,  the Company was leasing  equipment  and  providing
services to Health Card  pursuant to a verbal  agreement,  and was receiving its
allocable  share of  administrative  and  support  services  that were shared by
Health  Card  and  the  Company  at a  cost  to  Health  Card  of  approximately
$81,000/month.  As of January,  2002, the Company ceased  rendering  services to
Health Card.  Health Card  continues to pay its allocable  share of expenses for
shared services, which amounts to approximately $45,000 per month.

     The Company believes the results of its present  operations,  together with
the available  Credit Line,  should be adequate to fund present and  foreseeable
working capital requirements.


     The  allowance  for  doubtful  accounts for the year ended May 31, 2002 was
$203,000, as compared to $347,000 for the year ended May 31, 2001, a decrease of
$144,000  or 70%.  During  fiscal  year  2002 the  Company's  aging of  accounts
receivable  improved  significantly.  As a result,  the  allowance  for doubtful
accounts  was  decreased  to reflect  the  improvement  of the aged  outstanding
receivables.


Prospects for the Future, Trends and Other Events

     There is added competitive  pressure and uncertainty in the Company's SHARP
business  because the City of New York requires all contracts with City agencies
to undergo competitive bidding.  Furthermore,  the success of its SHARP business
rests  with  a  key  officer  of  the  Company,   who  has  established   strong
relationships  with the Company's SHARP  customers over the years.  Although the
Company has been awarded  contracts based on its bids, there can be no assurance
that its bids will be accepted in the future.

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  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  part of the  Acquiring  Group) would receive
$1.50 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 of the Company other than the shares owned by Mr. Brodsky and
the other  shareholders  that shall  comprise part of 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.

     Except as  discussed  above,  the Company has no  knowledge of any specific
prospects,  industry or other trends,  events or uncertainties that might have a
material impact on the Company's net sales or revenues or income from continuing
operations,  or that would  increase the value of the shares in the long-term or
the short-term.

ITEM 7       FINANCIAL STATEMENTS

             (BEGINS ON PAGE F-1 BELOW)



<PAGE>



                           SANDATA TECHNOLOGIES, INC.

                     FINANCIAL STATEMENTS COMPRISING ITEM 7
                            OF REPORT ON FORM 10-KSB
                      TO SECURITIES AND EXCHANGE COMMISSION
                             YEAR ENDED MAY 31, 2002




<PAGE>



                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                    F-2


Financial Statements

  Consolidated Balance Sheets as of May 31, 2002 and 2001                                                   F-3

  Consolidated Statements of Operations for the years ended
   May 31, 2002 and 2001                                                                                    F-4

  Consolidated Statement of Shareholders' Equity for the years
   ended May 31, 2002 and 2001                                                                              F-5

  Consolidated Statements of Cash Flows for the years ended
   May 31, 2002 and 2001                                                                                    F-6


Notes to Consolidated Financial Statements                                                              F-7 - F-29

</TABLE>



<PAGE>

                                       F-2




REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
of Sandata Technologies, Inc. and Subsidiaries

     We have audited the  accompanying  consolidated  balance  sheets of Sandata
Technologies,  Inc. and Subsidiaries (formerly Sandata, Inc.) as of May 31, 2002
and 2001, and the related consolidated  statements of operations,  shareholders'
equity and cash flows for the years then  ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
Sandata Technologies, Inc. and Subsidiaries as of May 31, 2002 and 2001, and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

     As  more  fully  described  in  the  Notes  to the  consolidated  financial
statements,  the Company had certain transactions with companies affiliated with
the Company's Officers and Chairman.

/s/ Marcum & Kliegman LLP

Woodbury, New York
July 26, 2002, except for Notes 12c and 12d, which are dated August 21, 2002 and
August 22, 2002, respectively


<PAGE>


                    SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

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

ASSETS

                                                                                             May 31,
                                                                                    2002                2001
                                                                                    ----                ----
CURRENT ASSETS
  Cash and cash equivalents                                                      $  1,630,617       $    475,578
  Accounts receivable, net of allowance for doubtful accounts
   of $202,746 and $346,903 at 2002 and 2001, respectively                          2,182,963          2,160,675
  Receivables from affiliates                                                         280,297            802,787
  Notes receivable - officer                                                          100,000                 --
  Inventories                                                                          45,342             35,993
  Prepaid expenses and other current assets                                           345,349            416,056
  Deferred income taxes                                                               207,595            274,470
                                                                                 ------------       ------------

         Total Current Assets                                                       4,792,163          4,165,559

FIXED ASSETS, NET                                                                   6,820,596          6,036,203
-----------------

DEFERRED INCOME TAXES                                                                 171,579            335,773
---------------------

OTHER ASSETS
  Notes receivable                                                                     25,190             29,669
  Cash surrender value of officer's life insurance, security
   deposits and other assets                                                        1,105,502            866,774
                                                                                -------------      -------------

         Total Assets                                                             $12,915,030        $11,433,978
                                                                                  ===========        ===========

                                       LIABILITIES AND SHAREHOLDERS' EQUITY



CURRENT LIABILITIES
  Accounts payable and accrued expenses                                           $  2,781,550       $  1,881,269
  Deferred/unearned revenue - maintenance contracts                                     16,367             31,069
  Deferred income - sale/leasebacks                                                    103,258            296,560
                                                                                 -------------      -------------


         Total Current Liabilities                                                   2,901,175          2,208,898

LONG-TERM DEBT                                                                       4,500,000          3,850,000
--------------

DEFERRED INCOME                                                                         21,142            124,401
---------------                                                                 --------------      -------------

         Total Liabilities                                                           7,422,317          6,183,299
                                                                                  ------------       ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
  Common stock, $.001 par value, 6,000,000 shares
   authorized; 2,481,808 and 2,506,475 shares issued and
   outstanding in 2002 and 2001, respectively                                            2,482              2,506
  Additional paid in capital                                                         5,765,766          5,803,704
  Retained earnings                                                                  1,193,755          1,051,721
  Notes receivable - officers                                                       (1,469,290)        (1,607,252)
                                                                                   -----------        -----------

         Total Shareholders' Equity                                                  5,492,713          5,250,679
                                                                                  ------------       ------------

         Total Liabilities and Shareholders'
           Equity                                                                  $12,915,030        $11,433,978
                                                                                   ===========        ===========
</TABLE>
<PAGE>



                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                               Years ended May 31,
<TABLE>
<S>                                                                              <C>    <C>    <C>    <C>    <C>    <C>

                                                                                       2002                2001
                                                                                       ----                ----

REVENUES
  Service fees                                                                     $17,173,922        $17,769,069
  Other income                                                                         514,999            368,502
  Interest income                                                                      163,789            185,311
                                                                                 -------------      -------------

       TOTAL REVENUES                                                               17,852,710         18,322,882
                                                                                   -----------        -----------

COSTS AND EXPENSES
  Operating                                                                          9,877,651         10,372,524
  Selling, general and administrative                                                5,502,264          5,004,255
  Depreciation and amortization                                                      1,839,965          2,748,411
  Interest expense                                                                     241,729            189,240
  Impairment of developed software                                                          --          3,298,872
  Impairment of goodwill                                                                                  201,128
                                                                                  ------------       ------------
                                                                                            --

