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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K

                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
        SECTIONS 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

       FOR THE TRANSITION PERIOD FROM                TO                .

                         COMMISSION FILE NUMBER 0-24128

                                BIO-PLEXUS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                            <C>
                 CONNECTICUT                                     06-1211921
       (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER IDENTIFICATION NO.)
        INCORPORATION OR ORGANIZATION)
</TABLE>

                 129 RESERVOIR ROAD, VERNON, CONNECTICUT 06066
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

                                 (860) 870-6112
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                              TITLE OF EACH CLASS:

                           COMMON STOCK, NO PAR VALUE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  [X]  No  [ ].

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     The aggregate market value of voting stock held by non-affiliates of the
registrant at March 31, 2000, was $37,620,383.

     On March 31, 2000, there were 14,389,979 outstanding shares of the
registrant's common stock.
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                           FORWARD LOOKING STATEMENTS

     The discussions set forth below and elsewhere herein contain certain
statements which are not historical facts and are considered forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's actual results could differ materially from those projected in the
forward-looking statements as a result of, among other factors, general economic
conditions and growth in the safety medical products industry, competitive
factors and pricing pressures, changes in product mix, product demand, risk of
dependence on third party suppliers, and other risk factors detailed in this
report, described from time to time in the Company's other Securities and
Exchange Commission filings, or discussed in the Company's press releases. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements.

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FACTORS THAT MAY AFFECT FUTURE RESULTS

WE NEED ADDITIONAL FINANCING AND THESE FUNDS MAY NOT BE AVAILABLE TO US.

     To date, our capital requirements have been significant. We have relied
upon the proceeds of sales of our securities and other financing vehicles to
continue research and development and to fund our working capital requirements.
We do not have sufficient capital to continue our daily operations beyond 2000
unless we obtain additional financing. With the exception of (i) the existence
of a call right in favor of certain holders of our 6% Convertible Debentures
which could result in up to $1 million in proceeds to us and (ii) the commitment
for $17.5 million in permanent financing with Appaloosa Management L.P., which
we expect to close on April 28, 2000 and which is described in more detail
elsewhere in this Annual Report on Form 10-K, we do not know of any other
existing commitments to us for any additional financing and we cannot assure
investors that any such commitment could be obtained on favorable terms, if at
all. Our ability to raise additional financing may be dependent on many factors
beyond our control, including the state of capital markets and the development
or prospects for development of competitive technology by other companies. Any
additional equity financing may cause dilution of our current stockholders, and
any debt financing may require restrictions on our right to declare dividends or
on other aspects of our business. See "Business -- Convertible Note Financing."

WE HAVE EXPERIENCED A HISTORY OF LOSSES AND ANY FUTURE PROFITABILITY IS
UNCERTAIN.

     We were formed in 1987, and we have not yet made a profit. We cannot
guarantee that we will ever be profitable. Furthermore, we may incur additional
losses. As of December 31, 1999 we had an accumulated deficit of approximately
$68,105,000 and we cannot assure investors that we will ever achieve
profitability or positive operating cash flow. Our relatively limited history of
operations, the nature of our business, and our limited marketing and
manufacturing experience make the prediction of future operating results
difficult and highly unreliable. Our future prospects, therefore, must be
evaluated in light of the substantial risks, expenses, delays and difficulties
normally encountered by companies in the medical device industry, which is
characterized by an increasing number of participants, intense competition and a
high rate of failure. We cannot assure investors that we will be able to market
our products at prices and in quantities that will generate a profit. We cannot
assure investors that we can avoid potential delays and expenses in developing
new products, problems with production and marketing or other unexpected
difficulties. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

WE HAVE RECEIVED A "GOING CONCERN" OPINION FROM OUR ACCOUNTANTS.

     We currently require substantial amounts of capital to fund current
operations and to implement our new business plan to be developed. Due to
recurring losses from operations, an accumulated deficit, and our inability
through December 31, 1999 to obtain sufficient permanent financing to support
current and anticipated levels of operations, our independent public
accountant's audit opinion states that these matters raise substantial doubt
about our ability to continue as a going concern. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

OUR SUCCESS DEPENDS ON GREATER COMMERCIAL ACCEPTANCE; WE ARE NOT ABLE TO PREDICT
FUTURE COMMERCIAL ACCEPTANCE.

     Our future depends on the success of our current safety medical products
and the development of new safety medical products, which depends primarily on
health care professionals accepting our products as reliable, accurate and
cost-effective replacement for traditional medical products. We cannot predict
how quickly the market will accept our safety blood collection needle and
related accessory products that are marketed under the Punctur-Guard(R) and
Drop-It(R) trademarks. We cannot predict how quickly we will be able to
introduce new safety medical products to the market either independently or
through our strategic partnerships with other healthcare companies. Although we
continue to focus on developing additional safety medical products featuring our
patented internal blunting technology to respond to the needs of health care
professionals, we cannot guarantee that we will be able to develop enough
additional safety medical products quickly enough or in a way that is
cost-effective or at all.

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OUR MANUFACTURING IS SUBJECT TO CERTAIN RISKS.

     We may face unexpected technical problems in trying to transfer product
ideas from the development stage to the manufacturing stage. These technical
problems could delay our plans for new product releases. In addition, our
manufacturing processes involve proprietary molds, machinery and systems to
manufacture our safety needle and related products which our manufacturing
personnel must continuously monitor and update, especially as we develop more
products. Also, we may not be able to predict or satisfy changing customer
demands for certain products and it could take longer than expected for us to
change the manufacturing processes to respond to these demands. As a result, we
may not have sufficient inventory to meet customer demands or we may have too
much product inventory at times, which could affect our relationships with
customers and negatively affect our working capital. In order to be profitable,
we must manufacture greater quantities of products than we have to date and we
must do this more efficiently than we have. We cannot assure investors that we
will be able to produce our products at commercially reasonable costs. Some of
our components are made by only a few outside vendors. We may not be able to
meet the demand for our products if one or more of these vendors could not
supply us with the needed components. Our Vernon, Connecticut facility is our
only manufacturing facility. If this facility were damaged or closed due to fire
or other causes, it would negatively impact our business.

