<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

    X    Quarterly report pursuant to Section 13 or 15(d) of the Securities
-------  Exchange Act of 1934


For the quarterly period ended June 30, 2002 or

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


For the transition period from             to
                               -----------    ---------

Commission File Number:            0-27166
                       -----------------------------------

                                XATA Corporation
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


         Minnesota                                     41-1641815
---------------------------------      --------------------------------------
(State or Other Jurisdiction of        (I.R.S. Employer Identification Number)
 Incorporation or Organization)

            151 E. Cliff Road, Suite 10, Burnsville, Minnesota 55337
--------------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code:     (952) 894-3680
                                                  ------------------------------

            -------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 9, 2002, the following securities of the Registrant were
outstanding: 6,928,825 shares of Common Stock, $.01 par value per share.


<PAGE>





                                XATA Corporation
                                      Index

<TABLE>
<CAPTION>

PART I.      FINANCIAL INFORMATION                                                      Page No.
                                                                                        --------
<S>          <C>                                                                         <C>
             Item 1.   Financial Statements:
                 Balance Sheets as of June 30, 2002
                 and September 30, 2001                                                      3

                 Statements of Operations for the Three and Nine
                 Months Ended June 30, 2002 and 2001                                         5

                 Statements of Cash Flows for the Nine Months
                 Ended June 30, 2002 and 2001                                                6

                 Notes to Financial Statements                                               7

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

             Item 3.   Quantitative and Qualitative Disclosures about
                       Market Risk                                                          12

PART II.     OTHER INFORMATION

             Item 1.  Legal Proceedings                                                     13

             Item 2.  Changes in Securities                                                 13

             Item 3.  Defaults upon Senior Securities                                       13

             Item 4.  Submission of Matters to a Vote of Security Holders                   13

             Item 5.  Other Information                                                     13

             Item 6.  Exhibits and Reports on Form 8-K                                      13

             Signatures                                                                     14
</TABLE>



                                       2

<PAGE>




PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
         XATA CORPORATION
         BALANCE SHEETS
         JUNE 30, 2002 AND SEPTEMBER 30, 2001
<TABLE>
<CAPTION>
                                                                                         JUNE 30,            September 30,
                                                                                          2002                  2001
ASSETS                                                                                 (UNAUDITED)           (audited)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                    <C>
Current Assets
     Cash and cash equivalents                                                       $  2,312,608           $ 2,031,432
     Accounts receivable, less allowances for doubtful accounts
         of $105,000 and $245,000                                                       2,195,810             3,930,581
     Inventories                                                                        1,309,379             1,235,078
     Prepaid expenses                                                                     130,776               190,794
     Deferred income taxes                                                                     --               600,000
                                                                                     -----------------------------------
                TOTAL CURRENT ASSETS                                                    5,948,573             7,987,885

Equipment and Leasehold Improvements, at cost
     Engineering and manufacturing equipment                                              258,289                26,924
     Office furniture and equipment                                                       917,228               784,849
     Leasehold improvements                                                                24,948                24,948
                                                                                     -----------------------------------
                                                                                        1,200,465               836,721

     Less: accumulated depreciation and amortization                                     (619,501)             (470,816)
                                                                                     -----------------------------------
                TOTAL EQUIPMENT AND LEASEHOLD IMPROVEMENTS                                580,964               365,905

Other Assets
     Capitalized software development costs, less accumulated
         amortization of $4,170,669 and $2,735,394                                      3,338,911             4,774,186
                                                                                     -----------------------------------
                TOTAL OTHER ASSETS                                                      3,338,911             4,774,186
                                                                                     -----------------------------------
                TOTAL ASSETS                                                         $  9,868,448          $ 13,127,976
                                                                                     ===================================

</TABLE>



See Notes to Financial Statements



                                       3


<PAGE>




<TABLE>
<CAPTION>
                                                                           JUNE 30,                        September 30,
                                                                             2002                                2001
LIABILITIES AND SHAREHOLDERS' EQUITY                                      (UNAUDITED)                         (audited)
-------------------------------------------------------------------------------------------------    -------------------
<S>                                                                     <C>                                 <C>
Current Liabilities
     Current maturities of long-term debt                               $     266,093                       $   253,990
     Accounts payable                                                         719,589                         1,367,557
     Accrued expenses                                                         686,718                           402,318
     Deferred revenue                                                         846,380                           618,804
                                                                        ------------------------------------------------
                TOTAL CURRENT LIABILITIES                                   2,518,780                         2,642,669