         TOTAL COSTS AND EXPENSES                                                   17,461,609         21,814,430
                                                                                   -----------        -----------

         Earnings (loss) before income taxes                                           391,101         (3,491,548)

Income tax expense (benefit)                                                           249,067         (1,293,401)
----------------------------                                                      ------------        -----------

         NET EARNINGS (LOSS)                                                      $    142,034       $ (2,198,147)
                                                                                  ============       ============

PER SHARE INFORMATION

         BASIC AND DILUTED EARNINGS (LOSS) PER
          SHARE                                                                  $         .06    $          (.88)
                                                                                 =============    ===============

       WEIGHTED-AVERAGE NUMBER OF
        SHARES OUTSTANDING                                                           2,494,175          2,506,475
                                                                                     =========          =========


</TABLE>
<PAGE>


                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                        Years ended May 31, 2002 and 2001


<TABLE>
<S>                                                                                 <C>           <C>     <C>      <C>    <C>
                                                                Additional                            Notes               Total
                                                                 Paid-In          Retained           Receivable        Shareholders'
                                        Common Stock             Capital          Earnings           Officers             Equity
                                        ------------             -------          --------           --------             ------
                                   Shares            Amount
                                   ------            ------
Balance at
June 1, 2000                       2,506,475        $2,506      $5,803,704      $ 3,249,868         $(1,607,252)        $ 7,448,826

Net Loss                                  --            --              --       (2,198,147)                 --          (2,198,147)
                                 -----------   -----------      ----------      -----------        -------------       -------------

Balance at
 May 31, 2001                      2,506,475         2,506       5,803,704        1,051,721          (1,607,252)          5,250,679

Reclassification of notes
receivable officer (re-paid
subsequent to year-end-Note 12d)
                                          --            --              --               --             100,000             100,000

Effect of Stock
 Surrender                           (24,667)          (24)        (37,938)              --              37,962                  --

Net Earnings                              --            --              --          142,034                  --             142,034
                                   ---------        -------       --------      -----------          ----------         -----------
Balance at
May 31, 2002                       2,481,808        $2,482      $5,765,766      $ 1,193,755         $(1,469,290)        $ 5,492,713
                                   =========        ======      ==========      ===========         ===========         ===========


</TABLE>


<PAGE>


                   SANDATA TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               Years ended May 31,
<TABLE>
<S>                                                                             <C>    <C>    <C>    <C>    <C>    <C>


                                                                                        2002                2001
                                                                                        ----                ----
Cash flows from operating activities
 Net earnings (loss)                                                                 $   142,034         $(2,198,147)
  Adjustments to reconcile net earnings (loss) to net cash
   provided by operating activities:
    Depreciation and amortization                                                      1,839,965           2,748,411
    (Gain) loss on disposal of fixed assets                                               (4,309)             75,111
    Change in allowance for doubtful accounts                                           (144,157)           (100,879)
    Recognition of deferred income                                                      (296,561)           (343,820)
    Recognition of deferred revenue                                                      (36,121)           (116,702)
    Impairment of developed software                                                          --           3,298,872
    Impairment of goodwill                                                                    --             201,128
    Deferred tax provision                                                               231,069          (1,312,401)
  (Increase) decrease in operating assets
     Accounts receivable                                                                 121,869             249,105
     Receivables from affiliates                                                         522,490            (397,055)
     Inventories                                                                          (9,352)            (18,828)
     Prepaid expenses and other current assets                                            70,708              (2,937)
     Other assets                                                                       (234,247)            (24,827)
  (Decrease) Increase in operating liabilities
     Accounts payable and accrued expenses                                               900,282            (698,874)
     Deferred/unearned revenue - maintenance contracts                                    21,418             108,923
     Deferred income - sales/leasbacks                                                        --             126,850
                                                                                     -----------       -------------


         Net cash provided by operating activities                                     3,125,088           1,593,930
                                                                                     -----------         -----------

Cash flows from investing activities:
  Purchases of fixed assets                                                           (2,620,049)         (3,795,285)
  Proceeds from sale/leaseback transactions                                                   --             548,343
  Acquisition of intangible asset                                                             --            (201,128)
                                                                                     -----------        ------------

         Net cash used in investing activities                                        (2,620,049)         (3,448,070)
                                                                                     -----------         -----------

Cash flows from financing activities
  Principal payments on note payable                                                    (500,000)           (500,000)
  Proceeds from note payable                                                             500,000                  --
  Proceeds from line of credit                                                         3,800,000           2,200,000
  Principal payments on line of credit                                                (3,150,000)           (600,000)
                                                                                     -----------         -----------

         Net cash provided by financing
           activities                                                                    650,000           1,100,000
                                                                                    ------------         -----------

         INCREASE (Decrease) in cash and cash                                          1,155,039            (754,140)
          equivalents

Cash and cash equivalents - beginning                                                    475,578           1,229,718
-------------------------                                                           ------------          ----------

Cash and cash equivalents - ending                                                   $ 1,630,617          $  475,578
-------------------------                                                            ===========          ==========

</TABLE>
<PAGE>

NOTE 1 - Summary of Significant Accounting Policies

       Nature of Business and Economic Dependency

     Sandata Technologies,  Inc. and Subsidiaries (the "Company", formerly known
as  Sandata,  Inc.  )  are  primarily  engaged  in  the  business  of  providing
computerized  data  processing  services  and custom  software  and  programming
services  using  Company-developed  and  licensed  software  principally  to the
healthcare industry. The Company primarily operates in the New York metropolitan
area.  During  fiscal  years ended May 31, 2002 and 2001,  the Company  received
revenues  from a group of  customers  who are all funded by the Human  Resources
Administration  of the  City of New York  ("HRA"),  amounting  to  approximately
$10,549,000 and $10,608,000,  respectively.  The Company was owed  approximately
$1,259,000  and  $1,160,000  from  these  customers  at May 31,  2002 and  2001,
respectively.

       Principles of Consolidation

     The  consolidated  financial  statements  include  the  accounts of Sandata
Technologies,  Inc. and its wholly owned subsidiaries:  Sandsport Data Services,
Inc.,  Sandata  Home Health  Systems,  Inc.,  Sandata  Spectrum,  Inc.,  SANTRAX
Systems,   Inc.,  SANTRAX  Productivity,   Inc.  and  Pro-Health  Systems,  Inc.
("Pro-Health",  formerly known as Sandata Inteck,  Inc.). SANTRAX  Productivity,
Inc.  and Sandata  Spectrum,  Inc. are inactive  subsidiaries.  All  significant
intercompany accounts and transactions have been eliminated in consolidation.

       Reclassifications

     Certain  accounts  in  the  prior  year  financial   statements  have  been
reclassified  for comparative  purposes to conform with the  presentation in the
current year financial  statements.  These  reclassifications  have no effect on
previously reported earnings/loss.

       Fixed Assets

     Fixed  assets are  recorded  at cost.  Depreciation  and  amortization  are
computed  principally  by  the  straight-line  method  over  the  lesser  of the
estimated useful lives or lease terms of the related assets.

