<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q
              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998


                         COMMISSION FILE NUMBER 1-11831
                              SABRATEK CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                                   36-3700639
                    (I.R.S. EMPLOYER IDENTIFICATION NUMBER)

                                    DELAWARE
                (STATE OR OTHER JURISDICTION OF INCORPORATION OR
                                 ORGANIZATION)

                          8111 North St. Louis Avenue
                             Skokie, Illinois 60076
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

                                 (847) 720-2400
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

                                    Yes X    No
                                       ----     ----

As of August 3, 1998, 10,652,144 shares of Sabratek Corporation's Common Stock
were outstanding.


<PAGE>   2






                              SABRATEK CORPORATION

                                   FORM 10-Q
                    FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

PART I   FINANCIAL INFORMATION                                                        Page
                                                                                      ----
<S>      <C>                                                                            <C>
                                                  
Item 1.  Financial Statements

         Balance Sheets
         June 30, 1998 (Unaudited) and December 31, 1997 ..........................    3

         Statements of Operations
         Three Months and Six Months Ended June 30, 1998 and 1997 (Unaudited) .....    4

         Statements of Cash Flows
         Six Months Ended June 30, 1998 and 1997 (Unaudited) ......................    5

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


Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations ...............................................................    8



PART II  OTHER INFORMATION

Item 1.  Legal Proceedings ........................................................   12

Item 2. Changes in Securities .....................................................   12

Item 4. Submissions of Matters to a Vote of Securityholders .......................   12

Item 5. Other Information .........................................................   13

Item 6. Exhibits and Reports on Form 8-K ..........................................   13
</TABLE>


                                       -2-

<PAGE>   3






                              SABRATEK CORPORATION
                                 BALANCE SHEETS
                        (In thousands, except share data)


<TABLE>
<CAPTION>


                                                                            JUNE 30,        DECEMBER 31,
                                                                              1998             1997
                                                                              ----             ----
       ASSETS                                                               (UNAUDITED)
<S>                                                                         <C>           <C>

Current assets:
  Cash & cash equivalents                                                    $  74,074    $  19,598
  Investments in marketable securities                                           2,003        5,004
  Receivables:
    Trade, net of allowance for doubtful accounts
    of $703 and $503 at June 30, 1998
    end December 31, 1997, respectively                                         21,226       15,293
    Other                                                                          780          208
                                                                             ---------    --------- 
  Total receivables                                                             22,006       15,501
                                                                             ---------    --------- 
  Inventories                                                                   20,882       13,719
  Other current assets                                                           1,182          821
                                                                             ---------    --------- 
Total current assets                                                           120,147       54,643
                                                                             ---------    --------- 
Property, plant and equipment, net                                               4,070        3,546
Notes receivable                                                                   924          233
Investments in marketable securities                                            19,629           --
Intangible assets, net                                                          18,507       12,644
Other                                                                            2,810          101
                                                                             ---------    --------- 
                                                                             $ 166,087    $  71,167
                                                                             =========    =========


       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Short-term debt, including capital lease obligation                        $       4    $      25
  Accounts payable                                                               4,329        3,718
  Payroll &commissions                                                             866        2,039
  Warranty                                                                         324          304
  Accrued expense                                                                1,526          300
  Other                                                                             36          102
                                                                             ---------    --------- 
Total current liabilities                                                        7,085        6,488
                                                                             ---------    --------- 
Long-term debt                                                                  85,000           --
Long-term obligations                                                              857          264
                                                                             ---------    --------- 
Total liabilities                                                               92,942        6,752
                                                                             ---------    --------- 
Stockholders' equity:
  Common stock, par value $.01, issued and
  Outstanding; 10,637,144 at June 30, 1998,
  10,325,280 at December 31, 1997                                                  106          103
  Additional paid-in capital                                                    73,675       71,344
  Other                                                                            (11)         (12)
  Income tax benefit                                                             2,190           --
  Accumulated other comprehensive income                                            12           44
  Accumulated deficit                                                           (2,827)      (7,064)
                                                                             ---------    --------- 
Total stockholders' equity                                                      73,145       64,415
                                                                             ---------    --------- 
                                                                             $ 166,087    $  71,167
                                                                             =========    ========= 
</TABLE>


                 See accompanying notes to financial statements


                                      -3-

<PAGE>   4









                              SABRATEK CORPORATION
                            STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)