Long-Term Debt                                                                441,400                           629,936
                                                                        ------------------------------------------------
                TOTAL LIABILITIES                                           2,960,180                         3,272,605

Commitments                                                                        --                                --

Shareholders' Equity
     Preferred stock                                                               --                                --
     Common stock, par value $0.01 per share; 12,000,000 shares
         authorized; 6,928,825 and 6,893,351 shares issued                     69,288                            68,933
     Additional paid-in capital                                            17,748,440                        17,657,710
     Accumulated deficit                                                  (10,909,460)                       (7,871,272)
                                                                        ------------------------------------------------
                TOTAL SHAREHOLDERS' EQUITY                                  6,908,268                         9,855,371
                                                                        ------------------------------------------------
                TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $   9,868,448                      $ 13,127,976
                                                                        ================================================

</TABLE>




See Notes to Financial Statements



                                       4

<PAGE>



XATA CORPORATION
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2002 AND 2001

<TABLE>
<CAPTION>

                                                        Three Months                            Nine Months
                                                       Ended June 30,                          Ended June 30,
                                         ---------------------------------------  ---------------------------------------
                                                  2002                2001               2002                   2001
                                         ---------------------- ----------------  ---------------------  ------------------
                                               (UNAUDITED)         (unaudited)        (UNAUDITED)           (unaudited)
                                         ---------------------- ----------------  ---------------------  ------------------
<S>                                     <C>                      <C>               <C>                    <C>
Net sales                               $       2,716,266         $  3,651,740     $   10,340,302         $ 10,240,204
Cost of goods sold                              2,261,363            2,681,268          6,896,310            6,846,551
                                        -----------------------  ----------------  ---------------------  -----------------
           GROSS PROFIT                           454,903              970,472          3,443,992            3,393,653

Operating expenses
     Selling, general and administrative        1,180,037            1,131,395          4,243,350            3,196,442
     Research and development                     486,588              759,725          1,608,121            1,266,339


                                                1,666,625            1,891,120          5,851,471            4,462,781
                                        -----------------------  ---------------   ---------------------  -----------------

           OPERATING LOSS                      (1,211,722)            (920,648)        (2,407,479)          (1,069,128)

Non-operating income (expense)
     Interest income                               10,188                7,320             31,915               37,438
     Interest expense                             (14,616)             (68,398)           (59,795)            (194,047)
     Other                                          3,963             (392,692)            (2,829)            (363,044)
                                        -----------------------  ---------------   ---------------------  -----------------
                                                     (465)            (453,770)           (30,709)            (519,653)
                                        -----------------------  ---------------   ---------------------  -----------------
           NET LOSS BEFORE INCOME TAXES        (1,212,187)          (1,374,418)        (2,438,188)          (1,588,781)

Income taxes                                     (600,000)                  --           (600,000)                  --
                                        -----------------------  ---------------   ---------------------  -----------------
           NET LOSS                     $      (1,812,187)        $ (1,374,418)    $   (3,038,188)        $ (1,588,781)
                                        =======================  ===============   =====================  =================
Net loss per common share
     Basic & Diluted                    $           (0.26)        $      (0.25)    $        (0.44)        $      (0.28)
                                        =======================  ===============   =====================  =================

Weighted average common and common
share equivalents
     Basic & Diluted                            6,927,638            5,589,030          6,907,442            5,586,285
                                        =======================  ===============   =====================  =================

