17


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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


                 For the quarterly period ended January 31, 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 0-21695

                          Manchester Technologies, Inc.
             (Exact name of registrant as specified in its charter)

         New York                                   11-2312854
(State or other jurisdiction of                  (I.R.S. Employer
Incorporation or organization)                   Identification Number)

                                 160 Oser Avenue
                            Hauppauge, New York 11788
              (Address of registrant's principal executive offices)

                                 (631) 435-1199
              (Registrant's telephone number, including area code)


          (Former name or former address, 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.

                                 [X] Yes [ ] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock, as of the latest practicable date.


  There were  7,990,215  outstanding  shares of COMMON STOCK at March 14, 2002.




<PAGE>


                 MANCHESTER TECHNOLOGIES, INC. AND SUBSIDIARIES

                                Table of Contents

PART I.       FINANCIAL INFORMATION                                        Page
-------       ---------------------                                        ----


Item 1.       Condensed Consolidated Balance Sheets
                 January 31, 2002  (unaudited) and July 31, 2001            3


              Condensed Consolidated  Statements of Income Three months and
                six months ended January 31, 2002 and 2001 (unaudited)      4

              Condensed  Consolidated  Statements  of Cash Flows Six months
                 ended January 31, 2002 and 2001 (unaudited)                5

              Notes to Unaudited Condensed Consolidated
                Financial Statements                                        6


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



PART II.      OTHER INFORMATION


Item 4.       Submission of Matters to a Vote of Security Holders           16

Item 6.       Exhibits and Reports                                          16





















                                       2

<PAGE>


Part I - FINANCIAL INFORMATION

ITEM 1.            Financial Statements

                 Manchester Technologies, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                     (in thousands except per share amounts)

<TABLE>
<CAPTION>

                                                January 31, 2002   July 31, 2001
                                                   (Unaudited)     -------------
                                                   ------------

<S>                                                     <C>          <C>
Assets:
  Cash and cash equivalents                             $ 9,559      $14,493
  Accounts receivable, net                               29,578       25,135
  Inventory                                              12,752        7,546
  Deferred income taxes                                     459          459
  Prepaid income taxes                                      109           43
  Prepaid expenses and other current assets                 610          362
                                                            ---          ---

         Total current assets                            53,067       48,038

Property and equipment, net                               6,390        6,300
Goodwill, net                                             8,296        6,148
Deferred income taxes                                       842          842
Other assets                                                490          455
                                                            ---          ---

                                                        $69,085      $61,783
                                                         ======       ======

Liabilities:
  Accounts payable and accrued expenses                 $22,269      $15,259
  Deferred service contract revenue                         552          807
                                                            ---          ---

         Total current liabilities                       22,821       16,066
Deferred compensation payable                               162          162
                                                            ---          ---

         Total liabilities                               22,983       16,228
                                                         ------       ------

Shareholders' equity:
  Preferred stock, $.01 par value; 5,000 shares
   authorized, none issued                                    -            -
  Common stock, $.01 par value; 25,000 shares
   authorized, 7,990  issued and outstanding                 80           80
  Additional paid-in capital                             18,942       18,942
  Deferred compensation                                     (28)         (38)
  Retained earnings                                      27,108       26,571
                                                         ------       ------

         Total shareholders' equity                      46,102       45,555
                                                         ------       ------

                                                        $69,085      $61,783
                                                         ======       ======

</TABLE>

See notes to condensed consolidated financial statements

                                       3
<PAGE>



                 Manchester Technologies, Inc. and Subsidiaries
                   Condensed Consolidated Statements of Income
                    (in thousands, except per share amounts)
                                    Unaudited

<TABLE>
<CAPTION>

                                    Three months ended January 31,  Six months ended  January 31,
                                            2002        2001          2002         2001
                                            ----        ----          ----         ----
<S>                                         <C>          <C>        <C>           <C>
   Revenue
       Products                             $65,287      $68,947    $124,159      $148,462
       Services                               2,812        1,941       5,506         3,568
                                              -----        -----       -----         -----
                                             68,099       70,888     129,665       152,030
                                             ------       ------     -------       -------

    Cost of revenue
       Products                              55,818       60,762     107,079       131,043
       Services                               2,214        1,209       4,025         2,313
                                              -----        -----       -----         -----
                                             58,032       61,971     111,104       133,356
                                             ------       ------     -------       -------


       Gross profit                          10,067        8,917      18,561        18,674

Selling, general and
    administrative expenses                   9,394        8,973      17,789        17,858
                                              -----        -----      ------        ------

       Income (loss) from operations            673          (56)        772           816

Interest income                                  47           95         122           291
                                                 --           --         ---           ---

       Income  before income taxes              720           39         894         1,107

Provision for income taxes                      287           15         357           445
                                                ---           --         ---           ---

       Net income                              $433          $24        $537          $662
                                                ===           ==         ===           ===

Net Income per share
   Basic                                      $0.05        $0.00       $0.07         $0.08
                                               ====         ====        ====          ====
   Diluted                                    $0.05        $0.00       $0.07         $0.08
                                               ====         ====        ====          ====

Weighted average
  shares outstanding
     Basic                                    7,990        8,014       7,990         8,074
                                              =====        =====       =====         =====

      Diluted                                 7,991        8,014       7,990         8,118
                                              =====        =====       =====         =====

</TABLE>

See notes to condensed consolidated financial statements.
                                        4
<PAGE>




                 Manchester Technologies, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>

                                                             For the six months
                                                             ended  January 31,
                                                               2002        2001
                                                               ----        ----
                                                                 (Unaudited)
                                                                 -----------


<S>                                                            <C>       <C>
Cash flows from operating activities:
         Net income                                            $537      $  662

