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, 1997


                         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)

                             5601 West Howard Street
                              Niles, Illinois 60714
          (Address of Principal Executive Offices, Including Zip Code)

                                 (847) 647-2760
              (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 1, 1997,  10,009,106 shares of Sabratek  Corporation's Common Stock
were outstanding.



<PAGE>



                              SABRATEK CORPORATION

                                    FORM 10-Q
                  For the Quarterly Period Ended June 30, 1997
                                TABLE OF CONTENTS


PART I     FINANCIAL INFORMATION
                                                                            Page
Item 1.    Financial Statements

           Balance Sheets
           June 30, 1997 (Unaudited) and December 31, 1996................... 3

           Statements of Operations
           Three Months and Six Months Ended June 30, 1997
           and 1996 (Unaudited).............................................. 4

           Statements of Cash Flows
           Six Months Ended June 30, 1997 and 1996 (Unaudited)............... 5

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

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


PART II    OTHER INFORMATION

Item 1.    Legal Proceedings................................................ 13

Item 2.    Changes In Securities............................................ 13

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


                                      - 2 -

<PAGE>


<TABLE>
<CAPTION>

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

                                                                           June 30,                  December 31,
                                                                             1997                        1996
                                                                            ------                      -----
                             ASSETS                                       (Unaudited)

<S>                                                                         <C>                        <C>
Current assets:
   Cash & cash equivalents                                                  $23,768                    $ 10,447
   Short-term investments in marketable securities                            4,010                       4,352
   Receivables:
        Trade, net of allowance for doubtful accounts
        of $318 and $146 at June 30, 1997
        and December 31, 1996, respectively                                  12,832                       8,305
        Other                                                                   308                         125
                                                                           --------                     -------
   Total receivables                                                         13,140                       8,430
                                                                           --------                     -------
   Inventories                                                                8,825                       5,049
   Other current assets                                                         840                         586
                                                                           --------                    --------
Total current assets                                                         50,583                      28,864
                                                                           --------                    --------
Property, plant and equipment, net                                            2,592                       1,775
Intangible assets, net                                                        4,532                          41
Notes receivable                                                              1,482                         200
Long-term investments in marketable securities                                3,985                       2,012
Other                                                                            82                          59
                                                                           ---------                    -------
                                                                            $63,256                     $32,951
                                                                            =======                     =======

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Short-term debt                                                             $168                       $168
   Current portion of capital lease obligation                                   75                        132
   Current portion of long-term debt                                            102                          3
   Accounts payable                                                           2,569                      2,247
   Accrued expenses:
        Payroll & commissions                                                 1,699                      1,265
        Warranty                                                                276                        236
        Other                                                                   430                         86
   Due to affiliated company                                                    125                        140
                                                                             ------                     ------
Total current liabilities                                                     5,444                      4,277
                                                                             ------                     ------
Long-term capital lease obligation                                                -                         23
Long-term obligations                                                            20                          1
                                                                             ------                     -------
Total liabilities                                                             5,464                      4,301
                                                                             ------                      ------
Stockholders' equity:
   Common stock, par value $.01, issued and                                     100                         82
     outstanding; 10,002,454 at June 30, 1997,
     8,196,981 at December 31, 1996
   Additional paid-in capital                                                69,309                     42,891
   Deferred compensation                                                        (15)                       (17)
   Unrealized gains                                                              36                          4
   Accumulated deficit                                                      (11,638)                   (14,310)
                                                                            --------                   --------
Total stockholders' equity                                                   57,792                     28,650
                                                                            -------                    --------
                                                                            $63,256                    $32,951
                                                                            =======                    ========
</TABLE>


                 See accompanying notes to financial statements

                                      - 3 -

<PAGE>

<TABLE>
<CAPTION>

                              SABRATEK CORPORATION
                            STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (UNAUDITED)


                                                                 Three Months Ended                   Six Months Ended
                                                                      June 30,                            June 30,
                                                        ------------------------------------------------------------------------
                                                                  1997              1996              1997             1996
                                                        ------------------------------------------------------------------------
<S>                                                              <C>               <C>               <C>              <C>    
Net Sales                                                        $ 9,848           $ 3,771           $17,314          $ 6,715

Cost of sales                                                      4,159             1,890             7,185            3,345
                                                        ------------------------------------------------------------------------
Gross margin                                                       5,689             1,881            10,129            3,370