</TABLE>

See Notes to Financial Statements


                                       5

<PAGE>




XATA CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001
<TABLE>
<CAPTION>
                                                                                                    Nine Months
                                                                                                   Ended June 30,
                                                                                -----------------------------------------
                                                                                          2002                  2001
                                                                                       (UNAUDITED)          (unaudited)
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                       <C>
Cash provided by (used in) Operating Activities
     Net loss                                                                   $    (3,038,188)          $(1,588,781)
     Depreciation and amortization of equipment and leasehold improvements              148,685               180,776
     Amortization of capitalized software development costs                           1,435,275               853,493
     Deferred income taxes                                                              600,000                    --
     Write-off of software product and other non-cash items                                  --               353,704
     Changes in assets and liabilities:
         Accounts receivable                                                          1,734,771               409,820
         Inventories                                                                    (74,301)             (752,426)
         Accounts payable                                                              (647,968)              221,901
         Accrued expenses and deferred revenue                                          511,976              (269,790)
         Prepaid expenses and other assets                                               60,018                17,207
                                                                                -----------------------------------------
                NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                     730,268              (574,096)
                                                                                -----------------------------------------
Cash used in Investing Activities
     Purchase of equipment                                                             (363,744)             (179,650)
     Addition to software development costs                                                  --            (1,091,906)
                                                                                -----------------------------------------
                NET CASH USED IN INVESTING ACTIVITIES                                  (363,744)           (1,271,556)
                                                                                -----------------------------------------
Cash provided by (used in) Financing Activities
     Net borrowings on bank line of credit                                                   --             1,047,176
     Payments on long-term debt                                                        (176,433)              (29,218)
     Proceeds from options and warrants exercised                                        91,085                23,878
                                                                                -----------------------------------------
                NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                     (85,348)            1,041,836
                                                                                -----------------------------------------

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        281,176              (803,816)

Cash and Cash Equivalents                                                       -----------------------------------------
     Beginning                                                                        2,031,432               928,497
                                                                                -----------------------------------------
     Ending                                                                     $     2,312,608           $   124,681
                                                                                =========================================
Supplemental Disclosures of Cash Flow Information
     Cash payments for interest                                                 $        56,134           $   186,003
</TABLE>


See Notes to Financial Statements

                                       6

<PAGE>





NOTES TO FINANCIAL STATEMENTS

NOTE 1.  MANAGEMENT STATEMENT

In the opinion of management of the Company, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal,
recurring accruals) necessary to present fairly the financial position of the
Company as of June 30, 2002 and the results of operations for the three and nine
months and cash flows for the nine months ended June 30, 2002 and 2001. The
results of operations for any interim period are not necessarily indicative of
the results for the fiscal year ending September 30, 2002. These interim
financial statements should be read in conjunction with the Company's annual
financial statements and related notes thereto included in the Company's Form
10-KSB and Annual Report to shareholders for the fiscal year ended September 30,
2001.


NOTE 2.  SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION: The Company derives its revenue from sales of hardware,
software and related services. The Company recognizes revenue in accordance with
Statement of Position (SOP) 97-2, Software Revenue Recognition, as amended by
SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition with Respect to
Certain Transactions, and Securities and Exchange Commission Staff Accounting
Bulletin (SAB) 101, Revenue Recognition in Financial Statements.

Hardware and software revenue is recognized under SOP 97-2 and SAB 101 when (i)
persuasive evidence of an arrangement exists, for example a signed agreement or
purchase order, (ii) delivery has occurred, as evidenced by shipping documents
and customer acceptance, (iii) the fee is fixed or determinable and payable
within twelve months, and (iv) collectibility is probable and supported by
credit checks or past payment history. Pursuant to certain contractual
arrangements, revenues are recognized for completed systems held at the
Company's warehouse pending the receipt of delivery instructions from the
customer.

The Company's customers typically purchase maintenance agreements annually.
Customers may also purchase extended warranty and service support contracts.
Revenue from maintenance agreements, extended warranty and service support
contracts are deferred and recognized ratably over the contract period.

INVENTORIES: Inventories are stated at the lower of cost or market. Cost is
determined using the standard cost method, which approximates the first-in,
first-out method.

CAPITALIZED SOFTWARE DEVELOPMENT COSTS: Software development costs incurred
after establishing technological feasibility are capitalized. These costs are
amortized to cost of goods sold beginning when the product is first released for
sale to the general public. Amortization is the greater of the amount computed
using the ratio of current gross revenues for the product to the total of
current and anticipated future gross revenues, or the straight-line method over
the remaining estimated economic life of the product (two to five years). The
Company reviews its long-lived assets periodically to determine potential
impairment by comparing the carrying value of the long-lived assets with
estimated future cash flows expected to result from the use of the assets,
including cash flows from disposition. Should the sum of the expected future
cash flows be less than the carrying value, the Company would recognize an
impairment loss. An impairment loss would be measured by comparing the amount by
which the carrying value exceeds the fair value of the long-lived assets.


