<PAGE>   1
                     The SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

MARK ONE:

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

       For the quarter, August 31, 1996

                                       OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

      For the transition period from                  to                 .

                         Commission file number 0-12850

                               EDUDATA CORPORATION
        (Exact name of small business issuer as specified in its charter)

           Delaware                                              13-3152648
(State or other jurisdiction of                              (IRS Employer
 incorporation or organization)                              Identification No.)

          200 N. Westlake Blvd., Suite 202, Westlake Village, CA 91362
                    (Address of principal executive offices)

          Issuer's telephone number, including area code (805) 381-2700

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes   X   No
                                                               ---     ---

State the number of shares of registrant's common stock outstanding as of
October 18,1996: 8,746,900.

Transitional Small Business Disclosure Format     Yes [   ]    No [ X ]



                                       1
<PAGE>   2
                      EDUDATA CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS

                               FORM 10-QSB REPORT

                                 August 31, 1996


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                 PAGE
                                                                                               ----
<S>                                                                                            <C>
         Item 1  Interim Condensed Consolidated Financial Statements (Unaudited)

                 Condensed Consolidated Balance Sheet-August 31, 1996                             3

                 Condensed Consolidated Statements of Operations                                  4
                 Thirteen Week and Twenty-Six Week Periods Ended August 31, 1996

                 Condensed Consolidated Statement of Shareholders' Equity                         5
                 Twenty Six Week Period Ended August 31, 1996

                 Condensed Consolidated Statement of Cash Flows                                   6
                 Twenty-Six Week Period Ended August 31, 1996

                 Notes to Interim Condensed Consolidated Financial Statements                     7

         Item 2  Management's Discussion and Analysis or Plan of Operation                        9


PART II - OTHER INFORMATION

         Item 5  Other Information                                                               13

         Item 6  Exhibits and Reports on Form 8-K                                                13

                 (a)  Exhibits                                                                   13

                 (b)  Reports on Form 8-K                                                        13

         Signatures                                                                              14

         Exhibit 11 Statement Regarding Computation of Net Income (Loss) Per Share               15

         Exhibit 27 Financial Data Schedule                                                      16
</TABLE>



                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION

    ITEM 1 - INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                      EDUDATA CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 August 31, 1996
                                   (Unaudited)


<TABLE>
<S>                                                                <C>
ASSETS

Current Assets:
   Cash and cash equivalents                                       $   133,843
   Accounts receivable, less allowances for bad
      debts and sales returns of $20,975                               909,867
   Inventories                                                       1,532,426
   Prepaid expenses and other                                          205,131
                                                                   -----------
      Total current assets                                           2,781,267

   Property and equipment, net                                         351,399
   Other assets                                                         35,790
                                                                   -----------
   Total assets                                                    $ 3,168,456
                                                                   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                $ 1,600,505
   Accrued salaries and wages                                           62,995
   Other accrued expenses                                              263,628
   Customer deposits                                                     4,560
   Income tax payable                                                   26,000
   Current portion of capital lease obligations                         18,468
   Notes payable to related parties                                    277,015
                                                                   -----------
      Total current liabilities                                      2,253,171

Capital lease obligations                                               71,402
Other long term liabilities                                             13,979
                                                                   -----------
      Total liabilities                                              2,338,552

Commitments and contingencies

SHAREHOLDERS' EQUITY:
   Common stock, par value $.01 per share; 10,000,000 shares
      authorized; 8,746,900 shares issued and outstanding               87,469
   Paid in capital                                                   2,331,915
   Accumulated deficit                                              (1,589,480)
                                                                   -----------
      Total shareholders' equity                                       829,904
                                                                   -----------
      Total liabilities and shareholders' equity                   $ 3,168,456
                                                                   ===========
</TABLE>


   The accompanying notes are an integral part of these interim consolidated
                             financial statements.