<TABLE>
<CAPTION>


                                                Three Months Ended         Six Months Ended
                                                     June 30,                   June 30,
                                               --------------------------------------------
                                                  1998         1997        1998       1997
                                               --------------------------------------------
<S>                                            <C>          <C>        <C>         <C>
Net sales                                      $ 16,301    $  9,848    $ 31,457    $ 17,314
Cost of sales                                     6,989       4,159      13,716       7,185
                                               --------------------------------------------
Gross margin                                      9,312       5,689      17,741      10,129

Selling, general and administrative expenses      5,923       4,427      11,590       7,937
                                               --------------------------------------------
Operating income                                  3,389       1,262       6,151       2,192
Other income (expense):
    Interest income                               1,128         414       1,343         557
    Interest expense                             (1,063)        (16)     (1,068)        (22)
                                               --------------------------------------------
Net income before taxes                           3,454       1,660       6,426       2,727

    Provision for income taxes                    1,178          33       2,190          55
                                               --------------------------------------------
Net income                                     $  2,276    $  1,627    $  4,236    $  2,672
                                               ============================================ 

Basic income per share                         $   0.22    $   0.17    $   0.40    $   0.30
                                               ============================================ 
Basic weighted average shares outstanding        10,570       9,823      10,484       9,055
                                               ============================================ 
Diluted income per share                       $   0.20    $   0.15    $   0.36    $   0.26
                                               ============================================ 
Diluted weighted average shares outstanding      11,639      10,890      11,681      10,195
                                               ============================================ 
</TABLE>


                See accompanying notes to financial statements.


                                      -4-


<PAGE>   5







                              SABRATEK CORPORATION
                            STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (UNAUDITED)

<TABLE>
<CAPTION>


                                                             Six Months Ended
                                                          --------------------
                                                           June 30,    June 30,
                                                            1998         1997
                                                          --------------------
<S>                                                       <C>         <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                             $  4,236    $  2,672
   Adjustments to reconcile net income to
   net cash used in operating activities:
      Depreciation and amortization                          1,332    $    316
      Deferred compensation                                      1           1
      Non-cash interest expense                              1,063          51
      Tax effect of stock option exercises                   2,190          --
      Provision for bad debts                                  200         112
   Changes in assets and liabilities:
      Receivables                                           (6,132)     (4,107)
      Other receivable                                        (573)       (184)
      Inventories                                           (7,163)     (3,763)
      Other current assets                                    (407)       (230)
      Accounts payable                                         611         509
      Accrued liabilities                                   (1,153)         --
      Long term obligations                                    594          --
      Other                                                     98        (238)
                                                          --------------------
Net cash used in operating activities                       (5,103)     (4,861)
                                                          --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property, plant, equipment                     (994)       (812)
   Issuance of note receivable                                (691)     (1,282)
   Purchase of intangible assets                            (6,626)        (12)
   Purchases of marketable securities                      (19,655)     (1,599)
   Sale and maturity of marketable securities                2,996          --
   Purchase of Rocap, Inc., net of cash acquired              --        (1,434)
                                                          --------------------
Net cash used in investing activities                      (24,970)     (5,139)
                                                          --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of short-term debt                               --           (50)
   Repayment of long-term debt                                --            (1)
   Payments of capital lease, net                              (23)        (81)
   Proceeds from issuance of long-term debt, net            82,238          --
   Proceeds from exercise of stock options and warrants      2,334       1,848
   Proceeds from issuance of stock, net                       --        21,605
                                                          --------------------
Net cash provided by financing activities                   84,549      23,321
                                                          --------------------
Increase in cash and cash equivalents                       54,476      13,321
Cash and cash equivalents at beginning of period            19,598      10,447
                                                          --------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $ 74,074    $ 23,768
                                                          ==================== 
</TABLE>


                 See accompanying notes to financial statements


                                      -5-


<PAGE>   6







                              SABRATEK CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 1998 and 1997
                                  (UNAUDITED)
(1)  FINANCIAL STATEMENTS

     The financial statements included herein have been prepared by the Company,
without audit, and include all adjustments of a normal recurring nature which
are, in the opinion of management, necessary for fair presentation of the
results of operations for the three month and six month periods ended June 30,
1998 pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
Company's financial statements and the notes thereto included in the Company's
Form 10-K filed by the Company with the Securities and Exchange Commission for
the year ended December 31, 1997. The results of operations for the three month
and six month periods ended June 30, 1998 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998.