Selling, general and administrative expenses                       4,427             1,776             7,937            3,253


                                                        ------------------------------------------------------------------------
Operating income                                                   1,262               105             2,192              117
                                                        ------------------------------------------------------------------------
Other income (expense):

      Interest income                                                414                13               557               15

      Interest expense                                              (16)             (133)              (22)            (237)

      Stock appreciation rights                                        -                 -                 -          (1,628)

      Other                                                            -                 1                 -                3
                                                        ------------------------------------------------------------------------
Net income (loss) before taxes                                     1,660              (14)             2,727          (1,730)



      Provision for income taxes                                      33                 -                55                -


                                                        ------------------------------------------------------------------------
Net income (loss)                                                  1,627              (14)             2,672          (1,730)
                                                        ========================================================================



Weighted average shares outstanding                               11,022             6,736            10,101            6,673
                                                        ========================================================================

Net income (loss) per share                                      $ 0.15            $ 0.00            $ 0.26          $ (0.26)
                                                        ========================================================================
</TABLE>

                       See accompanying notes to financial statements.

                                      - 4 -

<PAGE>

<TABLE>
<CAPTION>

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

                                                                                        Six Months Ended
                                                                       ---------------------------------------------------
                                                                                     June 30                June 30,
                                                                                      1997                    1996
                                                                       ---------------------------------------------------
<S>                                                                                  <C>                   <C>
Cash flows from operating activities:
   Net income (loss)                                                                $ 2,672                $ (1,730)
   Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
      Depreciation and amortization                                                     316                      151
      Deferred compensation                                                               1                        1
      Stock appreciation rights expense                                                   -                    1,628
      Non-cash expense                                                                   51                        -
      Provision for bad debts                                                           112                       35
      Changes in assets and liabilities
         Receivables                                                                 (4,107)                  (2,668)
         Other receivable                                                              (184)                       -
         Deferred revenue                                                                46                      (75)
         Inventories                                                                 (3,763)                    (517)
         Unrealized gain                                                                 36                        -
         Accounts payable                                                              (230)                    (966)
         Accrued expenses                                                               509                    1,062
         Due to affiliated company                                                      (23)                     (65)
         Other                                                                         (261)                    (196)
                                                                       --------------------------------------------------
Net cash used in operating activities                                                (4,825)                  (3,340)
                                                                       --------------------------------------------------

Cash flows from investing activities:
   Purchases of property, plant, equipment                                              812                     (101)
   Purchase of intangible assets                                                        (12)                       -
   Purchase of marketable securities, net                                            (1,635)                       -
   Purchase of Rocap, Inc., net of cash acquired                                     (1,434)                       -
   Issuance of note receivable                                                       (1,282)                       -
                                                                       --------------------------------------------------
Net cash used in investing activities                                                (5,175)                    (101)
                                                                       --------------------------------------------------

Cash flows from financing activities:
   Repayment of short-term debt                                                         (50)                    (491)
   Repayment of long-term debt                                                           (1)                    (350)
   Proceeds from issuance of long-term debt                                               -                    1,738
   Payments of capital lease, net                                                       (81)                    (102)
   Proceeds from exercise of stock options and warrants                               1,848                        -
   Proceeds from issuance of stock, net                                              21,605                   28,186
                                                                       --------------------------------------------------
Net cash provided by financing activities                                            23,321                   28,981
                                                                       --------------------------------------------------
Increase in cash                                                                     13,321                   25,540
Cash and cash equivalents at beginning of period                                     10,447                        8
                                                                       --------------------------------------------------
Cash and cash equivalents at end of period                                         $ 23,768                 $ 25,548
                                                                       ===================================================
</TABLE>


                 See accompanying notes to financial statements

                                      - 5 -

<PAGE>



                              SABRATEK CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                             June 30, 1997 and 1996
                                   (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,
1997  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, 1996. The results of operations for the three month
and six month periods ended June 30, 1997 are not necessarily  indicative of the
results that may be expected for the year ending December 31, 1997.

(2)      Acquisition

         On February 25, 1997, the Company  purchased  substantially  all of the
assets of Rocap, Inc., a Massachusetts corporation ("Rocap"), which produces and
markets  pre-packaged  injectable  prescription  pharmaceuticals  and pre-filled
flush syringes. Terms of the purchase are summarized as follows:

          1)   $100,000 in cash.