                                       3
<PAGE>   4
                      EDUDATA CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE THIRTEEN WEEK, AND TWENTY SIX WEEK PERIODS ENDED AUGUST 31, 1996
                                   (unaudited)

<TABLE>
<CAPTION>
                                                    Thirteen Weeks    Twenty Six Weeks
                                                    --------------    ----------------
<S>                                                 <C>               <C>
Net sales                                             $ 3,526,279        $ 6,784,910

Cost of sales                                          (2,098,391)        (3,865,972)
                                                      -----------        -----------

     Gross profit                                       1,427,888          2,918,938

     Operating expenses

   Selling, general and administrative expenses         1,247,007          2,683,343

   Research and development expenses                       73,676            161,301

   Interest expense                                         5,482             12,561
                                                      -----------        -----------

Income before tax                                         101,723             61,733

Provision for taxes on income                              26,000             26,000
                                                      -----------        -----------

Net income                                            $    75,723        $    35,733
                                                      ===========        ===========

Net income per common share                           $       .01        $       .00
                                                      ===========        ===========

Weighted average common shares and share
 equivalents outstanding                                9,049,721          8,564,537
                                                      ===========        ===========
</TABLE>


    The accompanying notes are an integral part of these interim consolidated
                              financial statements.


                                       4
<PAGE>   5
                      EDUDATA CORPORATION AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
              FOR THE TWENTY SIX WEEK PERIOD ENDED AUGUST 31, 1996
                                   (unaudited)


<TABLE>
<CAPTION>
                              Number of Shares     Common         Paid In       Accumulated
                              Outstanding          Stock          Capital       Deficit         Total
                              ----------------     -------        ----------    -----------    ----------
<S>                           <C>                  <C>            <C>           <C>            <C>
Balance at March 2,
  1996                        7,509,900            $75,099        $1,289,782    $(1,625,213)   $ (260,332)

Issuance of common stock
  for cash, net of
  issuance costs              1,237,000             12,370         1,042,133                    1,054,503


Net income                                                                           35,733        35,733
                             ---------             -------        ----------    -----------    ----------

Balance at August 31,
  1996                       8,746,900             $87,469        $2,331,915    $(1,589,480)   $  829,904
                             =========             =======        ==========    ===========    ==========
</TABLE>



    The accompanying notes are an integral part of these interim consolidated
                              financial statements.


                                       5
<PAGE>   6
                      EDUDATA CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
              FOR THE TWENTY SIX WEEK PERIOD ENDED AUGUST 31, 1996
                                   (unaudited)


<TABLE>
<S>                                                                      <C>
Cash flows from operating activities:
Net income                                                                $    35,733
Adjustments to reconcile net income to
  net cash used by operating activities:
  Depreciation and amortization                                                34,186
  Allowances for bad debts and sales returns                                   (7,305)
  Inventory write down                                                         70,822
  Deferred rent                                                                 1,351
Changes in operating assets and liabilities:
(Increase) decrease in:
    Accounts receivable                                                      (853,539)
    Inventories                                                              (531,163)
    Prepaid expenses and other                                                (52,146)
    Other assets                                                                  252
Increase (decrease) in:
    Accounts payable                                                           62,857
    Accrued expenses                                                          136,150
    Customer deposits                                                        (244,785)
    Income taxes payable                                                       26,000
                                                                          -----------

Net cash used by operating activities                                      (1,321,587)
                                                                          -----------

Cash flows from investing activities:
    Purchase of property and equipment                                       (137,057)
                                                                          -----------

Cash flows from financing activities:
    Decrease in book overdraft                                                (49,906)
    Payment of accounts payable in excess of terms to related party           (79,218)
    Net proceeds from issuance of common stock                              1,055,000
    Proceeds from borrowings from related parties                              25,000
    Payments on borrowings from related parties                               (25,000)
                                                                          -----------

Net cash provided by financing activities                                     925,876
                                                                          -----------

Net decrease in cash and cash equivalents                                    (532,768)

Cash and cash equivalents, beginning of period                                666,611
                                                                          -----------

Cash and cash equivalents, end of period                                  $   133,843
                                                                          ===========

Supplemental cash flow information:

    Capital lease obligation incurred                                     $     5,997
</TABLE>


The accompanying notes are an integral part of these interim consolidated
financial statements.