WE MAY NOT BE SUCCESSFUL IN DEFENDING OUR PROPRIETARY RIGHTS.

     Our commercial success depends partly upon our trade secrets, know-how,
trademarks, patents and other proprietary rights. We actively seek patent
protection for our proprietary technology in the United States and
internationally, but we cannot assure investors that third parties will not
challenge our patents or that they will not be invalidated or designed around or
that they will provide a commercially significant level of protection. We cannot
assure investors that any pending patent applications or applications filed in
the future will result in a patent being issued to us. Furthermore, once issued,
a patent is not always valid or enforceable, and a patent holder may still
infringe the patent rights of others. If our key patents are invalidated or
expire, this could lead to increased competition and would adversely affect our
business. In addition, we may be found to have infringed the proprietary rights
of others or may be required to respond to patent infringement claims and may
have to litigate to determine the priority of inventions. Litigation may be
necessary to enforce our patents, trade secrets or know-how, or to determine the
enforceability, scope and validity of the proprietary rights of others. It would
be a substantial expense to our business and a diversion of our personnel's time
and effort to defend and prosecute intellectual property suits and related legal
and administrative proceedings. A determination against us could be very costly
and/or require us to seek licenses from third parties which may not be available
on commercially reasonable terms, if at all. Furthermore, we cannot assure
investors that we will be able to maintain the confidentiality of our trade
secrets or know-how or that others may not develop or acquire trade secrets or
know-how that are similar to ours.

WE COMPETE AGAINST LARGER, STRONGER ENTITIES THAT SELL MORE ESTABLISHED SAFETY
MEDICAL PRODUCTS.

     Our success depends on our ability to establish and maintain a competitive
position in the safety medical product market, particulary with respect to our
Punctur-Guard(R) safety needle and related products. We expect that
manufacturers of conventional medical products will compete intensely to
maintain their markets and revenues. Some of these manufacturers currently offer
products which many perceive to be less expensive to operate and which include a
broader range of applications than the products we offer and expect to offer. We
cannot assure investors that competitive pressures will not result in price
reductions of our products, which could adversely affect our profitability. In
addition, health care professionals may choose to maintain their current method
of blood collection, which may not rely on self-blunting needle technology. We
also face competition from manufacturers of alternative safety medical products
intended for similar use. Many of our competitors have substantially greater
capital resources, research and development staffs and facilities than ours. Our
products may become obsolete or non-competitive if rapid technological changes
or developments occur. We may need to make substantial investments in and commit
significant resources to product improvement and development in order to stay
competitive and successfully introduce new products. We cannot assure investors
that we will have the resources necessary to make such investments. If we do
have the

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required resources, we cannot assure investors that we will be able to respond
adequately to technological or market changes.

WE DEPEND ON KEY MEMBERS OF OUR STAFF AND MUST RETAIN AND RECRUIT QUALIFIED
INDIVIDUALS IF WE ARE TO BE COMPETITIVE.

     Our success depends on our ability to attract and retain certain
scientific, technical, regulatory and managerial personnel. If we lose key
personnel, it could have a materially adverse effect on our business.
Competition for qualified personnel is intense and we cannot assure investors
that we will be successful in recruiting or retaining such personnel in the
future.

OUR PRODUCTS ARE REGULATED BY THE UNITED STATES FOOD AND DRUG ADMINISTRATION
(FDA).

     Our products in the United States are regulated as medical devices by the
FDA. The process of obtaining United States regulatory approvals and clearances
may be lengthy, expensive and uncertain. Commercial distribution of our products
in foreign countries may be subject to varying governmental regulation which may
delay or restrict the marketing of our products in those countries. In addition,
other regulatory authorities may impose limitations on the use of our products.
FDA enforcement policy strictly prohibits the marketing of FDA-cleared or
approved medical devices for unapproved uses. Our manufacturing operations are
subject to compliance with Good Manufacturing Practices ("GMP") regulations of
the FDA and similar foreign regulations. These regulations include controls over
design, testing, production, labeling, documentation and storage of medical
devices. Enforcement of GMP regulations has increased significantly in the last
several years and the FDA has stated publicly that compliance will be more
strictly monitored in the future. Our facilities and manufacturing processes, as
well as those of current and future third party suppliers, will be subject to
periodic inspection by the FDA and other regulatory authorities. Failure to
comply with these and other regulatory requirements could result in, among other
measures, warning letters, fines, injunctions, civil penalties, recall or
seizure of products, total or partial suspension or production, refusal of the
government to grant clearance or approval for devices, withdrawal of clearances
or approvals, or criminal prosecution, which would have an adverse effect on our
business.

RISKS ASSOCIATED WITH OUR INTERNATIONAL BUSINESS.

     In recent years, we experienced sales in international markets and expect
to continue to expand our product distribution internationally. We may face
difficulties and risks in our international business, including changing
economic or political conditions, export restrictions, currency risks, export
controls relating to technology, compliance with existing and changing
regulatory requirements, tariffs and other trade barriers, longer payment
cycles, problems in collecting accounts receivable, reimbursement levels, and
potentially adverse tax consequences. In addition, it may be difficult for us to
enforce and collect receivables through a foreign country's legal system and to
protect our intellectual property in foreign countries. We cannot assure
investors that one or more of these factors will not have a material and adverse
effect on our international business opportunities.

ANTITAKEOVER PROVISIONS.

     We are subject to Sections 33-840 through 33-845 of the Connecticut
Business Corporation Act which generally impose restrictions upon certain
acquirers and their affiliates and associates of ten percent or more of our
Common Stock.

MANAGEMENT AND SIGNIFICANT STOCKHOLDERS CAN EXERCISE INFLUENCE OVER THE COMPANY.

     As of March 31, 2000, directors, executive officers and principal
stockholders of the Company beneficially owned approximately 27% of our
outstanding voting securities. Furthermore, Appaloosa Management, L.P.
individually is the beneficial owner of 15.8% of our shares of Common Stock and
after the consummation of the permanent financing described elsewhere in this
Annual Report on Form 10-K, Appaloosa Management, L.P. could beneficially own a
greater percentage of the aggregate outstanding

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Common Stock, based on certain assumptions and calculations more fully described
in our proxy statement filed with the Securities and Exchange Commission on
April 3, 2000. As a result, the foregoing stockholders, individually and/or
acting together may be able to influence the outcome of stockholder votes.
Examples of stockholder votes include those for the election of directors,
changes in our Certificate of Incorporation and Bylaws and approving certain
mergers or other similar transactions, such as a sale of all or substantially
all of our assets. See "Security Ownership of Certain Beneficial Owners and
Management."