(2)  SALE OF CONVERTIBLE NOTES

     In April, 1998, the Company sold in a private placement, 6% Convertible
Notes ("Notes") in an aggregate principal amount of $85,000,000. The Notes are
unsecured and mature on April 15, 2005. Interest is payable at a fixed rate of
6% on April 14 and October 15 of each year, commencing on October 15, 1998. The
Notes are convertible at any time prior to maturity at the option of the holder
into shares of common stock of the Company at a conversion price of $40.46 per
share. The Company may redeem the Notes, in whole or in part, at any time after
April 18, 2001.

(3)  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     Cash paid for interest during the six month periods ended June 30, 1998 and
1997 was $5,012 and $11,495, respectively.

(4)  STOCK OPTIONS

     During the six month period ended June 30, 1998, the Company issued 203,999
shares, in aggregate, of common stock upon the exercise of stock options
pursuant to the Sabratek Corporation Amended and Restated 1993 Stock Option Plan
(the "Plan"). The option exercises resulted in proceeds to the Company of
$1,726,593, in aggregate. In addition, 5,338 shares of common stock were issued
pursuant to the Company's Stock Purchase Plan resulting in aggregate proceeds of
$133,951.

     Options for a total of 330,600 shares of common stock were granted during
the six month period pursuant to the Plan at an exercise price equal to the fair
market value on the date of grant. The stock options vest over a multi-year
period.

                                      -6-

 
<PAGE>   7







 (5)  WARRANTS

During the six month period ended June 30, 1998, the Company issued 102,527
shares, in aggregate, of common stock upon the exercise of warrants. The warrant
exercises resulted in proceeds to the Company of $473,727, in aggregate.

 (6)  COMPREHENSIVE INCOME

     During the quarter ended June 30, 1998, the Company adopted Statement of
Financial Accounting Standards ("SFAS No. 130"), "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains and losses) in
a full set of general-purpose financial statements, and requires a total for
comprehensive income to be provided in condensed financial statements of interim
periods. Comprehensive income includes all changes in stockholders' equity
during the period except those resulting from investments by owners and
distributions to owners. Comprehensive income (loss) for the six months ended
June 30, 1998 and 1997 consisted of the following:


<TABLE>
<CAPTION>

                                           Three Months Ended    Six Months Ended
                                                June 30                June 30
                                            1998         1997      1998       1997
                                            ----         ----      ----       ----
                                       
<S>                                         <C>        <C>       <C>        <C>      
Net income                                  $ 2,276    $ 1,627   $ 4,236    $ 2,672
Other comprehensive
   Income (loss):
     Unrealized holding gains
       (losses) arising during the period       (32)        36       (39)        32
Less: reclassification adjustment
    For amounts realized in net income            4          5         7          5
                                            -------    -------   -------    -------
Net unrealized gain (loss)                      (28)        41       (32)        37
                                            -------    -------   -------    -------
Comprehensive income                        $ 2,248    $ 1,668   $ 4,204    $ 2,709
                                            =======    =======   =======    ======= 
</TABLE>

(7)  SUBSEQUENT EVENTS

     In July, 1998, the Company purchased all of the capital stock of CMS
HealthCare, Inc. ("CMS"), a Florida corporation based in Tampa, for $160,000
in cash. The Company could be obligated to make additional payments to the
former stockholders of CMS pursuant to an earnout formula on pre-tax income
over a specified period.

(8)  RECENT ACCOUNTING PRONOUNCEMENTS

     In June, 1997, the Financial Accounting Standards Board also issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information." The Company is required to adopt this
new standard for periods ending after fiscal 1997, but is not required to be
reported in the interim financial statements in the first year of application.
This statement establishes standards for the way companies are to report
information about operating segments. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The Company is currently evaluating the impact of this standard on disclosures
required in its financial statements.



                                      -7-
<PAGE>   8


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


 OVERVIEW

     The Company's founding vision and strategic focus is the creation of a
virtual hospital room for the alternate-site health care market. From its
inception in 1989 through mid-1992, the Company was in its development stage and
engaged primarily in research and development, product engineering and
activities related to obtaining clearance from the FDA for its first product,
the 3030 Stationary Pump. The Company has six years of operating history and,
although profitable since the third quarter of 1996, experienced significant
operating losses from its inception through mid-1996. Upon receiving FDA
clearance for the 3030 Stationary Pump in mid-1992, the Company focused its
efforts on creating a domestic and international sales and marketing network, as
well as a manufacturing capability, to assist in the distribution of its first
product to the alternate-site health care market. Concurrent with these sales
and marketing activities, the Company continued to fund the research,
development and regulatory clearance activities of other device and software
products.