                                       6
<PAGE>   7
                      EDUDATA CORPORATION AND SUBSIDIARIES.
          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 AUGUST 31, 1996
                                   (unaudited)



1.    General

   The accompanying unaudited interim condensed consolidated financial
   statements include the accounts of Edudata Corporation and Subsidiaries (the
   "Company"). They have been prepared in accordance with generally accepted
   accounting principals for interim financial information and with instructions
   to Form 10-QSB and Item 10 of Regulation S-B. Accordingly, they do not
   include all of the information and footnotes required by generally accepted
   accounting principles for complete financial statements. In the opinion of
   management, all adjustments (consisting of normal recurring accruals)
   considered necessary for a fair representation have been included. Operating
   results for the thirteen week, and twenty six week periods ended August 31,
   1996 are not necessarily indicative of the results that may be expected for
   the year ending March 1, 1997. For further information, refer to the
   consolidated financial statements and footnotes thereto included in the
   Company's annual report on Form 10-KSB for the period ended March 2, 1996.

2. Summary of Significant Accounting Policies

   Basis of Presentation

   Prior to the second quarter, the Company since inception had incurred
   start-up losses and has an accumulated consolidated deficit of approximately
   $1,589,480 at August 31, 1996.

   The Company has funded these losses, and intends to fund possible future
   losses, through the offering of notes and equity and/or debt securities and
   ultimately, through the attainment of positive operating cash flows. Through
   the acquisition of the Company by Edudata (see Note 2 to the Company's Annual
   Report on Form 10-KSB), the Company raised approximately $606,000, net of
   issuance costs and in the first quarter of fiscal year 1997 completed the
   sale of 1,237,000 shares of the Company's common stock for approximately
   $1,055,000, net of issuance costs, through an offshore offering pursuant to
   Regulation S (Note 5). The Company plans additional equity financing
   offerings.

   The ability of the Company to raise additional funds and ultimately achieve
   positive operating cash flow is uncertain and, therefore, this raises
   substantial doubt about the Company's ability to continue as a going concern.
   The accompanying interim condensed consolidated financial statements have
   been prepared assuming that the Company will continue as a going concern and
   do not include any adjustments that might result from the outcome of this
   uncertainty.

   Use of Estimates

   The preparation of financial statements in conformity with generally accepted
   accounting principles requires management to make estimates and assumptions
   that affect the reported amounts of assets and liabilities at the date of the
   financial statements and the reported amounts of revenues and expenses during
   the reporting period. The significant estimates made in the preparation of
   the consolidated financial statements relate to the assessment of the
   carrying value of accounts receivable, inventories and warranty provision.
   Actual results could differ from those estimates.

   Earnings (Loss) Per Share

   Earnings (loss) per share is computed based on the weighted average number of
   common shares outstanding during the periods presented and common stock
   equivalent unless antidilutive.




                                       7
<PAGE>   8
3. Related Party Transactions

   From March 3, 1996 to August 31, 1996, 1,250 cameras and frame grabber units
   at an aggregate cost of $937,500 were purchased by the Company from Boston
   Marketing, a related party. Amounts payable at August 31, 1996 to Boston
   Marketing totaled $412,500 and are included in accounts payable. Through
   October 15, 1996, an additional 679 cameras and frame grabber circuitry units
   have been purchased by the Company at an aggregate cost of $509,250.
   Subsequent to August 31, 1996 payments totaling approximately $537,500 have
   been made to Boston Marketing.

   On April 11, 1996 Boston Marketing loaned the Company $25,000 in exchange for
   a promissory note that bears interest at 6% per annum and is due within six
   months. This note was paid in full by the Company on August 22, 1996.

4. Inventories

   Inventories at August 31, 1996 consisted of the following:

<TABLE>
<S>                                                             <C>       
      Raw materials                                             $  731,600

      Work in process                                              276,562

      Finished goods                                               524,264
                                                                ----------

      Total                                                     $1,532,426
                                                                ==========
</TABLE>

   Finished goods inventory included $133,844 of dental burs.

5. Capital Transactions

   On May 30, 1996, the Company completed the sale of a total of 1,237,000
   shares of its common stock to six foreign investors pursuant to Regulation S
   of the Securities Act of 1933, as amended. Each share was sold at a price of
   $.88 per share and, consequently, the Company raised approximately $1,055,000
   from the sales, net of related expenses of approximately $34,000.