  Adjustments to reconcile net income to net
   cash from operating activities:
         Depreciation and amortization                        1,006       1,035
         Increase in allowance for doubtful accounts            178         225
         Non cash compensation and commission expense            10          17
  Change in assets and liabilities (net of
   effects of acquisitions):
         (Increase) decrease in accounts receivable          (4,355)      4,289
         Increase in inventory                               (5,069)     (1,038)
         (Increase) decrease in prepaid income taxes            (66)        374
         Increase in prepaid expenses and
             other current assets                              (228)        (30)
         Increase in other assets                               (35)        (10)
         Increase (decrease) in accounts payable and
             accrued expenses                                 6,504      (8,010)
         Decrease in deferred service contract revenue         (255)       (225)
                                                                ---        ----


         Net cash used in operating activities               (1,773)     (2,711)
                                                              -----      -------

Cash flows from investing activities:
         Capital expenditures                                  (990)       (946)
         Payments for acquisitions, net of cash acquired     (1,613)          -
                                                              ------      -----
              Net cash used in investing activities          (2,603)       (946)
                                                             ------        -----

Cash flows from financing activities:
         Payments on notes payable - bank                      (515)        (18)
         Payments on notes payable - other                      (43)          -
         Purchase and retirement of common stock                  -        (574)
         Issuance of common stock upon exercise
          of options                                              -           6
                                                                ---        ----
              Net cash used in financing activities            (558)       (586)
                                                               ----        ----

         Net decrease in cash and cash equivalents           (4,934)     (4,243)
 Cash and cash equivalents at beginning of period            14,493      16,156
                                                             ------      ------
         Cash and cash equivalents at end of period          $9,559     $11,913
                                                              =====      ======
</TABLE>

See notes to condensed consolidated financial statements.

                                       5

<PAGE>


                 Manchester Technologies, Inc. and Subsidiaries
         Notes to Unaudited Condensed Consolidated Financial Statements
                  (in thousands except share and per share data)


   1.    Organization and Basis of Presentation


          Manchester Technologies, Inc., formerly Manchester Equipment Co., Inc.
     ("Manchester," "we," "us," or the "Company"),  is a single-source solutions
     provider  specializing  in  hardware  and  software   procurement,   custom
     networking,   storage,   enterprise  and  Internet  solutions.   Manchester
     engineers   provide   answers  to   companies'   MIS  needs  by   combining
     comprehensive  analysis,  design and  integration  services with a complete
     line of  competitively  priced products and peripherals from the industry's
     leading vendors.

         Sales of  hardware,  software  and  networking  products  comprise  the
      majority of the Company's revenue. The Company has entered into agreements
      with  certain  suppliers  and  manufacturers  that may provide the Company
      favorable  pricing and price  protection in the event a vendor reduces its
      prices.

         In the opinion of the Company,  the  accompanying  unaudited  Condensed
      Consolidated  Financial Statements contain all adjustments  (consisting of
      only  normal and  recurring  accruals)  necessary  to  present  fairly the
      financial  position  of the Company as of January 31, 2002 and the results
      of operations for the three and six months ended January 31, 2002 and 2001
      and cash  flows  for the six  months  ended  January  31,  2002 and  2001.
      Although the Company believes that the disclosures  herein are adequate to
      make the information not misleading,  these financial statements should be
      read in conjunction  with the audited  financial  statements and the notes
      thereto for the year ended July 31, 2001, included in the Company's Annual
      Report on Form 10-K as filed with the Securities and Exchange Commission.


   2.    Net Income Per Share

         Basic net income per share has been  computed by dividing net income by
      the weighted  average  number of common  shares  outstanding.  Diluted net
      income per share has been  computed by dividing net income by the weighted
      average number of common shares outstanding,  plus the assumed exercise of
      dilutive  stock options and warrants,  less the number of treasury  shares
      assumed to be  purchased  from the  proceeds of such  exercises  using the
      average market price of the Company's  common stock during each respective
      period. Stock options and warrants representing 916,000 and 899,000 shares
      for the  three  months  ended  January  2002 and 2001,  respectively,  and
      925,000 and 554,000  shares for the six months ended  January 31, 2002 and
      2001,  respectively,  are  excluded  from the  calculation  of diluted net
      income per share since the result  would be  antidilutive.  The  following
      table  reconciles  the  denominators  of the basic and  diluted  per share
      computations.  For  each  period,  the  numerator  is the  net  income  as
      reported.
<TABLE>
<CAPTION>

                                                          (shares in thousands)
                             Three months ended January 31,                  Six months ended January 31,
                                2002               2001                      2002                   2001
                                ----               ----                      ----                   ----
                                   Per share              Per share                 Per share             Per share
                         Shares     amount      Shares    amount        Shares      amount       Shares    amount
                         ------     ------      ------    ------        ------      ------       ------    ------
        <S>              <C>          <C>        <C>        <C>          <C>          <C>          <C>      <C>
         Basic           7,990        $0.05      8,014      $0.00        7,990        $0.07        8,074    $0.08
                                      =====                 =====                     =====                 =====

         Effect of
          dilutive
           options           1                       -                       -                        44
                             -                     ---                       -                        --


         Diluted         7,991       $0.05        8,014     $0.00         7,990       $0.07        8,118    $0.08
                         =====       =====        =====     =====         =====       =====        =====    =====
</TABLE>
                                       6
<PAGE>

  3.    Acquisition of Donovan Consulting Group, Inc.

          On August 29, 2001, the Company acquired all of the outstanding  stock
     of Donovan  Consulting  Group,  Inc.  ("Donovan"),  a Delaware  corporation
     headquartered near Atlanta,  Georgia.  Donovan is a technical services firm
     that  delivers  Wireless  LAN  solutions  to  customers   nationwide.   The
     acquisition,  which has been  accounted  for as a purchase,  consisted of a
     cash  payment  of  $1,500  plus  potential  future   contingent   payments.
     Contingent  payments  of up to $1,000 may be payable on each of November 2,
     2002 and November 2, 2003 based upon Donovan achieving certain  agreed-upon
     increases  in  revenue  and  pre-tax  earnings.   In  connection  with  the
     acquisition, the Company assumed approximately $435 of bank debt and $43 of
     other debt, which were subsequently  repaid.  Donovan was acquired in order
     to  strengthen  the Company's  position in the wireless LAN arena.  Donovan
     will allow the  Company to offer total  Wireless  LAN  solutions  including
     state of the art products as well as the  services  necessary to have those
     products operate optimally.