          2)   Forgiveness  of $300,000 in debt owed to the Company as evidenced
               by a bridge loan agreement entered into on January 15, 1997.

          3)   $2,900,000  in common  stock of the  Company,  valued at  131,593
               shares.

          4)   Assumption of $257,218 in net liabilities.

         Using  the  purchase  method  of  accounting,  the  purchase  price was
allocated to assets  acquired and  liabilities  assumed based on their estimated
fair values.  This  treatment  resulted in the excess of the purchase price over
the  estimated  fair value of net tangible  assets  acquired  being  recorded as
goodwill of $4,564,062. The results of operations acquired have been included in
the statement of operations since the date of acquisition.

                                      - 6 -

<PAGE>



(3)      Public Offering

         In April,  1997, the Company  completed a public offering for 1,291,486
primary shares of common stock and 176,574 shares of common stock by and for the
account of existing stockholders at a price to the public of $18.00. Proceeds to
the Company were $21,968,177 after underwriters' discounts and commissions.

(4)      Notes Receivable

         The Company has loaned $1,482,000 to two non-affiliated corporations in
the form of  NonNegotiable  Promissory  Notes due upon  demand at various  dates
between May 1, 1997 and February 28, 1999.  The notes bear interest at a rate of
5.5% for $1,000,000 of the principal amount and 6% for $482,000 of the principal
amount.

(5)      Supplemental Disclosures of Cash Flow Information

         Cash paid for interest during the six month periods ended June 30, 1997
and 1996 was $11,495 and $33,665, respectively.

(6)      Stock Options

         During the six month  period ended June 30,  1997,  the Company  issued
294,843 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
$1,449,322, in aggregate.

         Options for a total of 1,594,504 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.

(7)      Warrants

         During the six month  period ended June 30,  1997,  the Company  issued
95,034 shares, in aggregate,  of common stock upon the exercise of warrants. The
warrant exercises resulted in proceeds to the Company of $398,465, in aggregate.

(8)      Credit Facility

         In March,  1997, the Company entered into a bank credit agreement which
matures  in April,  1999,  and  provides  for up to $9.5  million  of  available
borrowing  at the bank's  prime rate.  As of June 30,  1997,  no funds have been
borrowed under the agreement.

(9)      Weighted Average Shares

         Weighted  average shares  outstanding for the three month and six month
periods ended June 30, 1997 are calculated on a fully diluted basis applying the
treasury-stock method for options and warrants outstanding.

                                      - 7 -

<PAGE>




         Weighted  average shares  outstanding for the three month and six month
periods ended June 30, 1996 are  calculated  pursuant to Securities and Exchange
Commission  Staff  Accounting  Bulletin  No. 83 for stock  options and  warrants
outstanding  and  pro-rated  based on the date of the initial  public  offering.
Other  common  stock  equivalent  shares  from stock  options and  warrants  are
excluded from the computation because their effect is anti-dilutive.

(10)     Subsequent Events

         In July,  1997, the Company  entered into a licensing  agreement with a
non-affiliated company whereby the Company will pay up to $7,000,000.

(11)     Recent Accounting Pronouncement

         In February,  1997,  the Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings  Per
Share"  ("EPS").  Implementation  of SFAS No. 128 is  required  for the  periods
ending  after  December  15,  1997.  The  standard  establishes  new methods for
computing  and  presenting  EPS and  replaces  the  presentation  of primary and
fully-diluted  EPS with  basic and  diluted  EPS.  The new  methods  under  this
standard  are not expected to have a  significant  impact on the  Company's  EPS
amounts.

         In  June,  1997,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 130, "Reporting  Comprehensive
Income." The Company is required to adopt the new  standard  for periods  ending
after fiscal 1997.  This  statement  establishes  standards  for  reporting  and
display of  comprehensive  income and its  components  in a fully set of general
purpose financial statements.  The standard requires all items that are required
to be recognized  under  accounting  standards as  components  of  comprehensive
income  be  reported  in a  financial  statement  that  is  displayed  in  equal
prominence with the other financial statements.  The standard is not expected to
have a material impact on the Company's current presentation of income.

         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.  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 its financial statements.