   On July 2, 1996, the Company modified the vesting period and expiration date
   on 275,000 options granted in April 1996, whereby these options are fully
   vested and expire in 2001.

6. Advertising and Promotion Expense

   Total advertising and promotion expense incurred for the second quarter and
   year to date periods ending August 31, 1996 amounted to $263,892 and
   $626,979, respectively.

7. Income Taxes

   The Company is accruing federal and state income taxes at the applicable
   statuary rates which result in an effective tax rate of approximately 43
   percent or $26,000 for the current periods. Upon further examination of the
   Company's tax position following its acquisition of DMD and BDI, management
   has determined that the Company's net operating losses (NOL) incurred prior
   to the acquisition are not available for carryforward because management
   determined that the losses were limited under the provisions of Internal
   Revenue Code Section 382. The reassessment of losses available for
   carryforward had no impact on previously issued financial statements because
   any deferred tax assets recognized were fully offset by valuation allowances.




                                       8
<PAGE>   9
Item 2. - Management's Discussion and Analysis or Plan of Operation

Introduction

This discussion summarizes the significant factors affecting the consolidated
operating results, financial condition and liquidity/cash flows of the Company
for the thirteen week and twenty six week periods ended August 31, 1996. This
discussion should be read in conjunction with the financial statements and notes
thereto, included in this Report on Form 10-QSB and the Company's financial
statements and notes thereto, included in the Company's Annual Report on From
10-KSB for the period ended March 2, 1996. Except for the historical information
contained herein , the matters discussed in this item 2-Management's Discussion
and Analysis are forward looking statements that involve risks and uncertainties
and are based upon judgments concerning various factors that are beyond the
Company's control. See "Risk Issues and Uncertainties" below.

As more fully described in the Company's Annual Report on From 10-KSB for the
period ended March 2, 1996, on March 1, 1996 the Company purchased 100% of the
outstanding member interests of Dental/Medical Diagnostic Systems, LLC ("DMD")
and the capital stock of Bavarian Dental Instruments, Inc. ("BDI"). Immediately
subsequent to the transaction, the former members of DMD and shareholders of BDI
owned approximately 66.7% of Edudata's outstanding common stock and management
control of Edudata was transferred to the former management of DMD and BDI.
Accordingly, for accounting purposes the acquisition was treated as a
recapitalization of DMD and BDI with DMD and BDI combined as the acquiror
(reverse acquisition). As a result, the combined historical financial statements
of DMD and BDI became the financial statements of Edudata. Since both DMD and
BDI were only formed in October and November of 1995, and since the historical
combined financial statements of DMD and BDI became the financial statements of
Edudata, there is no comparable financial information for the comparable periods
of the 1996 fiscal year.

DMD was formed in October 1995 and has been primarily involved in designing,
developing, manufacturing and marketing TeliCam Intraoral Camera Systems
("TeliCam Systems"). The first shipments to customers of the TeliCam System
commenced in early February 1996. BDI was formed in November 1995 and has been
primarily involved in negotiating distribution agreements to import from Russia
and to distribute and market dental burs in the United States and elsewhere. The
first sales of burs commenced in early March 1996. On July 9, 1996, the Company
decided to discontinue the dental bur product line. The Company intends to
either sell this product line and/or liquidate the remaining finished goods. The
Company is in the process of identifying qualified buyers of the business and is
continuing to sell the remaining dental bur finished goods.

Because of the limited history of the Company's operations and because the
Company anticipates increased sales of the TeliCam Systems, the results of
operations for the period presented is not indicative of future results.