          Operating   results  of  Donovan  are   included   in  the   condensed
     consolidated  statement of income from the acquisition  date. The estimated
     fair value of tangible assets and  liabilities  acquired was $497 and $869,
     respectively. The excess of the aggregate purchase price over the estimated
     fair value of the tangible net assets  acquired was  approximately  $1,872.
     The factors that contributed to the determination of the purchase price and
     the resulting goodwill include the significant growth expected in this area
     due to the  combination  of the Company's  long history of strong  customer
     relationships,  financial  strength and  stability  coupled with  Donovan's
     product  offerings and highly skilled  technical staff. The $1,872 will not
     be  amortized;  however,  it will  be  subject  to  impairment  testing  in
     accordance with Statement No. 142, "Goodwill and Other Intangible Assets."

          The  presentation of supplemental  pro forma financial  information is
     deemed immaterial.  Acquisition of e.Track  Solutions,  Inc. On November 9,
     2001,  the  Company  acquired  all  of the  outstanding  stock  of  e.Track
     Solutions,  Inc.  ("e.Track"),  a New  York  corporation  headquartered  in
     Pittsford,  New York. e.Track is a business and software services firm that
     delivers  business,   Internet  and  information  technology  solutions  to
     customers  nationwide.  The  acquisition,  which will be accounted for as a
     purchase,  consisted of cash payments of $290  (including  debt assumed and
     subsequently repaid). e.Track was acquired in order to allow the Company to
     offer our customers  customized  software solutions along with the products
     and services that we have traditionally offered.

          Operating  results  of  e.Track  will  be  included  in the  condensed
      consolidated statements of income from the acquisition date. The estimated
      fair value of tangible assets and liabilities  acquired was $116 and $192,
      respectively.  The excess of aggregate  purchase  price over the estimated
      fair value of the tangible net assets  acquired was $276. The factors that
      contributed to the  determination  of the purchase price and the resulting
      goodwill  include the expectation that the combination of e.Track's highly
      skilled technical staff, coupled with the Company's financial strength and
      customer base, will result in significant growth at e.Track going forward.
      The $276 will not be amortized;  however, it will be subject to impairment
      testing  in  accordance  with  Statement  No.  142,  "Goodwill  and  Other
      Intangible Assets."

          The presentation of supplemental  pro for ma financial  information is
     deemed immaterial.


4.       Statement of Cash Flow Information

      Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>

                                                 Six months ended January 31,
                                                    2002               2001
                                                    ------             ----
                                                          (in thousands)
<S>                                                   <C>               <C>
      Cash paid for income taxes                      $423              $93
                                                      =====             ===
</TABLE>

                                       7


<PAGE>



5.   Accounting for Business Combinations, Goodwill and Other Intangible Assets

          In July 2001, the Financial Accounting Standards Board ("FASB") issued
     SFAS No. 141 "Business Combinations," and SFAS No. 142, "Goodwill and Other
     Intangible  Assets." SFAS No. 141 specifies criteria that intangible assets
     acquired in a business  combination must meet to be recognized and reported
     apart from  goodwill.  SFAS No. 142 requires that  goodwill and  intangible
     assets with indefinite useful lives no longer be amortized,  but instead be
     tested for impairment at least annually in accordance with the provision of
     SFAS No. 142. This  pronouncement also requires that intangible assets with
     estimable useful lives be amortized over their respective  estimated useful
     lives and reviewed for impairment in accordance with SFAS No. 121.

          The Company has adopted the  provisions of SFAS Nos. 141 and 142 as of
     August 1, 2001.  The Company has evaluated  its existing  goodwill that was
     acquired in prior purchase business combinations and has determined that an
     adjustment or  reclassification  to intangible assets at August 1, 2001 was
     not  required  in order to conform to the new  criteria in SFAS No. 141 for
     recognition apart from goodwill.

          The Company was required to test goodwill for impairment in accordance
     with the provisions of SFAS No. 142 by January 31, 2002. In accordance with
     SFAS No. 142,  goodwill is allocated to reporting  units,  which are either
     the operating  segment or one reporting level below the operating  segment.
     The Company determined that its reporting unit for purposes of applying the
     provisions of SFAS 142 was its operating segment.  During the quarter,  the
     Company completed its initial  impairment review which indicated that there
     was no impairment  as of the date of adoption.  Fair value for goodwill was
     determined based on discounted cash flows.

          Goodwill  amortization  for the six months ended  January 31, 2001 was
     $195,000.  The  following  table shows the results of operations as if SFAS
     No. 141 was applied to prior periods:
<TABLE>
<CAPTION>

                                                     For the six months
                                                        ended January 31,
                                                    2002                2001
                                                    ----                ----
     <S>                                             <C>                <C>
      Net income as reported                          $537               $662
      Add back: Goodwill amortization                    -                195
                                                      ----                ---

      Adjusted net income                             $537               $857
                                                       ===                ===

      Income per share - Basic
        Net income, as reported                      $0.07              $0.08
        Goodwill amortization                         -                  0.02
                                                    -----                ----

        Adjusted net income                          $0.07              $0.10
                                                      ====               ====

      Income per share - Diluted
        Net income, as reported                      $0.07              $0.08
        Goodwill amortization                         -                  0.02
                                                      ---                ----

        Adjusted net income                          $0.07              $0.10
                                                      ====               ====
</TABLE>



                                       8



<PAGE>



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


      The following  discussion and analysis of financial  condition and results
of operations of the Company  should be read in  conjunction  with the condensed
consolidated  financial  statements and notes thereto included elsewhere in this
Quarterly Report on Form 10-Q and with the Company's Annual Report on Form 10-K.
This discussion and analysis contains certain forward-looking  statements within
the meaning of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are not historical facts, and
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially  from the results  anticipated in those  forward-looking  statements.
These risks and uncertainties  include,  but are not limited to, those set forth
below,  those set forth in the Company's Annual Report on Form 10-K for the year
ended July 31, 2001,  and those set forth in the  Company's  other  filings from
time to time with the Securities and Exchange Commission.