       Impairment of Long-Lived Assets

     The Company  evaluates  its  long-lived  assets,  including  goodwill,  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying   amount  of  such  assets  or  intangibles  may  not  be  recoverable.
Recoverability  of assets to be held and used is measured by a comparison of the
carrying  amount of the asset to future net cash flows  expected to be generated
by the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying  amount of the assets
exceed the fair value of the assets as determined by estimated  discounted  cash
flows. Assets to be disposed of are reported at the lower of the carrying amount
or fair value less costs to sell.

       Income Taxes

     The Company  uses the  liability  method to account for income  taxes.  The
primary  objectives  of  accounting  for income taxes are to (a)  recognize  the
amount of income tax payable for the current year and (b)  recognize  the amount
of deferred tax liability or asset based on  management's  assessment of the tax
consequences  of events  that have been  reflected  in the  Company's  financial
statements or tax returns.  Deferred tax assets and  liabilities  are recognized
for  the  future  tax  consequences  attributable  to  differences  between  the
financial  statement  carrying  amounts of existing  assets and  liabilities and
their  respective tax bases.  Deferred tax assets and  liabilities  are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those  temporary  differences  are  expected to be  recovered  or settled.
Valuation  allowances  are  established  when  necessary to reduce  deferred tax
assets to the amounts expected to be realized.

       Software Costs

     The Company capitalizes  software  development costs from the point in time
where technological feasibility has been established until the computer software
product is  available to be sold.  The annual  amortization  of the  capitalized
amounts  is the  greater  of the ratio of  current  revenue  to total  projected
revenue for a product, or the straight-line  method, and is applied over periods
ranging up to five years. The Company  performs  periodic reviews to ensure that
unamortized program costs remain recoverable from future revenue.

       Research and Development

     Research and development costs are charged to expense as incurred. Research
and development  expenses amounted to approximately  $62,000 and $10,000 in 2002
and 2001, respectively.

       Inventories

     Inventories,  consisting  of computer  hardware  and  peripherals  held for
resale, are stated at the lower of cost or market;  cost is determined using the
specific identification method.

       Net Earnings Per Common Share

     The Company  computes  earnings per share in accordance  with  Statement of
Financial  Accounting  Standards  ("SFAS") No. 128 "Earnings  per Share".  Basic
earnings per share has been computed using the weighted average number of shares
of common stock outstanding.  Diluted earnings per share has been computed using
the basic  weighted  average  shares of common  stock  issued  adjusted  for the
dilutive effect of outstanding stock options.

     For the year ended May 31, 2002 options and warrants to purchase  1,374,419
shares of common stock were outstanding and were not included in the computation
of diluted  earnings  per share  because the  exercise  price of the options and
warrants were greater than the average market price of the common stock. For the
year ended May 31, 2001, outstanding stock options, warrants and other potential
stock issuances were not been considered in the computation of diluted  earnings
per  share  amounts  since  the  effect  of  their  inclusion  would  have  been
antidilutive. The Company uses the treasury stock method to calculate the effect
that the  conversion  of the stock  options would have on earnings per share and
the weighted average number of shares of common stock.

       Revenue Recognition

       Computerized Information Processing Services

     The Company generates revenues for its computerized  information processing
services from its  Sandsport  Home  Attendant  Reporting  Program  ("SHARP") and
Pro-Health  software  applications.  The SHARP application  provides weekly time
sheets,  billing,  payroll  processing and management reports for not-for-profit
agencies  that provide home  attendant  services to those in need.  Revenues are
recognized  for these  services in the period they are provided.  The Pro-Health
application  is an  application  service  provider  solution  that provides home
health care customers access to the Company's software over the Internet without
needing  sophisticated  hardware at its site to house the  software or store the
data.  Customers using this application are charged a monthly fee and revenue is
recognized on a monthly basis as the service is provided.

       Telephone-Based Data Collection Services

     The Company  generates  revenues for its  telephone-based  data  collection
services from its  automated  electronic  system knows as Sandata(R)  SANTRAX(R)
("SANTRAX")  software  application.  The  SANTRAX  application  is an  automated
electronic  system  that  incorporates  telephone  technologies  into  the  data
reporting  process  to monitor  the  arrival  and  departure  times of  off-site
workers.  Revenues from this  application are recognized  based on a per call or
visit basis in the period in which the services are provided.

       Technology Infrastructure and Outsourcing Services

     Revenues from technology  infrastructure  and outsourcing  services such as
data processing,  technology  infrastructure  consulting,  web site development,
running e-commerce  applications and reselling telephone services are recognized
based on per hour or call rates in the period the service is provided.


       Information Technology Services

     The Company generates revenues from information  technology  services under
the name of SandataNet and includes services such as software support,  hardware
support/break-fix,  Local Area Network ("LAN")  administration and configuration
services  and the  reselling  of  computer  hardware  and  third-party  software
systems;  some of the  services are  pursuant to  long-term  contracts.  Support
revenue is  recognized  based on per hour  rates in the  period  the  service is
provided.   For  maintenance  contracts  greater  than  one  month,  revenue  is
recognized  over the term of the  contract on a  straight-line  basis.  Computer
hardware and software  resale revenues are recognized when the units are shipped
and accepted by the customer.  The Company does not bundle  maintenance with any
software sold.

       Long-Term Contracting

     As discussed above, the Company utilizes long-term contracts and recognizes
revenue for  financial  statement  purposes  under the  percentage of completion
method and,  therefore,  takes into  account the costs,  estimated  earnings and
revenue-to-date on contracts not yet completed.

     The amount of revenue  recognized  at the financial  statement  date is the
portion of the total contract price that the direct labor costs expended to date
bears to the anticipated total direct labor costs, based on current estimates of
costs to  complete.  Direct  labor  costs  include  all  direct  labor,  related
benefits,  and  subcontract  costs.  This  method  is  used  because  management
considers  direct  labor costs to be the best  available  measure of progress on
these contracts.

     Revisions  in  estimates  of  costs  and  earnings  during  the life of the
contracts are reflected in the accounting  period in which such revisions become
known. At the time a loss on a contract  becomes known, the entire amount of the
estimated loss is recognized in the financial statements.  Billings in excess of
estimated   costs  and  earnings  on  uncompleted   contracts  are  included  in
deferred/unearned revenue.

       Sale/Leaseback

     The Company recognizes gains from sale/leaseback  transactions ratably over
the term of the  underlying  lease.  All such leases are operating  leases.  Any
losses from these transactions are recognized in the period incurred.

       Deferred income - sale/leasebacks


     The Company recognizes the unrealized gain from sale/leaseback transactions
over  the  term  of the  underlying  lease.  The  long-term  portion  represents
sale/leaseback  gain that will not be recognized  within one year of the balance
sheet date.


       Deferred/unearned revenue - maintenance contracts


     The Company  collects  maintenance  fees for various  internally  developed
software applications which have not been earned as of the balance sheet date.


       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 reduction generally occurs over five to ten business days. At
May 31,  2001,  the  Company had  amounts on deposit  for these  liabilities  of
approximately $1,300,000.

       Concentration of Credit Risk

     The Company is subject to a  concentration  of credit risk with  respect to
its trade receivables,  as disclosed above. The Company performs on-going credit
evaluations  of its  customers and generally  does not require  collateral.  The
Company  maintains  allowances  to cover  potential  or  anticipated  losses for
uncollectible accounts.