     The Company commercially launched the 6060 Ambulatory Pump and related
disposable supplies in late 1995 and both MediVIEW(R) and the PumpMaster(R) in
late 1996. Since then, the Company has continued its sales and marketing
activities domestically and internationally for the distribution of its products
and continued to fund the research and development of additional products. On
February 25, 1997, the Company acquired substantially all the assets of
Rocap,Inc. which produces and markets prepackaged injectable prescription
pharmaceuticals and pre-filled flush syringes. In addition, the Company derives
revenues from the servicing of products, sale of accessories, sale of extended
warranties and consulting services.

     The Company sells its products both directly to alternate-site and
acute-care providers, as well as to third-party distributors. The Company's
distributors and customers may make bulk purchases which may cause fluctuations
in quarterly revenues. The Company also markets and sells its products
internationally and, as a result, its revenues may be affected by fluctuations
in exchange rates. Failure to obtain regulatory approval for the distribution of
new products domestically or in international markets, or adverse regulatory
changes, may also affect the revenues of the Company.

     The Company has entered into strategic partnerships, including Unitron and
GDS, which provide components of the virtual hospital room. Management intends
to pursue additional acquisition and partnering opportunities in order to
further accelerate the development of the virtual hospital room.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1998 VS. THREE MONTHS ENDED JUNE 30, 1997
AND SIX MONTHS ENDED JUNE 30, 1998 VS. SIX MONTHS ENDED JUNE 30, 1997

     Net sales. Net sales increased $6.5 million to $16.3 million for the three
month period ended June 30, 1998 as compared to $9.8 million for the three month
period ended June 30, 1997, an increase of 66%. Net sales increased $14.2
million to $31.5 million for the six month period ended June 30, 1998 as
compared to $17.3 million for the six month period ended June 30, 1997, an
increase of 82%. The increase for the three month and six month periods
attributable to several factors; incremental unit sales volume of the 3030
Stationary Pump and 6060 Ambulatory Pump and their respective disposables, an
increase in the average per unit selling price due to a higher ratio of direct
sales versus dealer sales, the incremental unit sales volume of the Rocap
product line resulting from sales channel integration, additional sales of the
MediVIEW(R) and PumpMaster(R) products, and the sale of licensed products from
GDS Technology, Inc.


                                      -8-

<PAGE>   9






     Cost of Sales. Cost of sales increased $2.8 million to $7.0 million for the
three month period ended June 30, 1998 as compared to $4.2 million for the three
month period ended June 30, 1997, an increase of 68%. Cost of sales increased
$6.5 million to $13.7 million for the six month period ended June 30, 1998 as
compared to $7.2 million for the six month period ended June 30, 1997, an
increase of 91%. The increase for the three month and six month periods is
primarily attributable to direct product costs associated with incremental unit
sales volume of the 3030 and 6060 infusion pumps and related disposables, as
well as the addition of the Rocap product line. To a lesser extent, the increase
for the three month period is attributable to costs relating to the expansion of
production capacity.

     Gross Margin. Gross margin increased $3.6 million to $9.3 million for the
three month period ended June 30, 1998 as compared to $5.7 million for the three
month period ended June 30, 1997, an increase of 64%. Gross margin increased
$7.6 million to $17.7 million for the six month period ended June 30, 1998 as
compared to $10.1 million for the six month period ended June 30, 1997, an
increase of 75 %. The increase for the three month and six month periods is due
primarily to the incremental unit sales volume and the per unit contribution
thereon, including the allocation of fixed manufacturing costs over a greater
number of units. Gross margin as a percent of sales decreased to 57% for the
three month period ended June 30, 1998, as compared to 58% for the three month
period ended June 30, 1997. Gross margin as a percentage of sales decreased to
56% for the six month period ended June 30, 1998, as compared to 58% for the six
month period ended June 30, 1997. The decrease in percentage is attributable to
the lower average gross margin generated from the Rocap product line.