THE COMPANY'S STOCK PRICE IS VOLATILE AND INVESTING IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK.

     The market price of our Common Stock has fluctuated significantly and as a
result, it has been described as "volatile." Future announcements concerning our
competitors, including operating results, technological innovations or new
commercial products, government regulations, developments concerning proprietary
rights, or litigation could have a significant impact on the market price of our
Common Stock. In addition, Appaloosa Management, L.P. and certain related
entities have the right to request under the Securities Act of 1933, as amended,
that we register the shares of Common Stock they beneficially own for public
sale. If we registered these shares, they would, subject to certain volume
limitations, become freely tradeable. Furthermore, the stock market has from
time to time experienced extreme price and volume fluctuations, which may
adversely affect the market price of our Common Stock. Some of these
fluctuations have particularly affected companies in the medical device industry
and they have often been unrelated to the operating performance of such
companies. In addition, general economic, political and market conditions may
also adversely affect the market price of our Common Stock. We cannot assure
investors that the trading price of our Common Stock will remain at or near its
current level.

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                                BIO-PLEXUS, INC.
                             INDEX TO ANNUAL REPORT
                                  ON FORM 10-K
                          YEAR ENDED DECEMBER 31, 1999

<TABLE>
<S>       <C>                                                           <C>
                                  PART I
Item 1.   Business....................................................    7
Item 2.   Properties..................................................   16
Item 3.   Legal Proceedings and Other Matters.........................   16
Item 4.   Submission of Matters to a Vote of Security Holders.........   16
                                  PART II
          Market for the Registrant's Common Equity and Related
Item 5.   Shareholder Matters.........................................   17
Item 6.   Selected Financial Data.....................................   19
          Management's Discussion and Analysis of Financial Condition
Item 7.   and Results of Operations...................................   19
Item 8.   Financial Statements and Supplementary Data.................   24
          Changes in and Disagreements with Accountants on Accounting
Item 9.   and Financial Disclosure....................................   24
                               PART III
Item 10.  Executive Officers and Directors of the Registrant..........   24
Item 11.  Executive Compensation......................................   26
          Security Ownership of Certain Beneficial Owners and
Item 12.  Management..................................................   32
Item 13.  Certain Relationships and Related Transactions..............   33
                               PART IV
Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form
          8-K.........................................................   33
</TABLE>

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                                     PART I

ITEM 1.  BUSINESS

  General Development of Business

     Bio-Plexus, Inc. was incorporated under the laws of the State of
Connecticut in September 1987 for the purpose of designing, developing,
manufacturing and selling safety medical products. Its executive offices and
manufacturing facility are located at 129 Reservoir Road, Vernon, Connecticut
06066, and its telephone number is (860) 870-6112. All references herein to the
"Company" refer to Bio-Plexus, Inc. unless otherwise indicated by context.

     The Company is engaged principally in the design, development and
manufacture of safety medical products used by healthcare professionals. The
Company's initial products have been safety blood collection needles and related
accessory products that are marketed under the Punctur-Guard(R) and Drop-It(R)
trade names. The safety blood collection needle utilizes a patented technology
that greatly reduces the risk of accidental needlesticks by internally blunting
the needle prior to removal from the patient. The Company's primary focus has
been the design, development, testing and evaluation of its safety blood
collection needle, and the design and development of the molds, machinery and
systems used to manufacture the blood collection needle. The Company has also
focused its efforts on developing strategic partnerships with healthcare
companies in order to bring other products to market featuring its patented
internal blunting technology.

     In June 1993, the Company completed its clinical tests of the
Punctur-Guard(R) blood collection needle and began selling the needle to
hospitals, medical centers and other large volume users on a limited basis. In
June 1994, the Company completed an initial public offering of 1,638,750 shares
of common stock at $10 per share. Net proceeds to the Company were $14,191,000.
From June 1994 through December 1996, the Company concentrated on improving and
expanding its overall manufacturing, sales and marketing operations. This
included the acquisition of a production facility, improvements to and the
expansion of its production tooling and the installation of a new needle
assembly and packaging system.

     On March 16, 1995, the Company entered into a domestic distribution and
marketing agreement with Allegiance Healthcare Corporation ("Allegiance",
formerly "Baxter Healthcare Corporation"), a worldwide leader in sales,
distribution and manufacturing of medical products. Pursuant to the agreement,
the Company retains primary responsibility for marketing its products.
Allegiance supports the Company's marketing efforts with marketing promotions
for the Company's products and stocks the Company's products in Allegiance
warehouse locations throughout the United States. Allegiance is compensated
based on a percentage of sales.

     In September 1995, the Company completed a secondary public offering of
securities involving the sale of 1,725,000 shares of common stock at $11.25 per
share. The net proceeds totaled $17,575,000, of which the Company utilized
$4,000,000 to repay outstanding debt obligations. The balance was used for
working capital to sustain ongoing operations, to purchase additional machinery
and equipment, and to continue to improve and expand its manufacturing and
marketing operations, as well as to support research and development.

     From the latter part of 1996 through 1998, the Company focused its efforts
on establishing joint venture agreements on one or more of its major product
lines, and on January 28, 1997, the Company entered into a Development and
License Agreement and a Supply Agreement with Johnson & Johnson Medical ("JJM")
of Arlington, Texas. Under the terms of the original agreements, the Company
would develop and manufacture safety needle assemblies for JJM utilizing its
self-blunting technology, which would be used by JJM, under an exclusive
worldwide license granted by the Company, to manufacture and sell a new safety
intravenous catheter ("I.V. catheter"). The Company received licensing fees and
funding to complete the development of the safety needle assemblies and for the
development of manufacturing equipment and tooling. JJM agreed to acquire
initial production equipment, purchase certain minimum quantities of safety
needle assemblies annually, and to pay certain minimum annual royalties.