                                       7

<PAGE>





BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: Basic net earnings (loss) per
common share are computed by dividing net earnings (loss) by the
weighted-average number of common shares outstanding for the period. Diluted net
earnings (loss) per common share reflect the dilutive effect of stock options
and warrants.

RESEARCH AND DEVELOPMENT COSTS: Expenditures for research and development
activities performed by the Company are charged to operations as incurred.


NOTE 3.  CORPORATE LIQUIDITY

The Company believes its current cash balances and vendor terms will provide
adequate cash to fund operating needs for the foreseeable future. However, a
protracted decline in revenue, significant revenue growth or an increase in
product development in the near term may require the Company to obtain external
funding. Moreover, it is possible that the Company's cash needs may vary
significantly from its predictions, due to failure to generate anticipated cash
flow or other reasons. No assurance can be given that the Company's predictions
regarding its cash needs will prove accurate, that the Company will not require
additional financing, that the Company will be able to secure any required
additional financing when needed, or that such financing, if obtained at all,
will be on terms favorable or acceptable to the Company.


                                       8

<PAGE>





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


The following discussion and analysis provides information we believe is
relevant to an assessment and understanding of our results of operations and
financial condition. This discussion should be read in conjunction with the
financial statements in Item 1 and our report on Form 10-KSB for the year ended
September 30, 2001.

RESULTS OF OPERATIONS
NET SALES. Our net sales for the three months ended June 30, 2002 were $2.72
million, which represents a decrease of 26% compared to net sales of $3.65
million for the three months ended June 30, 2001. Net sales for the nine months
ended June 30, 2002 increased 1% to $10.34 million from $10.24 million for the
comparable nine months ended June 30, 2001. We believe the decrease in sales for
the three months ended June 30, 2002 was due to poor economic conditions for
technology products and delayed receipt of several new orders for our current
fleet software and hardware products. The slight increase in net sales for the
nine months ended June 30, 2002 was due to a high order backlog at the beginning
of the period. We anticipate that total revenue for fiscal 2002 will approximate
that of fiscal 2001.

GROSS PROFIT. Our gross profit for the three months ended June 30, 2002 was
$455,000 (17% of net sales), a decrease of 53% compared to a gross profit of
$970,000 (27% of net sales) for the same period in 2001. The decrease in gross
profit percentage in the three months ended June 30, 2002 was due to an increase
in certain fixed cost of sales items, including increased amortization expense
of previously capitalized software development expenditures, as well as the
effect of spreading these fixed cost of sales expenses over a lower net sales
amount. Gross profit for the nine months ended June 30, 2002 of $3.44 million
(33% of net sales) slightly exceeded our gross profit of $3.39 million (33% of
net sales) for the same period in 2001. This increase in gross profit was due to
reduced manufacturing costs of certain products and improved software and
service contract revenue, offset by increased amortization expense.

OPERATING EXPENSES. Operating expenses include research and development
expenses, as well as selling, general and administrative expenses. Total
operating expenses were $1.67 million (61% of net sales) for the three months
ended June 30, 2002 compared to $1.89 million (52% of net sales) for the same
period in 2001. Operating expenses were $5.85 million (57% of net sales) for the
nine months ended June 30, 2002 compared to $4.46 million (44% of net sales) for
the same period last year.

Selling, general and administrative expenses were $1.18 million (43% of net
sales) for the three months ended June 30, 2002, compared to $1.13 million (31%
of net sales) for the comparable prior year period. For the nine months ended
June 30, 2002, selling, general and administrative expenses were $4.24 million
(41% of net sales), compared to $3.20 million (31% of net sales) for the same
period last year. The increase in selling, general and administrative expenses
in the first nine months of fiscal 2002 was due to increased sales salaries,
commissions and expenses incurred in an attempt to achieve higher net sales,
staff additions made to manage anticipated future growth, and a new matching
contribution to our retirement savings program. While we implemented several
initiatives in our fiscal third quarter to reduce our selling, general and
administrative expenses, we expect these expenses for fiscal 2002 to be higher
than during fiscal 2001.