General


         We are an integrator  and reseller of computer  hardware,  software and
networking products,  primarily for commercial customers. We offer our customers
single-source  solutions,  customized to their  information  systems  needs,  by
integrating  analysis,   design  and  implementation   services  with  hardware,
software,  networking  products and peripherals from leading  vendors.  To date,
most of our revenues have been derived from product  sales.  We generally do not
develop or sell software products.  However,  certain computer hardware products
sold by us are loaded with prepackaged software products.

         The  computer  industry  is  characterized  by a number of  potentially
adverse business conditions,  including pricing pressures, evolving distribution
channels,  market  consolidation and a decline in the rate of growth in sales of
personal   computers.   Heightened  price  competition  among  various  hardware
manufacturers  may result in reduced per unit revenue and declining gross profit
margins.  As a result of the intense price competition  within our industry,  we
have experienced  increasing  pressure on our gross profit and operating margins
with respect to our sale of products.  Our inability to compete  successfully on
the  pricing of  products  sold,  or a  continuing  decline in gross  margins on
products  sold due to adverse  industry  conditions or  competition,  may have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

         An  integral  part  of our  strategy  is to  increase  our  value-added
services revenue. These services generally provide higher operating margins than
those  associated  with the sale of products.  This strategy  requires us, among
other things,  to attract and retain  highly  skilled  technical  employees in a
competitive   labor   market,   provide   additional   training   to  our  sales
representatives  and enhance our existing service  management  system. We cannot
predict  whether we will be  successful  in  increasing  our focus on  providing
value-added  services,  and the  failure  to do so may have a  material  adverse
effect on our business, results of operations and financial condition.

         Our  strategy  also  includes  expanding  our  presence in the New York
metropolitan  area by increasing our sales and service  capabilities  in our New
York City office and enlarging our sales,  service and training  capabilities at
our Long Island headquarters,  as well as expanding  geographically into growing
business centers in the eastern half of the United States.  We cannot assure you
that the expansion of our New York  metropolitan  area  operations will increase
profits generated by such operations, that the opening of new offices will prove
profitable, or that these expansion plans will not substantially increase future
capital expenditures or other expenditures. The failure of this component of our
strategy may materially adversely affect our business, results of operations and
financial condition.

         To date,  our revenues have been based  primarily upon sales in the New
York  Metropolitan  area.  Our strategy,  encompassing  the expansion of service
offerings,  the  expansion  of  existing  offices and the  establishment  of new
regional  offices,  has  challenged  and will  continue to challenge  our senior
management and infrastructure. We cannot predict our ability to respond to these

                                       9

<PAGE>

challenges.  If we fail to effectively manage our planned growth, there may be a
material  adverse  effect on our business,  results of operations  and financial
condition.

         On September 11, 2001,  the World Trade Center in New York City and the
Pentagon  in  Washington,  D.C.  were  the  subject  of  terrorists  attacks.  A
significant  part of our  business  is  generated  from  our New  York  City and
Baltimore/Washington,  D.C. offices and revenues for the month of September were
adversely impacted with declines in orders and shipments.  We cannot predict the
impact that these or potential future attacks may have on our business,  results
of operations and financial condition.

         The success of our  strategy  depends in large part upon our ability to
attract and retain highly skilled technical personnel and sales representatives,
including independent sales representatives, in a very competitive labor market.
Our  ability  to grow our  service  offerings  has been  somewhat  limited  by a
shortage of qualified  personnel,  and we cannot assure you that we will be able
to attract and retain such skilled personnel and representatives.  The loss of a
significant number of our existing technical personnel or sales representatives,
difficulty  in hiring  or  retaining  additional  technical  personnel  or sales
representatives,  or reclassification of our sales  representatives as employees
may have a material  adverse  effect on our business,  results of operations and
financial condition.

         The  computer  industry is  characterized  by intense  competition.  We
directly  compete  with  local,   regional  and  national  systems  integrators,
value-added  resellers  and  distributors  as  well  as  with  certain  computer
manufacturers  that market through direct sales forces and/or the Internet.  The
computer industry has recently experienced a significant amount of consolidation
through mergers and acquisitions,  and  manufacturers of personal  computers may
increase  competition  by  offering a range of  services  in  addition  to their
current  product  and service  offerings.  In the  future,  we may face  further
competition  from new market entrants and possible  alliances  between  existing
competitors.  Moreover,  additional  suppliers and  manufacturers  may choose to
market  products  directly to end users  through a direct sales force and/or the
Internet rather than or in addition to channel distribution, and may also choose
to market services, such as repair and configuration  services,  directly to end
users. Some of our competitors have or may have,  greater  financial,  marketing
and other  resources,  and may offer a broader  range of products and  services,
than  us.  As a  result,  they may be able to  respond  more  quickly  to new or
emerging technologies or changes in customer requirements,  benefit from greater
purchasing  economies,  offer more  aggressive  hardware and service  pricing or
devote greater resources to the promotion of their products and services. We may
not be able to compete successfully in the future with these or other current or
potential competitors.