                                      - 8 -

<PAGE>



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

Overview

         Since 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 five years of operating
history  and,  although  profitable  for the last four  calendar  quarters,  has
experienced  significant  operating losses since  inception.  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 its  proprietary  medical  software
system   ("MediVIEW")   and  proprietary   infusion  pump  testing  device  (the
"PumpMaster")  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 which produces and markets pre-packaged  injectable prescription
pharmaceuticals and pre-filled flush syringes. In addition,  the Company derives
revenues from servicing of products and the sale of accessories.

         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 purchase  several months of inventory at any one
time 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 affect the revenues of the Company.

Results of Operations

Three months ended June 30, 1997 vs. Three months ended June 30, 1996 and Six 
Months Ended June 30, 1997 vs. Six Months Ended June 30, 1996

         Net Sales.  Net sales  increased  $6.1  million to $9.8 million for the
three month period ended June 30, 1997 as compared to $3.7 million for the three
month  period ended June 30,  1996,  an increase of 161%.  Net sales for the six
month period ended June 30, 1997  increased  $10.6  million to $17.3  million as
compared  to $6.7  million  for the six month  period  ended June 30,  1996,  an
increase of 158%. The increase is 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 addition of the Rocap
product line in February,  1997, and the addition of the MediVIEW and PumpMaster
products.


                                      - 9 -

<PAGE>



         Cost of Sales. Cost of sales increased $1.3 million to $4.2 million for
the three month  period  ended June 30, 1997 as compared to $1.9 million for the
three month  period  ended June 30,  1996,  an  increase of 120%.  Cost of sales
increased  $3.9  million to $7.2 million for the six month period ended June 30,
1997 as compared to $3.3  million for the six month  period ended June 30, 1996,
an increase of 115%.  The  increase for the three month period and the six month
period  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.  Also
contributing  to the  increase for the six month  period were  additional  costs
relating to the expansion of production capacity.

         Gross Margin.  Gross margin  increased $3.8 million to $5.7 million for
the three month  period  ended June 30, 1997 as compared to $1.9 million for the
three month  period  ended June 30,  1996,  an increase  of 202%.  Gross  margin
increased  $6.7 million to $10.1 million for the six month period ended June 30,
1997 as compared to $3.4  million for the six month  period ended June 30, 1996,
an increase of 201%.  The  increase  for the three 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.  The increase is also  attributable  to higher average  pricing
levels,  a more favorable  product mix of the 6060 Ambulatory Pump units to 3030
Stationary  Pump units and continued  reduction in direct product  costs.  Gross
margin  as a  percent  of sales  increased  to 58% for the  three  and six month
periods  ended June 30, 1997 from 50% for the three and six month  periods ended
June 30, 1996.

          Selling,  General  and  Administrative   Expenses.   Selling,  general
and administrative  expenses  increased  $2.6  million to $4.4 million for the 
three month period ended June 30, 1997 as compared to $1.8 million for the three
month period  ended  June  30,  1996,  an  increase  of  149%.  Selling,  
general  and administrative expenses increased $4.7 million to $7.9 million for
the six month period  ended June 30, 1997 as compared to $3.3 million for the 
six month period ended June 30,  1996,  an increase of 144%.  The  increase for
the three and six month periods is due  primarily to the  expansion of the 
Company's  direct sales force and clinical support staff and the associated  
travel thereby,  as well as greater  overall   commissions  paid  in  
conjunction  with  higher  net  sales.  Also contributing  to the  increase
for the six month period ended June 30, 1997 was  the  addition  of the  Rocap  
product  line,  as well  as the  addition  of administrative and management 
personnel,  including other resources necessary to support the  expansion of the
Niles,  Illinois  facility.  Selling,  general and administrative  expenses  as 
a  percent  of  sales  decreased  to 45%  and  46%, respectively,  for the  
three  and six  month  periods  ended  June 30,  1997 as compared to 47% and 
48%, respectively, for the three and six month periods ended June 30, 1996.

         Operating  Income.  Operating  income increased to $1.3 million for the
three month  period  ended June 30,  1997 as compared to $105,000  for the three
month  period  ended June 30,  1996,  an  increase of 1,102%.  Operating  income
increased  to $2.2  million  for the six month  period  ended  June 30,  1997 as
compared to $117,000 for the six month  period ended June 30, 1996,  an increase
of 1,773%. Operating income as a percent of sales increased to 13% for the three
and  six  month  periods  ended  June  30,  1997  as  compared  to  3%  and  2%,
respectively,  for the three and six month  periods  ended  June 30,  1996.  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.