     The  Company has cash  balances  in banks in excess of the  maximum  amount
insured by the FDIC as of May 31, 2002.

       Statements of Cash Flows

     The Company  paid  income  taxes of  approximately  $19,000 and $23,000 and
interest of approximately $242,000 and $252,000 for the years ended May 31, 2002
and 2001, respectively.

       Use of Estimates in the Financial Statements

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

       Fair Value of Financial Instruments

     The Company's  short term  financial  instruments  include  cash,  accounts
receivable,  receivable  from  affiliates  and  accounts  payable.  Due  to  the
short-term  nature of these  instruments,  the fair  value of these  instruments
approximates  their recorded value.  The Company has long-term debt  instruments
which it believes are stated at their estimated fair value.

       Stock Options and Similar Equity Instruments

     The Company  accounts  for stock  options and  similar  equity  instruments
(collectively  "Options")  issued to employees and directors in accordance  with
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees," rather than the fair value based method of accounting  prescribed by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation."  The exercise price for Options issued to employees and directors
equals or exceeds the fair value of the  Company's  Common  Stock at the date of
grant and, accordingly,  no compensation expense is recorded. Equity instruments
issued to acquire goods and services from  non-employees are accounted for based
on the fair value of the consideration  received or the fair value of the equity
instruments issued, whichever is more readily determinable.

       Comprehensive Income

     The Company adopted SFAS No. 130, "Reporting  Comprehensive  Income".  SFAS
No. 130 establishes standards for reporting and display of comprehensive income,
its  components and  accumulated  balances.  Comprehensive  income is defined to
include all changes in equity except those resulting from  investments by owners
and distributions to owners. Among other disclosures, SFAS No. 130 requires that
all items that are required to be recognized under current accounting  standards
as components of comprehensive  income be reported in a financial statement that
is displayed with the same prominence as other financial statements.

       Business Segments

     The  Company  adopted  SFAS No.  131,  "Disclosures  About  Segments  of an
Enterprise and Related  Information",  which supercedes SFAS No. 14,  "Financial
Reporting  for  Segments  of a Business  Enterprise."  SFAS No. 131  establishes
standards for the way that public enterprises report information about operating
segments in annual  financial  statements  and  requires  reporting  of selected
information about operating segments in interim financial  statements  regarding
products and  services,  geographical  areas and major  customers.  SFAS No. 131
defines  operating  segments as components of an enterprise about which separate
financial  information  is available  that is  evaluated  regularly by the chief
operating  decision maker in deciding how to allocate resources and in assessing
performance.  The Company has determined that its operations are in one segment,
computer services to the health care industry.

       New Accounting Pronouncements

     In October 2001, the Financial  Accounting  Standards Board ("FASB") issued
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  Company is  evaluating  the impact  that
implementation  of SFAS No.  144 may  have on the  financial  statements  of the
Company.


     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.  SFAS No.  142  becomes
effective for the Company  commencing  June 1, 2002. The Company does not expect
the  implementation  of SFAS No. 142 to have a material  impact on its financial
statements,  since the Company does 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 is
expected to have no impact to the Company.

     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities"  ("SFAS 146"),  provides guidance on the recognition and measurement
of  liabilities  for cost  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.


NOTE 2 - Fixed Assets

       Fixed assets consist of the following:
<TABLE>
<S>                                                                     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                                May 31,
                                                                 Useful Life           2002                2001
                                                                 -----------           ----                ----
       Computer equipment                                               5 years      $  3,169,445       $  2,883,819
       Software costs                                             Up to 5 years        12,364,224         10,047,618
       Furniture, fixtures and automobiles                            4-7 years           419,274            415,330
       Leasehold improvements                                          10 years         2,823,154          2,809,278
                                                                                     ------------      -------------
                                                                                       18,776,097         16,156,045
       Less:  accumulated depreciation and
                amortization                                                          (11,955,501)       (10,119,842)
                                                                                     ------------       ------------

             Total Fixed Assets, net                                                 $  6,820,596       $  6,036,203
                                                                                     ============       ============
</TABLE>


     Depreciation and amortization  expense relating to fixed assets (other than
software   costs)  amounted  to   approximately   $443,000  in  2002  and  2001,
respectively.

     Unamortized  software  costs  amounted  to  approximately   $5,105,000  and
$4,186,000  at May 31,  2002 and 2001,  respectively.  Amortization  expense for
these costs totaled  approximately  $1,397,000  and $2,305,000 in 2002 and 2001,
respectively.

     During the fourth  quarter of the year ended May 31, 2001, the Company shut
down  certain  operating  systems and  hardware  configurations,  which had been
capitalized in previous years. The Company had determined that the older systems
architecture  had become  obsolete  and too costly to  maintain,  so the Company
coordinated  placing  several new systems in production  after running  parallel
with  pre-existing  systems  resulting in the  retirement  of the older  systems
during the fourth quarter.  The Company further  determined that there is no net
realizable  value  remaining  since no future revenue would be recognized in the
retired  systems  because the  architecture  was completely  replaced by the new
systems.  As such the Company  recognized  an impairment  loss of  approximately
$3,300,000 for the year ended May 31, 2001.

NOTE 3 - Debt

       Credit Agreement

     The  Company's  wholly owned  subsidiary,  Sandsport  Data  Services,  Inc.
("Sandsport"),  has a revolving credit agreement (the "Credit Agreement") with a
Bank which allows  Sandsport to borrow  amounts up to  $4,500,000  and is due on
June 14,  2003.  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 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.  As of May 31, 2002 and
2001,  the  outstanding  balance  on the  Credit  Agreement  with  the  Bank was
$4,500,000 and $3,850,000, respectively.

       Long Term Debt


     The Company  owed  National  Medical  Health Card  Systems,  Inc.  ("Health
Card"), a company affiliated with the Company's Chairman, $500,000 pursuant to a
promissory  note,  dated May 31, 2000 and due June 1, 2001 plus  interest at the
rate of 9-1/2%;  interest on such note was payable quarterly.  The Note was paid
in May, 2001.

     On June 9, 2001, the Company issued a promissory note to Health Card in the
principal amount of $500,000,  with interest at the rate of 7%, which was due on
June 8, 2002. This Note was paid in full on August 15, 2001.