     On April 9, 1998, the Company amended the original development and license
agreement and canceled its supply agreement with JJM. The amended terms included
certain changes in the licensing and royalty

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agreements as well as the transfer of manufacturing of the safety needle
assemblies to JJM, in exchange for an initial milestone payment of $3,500,000
with an additional $500,000 payable upon completion of certain additional
milestones. The revised agreement also provided for an additional $300,000
payable to the Company for initial capital equipment purchases during 1998.

     In December of 1998, the Company completed the construction of an automated
assembly machine for JJM under the terms of the amended agreement, and the
equipment was transferred to JJM's facility. During the first quarter of 1999,
the Company continued to perform services for JJM under the terms of the
agreement; however, by the end of the first quarter of 1999, substantially all
of the contractual obligations had been met by the Company. During the second,
third and fourth quarters of 1999, the Company continued to provide consulting
and engineering work for JJM for the I.V. catheter project; however, revenue
recorded was outside of the original agreements with JJM.

     In October 1998, the Company entered in to a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific is one of the world leaders in serving science,
providing more than 245,000 products and services to research, healthcare,
industrial, educational and government customers in 145 countries. The
distribution agreement allows Fisher HealthCare to purchase and distribute all
of the Bio-Plexus blood collection products.

     On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation (subsequently known as Kendall Healthcare Products Company
("Kendall")), a subsidiary of Tyco and a major supplier of sharps containers in
the United States. The agreement allows Kendall to purchase and distribute
Bio-Plexus Drop-It(R) Needle Disposal Containers and Drop-It(R) Quick Release
Needle Holders. The agreement has an initial term of three years, and shall be
automatically renewed for an additional year, unless either party notifies the
other of its intent not to renew.

     On October 23, 1998, the Company entered into an exclusive License
Agreement and Design, Development and Asset Transfer Agreement for a safety
Peripherally Inserted Central Catheter ("PICC") introducer with TFX Medical
("TFX"), a division of Teleflex Incorporated, the industry's dominant supplier
of PICC introducers. The License Agreement includes certain minimum annual
volume requirements and ongoing royalties on the sale of PICC introducer
catheters featuring Punctur-Guard(R) technology. Under the Design, Development
and Asset Transfer Agreement, the Company would design and develop safety needle
assemblies to be used with the TFX peelable catheter, and would modify existing
manufacturing equipment to be transferred to TFX pursuant to the terms and
conditions of the agreement. On July 26, 1999, an agreement was entered into
with TFX to modify the License Agreement dated October 23, 1998. The amended
agreement included additional licensing fees and changes in royalty revenue in
exchange for TFX's right to exclusively market to one of its customers. In the
first quarter of 2000, the Company completed its obligations under the Design,
Development and Asset Transfer Agreements.

     In June of 1998 the Company received ISO 9002 and EN 46002 certifications.
ISO 9002 is a general international standard for quality assurance in
production, installation and servicing. EN 46002 provides particular quality
system requirements for suppliers of medical devices that are more specific than
the general requirements specified in ISO 9002. The Company also began labeling
its products with the CE Mark during 1998, which indicates that the Company is
following Medical Device Directives in Europe which include the standards set
forth under ISO 9002 and EN 46002. In February of 2000 the Company received ISO
9001 and EN46001 registrations. This certification is an upgrade from the
previous ISO 9002 and EN 46002 status. The change indicates that the Company's
product design process also meets the international quality system standards.
The Company will continue to label product with the CE Marking which indicates
that the Company is following the European Community Medical Device Directives.
These registrations will better enable the Company to sell its products
internationally.

     In January 2000, the Company entered into a distribution agreement with
Owens & Minor, a major distributor of medical products to hospitals through the
United States. Owens & Minor, a Fortune 500 company headquartered in Richmond,
Virginia, is the nation's largest distributor of national brand medical and
surgical supplies. The company's distribution centers serve hospitals,
integrated healthcare systems and
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<PAGE>   10

group purchasing organizations nationwide. The distribution agreement allows
Owens & Minor to purchase and distribute all of the Bio-Plexus blood collection
products.

     On February 21, 2000, the Company entered into a distribution agreement
with McKessonHBOC Medical Group of Richmond, Virginia. McKessonHBOC's Supply
Management Business is a leading distributor of medical-surgical supplies to
more than 5,000 hospitals nationwide. The agreement allows McKessonHBOC to
purchase and distribute the Company's products on a non-exclusive basis without
territorial limitations or restrictions. The agreement is in effect for a period
of five years and shall continue automatically in effect for successive terms of
five years each until terminated by either party.

     The Company also has continued its research and development of new
products. Pursuant to Section 510(k) of the Food, Drug and Cosmetics Act (21
U.S.C. 360(k)) and the regulations promulgated thereunder, the Company has
received approval ("510(k) approval") from the Food and Drug Administration for
its blood collection needle, winged intravenous set, needle disposal container,
and various holders. In addition, the Company has also identified several other
potential applications for its patented self-blunting technology, which it
believes may be of interest to potential joint venture partners.

     Overall product sales increased by $412,000 to $5,498,000 in 1999, compared
to $5,086,000 in the prior year. Sales of medical devices specifically increased
by $1,814,000, while product sales from joint venture arrangements decreased by
$1,402,000, due to the completion of the development project for the I.V.
catheter with JJM. The Company anticipates continued medical device sales growth
in 2000 due, in part, to legislation passed in several states including
California, Tennessee, Texas and New Jersey requiring the use of safety
products, as well as strong safety Compliance Directives issued by Federal OSHA
on November 5, 1999. However, continued losses from operations could occur while
the Company is investing in the research and development of new product lines
and the expansion of its sales and marketing capacity. Such losses could
continue until additional increases in revenues occur and further reductions in
manufacturing costs are achieved.

  Convertible Note Financing

     In fiscal year 2000, the Company will need to raise additional capital. On
September 21, 1999, the Company received a commitment from Appaloosa Management,
L.P., of Chatham, New Jersey ("Appaloosa") for a total financing package of
$17.5 million (the "Permanent Financing"). The Permanent Financing is currently
scheduled to be consummated in April 2000 after receipt of stockholder approval
of the Permanent Financing. A more detailed description of the Permanent
Financing is contained in the Company's Definitive Proxy Statement filed with
the Securities and Exchange Commission ("SEC") on January 31, 2000 and its
Supplemental Proxy Statement filed with the SEC on April 3, 2000.