     Selling General and Administrative Expenses. Selling, general and
administrative expenses increased $1.5 million to $5.9 million for the three
month period ended June 30, 1998 as compared to $4.4 million for the three month
period ended June 30, 1997, an increase of 34%. Selling, general and
administrative expenses increased $3.7 million to $11.6 million for the six
month period ended June 30, 1998 as compared to $7.9 million for the six month
period ended June 30, 1997, an increase of 46%. The increase for the three month
and six month periods is due primarily to the expansion of the Company's direct
sales force and clinical support staff and associated travel. Also contributing
to the increase for the six month period ended June 30, 1998 was two full
quarter of expenses relating to the Rocap product line, and the addition of
administrative and management personnel. Selling, general and administrative
expenses as a percent of sales decreased to 36% for the three month period ended
June 30, 1998 as compared to 45% for the three month period ended June 30, 1997.
Selling, general and administrative expenses as a percent of sales decreased to
37% for the six month period ended June 30, 1998 as compared to 46% for the six
month period ended June 30, 1997.

     Operating Income. Operating income increased $2.1 million to $3.4 million
for the three month period ended June 30, 1998 as compared to $1.3 million for
the three month period ended June 30, 1997, an increase of 169%. Operating
income increased $4.0 million to $6.2 million for the six month period ended
June 30, 1998 as compared to $2.2 million for the six month period ended June
30, 1997, an increase of 181%. Operating income as a percent of sales increased
to 21% for the three month period ended June 30, 1998 as compared to 13% for the
three month period ended June 30, 1997. Operating income as a percent of sales
increased to 20% for the six month period ended June 30, 1998 as compared to 13%
for the six month period ended June 30, 1997. The increase in operating income
is due primarily to incremental gross margin generated by increased unit sales
volume of new and existing products, as described above.


                                      -9-

<PAGE>   10






     Interest Income. Interest income increased $714,000 to $1.1 million for the
three month period ended June 30, 1998 as compared to $414,000 for the three
month period ended June 30, 1997, and increase of 172%. Interest income
increased $786,000 to $1.3 million for the six month period ended June 30, 1998
as compared to $557,000 for the six month period ended June 30, 1997, an
increase of 141%. The increase is attributable to a higher average amount of
cash available for investment as compared to that of the comparative period. The
Company completed a secondary public offering in April, 1997 which resulted in
proceeds to the Company of approximately $22 million, after underwriting
discounts and commissions. In addition, the Company completed the sale of
convertible notes in April, 1998 which resulted in net proceeds to the Company
of approximately $82.3 million.

     Interest Expense. Interest expense increased $1.0 million to $1,063,000 for
the three month period ended June 30, 1998 as compared to $16,000 for the three
month period ended June 30, 1997, an increase of 6,544%. Interest expense
increased $1.0 million to $1,068,000 for the six month period ended June 30,
1998 as compared to $22,000 for the six month period ended June 30, 1997, an
increase of 4,755%. The increase for the three month and six month periods is
attributable to the sale of 6% convertible notes in April, 1998, for which
interest expense is recorded at a rate of $1.3 million per full fiscal quarter.
Interest expense would be reduced proportionately for any notes converted into
common stock.

     Provision for Income Taxes. The provision for income taxes increased $1.1
million to $1.2 million for the three month period ended June 30, 1998 as
compared to $33,000 for the three month period ended June 30, 1997, an increase
of 3,470%. The provision for income taxes increased $2.1 million to $2.2 million
for the six month period ended June 30, 1998, as compared to $55,000 for the six
month period ended June 30, 1997, an increase of 3,882%. The provision for
income taxes for the three month and six month periods ended June 30, 1998
reflects an estimated 34% effective annual tax rate, after adjusting for
allowable net operating loss carryforwards. The provision for income taxes for
the three month and six month periods ended June 30, 1997 ultimately was
reversed by year end 1997 as no federal, state or alternative minimum tax was
incurred due to allowable net operating loss carryforwards and compensation
related book versus tax differences.

     Net Income Net income increased $649,000 to $2.3 million for the three
month period ended June 30, 1998 as compared to $1.6 million for the three month
period ended June 30, 1997, an increase of 40%. Net income increased $1.5
million to $4.2 million for the six month period ended June 30, 1998 as compared
to $2.7 million for the six month period ended June 30, 1997, an increase of
59%. The increase in net income for the three month and six month periods was
achieved primarily as a result of incremental gross margin generated by
increased unit sales volume of new and existing products, as discussed above.
Also contributing to the increase in net income was the decrease in general and
administrative expenses, as a percent of sales. The increase in net income was
partially offset by an increase in the provision for income taxes.