     Our business is dependent upon our relationships  with major  manufacturers
and  distributors  in the  computer  industry.  Many aspects of our business are
affected  by our  relationships  with  major  manufacturers,  including  product
availability,  pricing and  related  terms,  and  reseller  authorizations.  The
increasing demand for personal computers and ancillary equipment has resulted in
significant product shortages from time to time, because manufacturers have been
unable to produce  sufficient  quantities of certain products to meet demand. We
cannot  predict that  manufacturers  will  maintain an adequate  supply of these
products to satisfy all the orders of our customers or that,  during  periods of
increased demand,  manufacturers will provide products to us, even if available,
or at discounts previously offered to us. In addition, we cannot assure you that
the pricing and related terms offered by major  manufacturers will not adversely
change in the future. Our failure to obtain an adequate supply of products,  the
loss of a major manufacturer, the deterioration of our relationship with a major
manufacturer  or our inability in the future to develop new  relationships  with
other  manufacturers  may  have a  material  adverse  effect  on  our  business,
financial  condition  and  results of  operations.  On  September  4, 2001,  the
Hewlett-Packard   Company  and  Compaq  Computer  Corporation   announced  their
intention  to merge.  Manchester  sells the  products of both  companies  and we
believe that we have strong  relationships with both companies.  While we do not
believe that there will be a material adverse effect on our business,  financial
condition and results of operations as a result of this merger,  there can be no
assurance that such a material adverse effect will not occur.

         Certain  manufacturers  offer  market  development  funds,  cooperative
advertising and other promotional programs to systems integrators,  distributors
and computer  resellers.  We rely on these funds for many of our advertising and
                                       10

<PAGE>

promotional  campaigns.  In recent years,  manufacturers  have generally reduced
their level of support with respect to these programs,  which has required us to
increase  spending of our own funds to obtain the same level of advertising  and
promotion.  If manufacturers continue to reduce their level of support for these
programs, or discontinue them altogether,  we would have to further increase our
advertising and promotion spending,  which may have a material adverse effect on
our business, financial condition and results of operations.

         Our  profitability  has been  affected by our ability to obtain  volume
discounts from certain  manufacturers,  which has been dependent,  in part, upon
our  ability  to sell  large  quantities  of  products  to  computer  resellers,
including value added resellers. Our sales to resellers have been made at profit
margins   generally  less  favorable  than  our  sales  directly  to  commercial
customers.  Our  inability to sell  products to computer  resellers  and thereby
obtain the desired volume discounts from manufacturers or to expand our sales to
commercial  customers  sufficiently  to  offset  our  need to rely on  sales  to
computer resellers may have a material adverse effect on our business, financial
condition and results of operations.

         The markets for our products and services are  characterized by rapidly
changing  technology  and  frequent  introduction  of new  hardware and software
products  and  services.  This may render many  existing  products  and services
noncompetitive,  less profitable or obsolete.  Our continued success will depend
on our ability to keep pace with the technological  developments of new products
and services and to address increasingly  sophisticated  customer  requirements.
Our  success  will also  depend  upon our  abilities  to address  the  technical
requirements  of  our  customers   arising  from  new  generations  of  computer
technologies,  to obtain these new products from present or future suppliers and
vendors at reasonable  costs,  to educate and train our employees as well as our
customers  with  respect to these new  products  or  services  and to  integrate
effectively  and efficiently  these new products into both our internal  systems
and  systems  developed  for  our  customers.   We  may  not  be  successful  in
identifying,  developing  and  marketing  product  and service  developments  or
enhancements in response to these technological  changes. Our failure to respond
effectively to these technological changes may have a material adverse effect on
our business, financial condition and results of operations.

         Rapid product  improvement and  technological  change  characterize the
computer  industry.  This results in  relatively  short  product life cycles and
rapid product obsolescence,  which can place inventory at considerable valuation
risk. Certain of our suppliers provide price protection to us, which is intended
to reduce the risk of inventory  devaluation due to price  reductions on current
products.  Certain of our suppliers also provide stock  balancing to us pursuant
to which we are able to  return  unsold  inventory  to a  supplier  as a partial
credit against  payment for new products.  There are often  restrictions  on the
dollar amount of inventory that we can return at any one time.  Price protection
and stock  balancing  may not be  available  to us in the future,  and,  even if
available,  these measures may not provide complete  protection against the risk
of excess or obsolete inventories. Certain manufacturers have reduced the period
for which they provide price protection and stock balancing rights.  Although we
maintain a sophisticated  proprietary  inventory  management  system,  we cannot
assure you that we will continue to successfully  manage our existing and future
inventory.  Our failure to successfully  manage our current or future  inventory
may have a material  adverse  effect on our business,  financial  conditions and
results of operations.

         Our strategy  envisions  that part of our future  growth will come from
acquisitions  consistent  with our strategy.  There can be no assurance  that we
will be able to identify suitable  acquisition  candidates and, once identified,
to  negotiate  successfully  their  acquisition  at a  price  or  on  terms  and
conditions  favorable to us, or to integrate  the  operations  of such  acquired
businesses  with  our  operations.  Certain  of  these  acquisitions  may  be of
significant  size  and may  include  assets  that  are  outside  our  geographic
territories or are ancillary to our core business strategy.

         Our quarterly revenue and operating  results have varied  significantly
in the past and are  expected  to  continue  to do so in the  future.  Quarterly
revenue and operating results generally  fluctuate as a result of the demand for
our  products  and  services,  the  introduction  of new  hardware  and software
technologies with improved features,  the introduction of new services by us and
our  competitors,  changes in the level of our operating  expenses,  competitive
conditions and economic conditions. In particular,  over the last several years,
                                       11
<PAGE>

we  have  increased  certain  of  our  fixed  operating  expenses,  including  a
significant increase in personnel, as part of our strategy to increase our focus
on  providing  systems  integration  and other  higher  margin  and value  added
services.  As a result,  we believe  that  period-to-period  comparisons  of our
operating  results  should  not  be  relied  upon  as an  indication  of  future
performance.   In  addition,  the  results  of  any  quarterly  period  are  not
necessarily indicative of results to be expected for a full fiscal year.