Results of Operations

For the thirteen week and twenty six week periods ended August 31, 1996
("current periods"), total net sales for the Company's two product lines
(intraoral dental cameras and dental burs) amounted to $3,526,279 and
$6,784,910, respectively. Cost of sales for both product lines totaled
$2,098,391 or 60% of net sales and $3,865,972 or 57%, respectively. Gross margin
for both product lines totaled $1,427,888, or 40% of net sales and $2,918,938 or
43%, respectively. Selling, general and administrative expenses related to both
product lines totaled $1,247,007, and $2,683,343, respectively. Research and
development expenses totaled $73,676 and $161,301, respectively for the second
quarter and the year to date. Interest expense totaled $5,482 for the quarter
and $12,561 for the year to date. For the current periods, operating profits
before interest expense relating to the intraoral camera product line totaled
$155,348 and $291,615, respectively. Operating losses before interest relating
to the dental bur product line totaled ($47,927) and ($217,106), respectively in
the current periods. On a consolidated basis the net income before tax for the
current periods totaled $101,723 and $61,733,respectively. Tax expense was
$26,000 for the current 




                                       9
<PAGE>   10
periods. This resulted in net income of $75,723 or $.01 per share for the
quarter and $35,733 or $.00 per share for the year to date.

Intraoral Dental Camera Systems Product Line:

Sales: Net sales relating the intraoral dental camera systems for the second
quarter totaled $3,462,579 and $6,599,936 for the year to date, and primarily
relate to sales of the Company's TeliCam Systems.

Cost of Sales: Cost of sales relating to intraoral dental camera systems and
related products totaled $2,058,631 for the second quarter, or 59% of sales and
$3,794,488 or 58% year to date. The cost of sales include direct costs of
production, including raw materials, labor and overhead. Cost of sales have
increased due to the increase in camera shipments. The increase in the second
quarter as compared to the first quarter as a percent is primarily due to an
increase in lower margin international sales.

Selling, General and Administrative Expenses: Selling, general and
administrative expenses relating to the intraoral dental camera systems product
line totaled $1,174,923 for the second quarter , and $2,352,530 year to date.
These expenses relate to administering the continuing design, development,
manufacture and marketing of the Company's camera systems. The expenses include
the following: advertising and promotion expenses totaling $219,833 and $451,762
, respectively for the current periods. These costs relate to trade show fees,
trade magazine advertising and direct mail promotions. Salaries and wages
totaled $283,737 and $505,183, respectively relating to sales and production
administration, marketing, sales and customer support staff and finance and
accounting personnel; commissions resulting from the sales of the intraoral
dental camera systems totaled $347,827 and $705,644, respectively. These
expenses are expected to increase relative to net sales in future periods due to
the need for additional support functions as the Company's sales increase.

Research and Development Expenses: Research and development expenses relating to
the intraoral dental camera totaled $73,676 and $161,301, respectively in the
current periods and relate to direct expenses of ongoing design and development
of enhancements to the Company's camera system. These expenses are comprised of
wages and benefits for engineering personnel, design and development fees, and
raw material used in the development of prototypes. These expenses are expected
to continue in future periods.

Dental Bur Product Line:

On July 9, 1996, the Company decided to discontinue its dental bur product line.
The Company intends to either sell this product line and/or liquidate the
remaining finished goods. The Company is currently in the process of identifying
qualified buyers and is continuing to sell its remaining finished goods.
Remaining assets and liabilities relating to this product line primarily consist
of approximately $133,844 of finished goods inventory and $37,792 of accounts
payable and accrued expenses. No loss is expected on the sale of this product
line or liquidation of the remaining finished goods..

Sales: Dental bur net sales in the current periods amounted to $63,700 and
$184,974, respectively. As previously discussed, since the Company decided to
discontinue the dental burs product line, sales from dental burs decreased in
the second quarter and will continue to decrease in future periods.

Cost of Sales: Cost of sales relating to the sales of dental burs totaled
$39,760 in the second quarter, or 62% of net sales, and $71,484 year to date or
39% of net sales, and included dental bur product costs. As a percent, these
costs have increased due to the discontinuance of the business.

Selling, General and Administrative Expenses: Selling, general and
administrative expenses relating to the dental bur business totaled $71,868 and
$330,597, respectively in the current periods. These expenses relate the
importing, distribution, marketing and selling the dental bur product.. These
expenses have decreased in the second quarter and will continue to decrease in
future periods as this product line is discontinued.