  Bridge Transactions

     Pending consummation of the Permanent Financing, on October 21, 1999, the
Company issued to Appaloosa and entities affiliated therewith (the "Purchasers")
a 7.5% non-convertible secured note in the aggregate principal amount of $3
million (the "First Bridge Note"). In January 2000, the interest rate on the
First Bridge Note was increased to 12% per annum. In connection with the
issuance of the First Bridge Note the Company also issued to the Purchasers (i)
a five-year warrant to purchase up to 1.0 million shares of the Company's common
stock, no par value (the "Common Stock") at an initial exercise price of $3.00
per share (the "$3 Warrants") and (ii) a nine-year warrant to purchase up to 1.5
million shares of Common Stock at an initial exercise price of $5.00 per share
(the "$5 Warrants") (the $3 Warrants and $5 Warrants are collectively referred
to herein as the "First Bridge Warrants"). At the Purchaser's election and
contingent upon the satisfaction of certain criteria at the closing of the
Permanent Financing, or within six months and one day thereafter, the exercise
price of the $3 Warrants will increase to $4.00 per share of Common Stock. The
exercise price of the $5 Warrants will increase to $7.00 per share of Common
Stock upon the earlier of the closing of the Permanent Financing and October 21,
2000. The $5 Warrants contain a net-exercise provision.

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     On January 5, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $1.65 million
(the "Second Bridge Note"). In connection with the issuance of the Second Bridge
Note the Company also agreed to issue and sell on the earlier of (i) April 30,
2000 and (ii) the closing of the Permanent Financing, five-year warrants to
acquire up to 200,000 shares of Common Stock at an initial exercise price of
$3.00 per share (the "Second Bridge Warrants"). The Second Bridge Warrants
contain a net-exercise provision.

     On April 3, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $2.2 million
(the "Third Bridge Note"). No warrants or convertible securities were issued in
connection with the Third Bridge Note. The First Bridge Note, the Second Bridge
Note and the Third Bridge Note are collectively referred to as the "Bridge
Notes". The issuance of the Bridge Notes, the First Bridge Warrants and the
Second Bridge Warrants are collectively referred to as the "Bridge
Transactions".

     The Bridge Notes are not convertible into shares of Common Stock and are
required to be paid-in-full (together with accrued interest) at the closing of
the Permanent Financing.

  Permanent Financing

     In order to consummate the Permanent Financing the Company is required by
the rules of The NASDAQ Stock Market ("NASDAQ") to obtain the approval of a
majority of the Company's stockholders of the terms and conditions of the
Permanent Financing (the "Investment Proposal"). In addition, the Connecticut
Business Corporation Act requires that the Company obtain stockholder approval
of (i) an amendment to the Company's certificate of incorporation (the "Charter
Amendment Proposal") and (ii) an amendment to the Company's 1991 Long-Term
Incentive Plan (the "Incentive Plan Amendment Proposal"). The Charter Amendment
and the Incentive Plan Amendment Proposal are required by the terms of the
Permanent Financing. The approval of the Company's stockholders of the
Investment Proposal, the Charter Amendment Proposal and the Incentive Plan
Amendment Proposal is collectively referred to as "Stockholder Approval".

     Once Stockholder Approval is obtained the Company will issue to the
Purchasers (i) $16.75 million of zero-coupon, secured convertible notes due 2005
(the "Convertible Notes"), (ii) 250,000 shares of Common Stock at a purchase
price of $3.00 per share (the "Permanent Financing Shares") and (iii) nine-year
warrants to purchase up to 1.5 million shares of Common Stock at an initial
exercise price of $7.00 per share (the "$7 Warrants"). The Convertible Notes are
convertible into shares of Common Stock at an initial conversion priced $3.00.
The $7 Warrants contain a net exercise provision.

     The Permanent Financing will generate aggregate proceeds to the Company of
$17.5 million. After repayment of the Bridge Notes, the Company will realize net
proceeds of approximately $8.4 million which will be available for general
working capital purposes, subject to the terms and conditions of the Permanent
Financing transaction agreements.

     The Company is continuing to explore additional financing alternatives and
potential strategic relationships which may provide the Company with additional
sources of working capital. There can be no assurances that the Company will be
able to secure such additional sources of working capital. Failure to raise
needed capital may have a material adverse impact on the Company's operations,
development plans and cash flows.

  Financial Information About Industry Segments

     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information" effective for periods beginning after December 15, 1997. SFAS 131
requires that a public enterprise report financial and descriptive information
about its reportable operating segments. Operating segments are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. In fiscal 1998, with the onset
of the development contract with JJM, the Company began internally reporting two
distinct segments: Safety

                                       10
<PAGE>   12

Medical Products and Accessories and Joint Venture Design and Development.
Distinct reporting by such segments was deemed necessary by management based on
the significance of reported revenues and expenses and the Company's intention
to focus operating resources in both of these areas.

     The Safety Medical Products and Accessories segment includes operations
associated with the manufacture of blood collection needles, needle holders and
needle disposal containers. The Joint Venture Design & Development segment
includes operations associated with product design and development, product
licensing, and the design, development and construction of machinery and tooling
in connection with joint venture partners.