                                      -10-


<PAGE>   11

LIQUIDITY AND CAPITAL RESOURCES

     In April, 1998, the Company completed the private sale of 6% Convertible
Notes in an aggregate principal amount of $85,000,000 maturing in 2005. The
interest is fixed and is payable semi-annually. The notes are convertible into
the Company's common stock at a conversion price of $40.46 anytime at the option
of the noteholders. The Company may redeem the notes at anytime after April 18,
2001. Net proceeds to the Company were approximately $82.2 million and such
proceeds were used to purchase investment grade securities.

     As of June 30, 1998, the Company had approximately $95.7 million in cash,
cash equivalents, and investments in marketable securities, and had net working
capital of approximately $113.1 million. In March, 1997, the Company entered
into a two-year credit agreement with a financial institution with up to $9.5
million of available borrowing. As of July 31, 1998, no borrowing has been made
under the credit agreement. 

     The Company used cash in its operations of approximately $5.1 million for
the six months ended June 30, 1998. Cash used in operations for the period
exceeds the Company's operating income for the same period due, primarily, to
the growth in trade accounts receivable and inventories as a result of actual
and anticipated growth in sales volume.

     During the third quarter of 1997, the Company entered into strategic
partnerships with Unitron and GDS. The Company has made cumulative payments of
$13.6 million to Unitron and GDS in cash license fees, in aggregate, pursuant to
the respective license agreements. In addition, should the Company decide to
license other products, or exercise its right to acquire either Unitron or GDS,
such acquisitions could require additional outlays of cash. 

     In September, 1997, the Company initiated a hedging program through the use
of forward contracts to minimize foreign currency fluctuation exposure. As of
July 31, 1998, the aggregate U.S. dollar amount of the contracts is $1,794,435
and such contracts expire at various dates through March, 1999.

     Future liquidity and capital resources could be adversely influenced by
certain factors, including the Company's dependence on a relatively new customer
base, regulatory or legislative changes pertaining to health care, product
liability exposure regarding the delivery of medication, dependence on future
product development, and others. There can be no assurance that the Company will
not require additional financing and, in the future, seek additional funds
through bank facilities, debt or equity offerings and to the extent such
additional financing is not available, the Company could suffer material adverse
effects to its financial condition and the results of its operations.


                                      -11-


<PAGE>   12







                                    PART II
                               OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On February 5, 1997, SIMS Deltec filed a complaint in the United States
District Court for the District of Minnesota alleging that Sabratek's
manufacture, use and/or sale of the MediVIEW(R) software in conjunction with its
infusion pumps infringes on a patent entitled "Systems and Methods of
Communicating with Ambulatory Medical Devices Such as Drug Delivery Devices"
previously issued to SIMS Deltec. Subsequently, SIMS Deltec filed other
pleadings that raised additional claims against Sabratek and three of its
employees including trade secret misappropriation, unfair competition and
interference with SIMS Deltec's customers. SIMS Deltec seeks injunctive relief,
unspecified monetary damages and costs. In addition, SIMS Deltec filed for a
preliminary injunction against Sabratek seeking to prevent on a preliminary
basis Sabratek's manufacture and sale of the MediVIEW(R) system. On August 4,
1997, the District Court denied the motion for preliminary injunction.
Additionally, one of the claims against a Sabratek employee has been dismissed
with prejudice. The Company and the individual defendants intend to vigorously
defend against the allegations made by SIMS Deltec. Protracted litigation or an
adverse outcome in this matter could have a material adverse impact on the
Company's business, financial condition and results of operations. 

     In addition, Sabratek has filed a complaint against SIMS Deltec in the
United States District Court for the Northern District of Illinois alleging that
SIMS Deltec employees have made misstatements about Sabratek's products.
Sabratek has stated claims under the Federal Lanham Act to stop SIMS Deltec's
improper disparagement and has requested preliminary and permanent injunctive
relief, monetary damages and costs.

ITEM 2. CHANGES IN SECURITIES

     During the six month period ended June 30, 1998, the Company issued the
following securities without registration under the Securities Act of 1933, as
amended. 