         Interest  Income.  Interest income  increased to $414,000 for the three
month  period  ended June 30,  1997 as  compared  to $13,000 for the three month
period ended June 30, 1996.  Interest  income  increased to $557,000 for the six
month period ended June 30,1997 as compared to $15,000 for the six

                                     - 10 -

<PAGE>



month  period  ended June 30,  1996.  The  increase  for the three and six month
periods is  attributable  to the  investment  return on unused  proceeds  of the
Company's  initial  public  offering in June,  1996 and the Company's  secondary
public offering in April, 1997.

         Interest  Expense.  Interest expense decreased to $16,000 for the three
month  period  ended June 30, 1997 as  compared to $133,000  for the three month
period ended June 30, 1996.  Interest  expense  decreased to $22,000 for the six
month  period  ended June 30, 1997 as  compared  to  $237,000  for the six month
period ended June 30, 1996.  The decrease for the three and six month periods is
primarily  attributable to the conversion of all convertible debt outstanding at
the Company's initial public offering in June, 1996.

         Stock Appreciation Rights Expense. No stock appreciation rights expense
is recorded for the three and six month  periods ended June 30, 1997 as compared
to $1.6  million  for the six  month  period  ended  June 30,  1996.  The  stock
appreciation  rights  expense for the six month  period  ended June 30, 1996 was
non-recurring.

         Provision for Income  Taxes.  The provision for income taxes of $33,000
and $55,000,  respectively,  for the three and six month  periods ended June 30,
1997 reflect an effective rate for Alternative  Minimum Tax. The Company expects
net operating loss  carryforwards to offset pretax income for its 1997 tax year.
Due to net losses for the three and six month periods  ended June 30, 1996,  the
Company did not incur any federal or state income tax liability for the period.

         Net Income.  Net income was $1.6  million  for the three  month  period
ended June 30,  1997 as  compared  to a net loss of $14,000  for the three month
period ended June 30, 1996. Net income was $2.7 million for the six month period
ended June 30, 1996 as compared to a net loss of $1.7  million for the six month
period ended June 30, 1996. Net income for the three and six month periods ended
June 30, 1997 was  achieved  primarily as a result of  incremental  gross margin
generated by increased  unit sales  volume of new and  existing  products.  Also
contributing  to net income for the three and six month  periods  ended June 30,
1997 was the increase in interest income from the investment of excess cash.
The six month period ended June 30, 1996 included the non-recurring charge for 
stock appreciation rights of $1.6 million.

Liquidity and Capital Resources

         In April,  1997, the Company completed a secondary public offering with
proceeds  of  approximately  $22  million,  after  underwriters'  discounts  and
commissions.  As of June 30, 1997, cash balances were invested in U.S.  Treasury
Bills,  U.S.  Treasury Notes,  Certificates of Deposit,  commercial  paper and a
money market account.

         As of June 30, 1997,  the Company had  approximately  $31.8  million in
cash,  cash  equivalents,  short-term  and long-term  investments  in marketable
securities,  and had net working  capital of  approximately  $45.1  million.  In
March, 1997, the Company entered into a credit agreement with up to $9.5 million
of available  borrowing.  As of June 30, 1997,  no borrowing has been made under
the credit agreement.

         The Company used cash in its operations of  approximately  $4.8 million
for the six months ended June 30, 1997.  Cash used in operations  for the period
exceeds the Company's operating results for the

                                     - 11 -

<PAGE>



same period  due,  primarily,  to the growth in trade  accounts  receivable  and
inventories as a result of actual and anticipated growth in sales volume.

         The Company  believes that its  financial  assets will be sufficient to
fund its operations for the  foreseeable  future.  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 may, 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.

                                     - 12 -

<PAGE>



                                     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 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  system.  On August 4, 
1997, the District Court denied the motion for preliminary injunction.  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 period  covered by this report,  the Company issued
the following  securities without registration under the Securities Act of 1933,
as amended.