     Information with respect to each of the Company's business segments is as
follows:

SEGMENT REVENUE

<TABLE>
<CAPTION>
                                                    1999          1998          1997
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Safety Medical Products and Accessories........  $5,449,000    $3,636,000    $3,542,000
Joint Venture Design & Development.............   1,575,000     5,671,000     1,500,000
                                                 ----------    ----------    ----------
Total Consolidated Revenue.....................  $7,024,000    $9,307,000    $5,042,000
                                                 ==========    ==========    ==========
</TABLE>

MAJOR CUSTOMERS

     There were three customers, two domestic distributors of the Company's
products, Allegiance Healthcare and Fisher HealthCare, and one foreign
distributor, FORA srl, that exceeded 10% of the Company's Safety Medical
Products and Accessories segment revenue for the periods presented. The loss of
business of any of the foregoing customers could potentially have a material
adverse effect on the business and prospects of the Company. In the Joint
Venture Design and Development segment, JJM and TFX contributed to more than 10%
of the revenues for the periods presented. The following table represents the
revenue associated with these major customers by segment:

<TABLE>
<CAPTION>
                                                    1999          1998          1997
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
TOTAL REVENUE MAJOR CUSTOMERS:
Safety Medical Products and Accessories........  $4,510,000    $2,962,000    $2,766,000
Joint Venture Design & Development.............   1,575,000     5,671,000     1,500,000
OTHER DOMESTIC SALES...........................     391,000       414,000       402,000
EXPORT SALES:
Safety Medical Products and Accessories........     548,000       260,000       374,000
Joint Venture Design & Development.............          --            --            --
                                                 ----------    ----------    ----------
TOTAL CONSOLIDATED REVENUE.....................  $7,024,000    $9,307,000    $5,042,000
                                                 ==========    ==========    ==========
</TABLE>

     For the periods presented, there were no material intersegment revenues.

SEGMENT OPERATING PROFIT (LOSS)

<TABLE>
<CAPTION>
                                                1999           1998            1997
                                             -----------    -----------    ------------
<S>                                          <C>            <C>            <C>
Safety Medical Products and Accessories....  $ 2,289,000    $   435,000    $ (1,441,000)
Joint Venture Design & Development.........    1,706,000      3,361,000         173,000
                                             -----------    -----------    ------------
Total Consolidated Operating Profit
  (Loss)...................................    3,995,000      3,796,000      (1,268,000)
                                             -----------    -----------    ------------
Selling, General and Administrative
  Expenses.................................   (4,937,000)    (4,310,000)     (6,500,000)
Other......................................   (1,924,000)    (1,857,000)       (758,000)
Financing Expenses.........................   (2,367,000)      (589,000)     (3,786,000)
                                             -----------    -----------    ------------
Net Loss...................................  $(5,233,000)   $(2,960,000)   $(12,312,000)
                                             ===========    ===========    ============
</TABLE>

                                       11
<PAGE>   13

     For the Safety Medical Products and Accessories segment, operating profit
(loss) consists of total revenues less product costs and expenses. In the Joint
Venture Design and Development segment, operating profit (loss) consists of
total revenues less costs and expenses and research and development expenses
through the first quarter of 1999, as the I.V. catheter project was completed at
the end of the first quarter. Subsequent to the first quarter of 1999, operating
profit for this segment consists of total revenues less costs and expenses.
Interest expense is not reported, as it is not included in the reporting of
segment operating profit (loss) for use internally by the chief decision maker.

SEGMENT CAPITAL EXPENDITURES

<TABLE>
<CAPTION>
                                                        1999       1998        1997
                                                      --------    -------    --------
<S>                                                   <C>         <C>        <C>
Safety Medical Products and Accessories.............  $536,000    $82,000    $718,000
Joint Venture Design & Development..................        --         --          --
                                                      --------    -------    --------
Total Consolidated Capital Expenditures.............  $536,000    $82,000    $718,000
                                                      ========    =======    ========
</TABLE>

     Net identifiable assets related to Safety Medical Products and Accessories
were $2,198,000, $2,343,000, and $4,321,000 at December 31, 1999, 1998 and 1997,
respectively. Depreciation expense related to these assets was $269,000,
$729,000, and $1,091,000 for the periods ended December 31, 1999, 1998 and 1997,
respectively. Due to the "service" nature of the Joint Venture Design and
Development segment, identifiable assets were not material for the periods
presented.

  Description of Business

     The Company designs, develops, manufactures and sells safety medical
products and accessories marketed under the Punctur-Guard(R) and Drop-It(R)
brand names. The Company's Punctur-Guard(R) blood collection needle is a
patented safety needle, which reduces the risk of accidental needle sticks
through a self-blunting mechanism. The Punctur-Guard(R) needle is the only
safety needle on the market, which is activated prior to its removal from the
patient, eliminating exposure time to a contaminated sharp.

     The Company's first Punctur-Guard(R) product was a safety blood collection
needle. The Company manufactures and sells three varieties of safety blood
collection needles, three types of needle holders and a needle disposal
container. The blood collection needle is similar in appearance, size,
performance and general operation to standard blood collection needles, and
works with substantially all standard blood collection accessories. Hospitals,
doctors and other health care professionals use blood collection needles to
obtain blood for a variety of diagnostic procedures.

     The blood collection needle assembly consists of a mechanically activated,
hollow, internal cannula with a blunt end, called a blunting member, placed
within a blood collection needle. The blunting member advances through the
needle by applied mechanical pressure. When the needle is inserted into the
patient, the blunting member is in its retracted position. Prior to removing the
needle from the patient, the operator activates the safety feature, allowing the
blunting member to advance forward and lock into place beyond the needle's tip.
The blunting member does not cause any additional patient discomfort, and
because it is hollow, fluids flow through the needle in the same manner as
through standard blood collection needles.

     The Company assembles the purchased components of its Punctur-Guard(R)
blood collection needles on automated assembly machines. In 1996, the Company
purchased additional assembly and packaging equipment, allowing for increased
capacity and efficiencies in its manufacturing processes.

     In addition to its blood collection needles, the Company manufactures
needle holders and needle disposal containers. The Drop-It(R) product line
consists of the Drop-It(R) Quick Release Needle Holder and Drop-It(R) Needle
Disposal Container. These products are designed to work in conjunction with the
blood collection needle to increase the ease-of-use for the healthcare
professional. The needle holder features simple one-handed disposal of a needle,
with a push button for quick release. The needle can also be automatically
released when used with the Drop-It(R) Needle Disposal Container. In addition,
the Company developed a needle holder, the Punctur-Guard Revolution(TM) Quick
Release Holder, which will allow for greater ease-of-use

                                       12
<PAGE>   14

with its safety blood collection needle devices with a simple quarter turn of
the holder for activation of the internal blunt. The Company filed patent
applications and received its 510(k) approval with the Food and Drug
Administration in September of 1999. The Company began shipping limited
quantities of this holder in the fourth quarter of 1999.