         As a result of the rapid changes which are taking place in computer and
networking technologies, product life cycles are short. Accordingly, our product
offerings change  constantly.  Prices of products change,  with generally higher
prices  early in the life cycle of the product and lower  prices near the end of
the product's life cycle. The computer  industry has experienced  rapid declines
in average selling prices of personal computers. In some instances, we have been
able to offset these price declines with  increases in units shipped.  There can
be no assurance that average selling prices will not continue to decline or that
we will be able to offset  declines in average  selling prices with increases in
units shipped.

         Most of the  personal  computers  we  sell  utilize  operating  systems
developed by Microsoft Corporation.  The United States Department of Justice has
brought a successful  antitrust action against Microsoft,  which could delay the
introduction   and   distribution   of   Microsoft   products.   The   potential
unavailability of Microsoft products could have a material adverse effect on our
business, results of operations and financial condition.

         We lease certain warehouses and offices from entities that are owned or
controlled by our majority shareholder.  Each of the leases with related parties
has been amended  effective with the closing of our initial  public  offering in
December 1996 to reduce the rent payable under that lease to then current market
rates.

Critical Accounting Policies

         The  preparation  of financial  statements  and related  disclosures in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments,  assumptions and estimates that
affect  the  amounts  reported  in the  consolidated  financial  statements  and
accompanying  notes.  Note 1 to the  consolidated  financial  statements  in the
Annual Report on Form 10-K for the fiscal year ended July 31, 2001 describes the
significant  accounting  policies  and methods  used in the  preparation  of the
consolidated  financial statements.  Estimates are used for, but not limited to,
the accounting for the allowance for doubtful  accounts,  inventory  allowances,
and goodwill impairments.  Actual results could differ from these estimates. The
following critical accounting policies are impacted  significantly by judgments,
assumptions and estimates used in the preparation of the consolidated  financial
statements.

         The allowance for doubtful  accounts is based on our  assessment of the
collectibility  of  specific  customer  accounts  and the aging of the  accounts
receivable.  If there is a deterioration of a major customer's credit worthiness
or actual defaults are higher than our historical  experience,  our estimates of
the recoverability of amounts due us could be adversely affected.

         Inventory  purchases  and  commitments  are based  upon  future  demand
forecasts.  If there is a sudden  and  significant  decrease  in demand  for our
products or there is a higher risk of inventory  obsolescence because of rapidly
changing  technology and customer  requirements,  we may be required to increase
our inventory allowances and our gross margin could be adversely affected.

         We will  perform  goodwill  impairment  tests on an  annual  basis  and
between annual tests in certain  circumstances.  In assessing the recoverability
of the Company's goodwill,  the Company must make various assumptions  regarding
estimated  future cash flows and other factors in determining the fair values of
the respective assets. If these estimates or their related assumptions change in
the future,  the Company may be required to record impairment  charges for these
assets  in  future  periods.  Any such  resulting  impairment  charges  could be
material to the Company's results of operations.
                                       12
<PAGE>

      Results of Operations

      The following  table sets forth,  for the periods  indicated,  information
derived from our  Condensed  Consolidated  Statements  of Income  expressed as a
percentage of related revenue or total revenue.
<TABLE>
<CAPTION>


                                                                   Percentage of Revenue
                                                  Three Months Ended              Six  Months Ended
                                                        January 31,                  January 31,
                                                    2002             2001         2002         2001
                                                    ----             -----        ----         ----
           <S>                                      <C>              <C>         <C>            <C>
           Product sales                            95.9%            97.3%       95.8%          97.7%

           Services                                  4.1              2.7         4.2            2.3
                                                     ---              ---         ---           ----
                Total revenue                      100.0            100.0       100.0          100.0
                                                   -----            -----       -----          -----

           Cost of product sales                    85.5             88.1        86.2           88.3
            Cost of services                        78.7             62.3        73.1           64.8
                                                    ----             ----        ----           ----

                Cost of revenue                     85.2             87.4        85.7           87.7
                                                    ----             ----        ----           ----

           Product gross profit                     14.5             11.9        13.8           11.7
           Services gross profit                    21.3             37.7        26.9           35.2
                                                    ----             ----        ----           ----

                Gross profit                        14.8             12.6        14.3           12.3

           Selling, general and
              administrative expenses               13.8             12.7        13.7           11.8
                                                    ----             ----        ----           ----
           Income (loss) from operations             1.0             (0.1)        0.6            0.5
           Interest and other income, net            0.0              0.1         0.1            0.2
                                                     ---              ---         ---            ---
           Income before income taxes                1.0              0.0         0.7            0.7
                                                                                  ---
           Provision for income taxes                0.4              0.0         0.3            0.3
                                                     ---              ---         ---            ---
           Net income                                0.6%             0.0%        0.4%           0.4%
                                                     ===              ===         ===            ===
</TABLE>

     Three  Months  Ended  January 31, 2002  Compared  with Three  Months  Ended
     January 31, 2001

           Revenue.  The Company's  revenue  decreased $2.8 million or 3.9% from
      $70.9 million for the three months ended January 31, 2001 to $68.1 million
      for the three months ended January 31, 2002.  Product revenue decreased by
      $3.7  million due  primarily  to lower  shipments  of computers as well as
      lower per unit prices for computers. This was somewhat offset by increases
      in shipments  of  displays.  Service  revenue  increased  $871,000 to $2.8
      million  from $1.9  million in the same  quarter  last year.  Revenue from
      services  increased  primarily  due to  revenue  generated  by our two new
      acquisitions,  Donovan  and  e.Track,  as well as  revenue  from  sales to
      customers that is delivered by manufacturers or vendors.