NOTE 4 - Income Taxes


       The income tax expense (benefit) is comprised of the following:
<TABLE>
<S>                                                                       <C>    <C>    <C>    <C>    <C>    <C>

                                                                                        Year Ended May 31,
                                                                                       2002             2001
                                                                                       ----             ----
       Current
         Federal                                                                  $          --   $            --
         State                                                                           17,998            19,000
                                                                                       --------     -------------

             Total current                                                               17,998            19,000
                                                                                       --------     -------------

       Deferred
                                                                                        192,761        (1,089,293)
         Federal
         State                                                                           38,308          (223,108)
                                                                                      ---------      ------------

             Total deferred                                                             231,069        (1,312,401)
                                                                                       --------       -----------

             Income tax expense (benefit)                                              $249,067       $(1,293,401)
                                                                                       ========       ===========
</TABLE>


       The Company's effective income tax rate differs from the statutory U.S.
Federal income tax rate as a result of the following:

<TABLE>
<S>                                                                                   <c>            <C>
                                                                                         Year Ended May 31,
                                                                                       2002                2001
                                                                                       ----                ----
       Statutory U.S. federal tax rate                                                 34.0%             (34.0%)
       State taxes                                                                      4.6               (5.8)
       Permanent Differences                                                           12.2                1.2
       Other                                                                           12.9                1.6
                                                                                       ----             ------

                                                                                       63.7%             (37.0%)
                                                                                       =====             ======

       The components of deferred tax assets and liabilities consists of the
following:

                                                                                             May 31,
                                                                                    2002                2001
                                                                                    ----                ----
       Deferred Tax Assets-Current portion
         Allowance for Doubtful Accounts                                          $   81,686           $142,230
         Deferred Income                                                              61,367             43,340
         Accrued Expenses                                                             56,117             79,706
         Other                                                                         8,425              9,194
                                                                                  ----------         ----------

             Deferred Tax Assets, current                                           $207,595           $274,470
                                                                                    ========           ========

                                                                                             May 31,
                                                                                    2002                2001
                                                                                    ----                ----
       Deferred Tax Assets-Long term portion
         Net Operating Loss Carryforwards                                          $ 1,642,275        $ 1,255,038
         Deferred Income                                                                    --            129,255
         Goodwill                                                                           --             82,872
         Other                                                                             604                615
                                                                               ---------------    ---------------

             Deferred Tax Assets, Long-term                                          1,642,879          1,467,780
                                                                                   -----------        -----------

       Deferred Tax Liabilities-Long-term portion
         Depreciation and amortization                                              (1,460,054)        (1,132,007)
         Deferred income                                                               (11,246)                 --
                                                                                 -------------   -----------------

             Deferred Tax Liabilities, Long-term                                    (1,471,300)        (1,132,007)
                                                                                   -----------        -----------

             Deferred Tax Assets - Long-term, Net                                      171,579            335,773
                                                                                  ------------        -----------

             Total Deferred Tax Asset, Net                                        $    379,174        $   610,243
                                                                                  ============        ===========
</TABLE>


     Management  determined that it was more likely than not that future taxable
income would be  sufficient to enable the Company to realize all of its deferred
tax assets.  Accordingly,  no valuation  allowance  has been recorded at May 31,
2002 and 2001.

     At May 31, 2002, the Company had net operating loss  carryforwards  for tax
purposes of approximately $4,076,000, expiring at various dates through 2022.

NOTE 5- Commitments and Contingencies

       Lease Agreements

     The Company leases office space at 26 Harbor Park Drive,  Port  Washington,
NY 11050 (the "Facility")  from BFS Realty LLC,  successor to BFS Sibling Realty
and an affiliate of the Company's  Chairman (the  "Affiliate") (see Note 6). The
Company paid rent in the amount of $407,834 and  $615,412 to the  Affiliate  for
the years ended May 31, 2002 and 2001, respectively.

     On June 1, 2001 (revised  November,  2001) , the Company entered into a ten
(10) year lease for the  Facility  with the  Affiliate.  The lease  provides for
annual rental  payments of $277,817 for the period June 1, 2002 to May 31, 2003,
with annual 5% increases in each 12-month period thereafter.  The lease is being
expensed on a  straight-line  basis over the lease term. The lease also requires
monthly payments of various types, such as the Company's  proportionate share of
real  estate  taxes  and  common  area  maintenance   charges,   that  aggregate
approximately  $10,000 per month.  In November,  2001,  the lease was revised to
provide  that  the  Company  would  pay its  utility  expenses  directly  to the
respective utility company, not to the Affiliate.

     The Company has  obligations to pay rental  expense in connection  with six
sale/leaseback  transactions.  The rental  expenses  amounted  to  approximately
$1,195,000   and   $1,630,000  for  the  years  ended  May  31,  2002  and  2001
respectively. (See Note 8)

     Total office space and equipment  rental expense under all operating leases
amounted to  approximately  $2,294,000  and  $3,417,000 in fiscal 2002 and 2001,
respectively.

     Future minimum lease payments for all non  cancelable  operating  leases at
May 31, 2002 are as follows:

                              Year Ending May 31,               Amount
                              -------------------               ------
                                      2003                      $1,759,640
                                      2004                         969,461
                                      2005                         644,554
                                      2006                         336,390
                                      2007                         330,988
                                   Thereafter                    1,739,257
                                                                ----------

                                     Total                      $5,780,290


         Litigation

          a. On October 19, 1999, the Company and  Pro-Health  brought an action
     against Provider Solutions Corporation  ("Provider") and others, in Supreme
     Court,   New  York  County,   based  on  breach  of  contract,   fraudulent
     misrepresentation  and  other  causes  of  action,   demanding  damages  of
     approximately  $10,000,000  (the  "State  Action").  On October  22,  1999,
     Provider  brought a federal action in the United States  District Court for
     the Eastern  District of New York (the  "Federal  Action").  The  complaint
     demanded  relief in the form of a permanent  injunction and damages against
     the Company and  Pro-Health for total amounts  ranging from  $10,000,000 to
     $15,000,000. The State Action was consolidated with the Federal Action.

          On March 8, 2001 the  Company,  Pro-Health,  Provider and all involved
     parties and individuals settled the consolidated  Federal Action,  globally
     resolving all issues,  claims and  disputes.  The  settlement  entailed the
     exchange of general releases between the Company, Pro-Health,  Provider and
     all parties, and the payment of $600,000 to Provider,  of which $50,000 was
     paid by the Company.  The balance of the payment under the  settlement  was
     funded by the Company's  insurers.  The  settlement did not have a material
     effect  on  the  Company's   operations.   The  Company  has  retained  its
     proprietary interest in the subject software.

          b. 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.

          c. 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.  During the year
     ended May 31, 2002,  the Company has recognized  approximately  $115,000 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.

          d. An action was  commenced  against  the Company and Health Card by a
     former executive of Health Card, Mary Casale, who alleged that employees of
     both Health Card and the Company  engaged in sex  discrimination  as to Ms.
     Casale,  and thus,  violated  Title VII of the Civil Rights Act of 1964. In
     February  2002  the  matter  was  withdrawn   from  the  Equal   Employment
     Opportunity Commission, and was settled without any effect on the financial
     statements of the Company.

       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.

       Employment and Deferred Compensation Agreements

          On  February  1, 1997 the Company  and its  Chairman  ("Mr.  Brodsky")
     entered into an  employment  agreement  for a five year term (the  "Brodsky
     Employment   Agreement").   Among  other  things,  the  Brodsky  Employment
     Agreement provides  compensation at the annual rate of $500,000 or a lesser
     amount if mutually agreed. The Brodsky  Employment  Agreement also provides
     for  payment  of an  annual  bonus at the sole  discretion  of the Board of
     Directors. Mr. Brodsky agreed to accept a reduction in compensation for the
     fiscal  years ended May 31,  2002,  2001,  and 2000 and has signed  waivers
     evidencing  his  agreement  to  such  reductions.  The  Brodsky  Employment
     Agreement was renewed, on identical terms, on March 1, 2002.