                                       10
<PAGE>   11
Capital Resources and Liquidity

For the current period, the Company used net cash in operating activities of
$1,321,587. Accounts receivable increased $853,539 to $909,867 primarily due to
the increase in intraoral dental camera sales internationally shipped in the
current period. Inventory levels increased $531,163 to $1,532,426 in
anticipation of increased sales and production levels for the cameras. Accounts
payable was increased by $ 62,857 to $1,600,505 and customer deposits decreased
$244,785 to $4,560 due to shipments of product. These increases in working
capital were partially financed by accrued liabilities which increased $136,150.

Capital expenditures totaled $137,057, in the current period and related
primarily to purchases of additional computer equipment to support the
administrative and production functions of the Company.

Bank overdrafts decreased in the current period by $49,906, Also, $79,218 of
accounts payable in excess of terms were paid to a related party. Cash on hand
at the end of the period was $133,843.

These cash outflows were primarily financed through the sale of 1,237,000 shares
of common stock to foreign investors which raised approximately $1,055,000, net
of issuance costs and issuance. A note totaling $25,000 was issued and repaid to
a related party.

The Company needs additional cash to continue to pay down its current
liabilities and to finance increases in accounts receivable and inventory
necessary to support anticipated increased sales levels. The Company believes
that funds available from operations and the ability to raise funds through
additional sales of equity and/or debt securities will be adequate to finance
its operations and meet its obligations. There can be no assurance, however,
that operations and/or efforts to raise funds through the sale of its securities
will provide adequate cash or that such capital will be available at terms
acceptable to the Company, or at all.

Seasonality: It is expected that the Company's business will be moderately
seasonal, with lower sales in the summer months.

New Accounting Pronouncements: The FASB recently issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123), which is effective for financial statements for fiscal years beginning
after December 15, 1995. SFAS 123 establishes new financial accounting and
reporting standards for stock-based compensation plans. Entities will be allowed
to measure compensation cost for stock-based compensation under SFAS 123 or APB
Opinion No. 25, "Accounting for Stock Issued to Employees". Entities electing to
remain with the accounting provisions of APB Opinion No. 25 will be required to
make pro forma disclosure of net income and earnings per share as if the
provisions of SFAS 123 had been applied. The Company is in the process of
evaluating SFAS 123. The potential impact on the Company by adopting the new
standard has not been quantified at this time. The Company is required to
implement SFAS 123 in fiscal 1997.



Risk Issues and Uncertainties

The statements contained herein are based on current expectations. These
statements are forward looking, and actual results may differ materially. While
the management of Edudata is optimistic about the Company's long-term prospects,
the following issues and uncertainties, among others, should be considered in
evaluating its growth outlook.

Technological Change: Management believes that the TeliCam is the only intraoral
camera presently capable of capturing and displaying images without the use of
an external freeze frame device (i.e.printer), unlike other systems. However, in
this period of rapid technological change, competitors may develop systems that
are comparable or superior to the TeliCam Systems.

Customer Acceptance: The Company is in the early stages of marketing the TeliCam
Systems products through DMD. As such, the degree to which the market will
accept and purchase these products is 



                                       11
<PAGE>   12
unknown. Accordingly, the Company's performance and revenue will be impacted
depending upon the marketplace acceptance of these products. While the Company
has tested the TeliCam System , user acceptance and market penetration rates
ultimately dictate the success of the marketing efforts of these products.

Prices: Future prices that the Company is able to obtain for its products may
increase or decrease from current levels depending upon competitive market or
cost factors.

Intellectual Property Rights: While the Company does not own the patents, DMD
holds the exclusive worldwide rights to market the TeliCam and Frame Grabber
Circuitry (#CS6110 NTSC-PAL) to the dental market and has the rights to use the
"TeliCam" trademark through an agreement with Boston Marketing. The Company also
holds the exclusive rights to market and sell JV "Dentomal" and NPO "ALTECH"
manufactured dental burs in sixteen North and South American countries,
including the United States and Canada, for a period of three (3) years that
began in December, 1995. Nevertheless, there can be no assurance that these
efforts to protect these agreements and property rights will be successful.