           Gross Profit.  Cost of revenue  includes the direct costs of products
      sold, freight and the personnel costs associated with providing  technical
      services,  offset in part by certain market  development funds provided by
      manufacturers.  All other operating costs are included in selling, general
      and administrative  expenses. Gross profit increased $1.2 million or 12.9%
      from $8.9 million for the second  quarter of fiscal 2001 to $10.1  million
      for the most recent fiscal quarter. Gross profit from the sale of products
      increased  by $1.3  million or 15.7%,  while gross profit from the sale of
      services  decreased  by  $134,000 or 18.3%.  The  changes in gross  profit
      primarily  resulted  from the  changes  in  revenue  discussed  above.  In
      addition,  the  Company  was able to take  advantage  of  certain  product
      opportunities  from  manufacturers and vendors resulting in higher margins
      than  experienced in recent  quarters.  Margins on service  offerings were
      negatively impacted by lower utilization of our technical staff, primarily
      the staff connected with Donovan and e.Track.  As a percentage of revenue,
      gross profit  increased  to 14.8% in the second  quarter of fiscal 2002 as
      compared to 12.6% in fiscal 2001.
                                       13
<PAGE>

              Selling, General and Administrative Expenses. Selling, general and
      administrative  expenses  increased  $421,000 or 4.7% from $9.0 million in
      the second quarter of fiscal 2001 to $9.4 million in the second quarter of
      fiscal 2002.  This  increase is  principally  a result of higher bad debts
      expenses,  as well as higher  salaries  and  personnel  costs  incurred in
      connection with the  acquisition of Donovan and e.Track,  and additions to
      the sales  and  service  staff to  better  position  the  Company  to take
      advantage of any improvement in market conditions in coming quarters.  The
      increase in  personnel  costs was  partially  offset by the  reduction  in
      amortization  costs (due  primarily to the August 1, 2001 adoption of SFAS
      Statement No. 142 "Goodwill and Other  Intangible  Assets" which  requires
      that goodwill no longer be amortized).

              Interest and Investment  Income.  Interest and  investment  income
      decreased by $48,000 due to lower cash balances  available for investments
      as well as lower interest rates.

              Provision  for  Income  Taxes.   The  effective  income  tax  rate
      increased  slightly  to 39.8%  of  pretax  income  in the  current  period
      compared to 38.5% of pretax income in the prior year's period.

     Six Months Ended  January 31, 2002 Compared to Six Months Ended January 31,
     2001

              Revenue. The Company's revenue decreased by $22.4 million or 14.7%
      from $152.0  million for the six months  ended  January 31, 2001 to $129.7
      million for the six months ended  January 31, 2002.  Revenue from the sale
      of products decreased by $24.3 million or 16.4% while revenue from service
      offerings  increased  by $1.9  million or 54.3%.  The  decrease in product
      revenue is due  primarily to the shipment of fewer  personal  computers as
      well as lower  average  selling  prices for personal  computers.  This was
      partially  offset by increases in shipments of displays,  primarily  large
      screen flat panel displays shipped from our Electrograph  subsidiary.  The
      growth in  services  revenues  is due to the  acquisition  of Donovan  and
      e.Track,  as well as growth in the sale of services to customers  that are
      delivered by manufacturers or vendors.

              Gross  Profit.Gross  profit decreased by $113,000 or 0.6% to $18.6
      million for the first six months of fiscal 2002 from $18.7  million in the
      comparable period a year ago. Gross profit from product sales decreased by
      $339,000 or 1.9% from $17.4 million in the first six months of fiscal 2001
      to $17.1  million in the most recent six month period.  Service  offerings
      generated  $1.3  million of gross profit in the first six months of fiscal
      2001 and $1.5  million of gross  profit for the first six months of fiscal
      2002. Gross margin  percentages on product sales improved in the first six
      months of fiscal 2002 due to increased  sales of higher  margin  products,
      increased volume rebates by manufacturers and certain large volume product
      purchases that the Company was able to take advantage of. Service  margins
      declined during the period due primarily to lower utilization of technical
      personnel as well as increases in lower margin sales of services  that are
      delivered by other than Company personnel.

              Selling, General and Administrative Expenses. Selling, general and
      administrative  expenses  decreased by $69,000 or 0.4% from $17.9  million
      for the first six months of fiscal 2001 to $17.8 million for the first six
      months of fiscal 2002. The decrease is  principally  due to lower salaries
      and personnel costs, partially offset by higher bad debt expenses.

          Interest Income.  Interest income decreased due to lower cash balances
     available for investment as well as lower  interest rates  available in the
     marketplace.

              Provision  for  Income  Taxes.   The  effective  income  tax  rate
      decreased  slightly  to 39.9% for the first six months of fiscal 2002 from
      40.2% for the first six months of fiscal 2001.

                                       14
<PAGE>



      Liquidity and Capital Resources

           The  Company's  primary  sources of  financing  have been  internally
      generated  working  capital  from  operations  and a line of  credit  from
      financial institutions.