     The Drop-It(R) Needle Disposal Container is a one-quart, tray-mountable
container. The container offers fast, one handed needle disposal with push
button or automatic release when used with a Drop-It(R) Quick Release Needle
Holder or Punctur-Guard Revolution(TM) Needle Holder. It offers temporary and
permanent locking tabs, is injection molded for uniform thickness, and meets
OSHA Standards for needle disposal containers.

     The Company also manufactures a standard needle holder, which can be used
with both Punctur-Guard(R) and standard blood collection needles.

     The Company continued to focus on the design and development of new
products during 1999. The redesign and continued development of the Company's
winged intravenous set continued during 1999. The Company also fulfilled its
obligations under the development agreements with TFX for the PICC introducer
catheter during 1999 and into the beginning of 2000. The Company has also
identified several other potential applications of its self-blunting technology
to other needle products.

     The Company is considering establishing joint venture agreements on one or
more of its new products, which could assist the Company in raising additional
capital and help fund the research and development costs related to these
products.

  Revenues and Distribution

     The Company's products are marketed and sold in the United States both
through independent distribution channels and directly to end-users. The
Company's products are marketed and sold outside of the United States primarily
through independent distributors. Order backlog is not material to the Company's
business, as orders for the Company's products are received and filled on a
current basis. Product sales revenue is recognized when products are shipped to
distributors or direct to end-user customers.

     The Company's strategic partnerships with JJM and TFX resulted in the
recognition of development contract or "service" revenue during 1999. Product
and process development services were progress billed as performed, and revenue
was recognized when billed.

  Products under Development

     A late-stage development product featuring Punctur-Guard(R) internal blunt
technology is the I.V. catheter. An I.V. catheter is a flexible tube that is
used to inject or continuously-flow fluids into a patient. I.V. catheters are
inserted into a patient by a needle within the flexible catheter tube. As the
Punctur-Guard(R) portion of the catheter is removed, the needle is automatically
blunted and then discarded.

     In January 1997, the Company entered into a Development and Licensing
Agreement with JJM. Under this agreement and its subsequent amendment in April
1998, the Company has designed and developed safety needle assemblies for JJM
which will become part of a new safety I.V. catheter to be manufactured and sold
by JJM, utilizing the Company's patented self-blunting needle design. JJM
anticipates that it will launch its new safety I.V. catheter product line,
incorporating the Punctur-Guard(R) needle, in early 2000.

     Another late-stage development product is the winged intravenous set.
Prototypes for the redesigned safety winged intravenous set utilizing the
Company's self-blunting needle technology have been manufactured. A winged
intravenous set is a small needle with a pair of plastic wings which gives the
healthcare worker the ability to control the needle for very precise vein
insertion. Its primary purpose is to draw blood from patients whose veins are
more difficult to access, such as geriatric and pediatric patients. The
Company's product offers a unique third wing for easy insertion and safety blunt
activation. It also features a conventional design and appearance for easy
handling, storage and disposal. The blunt is activated with movement of the

                                       13
<PAGE>   15

third wing to the right, rendering the needle safe prior to removal from the
patient. The Company's strategy is to complete the development of this product,
and build a production line in order to begin selling this product.

     Another late-stage product in development is the PICC introducer. PICC
introducers represent the fastest growing segment of the central venous catheter
market. PICC introducers are used to place a peel apart catheter in a patient's
vein. The PICC introducer is comprised of a peel apart catheter mounted over a
hollow bore needle that is attached to a plastic housing. The peel apart
catheter and needle is inserted into the patient's vein. The needle is then
withdrawn from the patient leaving the catheter in the vein. The motion of
withdrawing the needle automatically deploys our internal blunt safety
technology. The Company has completed the design of the product and, in October
1998, entered into a Development and Sales Agreement for this product with TFX.
Pursuant to the terms of agreement, the Company has received design,
development, and licensing fees and will receive royalties from future product
sales.

     The Company has also developed initial prototype designs for a number of
other applications of its self-blunting technology and intends to explore
opportunities during 2000 to establish additional joint ventures on one or more
of these new products. The Company also intends to continue its efforts to
improve production processes and reduce manufacturing costs of its safety
medical products.

     The Company incurred $1,112,000 in research and development expenses during
the fiscal year ended December 31, 1999, and $463,000 and $1,056,000,
respectively, during the two immediately preceding fiscal years.

  Raw Materials

     The Company's Punctur-Guard(R) blood collection needle has seven
components. The component parts are purchased from outside suppliers which
manufacture the components according to drawings and specifications provided by
the Company. The majority of the materials used in the components are plastics,
rubber and stainless steel and are available from a number of sources.

     The Company owns or otherwise controls all production molds and tooling
used by its suppliers to manufacture critical plastic and rubber parts. Rubber
parts are currently manufactured by a single major supplier. Subgroups of
plastic parts are manufactured by separate single major suppliers. The Company
currently has one supplier of cannula which is located in a foreign country and
has multiple manufacturing sources. Lead times on cannula orders are several
months. While alternative manufacturers are available, changes in the Company's
suppliers could disrupt production schedules and adversely affect the Company.

  Competition

     The blood collection needle market is highly competitive. One of the
Company's primary challenges is gaining market share against well funded and
strongly entrenched competitors as they promote their own brands of safety
needles. Today the majority of the blood collection needle market is still
non-safety with one major medical device manufacturer, Becton Dickinson and
Company, holding the largest share of the market.

     In the safety blood collection needle market, the Company is a major
player. The Company believes that the Punctur-Guard(R) blood collection needle
and accessory products are superior or competitive in design, quality and
convenience-of-use to all other safety needles on the market today and can
compete effectively against other safety products, particularly given the recent
regulatory actions mandating safety needle use.

     Recent regulatory actions are strongly promoting the use of safety needles.
On July 1, 1999, California, through its state OSHA program, began requiring the
use of safety needles. Other states such as Texas, Tennessee, West Virginia and
New Jersey have passed similar legislation. On November 5, 1999, Federal OSHA
issued a new Compliance Directive (the "Compliance Directive"), which requires
the use of safer needles and directs OSHA field inspectors to issue citations
for facilities that fail to follow the Compliance Directive. The Company is
encouraged by language in the Compliance Directive that directs facilities to
evaluate the commercially available safety devices and select those that will
eliminate or minimize the risk of needlestick injuries.