          In May 1992,  Mr.  Brodsky  and the  Company  entered  into a deferred
     compensation  agreement  pursuant to which the Company would (i) pay to Mr.
     Brodsky a lump sum  ranging  from  $75,000 to  $255,000  if he  voluntarily
     terminated his employment with the Company after attaining 55 years of age,
     or (ii) pay to Mr.  Brodsky's  beneficiary a lump sum ranging from $200,000
     to  $450,000  in the event of Mr.  Brodsky's  death  during the term of his
     employment  with the Company.  This  agreement  was  terminated in October,
     2001.


          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.  Mr.  Davies  received  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.  None of such  options  were  exercised.  In
     addition,  the Company paid approximately $47,000 in severance payments for
     approximately 30 other terminated employees.

NOTE 6 - Related Party Transactions

          a. In November  1996 the Company  entered into an  agreement  with the
     Affiliate, the Nassau County Industrial Development Agency ("NCIDA"), and a
     Bank (the "Bondholder") (the "Agreement").  Pursuant to the Agreement,  the
     Affiliate (i) assumed all of the Company's  rights and obligations  under a
     Lease Agreement that was previously  between the Company and the NCIDA (the
     "Lease"),  and (ii) entered into a Sublease  Agreement with the Company for
     the premises the Company occupies. Pursuant to the Agreement, the Affiliate
     also obtained the right to become the owner of the premises upon expiration
     of the Lease. 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;  however,  the  Affiliate  has  indemnified  the
     Company with respect to certain  obligations  relative to the Lease and the
     Agreement. In addition, the Agreement provides that the Company is bound by
     all the terms and conditions of the Lease, and that a security  interest is
     granted to the Affiliate in all of the Company's fixtures constituting part
     of the premises.

          The foregoing transactions and agreements were the last in a series of
     transactions  involving the Company,  the Affiliate,  NCIDA, the Bondholder
     and the U.S. Small Business  Administration  ("SBA"). Chief among these was
     the borrowing by the Affiliate in June of 1994 of $3,350,000 in the form of
     Industrial   Development   Revenue  Bonds  (the  "Bonds")  to  finance  the
     acquisition of the Facility. Simultaneously with the issuance of the Bonds:
     (1) NCIDA  obtained  title to the Facility and leased it to the  Affiliate,
     (2) the Affiliate subleased the Facility to the Company, (3) the Bondholder
     bought the Bonds,  (4) the Bondholder  received a security  interest in the
     Facility to secure the payment of the Bonds.  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 May 31, 2002 was $1,444,445. The
     Company  paid rent to the  Affiliate of $407,834 and $615,412 for the years
     ended May 31, 2002 and 2001.

          On August 11, 1995, the Company entered into a $750,000 loan agreement
     with the Long Island Development Corporation ("LIDC"), under a guarantee by
     the 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 entire proceeds were
     used to  repay a  portion  of the  Bonds.  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 May  31,  2002  was
     $599,024.

          b. Until January 2002, the Company derived revenue from 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.  The revenues generated from Health Card amounted
     to  approximately  $693,000 and $2,458,000 for the years ended May 31, 2002
     and 2001,  respectively.  The  Company  billed  Health  Card  approximately
     $126,000 and $821,000 for quality  assurance  testing of software  programs
     developed by Health Card and network support,  and $47,000 and $561,000 for
     help desk  services,  $175,000 and $448,000 for data  processing  center as
     well as $305,000  and $534,000 for certain  computer  equipment  leases and
     other  services  for  $40,000  and $95,000 for years ended May 31, 2002 and
     2001, respectively.  In addition the Company resells its telephone services
     to Health  Card.  The  billings  for such  telephone  services  amounted to
     approximately  $124,000  and  $134,000 for the years ended May 31, 2002 and
     May 31, 2001 and are  recorded as a reduction  of  operating  expense.  The
     Company was owed $19,280 from Health Card at May 31,  2002.  Subsequent  to
     May 31, 2002, the Company received  approximately $14,000 from Health Card,
     representing substantially complete payment of amounts due as of that date.
     As of January,  2002, the Company ceased rendering services to Health Card.
     Health Card  continues  to pay its  allocable  share of expenses for shared
     services, which amounts to approximately $45,000 per month.

          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 $268,011 and
     $395,989  for the years  ended May 31,  2002 and  2001,  respectively.  The
     payments for the Facility  were made to BFS Realty,  LLC, and were $407,834
     and  $615,412 for the years ended May 31, 2002 and 2001,  respectively.  In
     June 2001, the Company  entered into a new lease for the Facility which was
     revised in November, 2001. (See Note 5).

          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 years ended May 31, 2002 and 2001
     the total  payments made by the Company to MAOS were $340,869 and $279,894,
     respectively.

          e. During the years  ended May 31,  2002 and 2001 the Company  paid an
     aggregate  of  $57,285  and  $65,894,  respectively  on behalf  of  certain
     officers to companies affiliated with the Company's Chairman for payment of
     automobile leases.

NOTE 7 - SHAREHOLDERS' EQUITY

         Stock Options

         The Company maintains the following stock option plans:

         1984 Stock Option Plan

     There had been 2,536 options granted at an exercise price of $1.88 under an
incentive  stock  option  plan  adopted  in October  1984 (the "1984  Plan") and
subsequently  amended.  Options granted under this plan were granted at exercise
prices not less than fair market value on the date of grant.  All of the options
outstanding  under this plan expired in January 2001. No additional  options may
be granted under this plan.

         1995 Stock Option Plan

     At May 31, 2002, there were 590,500 incentive  options  outstanding under a
stock option plan adopted in January 1995 (the "1995 Plan"),  which provides for
both incentive and nonqualified  stock options and reserves  1,000,000 shares of
common  stock for grant under the plan.  Of these  options,  520,500 are held by
officers of the Company.  The plan requires that incentive options be granted at
exercise  prices not less than the fair market  value at the date of grant,  and
terminates  in  January  2005.  All  options  outstanding  under  this  plan are
exercisable at May 31, 2002 at prices ranging from $1.41 to $2.61 per share over
a period of five years from date of grant.

     On July 14, 1997,  the Company filed a  Registration  Statement on Form S-8
relative to  reofferings  of shares of Common Stock of the Company  which may be
acquired pursuant to the 1984 and 1995 Plan.

        1998 Stock Option Plan

     At May 31, 2002 there were  775,579  incentive  stock  options  outstanding
under a stock  option plan  adopted in October  1998,  (the "1998  Plan")  which
provides  for  both  incentive  and  nonqualified  stock  options  and  reserves
1,000,000  shares of common  stock for grant under the plan.  The plan  requires
that  incentive  options be granted  at  exercise  prices not less than the fair
market value at the date of grant and  terminates in August 2008. Of the options
outstanding  at May 31, 2002,  567,060 were  exercisable  at prices ranging from
$1.31 to $3.00 over three to five years from the date of grant.