     From February 12, 1998 to June 26, 1998, the Company issued 102,527 shares
of common stock upon the exercise of warrants not covered by a registration
statement. The Company received aggregate proceeds of approximately $473,727
upon the exercise of such warrants. All such issuances of common stock were
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended.

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITYHOLDERS

     (a) At the Annual Meeting of Stockholders held on June 4, 1998, the
         following directors were elected:

<TABLE>
<CAPTION>


                                  For         Withheld
                               ---------  ---------------
          <S>                  <C>            <C>     
          Mark Lampert         9,806,583      12,576       
          William D. Lautman   9,622,683     196,476
          Marvin Samson        9,806,683      12,476
</TABLE>



                                      -12-


<PAGE>   13






     (b) At the Annual Meeting of Stockholders held on June 4, 1998, the
         following resolution was passed:

     Resolved, that the Company adopt the Amendment to the Amended and Restated
1993 Stock Option Plan to provide for the increase in formula grant of stock
options to Independent Directors to 10,000 shares per year, and additionally,
1200 shares for serving on a committee, plus 600 shares for serving as Chairman
of a committee.

<TABLE>
<CAPTION>
         
                       For          Against      Abstain
                       ---          -------      -------
<S>                  <C>            <C>            <C>
Shares voted         6,028,523      3,762,588      28,048
</TABLE>

ITEM 5. OTHER INFORMATION

     In July, 1998 the following management changes were announced.

     Stephen L. Holden was named President and Treasurer. Mr. Holden previously
held the positions of Senior Vice President, Chief Financial Officer and
Treasurer. Vincent J. Capponi was named Vice President and Chief Operating
Officer. Mr. Capponi previously held the position of Vice President of
Operations. Paul S. Jurewicz was appointed Senior Vice President and Chief
Financial Officer. Prior to joining the Company, Mr. Jurewicz held the
positions of Chief Financial Officer of Option Care, Inc., and Chief Financial
Officer of Health Management, Inc. Anil K. Rastogi resigned from his position
as President and Chief Operating Officer, which he held for approximately three
years. Alan E. Jordan resigned from his position as Senior Vice President of
Sales and Marketing, but will remain a consultant to the company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


<TABLE>
<CAPTION>

                                                                          Page       Incorporation
  Exhibit                                                              Number (if    by Reference
  Number           Description of Documents                            applicable)  (if applicable)
  ------           ------------------------                            -----------  ---------------
<S>         <C>                                                           <C>              <C>
    3.1     Articles of Incorporation                                                         H
    3.2     ByLaws                                                                            H    
   10.1     Agreement with Americorp Financial, Inc. re: Leasing                              H  
            Services, dated March 22, 1995                                                        
   10.1.1   Amendment, dated September 16, 1996, to Agreement                                HHH   
            with Americorp Financial, Inc.                                                        
   10.2     Agreement with Clintec Nutrition Company re:                                      H     
            Development Agreement, dated September 1, 1995                                        
   10.3     Intentionally Omitted                                                                 
   10.4     Intentionally Omitted                                                                 
   10.5     Distributorship Agreement with CO-Medical, Inc., dated                            H   
            February 17, 1992                                                                     
   10.6     Distributorship Agreement with Clinical Technology Inc                            H    
            dated August 1, 1992                                                                  
   10.7     Intentionally Omitted                                                                
   10.8     Intentionally Omitted                                                                 
   10.9     Distributorship Agreement with Advanced Medical, Inc.,                            H   
            dated September 1, 1991                                                               
   10.10    Distributorship Agreement with Healthcare Technology,                             H    
            dated October 9, 1991                                                                 
   10.11    Intentionally Omitted                                                                
   10.12    Intentionally Omitted                                                                 
   10.13    Pump Contract with Chartwell Home Therapies, dated                                H
            
</TABLE>


                                      -13-




<PAGE>   14



<TABLE>
<CAPTION>

                                                                            Page        Incorporation
     Exhibit                                                              Number(if      by Reference
     Number              Description of Documents                        applicable)    (if applicable)
     ------              ------------------------                        -----------    ---------------
     <S>         <C>                                                         <C>          <C>  
                 November 22, 1993