           For the six months  ended  January 31,  2002,  cash used by operating
      activities was $1.8 million consisting  primarily of increases in accounts
      receivable  and  inventory  partially  offset by an  increase  in accounts
      payable and  accrued  expenses.  During the first  quarter of the year the
      Company made an investment in inventory by purchasing a significant number
      of large screen flat panel displays. The investment made in this inventory
      resulted  in benefits to the  Company  through the volume  incentives  and
      discounts obtained on these products. We expect that most of the remaining
      products from this purchase  will be sold by the next fiscal  quarter.  We
      also  expended  $2.2  million  (including  $558,000 in  repayment of debts
      assumed) for the purchase of Donovan  Consulting  Group,  Inc. and e.Track
      Solutions,  Inc. and $1.0 million for capital  expenditures during the six
      months ended  January 31, 2002.  The  Company's  accounts  receivable  and
      accounts payable and accrued  expenses  balances as well as its investment
      in inventory can fluctuate  significantly  from one period to the next due
      to the  receipt of large  customer  orders or payments  or  variations  in
      product  availability and vendor shipping patterns at any particular date.
      Generally,   the  Company's  experience  is  that  increases  in  accounts
      receivable,  inventory  and  accounts  payable and accrued  expenses  will
      coincide with growth in revenue and increased operating levels.

           The  Company  has  available  a  line  of  credit  with  a  financial
      institution  in the  aggregate  amount  of $15.0  million.  This  line was
      recently  renewed and extended  through  January 31, 2005. No amounts were
      outstanding under this line as of January 31, 2002.

          The  Company  believes  that  its  current  balances  in cash and cash
     equivalents,  expected cash flows from operations and available  borrowings
     under the line of credit  will be  adequate  to support  current  operating
     levels for the foreseeable future, specifically through at least the end of
     fiscal 2003. The Company currently has no material  commitments for capital
     or other  expenditures,  except  operating  leases  which  the  Company  is
     committed  under for  facilities  and  certain  tangible  property.  Future
     capital requirements of the Company include those for the growth of working
     capital items such as accounts receivable and inventory and the purchase of
     equipment and expansion of facilities, the possible opening of new offices,
     potential  acquisitions,   and  expansion  of  the  Company's  service  and
     e-commerce   capabilities.   In  addition,   there  are  no   transactions,
     arrangements and other relationships with unconsolidated  entities or other
     persons that are reasonably  likely to affect liquidity or the availability
     of or requirements for capital resources.

     Impact of Recently Issued Accounting Standards

           In October 2001,  the FASB issued SFAS No. 144,  "Accounting  for the
      Impairment of Long-Lived Assets," which addresses financial accounting and
      reporting  for the  impairment  or disposal  of  long-lived  assets.  This
      statement  supersedes  SFAS No. 121,  "Accounting  for the  Impairment  of
      Long-Lived  Assets and for  Long-Lived  Assets to Be  Disposed  Of," while
      retaining the fundamental  recognition and measurement  provisions of that
      statement.  SFAS No. 144 requires that a long-lived asset to be abandoned,
      exchanged for a similar  productive  asset or  distributed  to owners in a
      spin-off to be considered  held and used until it is disposed of. However,
      SFAS No. 144 requires that  management  consider  revising the depreciable
      life of such  long-lived  asset.  With respect to long-lived  assets to be
      disposed of by sale,  SFAS No. 144 retains the  provisions of SFAS No. 121
      and,  therefore,  requires  that  discontinued  operations  no  longer  be
      measured on a net realizable  value basis and that future operating losses
      associated  with such  discontinued  operations  no  longer be  recognized
      before they occur.  SFAS No. 144 is effective  for all fiscal  quarters of
      fiscal years  beginning  after December 15, 2001, and will thus be adopted
      by the  Company on August 1, 2002.  The  Company  has not  determined  the
      effect,  if any,  that  the  adoption  of SFAS No.  144  will  have on the
      Company's consolidated financial statements.

                                       15
<PAGE>


      PART II - OTHER INFORMATION


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

         At our Annual  Meeting of  Shareholders  held on January 16, 2002,  the
      following proposals were adopted by the margins indicated:

     (1) Elect  seven  Directors  to serve  until  the 2003  Annual  Meeting  of
     Shareholders;
<TABLE>
<CAPTION>

                                                                        Broker
             Nominee                 For     Withheld      Abstain     Non-votes
             -------                 ---     --------      -------     ---------

<S>                               <C>          <C>            <C>         <C>
          Barry R. Steinberg      7,795,442     106,399        0           0
          Joel G. Stemple         7,795,442     106,399        0           0
          Joel Rothlein           7,811,442      90,399        0           0
          Bert Rudofsky           7,811,442      90,799        0           0
          Michael E. Russell      7,811,442      90,799        0           0
          Julian Sandler          7,804,742      97,099        0           0
          Robert Valentine        7,804,742      97,099        0           0

</TABLE>

(2)        Vote  on  the  ratification  of  the  reappointment  of  KPMG  LLP as
           independent  auditors  of the  Company  for the year  ending July 31,
           2002.

<TABLE>
<CAPTION>
                                                                       Broker
                   For         Against           Abstain              Non-votes
                   ---         -------           -------              ---------
<S>               <C>           <C>                <C>                 <C>
                  7,841,891     59,700              250                 0
</TABLE>

         No other items were voted on at the Annual Meeting of  Shareholders  or
      during the quarter ended January 31, 2002.



      Item 6.     Exhibits and Reports

      Exhibits

       99.1 Press Release  dated  December 6, 2001 filed on Form 8-K December 6,
2001.



      (b)     Reports on Form 8-K

       Form 8-K filed  December 6, 2001  disclosing  Exhibit 99.1 Press  release
      dated December 6, 2001 reporting  earnings for first quarter ended October
      31, 2001.




                                       16


<PAGE>




                          MANCHESTER TECHNOLOGIES, INC.

                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                          MANCHESTER TECHNOLOGIES., INC.
                                          ------------------------------
                                          (Registrant)



DATE:    March 18, 2002                    s/ Barry Steinberg
                                            ---------------------------

                                          Barry Steinberg
                                          President and Chief Executive Officer




DATE:    March 18, 2002                    s/ Barry Steinberg
                                          --------------------------------

                                          Joseph Looney
                                          Vice President of Finance and
                                          Chief Financial Officer

                                       17
<PAGE>