Competition: There are many companies that compete in the intraoral camera and
dental bur markets. The Company believes that the TeliCam System and dental burs
offered by it are superior to competing products currently being marketed to the
dental industry at the current price points. Several of the companies with which
the Company competes are better financed and have better resources than the
Company. There can be no assurance that competitive pressures will not result in
price reductions or that other developments in the markets will have an adverse
effect on the Company.

Suppliers: The Company purchases the non-proprietary hardware components
included as part of its TeliCam System from outside sources. Except for the CCU
processor, an important system component, which is purchased from a single
supplier under an agreement with Boston Marketing, discussed above, other key
components are available from a limited number of suppliers. Although there are
a limited number of suppliers of these key component parts, management believes
that other suppliers could be found to provide similar components on comparable
terms. However, changes in key suppliers could cause delays in manufacturing and
distribution of products and a possible loss in sales which could adversely
affect future operating results.

Disposition of the Dental Bur Product Line: On July 9, 1996, the Company decided
to discontinue its dental bur product line. The Company intends to either sell
this product line and/or liquidate the remaining finished goods. Although the
Company does not expect a loss on the disposition, there can be no assurance
that this will not occur.

Conflict of Interests: The Company's Executive Vice President, Secretary and
Director, Hiroki Umezaki, is also an owner of Boston Marketing. As described
more fully in Item 12 in the Company's Annual Report on Form 10-KSB for the
period ended March 2, 1996, the Company has entered into agreements with Boston
Marketing with respect to the TeliCam System and Boston Marketing has loaned
money to the Company.




                                       12
<PAGE>   13
                           PART II - OTHER INFORMATION

Item 5 - Other Information

   On October 4, 1996, the Company issued two promissory notes aggregating
   $250,000 to two non-affiliated investors. Each promissory note bears interest
   at a rate of 10% per annum and matures (subject to the non-occurrence of
   certain events of default) upon the earlier to occur (a) December 3, 1996 and
   (b) the consummation of certain other capital raising events. At the option
   of the holders, and under certain circumstances, the Company's promissory
   notes may be exchanged for certain equity securities of the Company.

Item 6 - Exhibits and Reports on Form 8-K

   (3)  Exhibits:

           (3)(i) Certificate of Incorporation and by-laws.*

           (3)(ii) Certificate of Amendment to Certificate of Incorporation.**

           (4)(b) Stock Appreciation Rights Plan.*

           (10.1) The Contribution Agreement dated February 29, 1996 by and
               between the Company and DMD.***

           (10.2) Contribution Agreement dated February 29, 1996 by and between
               the Company and BDI.***

           (10.3) Letter of Authorization and Declaration of Exclusive Rights by
               JV "DENTOMAL" to BDI dated December 25, 1995.***

           (10.4) Letter of Authorization dated January 3, 1996 and Declaration
               of Exclusive Rights dated December 21, 1995 by NPO "ALTECH" to
               BDI.***

           (10.5) Agreement by and between DMD and Boston Marketing Company,
               Ltd. dated February 1, 1996***

           (11) Statement re: Computation of earnings per share.****

           (27) Financial Data Schedule.****

(b)   Reports on Form 8-K

         On March 17, 1996, the Company filed a report on Form 8-K, dated March
1, 1996 regarding the acquisition of DMD and BDI.

         On May 15 and 20, 1996, the Company filed an amendment to the Form 8-K
dated March 1, 1996 to submit the required financial statements regarding the
acquisition of DMD and BDI.

         On May 31, 1996, the Company filed a Form 8-K, dated May 20, 1996
disclosing the Company's change in year end.


* Incorporated by reference to Exhibits 3(a) and 3(b) to Registrant's
Registration Statement on Form S-1 (File No. 2-88997)

** Incorporated by reference to Exhibit 3(b) to Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1987.

*** Incorporated by reference to the exhibits to Registrant's Report on Form
8-K, dated March 1, 1996.

**** Included herewith.




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Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
duly caused this report to be signed on behalf by the undersigned, thereto duly
authorized.


                                                  Edudata Corporation

Dated October 18,1996                             By: /s/ Ronald E. Wittman
                                                  -------------------------
                                                  Ronald E. Wittman
                                                  Chief Financial Officer




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