        2000 Stock Option Plan

     At May 31, 2002, there were 28,340 incentive  options  outstanding  under a
stock option plan adopted on November 20, 2000 (the "2000 Plan"), which provides
for both incentive and nonqualified  stock options and reserves 1,500,000 shares
of common stock for grant under the plan. The 2000 Plan  terminates in September
2010.  Options  outstanding  under  the  plan  vest  over  a  seven-year  period
commencing December 31, 2000 and ending December 31, 2007 and are exercisable at
prices  ranging  from  $1.00 per  share to $3.00 per share  over a period of ten
years from the date of grant. At May 31, 2002,  there were no options  currently
exercisable.

         Summary information with respect to the stock option plans follows:

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

                                                                  Range of        Outstanding       Outstanding
                                                                  exercise          options            options
                                                                 prices ($)         granted          exercisable
                                                                 ----------         --------         -----------

       Balance, June 1, 2000                                   1.31 - 3.00           1,523,902           849,871
       Granted                                                      3.00               279,808           269,653
       Cancelled                                                                       (76,118)          (11,146)
                                                                                  ------------      ------------
       Balance, May 31, 2001                                   1.31 - 3.00           1,727,592         1,108,378
       Granted                                                 1.00 - 3.00              40,085           150,895
       Cancelled                                                                      (373,258)         (101,713)
                                                                                   -----------       -----------

       Balance, May 31, 2002                                   1.31 - 3.00           1,394,419         1,157,560
                                                                                     =========         =========
</TABLE>

       Stock option grants to certain officers and directors were as follows:

     In October  1998,  the Company  granted  certain  directors  of the Company
non-qualified  stock  options to purchase an aggregate  of 20,000  shares of the
Company's common stock under the 1998 Plan at an exercise price of $1.00.  These
options vested immediately and are exercisable over a five-year period.

     In December 1998, the Company granted 520,500  incentive options to certain
officers  of the Company  under the 1995 Plan at an exercise  price of $1.41 per
share.  These options vested  immediately and are  exercisable  over a five-year
period.

     In February 2000, the Company granted its Chairman  incentive stock options
to purchase an  aggregate  of 350,000  shares under the 1998 Plan at an exercise
price of $1.31. These options vest and are exercisable over a five-year period.

     In April  2000,  the  Company  granted  certain  directors  of the  Company
non-qualified  stock options to purchase an aggregate of 72,000 shares under the
1998 Plan at an exercise price of $3.00.  These options vest and are exercisable
over a six-year period.

     In April 2000,  the  Company  granted its then  President  incentive  stock
options to purchase an  aggregate  of 100,000  shares  under the 1998 Plan at an
exercise price of $3.00. In October 2000, the Company granted its then President
incentive  stock options to purchase  150,000  shares under the 2000 Plan, at an
exercise price of $3.00 per share. The President's  employment was terminated on
August 6, 2001, at which date the  President  became  entitled to exercise,  for
ninety days,  the options that had already  vested.  Those options  consisted of
33,340 shares under the 1998 Plan, and 33,333 under the 2000 Plan, none of which
were exercised before the right to exercise expired.

     In November  2000,  the Company  granted  certain  directors of the Company
non-qualified  stock  options to purchase an aggregate  of 20,000  shares of the
Company's common stock under the 1998 Plan at an exercise price of $3.00.  These
options  vest over a  three-year  period and are  exercisable  over a  five-year
period.

     During the fiscal year ended May 31, 2002 non-qualified options to purchase
up to 10,000  shares of Common Stock,  at an exercise  price of $1.00 per share,
were issued to each of two Directors.


     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 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. The Company has
received  interest payments on such notes in the amount of $131,994 and $162,110
during the fiscal  years  ended May 31,  2002 and 2001.  As of May 31,  2002 and
2001, the outstanding balance on such notes, including principal and accrued but
unpaid interest, was $1,669,640 and $1,722,547,  respectively (see Note 12d). 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.


     Pro forma  information  regarding  net  income  and  earnings  per share is
required  by SFAS  No.  123,  and has  been  determined  as if the  Company  had
accounted  for its  employee  stock  option plans under the fair value method of
SFAS No.  123.  The fair value for these  options was  estimated  at the date of
grant   using  a   Black-Scholes   option-pricing   model  with  the   following
weighted-average assumptions for 2002 and 2001.
<TABLE>
<S>                                                                               <C>    <C>    <C>    <C>    <C>    <C>

        ASSUMPTIONS
                                                                                         Year Ended May 31,
                                                                                 2002                       2001
                                                                                 ----                       ----
        Risk free rate                                                       4.95 - 6.05%               5.25 - 6.04%
        Dividend yield                                                               .00%                       .00%
        Volatility factor of the expected market
         price of the Company's common stock                                          61%                       117%
        Average life                                                              5 years                    5 years
</TABLE>

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

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized to expense  over the vesting  period of the  options.  The
Company's pro forma loss is as follows:
<TABLE>
<S>                                                                                <C>    <C>    <C>    <C>    <C>

                                                                                          Year Ended May 31,
                                                                                      2002               2001
                                                                                      ----               ----
     Pro forma net income (loss)                                                    $78,025       $(2,470,616)
     Pro forma net income (loss) per share                                           $  .03       $      (.99)

</TABLE>

     The weighted  average fair value of options  granted during the years ended
May 31, 2002 and 2001 were $1.12 and $.86,  respectively.  The weighted  average
remaining  contractual  life of options  exercisable at May 31, 2002 is 5 years.
The exercisable  prices range from $1.31 to $3.00 for options  outstanding as of
May 31, 2002.

       Restricted Stock Grant Plan

     On September  1, 2000 the Board of  Directors  approved the adoption of the
Company's 2000 Restricted  Stock Grant Plan (the "Stock Grant Plan").  The Stock
Grant Plan was subsequently  adopted by the Shareholders at the Company's Annual
Meeting on November 20, 2000.  The Stock Grant Plan provides for the issuance of
shares that are subject to both standard restrictions on the sale or transfer of
such shares  (e.g.,  the standard  seven year vesting  schedule set forth in the
Stock  Grant  Plan)  and/or  restrictions  that the  Board may  impose,  such as
restrictions  relating to length of  service,  corporate  performance,  or other
restrictions.  As of May 31, 2002, no grants had been made under the Stock Grant
Plan and, therefore,  no shares had vested under it. There are 700,000 shares of
Common  Stock  reserved for  issuance in  connection  with grants made under the
Stock Grant Plan.

NOTE 8 - Sale/Leaseback Transactions

     The  Company is a party to various  sale/leaseback  transactions  involving
certain fixed assets,  principally  computer  hardware,  software and equipment.
Gains on these transactions have been deferred and are being recognized over the
lives of the related leases, each of which is 36 months.  Approximately $297,000
and $344,000 of the deferred gains were recognized in other income for the years
ended May 31, 2002 and 2001,  respectively.  Included  in these  amounts are the
effects of the following sale/leaseback transactions:

     In January 1998, the Company  consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $515,000,  were sold for
$700,000.  The resulting gain of approximately $185,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $36,000
of the deferred gain was recognized for fiscal 2001,  which was the last year of
the lease.  An  unaffiliated  third party  purchased the residual rights to such
lease.

     In January 1999, the Company  consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $830,000,  were sold for
$1,100,000.  The  resulting  gain of  approximately  $270,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $60,000 and $90,000 of deferred gain was recognized for the years
ended May 31, 2002 and 2001, respectively. An unaffiliated third party purchased
the residual rights in such lease.