Research and development expenses during the three and nine months ended June
30, 2002 were $487,000 and $1.61 million. Research and development expenses in
the comparable 2001 periods were $760,000 and $1.27 million. As planned, we are
utilizing proceeds from the July 2001 JDSTG equity investment for development of
our XATANET, XATA Application Module and Fleet Enterprise products. We
capitalize software development expenditures after we establish technological
feasibility of new products, and later


                                       9
<PAGE>




amortize these capitalized amounts to cost of goods sold based on the
anticipated useful life of the product. We determine the useful life of each
product based upon its anticipated future net revenues. In the nine months ended
June 30, 2002, we did not capitalize any software development costs because the
expenditures were primarily on products that have not attained technological
feasibility. In the nine months ended June 30, 2001, we capitalized $1.09
million of software development expenditures. We anticipate that total expenses
for research and development for fiscal 2002 will be greater than fiscal 2001.

NON-OPERATING INCOME AND EXPENSE. Interest expense for the three months ended
June 30, 2002 was $15,000 compared to $68,000 in the comparable prior year
period. Interest expense for the nine months ended June 30, 2002 was $60,000
compared to $194,000 in the comparable prior year period. Interest expense
decreased in the current year because we repaid in full our bank credit line
with funds from the July 2001 JDSTG investment. Interest expense in the first
nine months of fiscal 2002 included interest on the JDSTG Note Payable and an
annual minimum interest assessment associated with our former bank line of
credit. Interest income for the three and nine months ended June 30, 2002 was
$10,000 and $32,000, compared to $7,000 and $37,000 in the comparable prior year
periods.

INCOME TAXES. Income tax expense of $600,000 was recorded in the three months
ended June 30, 2002 in connection with the write-off of a deferred tax asset. No
income tax benefit or expense was recorded for the three or nine months ended
June 30, 2001. Financial Accounting Standards Board (FASB) Statement No. 109,
Accounting for Income Taxes, states in part: (i) all available evidence, both
positive and negative, shall be considered to determine whether, based on the
weight of that evidence, a valuation allowance is needed, (ii) forming a
conclusion that a valuation allowance is not needed is difficult if there is
negative evidence such as cumulative losses in recent years, and (iii) weight
given to the potential effect of negative and positive evidence shall be
commensurate with the extent to which it can be objectively verified. Because we
have had continued operating losses and do not have objectively verifiable
positive evidence as prescribed by FASB Statement No. 109, as of June 30, 2002
we concluded that the write-off of the deferred tax asset was appropriate.
Realization of deferred tax assets is dependent on future taxable income during
the periods when deductible temporary differences and carryforwards are expected
to be available to reduce taxable income. The amount of the net deferred tax
asset considered realizable could be increased in the future if we return to
profitability and actual future taxable income is higher than currently
estimated.

NET EARNINGS (LOSS). Net loss for the three months ended June 30, 2002 was $1.81
million compared to a net loss of $1.37 million for the three months ended June
30, 2001. Net loss for the nine months ended June 30, 2002 was $3.04 million
compared to a net loss of $1.59 million for the nine months ended June 30, 2001.
The increased net loss in the current year resulted from higher research and
development expenses, amortization of software development costs and selling,
general and administrative expenses, without a comparable increase in revenues
and gross profit, and the write-off of the deferred tax asset of $600,000 in the
current three month period.

LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2002, we had working capital of $3.43 million compared to working
capital of $5.35 million at September 30, 2001. The decrease in working capital
was primarily caused by purchases of equipment, payments on our long-term debt,
the write-off of the $600,000 deferred tax asset and our net loss for the
period, excluding non-cash depreciation and amortization expenses.

Cash provided by operating activities during the nine months ended June 30, 2002
totaled $730,000 compared to cash used by operating activities of $574,000 for
the same period last year. Cash provided by operating activities for the nine
months ended June 30, 2002 was the combined result of a decrease in accounts
receivable and prepaid expenses of $1.79 million, increase in accrued expenses
and deferred revenue of $512,000, non-cash depreciation and amortization expense
of $1.58 million and the $600,000 deferred tax asset write-off, offset by a an
increase in inventories of $74,000, decrease in accounts payable


                                       10
<PAGE>




of $648,000 and the $3.04 million net loss. We expect non-cash depreciation and
amortization expenses to be greater in fiscal 2002 than in 2001.