     10.14       Sales Agreement with Pharmacy Corporation of America,                           H
                 dated March 17, 1995                                                                   
     10.15       Sales & Marketing Agreement with Alpha                                          H                
                 Group, dated November 6, 1995                                                          
     10.16       Foreign Distributorship Agreement with MED-O-GEN                                H      
                 INC., dated September 22, 1995                                                         
     10.17       Foreign Distributorship Agreement with Yoon Duk                                 H      
                 Separation Technology, dated April 17, 1995                                            
     10.18       Foreign Distributorship Agreement with Upwards                                  H      
                 Biosystems Ltd., dated March 8, 1995                                                   
     10.19       Foreign Distributorship Agreement with Grupo Grifols,                           H      
                 S.A., dated September 17, 1993                                                         
     10.20       Foreign Distributorship Agreement with JMS Company,                             H      
                 dated March 22, 1996                                                                   
     10.21       Foreign Distributorship Agreement with Brasimpex                                H      
     10.22       Foreign Distributorship Agreements with Medicare (s)                            H      
                 PTE LTD., dated February 10, 1995                                                      
     10.23       Intentionally Omitted                                                                  
     10.24       Intentionally Omitted                                                                  
     10.25       Master Lease Agreement with Comdisco, Inc., dated                               H      
                 August 9, 1994                                                                         
     10.26       Stock Option Plan                                                               H                       
     10.27       Lease for Real Property located at 5601 West Howard,                            H      
                 Niles, Illinois, dated as of May 31, 1994                                              
     10.27.1     Amendment, dated October 30 1996, to Lease for Real                            HHH                                
                 Property located at 5601 West Howard, Niles, Illinois                                  
     10.28       Employment Agreement for K. Shan Padda                                          H
     10.29       Employment Agreement for Anil Rastogi                                           H
     10.30       Asset Purchase Agreement, dated February 25, 1997, by                          HH     
                 and among Sabratek Corporation; Rocap, Inc. and Elliott                                
                 Mandell                                                                                
     10.31       Employment Agreement for Stephen L. Holden                                    HHHH   
     10.32       Employment Agreement for Elliott Mandell                                       HH     
     10.33       Lease Agreement for property located at 11 Sixth Road,                        HHHH   
                 Woburn, Massachusetts, dated February 1, 1997                                          
     10.34       Lease Agreement for property located at 5 Constitution                        HHHH
</TABLE>
                                      -14-
<PAGE>   15








<TABLE>
<S>               <C>                                                                      <C>
                  Way, Woburn, Massachusetts, dated June 26, 1995
   10.35          Lease Agreement for property located at 1629 Prime                        HHHHH
                  Court, Suite 100 Orlando, Florida. dated March 11,
                  1997
   10.36          Lease Agreement for property located at 8350 Parkline
                  Blvd., Orlando, Florida, dated June 18, 1998                    
   11.1           Statement re: computation of per share earnings                 
   27             Financial Data Schedule                                         
</TABLE>

H       Incorporated by reference to the Company's Registration Statement on
        Form S-1, declared effective by the Commission on June 21, 1996 (File
        No. 333-3866).

HH      Incorporated by reference to the Company's Current Report on Form 8-K
        filed with the Commission on March 11, 1997.

HHH     Incorporated by reference to the Company's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1996 filed with the Commission on
        March 31, 1997.

HHHH    Incorporated by reference to the Company's Registration Statement on
        Form S-1, declared effective by the Commission on April 4, 1997 (File
        No. 333-23437).

HHHHH   Incorporated by reference to the Company's Quarterly Report on Form 10-Q
        for the quarter ended March 31, 1997 filed with the Commission on May
        15, 1997.

(b) Reports on Form 8-K

    Not applicable


                                      -15-


<PAGE>   16







                                   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.

                                    SABRATEK CORPORATION
Date: August 14, 1998               By: /s/ K. Shan Padda
                                        -------------------------------
                                        K. Shan Padda
                                        Chairman and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the principal
financial officer of the registrant, for the period covered by this report.

Date: August 14, 1998               By: /s/ Stephen L. Holden
                                        --------------------------------   
                                        Stephen L. Holden
                                        President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the principal
financial officer of the registrant.

Date: August 14, 1998               By: /s/ Paul S. Jurewicz
                                       --------------------------------   
                                       Paul S. Jurewicz
                                       Principal Financial Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the chief
accounting of ficer of the registrant.

Date: August 14, 1998               By: /s/ Scott Skooglund
                                       -------------------------------
                                       Scott Skooglund
                                       Chief Accounting Officer



                                      -16-