     In May 1999,  the Company  consummated  a  sale/leaseback  of certain fixed
assets  which  had a net book  value of  approximately  $896,000,  were sold for
$1,100,000.  The  resulting  gain of  approximately  $204,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $68,000 of  deferred  gain was  recognized  for each of the years
ended May 31, 2002 and 2001. An unaffiliated  third party purchased the residual
rights in such lease.

     In October 1999, the Company  consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $895,000,  were sold for
$1,115,000.  The  resulting  gain of  approximately  $220,000  was  recorded  as
deferred   income  and  is  being   recognized  over  the  life  of  the  lease.
Approximately  $73,000 of the deferred gain was recognized for each of the years
ended May 31, 2002 and 2001. An unaffiliated  third party purchased the residual
rights in such lease.

     In January 2000, the Company  consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $442,000,  were sold for
$561,000.  The resulting gain of approximately $119,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $40,000
of  deferred  gain was  recognized  for each of the years ended May 31, 2002 and
2001. An unaffiliated third party purchased the residual rights in such lease.

     In February 2000, the Company consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $237,000,  were sold for
$277,000.  The resulting gain of approximately  $40,000 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $14,000
of  deferred  gain was  recognized  for each of the years ended May 31, 2002 and
2001. An unaffiliated third party purchased the residual rights in such lease.

     In November 2000, the Company consummated a sale/leaseback of certain fixed
assets  which  had a net book  value of  approximately  $421,500,  were sold for
$548,300.  The resulting gain of approximately $126,800 was recorded as deferred
income and is being recognized over the life of the lease. Approximately $42,000
and $21,000 of the deferred gain was recognized for the years ended May 31, 2002
and 2001,  respectively.  An  unaffiliated  third party  purchased  the residual
rights in such lease.

NOTE 9 - Asset Acquisition and Impairment

     On April 27, 2001,  the Company  acquired  certain assets of North American
Internet Services,  Inc. ("NAIS"),  a provider of broadband  services,  Internet
access, and co-location  services for approximately  $201,000.  NAIS had entered
bankruptcy  proceedings  and,  under the auspices of the Bankruptcy  Court,  the
Company  was  permitted  to "credit  bid"  approximately  $124,000  of  expenses
(including salaries) it had incurred on behalf of NAIS as the purchase price for
the assets,  and was given 180 days to exploit the assets it had  acquired.  The
Company  incurred  approximately  $77,000  in  additional  costs  related to the
acquisition  of these  assets.  The tangible  assets were  determined to have no
significant  fair  value.  Therefore,   all  the  expenditures  related  to  the
acquisition  were  allocated to goodwill.  The Company has the option to abandon
the  exploitation  of these  assets  within the 180 day  period.  If the Company
continues to use the NAIS assets, 10% of the profits (defined as earnings before
interest expense and taxes) generated by such use must be paid to the bankruptcy
estate for the first three years.

     At May 31, 2001, the Company performed an evaluation of the  recoverability
of the assets acquired from NAIS and concluded that a significant  impairment of
these assets had occurred  based on actual results during the year ended May 31,
2001 and on  estimated  future  cash flows not being  sufficient  to recover the
carrying  value of the  goodwill.  As such,  the carrying  value of goodwill was
written  down to its  estimated  fair  value,  which  was  determined  based  on
discounted  estimated cash flows. The Company  recognized an impairment loss and
write down of the goodwill of approximately  $201,000.  Considerable  management
judgment is necessary to estimate fair value; accordingly,  actual results could
vary significantly from such estimates.


NOTE 10 - Retirement Plan

     The Company has a 401(k)  savings plan  covering all eligible  employees in
which the Company matches a portion of the employees'  contribution.  The amount
of  this  match  was  $40,204  and  $38,197  in  fiscal  years  2002  and  2001,
respectively.

NOTE 11 - Revenue by Product Line

     The Company operates in one business segment,  but derives its revenue from
several product lines. The following table provides the service fee revenues for
the product lines earned for the fiscal years ended May 31, 2002 and 2001:
<TABLE>
<S>                                                                     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                           Year Ended May 31,
                                                                                    2002                2001
                                                                                    ----                ----
       Computerized information processing                                        $  5,962,880      $   5,960,450
       Telephone-based data collection                                               7,690,852          7,561,852
       Technology infrastructure and outsourcing                                       736,932          2,071,266
       Information technology                                                        2,765,761          2,170,240
       Other                                                                            17,497              5,261
                                                                                --------------    ---------------

             Total                                                                 $17,173,922        $17,769,069
                                                                                   ===========        ===========
</TABLE>


NOTE 12 - Subsequent Events

          a. 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.

          b. 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 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.

          c. On July 9, 2002 the Company issued a press release  announcing that
     Nasdaq  had  informed  the  Company  that its  shares  would be  subject to
     de-listing  from the Small Cap Market for failure to comply  with  Nasdaq's
     Marketplace  Rules  regarding  minimum  value of  publicly  held shares and
     minimum  bid price per  share.  The  Company  requested  a hearing on these
     matters,  and the de-listing was stayed until the hearing.  The Company was
     informed  by Nasdaq on  August  21,  2002  that the  Company  had  regained
     compliance with both Marketplace Rules and that therefore,  the hearing was
     cancelled and the matter was moot.

          d. On  August  22,  2002  the  Chairman  repaid  $100,000  of the note
     receivable officer.

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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)

                                        By  /s/ Bert E. Brodsky
                                            Bert E. Brodsky, Chairman
                                          (Principal Executive Officer and
                                            Principal Financial Officer)

Date: March 24, 2003

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


By   /s/ Bert E. Brodsky
         Bert E. Brodsky, Chairman, Treasurer, Director

Date: March 24, 2003

By   /s/ Hugh Freund
         Hugh Freund, Executive Vice President, Secretary, Director

Date: March 24, 2003


By   /s/ Gary Stoller
         Gary Stoller, Executive Vice President, Director

Date: March 24, 2003


By    /s/ Martin Bernard
          Martin Bernard, Director

Date: March 24, 2003

By   /s/ Ronald L. Fish
         Ronald L. Fish, Director

Date: March 24, 2003

<PAGE>




                            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  Amendment  to  the  Annual  Report  of  Sandata
Technologies,  Inc.  (the  "Company")  on Form 10-KSB for the year ended May 31,
2002 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the "Report"),  Bert E. Brodsky,  Chief  Exectuive  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
       March 24, 2003



<PAGE>



                                  CERTIFICATION

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

          1. I have  reviewed  this amended  annual  report on Form  10-KSB/A of
     Sandata Technologies, Inc. and its Subsidiaries;

          2. Based on my  knowledge,  this  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 periods covered by
     this amended annual report; and

          3.  Based  on  my  knowledge,  the  financial  statements,  and  other
     financial  information  included  in this  amended  annual  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 amended annual
     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  periods in which this  amended  annual  report is
     being prepared;

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

          c) presented in this 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 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.

Dated: March 24, 2003                      /s/Bert E. Brodsky
                                         ---------------------------------------
                                          Bert E. Brodsky, Chief Executive
                                           Officer and Chief Financial Officer