Cash used in investing activities was $364,000 for purchases of equipment in the
nine months ended June 30, 2002 compared to $1.27 million during the same period
last year. The decrease in cash used in investing activities was primarily due
to not capitalizing any software development expenditures during the nine months
ended June 30, 2002. We capitalize software development expenditures only after
achieving technological feasibility. Development expenditures before achieving
technological feasibility are treated as research and development expense as
they are incurred.

Cash used in financing activities was $85,000 in the nine months ended June 30,
2002 compared to $1.04 million provided by financing activities during the same
period a year ago. The decrease was primarily due to repayment in full of our
bank credit line in July 2001, and the absence of credit line activity since
that time.

On February 28, 2002, we terminated our credit agreement with Wells Fargo
Business Credit, Inc. because of the fees associated with maintaining an unused
line of credit with them. At the time of termination, we did not project usage
of the credit line for the balance of fiscal 2002. We believe our current cash
balances and vendor terms will provide adequate cash to fund operating needs for
the next twelve months and the foreseeable future. However, if our future
revenue is less than we currently anticipate, we may seek additional financing.
See Note 3 in the Notes to Financial Statements. It is possible our cash needs
may vary significantly from our predictions, due to failure to generate
anticipated cash flow or other reasons. No assurance can be given that our
predictions regarding cash needs will prove accurate, that we will not require
additional financing, that we will be able to secure any required additional
financing when needed, or that such financing, if obtained at all, will be on
terms favorable or acceptable to us.

TRANSACTIONS WITH RELATED PARTY VENDOR
We purchase our new XATA Application Module (XAM) mobile computing and
communication devices from Phoenix International Corporation, a wholly owned
subsidiary of Deere & Company. Deere is one of our significant shareholders and
currently has three individuals serving on our Board of Directors. Phoenix
International fabricates the XAM units to our detailed design specifications. We
retain full ownership to the intellectual property rights of the XAM design. Our
terms with Phoenix International are comparable to those we have with
non-affiliated vendors. Payments to Phoenix International in the three and nine
months ended June 30, 2002 totaled $312,000 and $444,000. These amounts may
increase over time to the extent sales of our XAM units and related products
increase. We have no dependence on this vendor and are able to purchase the
fabrication of this product from other vendors if necessary or desirable.


                                       11

<PAGE>





ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We invest our excess cash in money market mutual funds. The market risk on these
investments is minimal. Our outstanding long-term debt carries interest at rates
that primarily float with prime rates. As a result, there is no material market
risk relating to our long-term debt.

FORWARD-LOOKING STATEMENTS
This document includes forward-looking statements based on current expectations.
Actual results may differ materially. These forward-looking statements involve a
number of risks and uncertainties about us, our business, our customers, and the
economy and business environment in general. Risks and uncertainties about us
include, for example, the following: although we expect to incur operating
losses in the current fiscal year, these losses may continue beyond the expected
timeframe or in excess of the expected magnitude, and we may be dependent upon
external investment to support our growth during periods in which we incur
operating losses; we may be unable to adapt to technological change quickly
enough to grow or to retain our customer base; we will continue to be dependent
upon positioning systems and communication networks owned and controlled by
others, and accordingly, their problems may adversely impact us; for the
foreseeable future, we are dependent upon the continued receipt and fulfillment
of new orders for our current products; and our growth and profitability depend
on our timely introduction and market acceptance of new products, our ability to
continue to fund research and development activities, and our ability to
establish and maintain strategic partner relationships. You are encouraged to
read more about the specific risks and uncertainties of our business. We have
described those which we currently consider most important in our report on Form
10-KSB for our fiscal year ended September 30, 2001. We undertake no obligation
to update our disclosures in this regard.


                                       12
<PAGE>





PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         None


ITEM 2.   CHANGES IN SECURITIES

         None


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

         None


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

         None


ITEM 5. OTHER INFORMATION

         None


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          Exhibit
          99.1    Certification pursuant to 18 U.S.C. Section 1350 as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


                                       13
<PAGE>











SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Dated: August 12, 2002    XATA Corporation
      ----------------    (Registrant)



                          by:/s/  John G. Lewis
                             --------------------------------------------------
                             John G. Lewis
                             Chief Financial Officer
                             (Signing as Principal Financial and Accounting
                             Officer and as Authorized Signatory of Registrant)



                                       14