                  From April 3, 1997 to June 27, 1997, the Company issued 18,667
shares  of  common  stock  upon  the  exercise  of  warrants  not  covered  by a
registration  statement.  The Company received proceeds of approximately $76,465
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 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> 
       2
      3.1         Articles of Incorporation                                                                      +
      3.2         ByLaws                                                                                         +
     10.1         Agreement with Americorp Financial, Inc. re: Leasing                                           +
                  Services, dated March 22, 1995


                                     - 13 -

<PAGE>




    10.1.1        Amendment, dated September 16, 1996, to Agreement                                             +++
                  with Americorp Financial, Inc.
     10.2         Agreement with Clintec Nutrition Company re:                                                   +
                  Development Agreement, dated September 1, 1995
     10.3         Intentionally Omitted
     10.4         Intentionally Omitted
     10.5         Distributorship Agreement with CO-Medical, Inc.,                                               +
                  dated February 17, 1992
     10.6         Distributorship Agreement with Clinical Technology                                             +
                  Inc., dated August 1, 1992
     10.7         Intentionally Omitted
     10.8         Intentionally Omitted
     10.9         Distributorship Agreement with Advanced Medical,                                               +
                  Inc., dated September 1, 1991
     10.10        Distributorship Agreement with Healthcare                                                      +
                  Technology, dated October 9, 1991
     10.11        Intentionally Omitted
     10.12        Intentionally Omitted
     10.13        Pump Contract with Chartwell Home Therapies, dated                                             +
                  November 22, 1993
     10.14        Sales Agreement with Pharmacy Corporation of                                                   +
                  America, dated March 17, 1995
     10.15        Sales & Marketing Agreement with Alpha                                                         +
                  Group, dated November 6, 1995
     10.16        Foreign Distributorship Agreement with MED-O-GEN                                               +
                  INC., dated September 22, 1995
     10.17        Foreign Distributorship Agreement with Yoon Duk                                                +
                  Separation Technology, dated April 17, 1995
     10.18        Foreign Distributorship Agreement with Upwards                                                 +
                  Biosystems Ltd., dated March 8, 1995
     10.19        Foreign Distributorship Agreement with Grupo Grifols,                                          +
                  S.A., dated September 17, 1993
     10.20        Foreign Distributorship Agreement with JMS                                                     +
                  Company, dated March 22, 1996
     10.21        Foreign Distributorship Agreement with Brasimpex                                               +
     10.22        Foreign Distributorship Agreements with Medicare (s)                                           +
                  PTE LTD., dated February 10, 1995
     10.23        Intentionally Omitted


                                     - 14 -

<PAGE>




     10.24        Intentionally Omitted
     10.25        Master Lease Agreement with Comdisco, Inc., dated                                              +
                  August 9, 1994
     10.26        Stock Option Plan                                                                              +
     10.27        Lease for Real Property located at 5601 West Howard,                                           +
                  Niles, Illinois, dated as of May 31, 1994
    10.27.1       Amendment, dated October 30, 1996, to Lease for Real                                          +++
                  Property located at 5601 West Howard, Niles, Illinois
     10.28        Employment Agreement for K. Shan Padda                                                         +
     10.29        Employment Agreement for Anil Rastogi                                                          +
     10.30        Asset Purchase Agreement, dated February 25, 1997,                                            ++
                  by and among Sabratek Corporation; Rocap, Inc. and
                  Elliott Mandell
     10.31        Employment Agreement for Stephen L. Holden                                                   ++++
     10.32        Employment Agreement for Elliott Mandell                                                      ++
     10.33        Lease Agreement for property located at 11 Sixth                                             ++++
                  Road, Woburn, Massachusetts, dated February 1, 1997
     10.34        Lease Agreement for property located at 5 Constitution                                       ++++
                  Way, Woburn, Massachusetts, dated June 26, 1995
     10.35        Lease Agreement for property located at 1629 Prime                                           +++++
                  Court, Suite 100, Orlando, Florida, dated March 11,
                  1997
     11.1         Statement re: computation of per share earnings                          E-16
      27          Financial Data Schedule                                                  E-17
</TABLE>


+        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).

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

+++      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.

++++     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).

+++++    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.



                                     - 15 -

<PAGE>



(b)      Reports on Form 8-K

         The  Company's  current  report on Form 8-K,  dated  February  25, 1997
(filed March 12, 1997), is incorporated herein by this reference.


                                     - 16 -

<PAGE>



                                   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, 1997                      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.





Date:  August 14, 1997                      By:   /s/ Stephen L. Holden
                                               ----------------------------
                                                 Stephen L. Holden
                                                 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 officer of the registrant.





Date:  August 14, 1997                      By:   /s/ Scott Skooglund
                                               --------------------------
                                                 Scott Skooglund
                                                 Chief Accounting Officer

                                     - 17 -