                                       14
<PAGE>   16

     Given this important regulatory shift toward the use of safety devices, the
Company believes it will be able to increase its share of the national blood
collection needle market that today is dominated by Becton Dickinson and
Company. However, many of the Company's competitors have longer operating
histories, are substantially larger, and are better financed than the Company.
Some of these larger competitors have multiple products, which are sold to the
Company's current and/or targeted customers, giving them a potential marketing
advantage.

  Patents, Proprietary Rights and Trademark

     The Company holds a United States utility patent for a self-blunting needle
using an internal cannula design, which expires in May 2006. The Company
believes the patent is broad enough to include a number of product applications
including blood collection needles, winged intravenous sets, and I.V. catheters
and similar patents have been granted in a number of foreign countries as well,
which expire on various dates ranging from September 2003 to September 2008. In
addition to its original utility patent for its self-blunting needle design, the
Company was granted a patent for its self-blunting needle design for use with a
catheter in April 1991, which expires in April 2008. In September 1999, the
Company was granted a patent for the method by which needles with self-blunting
technology can be assembled, which expires in 2016. There are also patent
applications pending in both the United States and in several foreign countries
which the Company believes will lengthen its product protection once such
patents are granted. There can be no assurance, however, that patents will be
issued for any pending patent application.

     In May 1997, the Company was granted patent protection on its Drop-It(R)
holder through May 2018 and, in 1998, filed additional patent applications on
its needle disposal container, holders, and other blood collection and infusion
devices.

     The Company considers the design of its needle assembly machines and
certain other features of its manufacturing systems to be proprietary
information. The Company protects such information through employee
confidentiality agreements and limited access to its facilities.

     "Punctur-Guard(R)", "Drop-It(R)", "Revolution(TM)", "Bio-Plexus(R)",
"Safeguarding The Future of Healthcare Workers(R)" and the Company logo are all
trademarks registered with the United States Patent and Trademark Office. The
Company considers these marks, its patents, and other proprietary information to
be valuable assets to its business.

  Seasonality of Business

     Sales of the Company's products are not subject to material seasonal
variations.

  Regulation

     The Company's medical products and operations are subjected to regulations
by the federal Food and Drug Administration (the "FDA") and various other
federal and state agencies, as well as by a number of foreign governmental
agencies. Among other things, the FDA requires the Company to adhere to certain
"Good Manufacturing Practices" ("GMP") regulations which include validation
testing, quality assurance, quality control and documentation procedures. The
Company's facilities are also subject to periodic inspections. In addition,
performance standards may be adopted by regulatory organizations for the blood
collection needle product, which the Company believes would then be required to
meet.

     In June 1998, the Company received ISO 9002 and EN 46002 certifications.
ISO 9002 is a general international standard for quality assurance in
production, installation and servicing. EN 46002 provides particular quality
system requirements for suppliers of medical devices that are more specific than
the general requirements specified in ISO 9002. The Company also began labeling
its products with the CE Mark during 1998, which indicates that the Company is
following Medical Device Directives in Europe which include the standards set
forth under ISO 9002 and EN 46002. In February of 2000, the Company received ISO
9001 and EN 46001 registrations. This certification is an upgrade from the
previous ISO 9002 and EN 46002 status. The change indicates that the Company's
product design process also meets the international quality system

                                       15
<PAGE>   17

standards. The Company will continue to label product with the CE Marking which
indicates that the Company is following the European Community Medical Device
Directives. These registrations will better enable the Company to sell its
products internationally.

     The Company believes it is in compliance in all material respects with the
regulations promulgated by these regulatory organizations, and that such
compliance has not had, and is not expected to have, a material adverse effect
on its business.

     The Company also believes that its operations comply in all material
respects with applicable environmental laws and regulations. Such compliance has
not had, and is not expected to have, a material adverse effect on the Company's
business.

  Employees

     As of December 31, 1999, Bio-Plexus employed 67 people including 14
research and development employees, 19 production employees and 34 sales,
marketing and administrative employees. The Company's employees are not
represented by a labor union, and the Company believes its employee relations
are satisfactory.

  Year 2000 Update

     As previously disclosed in the Company's quarterly report on Form 10-Q for
the period ended September 30, 1999, the Company had developed plans to address
the possible business risks related to the impact of the Year 2000 on its
computer systems. Since entering the Year 2000, the Company has not experienced
any major disruptions to its business nor is it aware of any significant Year
2000-related disruptions affecting its distributors and customers, strategic
partners, and suppliers. Although the Company does not anticipate any
significant impact due to Year 2000 exposures, it will continue to monitor its
critical systems, along with distributors and customers, strategic partners, and
suppliers over the next several months. Despite these efforts, the Company can
provide no assurance that all external party Year 2000 compliance plans were
successfully completed in a timely manner, although it is not currently aware of
any problems that would significantly impact its financial position, results of
operations or cash flows. Costs incurred by the Company to achieve Year 2000
readiness were not material and were charged to expense as incurred.

ITEM 2.  PROPERTIES

     In October of 1994, the Company acquired a 37,500 square foot facility on
5.6 acres in Vernon, Connecticut, which houses all of the Company's
manufacturing, research and development, warehouse and general and
administrative personnel. The company relocated to the Vernon, Connecticut
facility from its facility in Tolland, Connecticut all of its manufacturing,
research and development and warehouse operations in the first quarter of 1995.
The general and administrative staff of the Company moved to the Vernon,
Connecticut facility in the fourth quarter of 1997. The Company believes that
its facility in Vernon, Connecticut is of good construction and in good physical
condition, is suitable and adequate for the operations conducted there, and
operating at a normal capacity.

ITEM 3.  LEGAL PROCEEDINGS AND OTHER MATTERS

     The Company is not party to any litigation or legal proceedings material to
its business.

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

     No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of 1999.

                                       16
<PAGE>   18

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS

     The Company's Common Stock is traded on The Nasdaq Stock Market(R) under
the symbol BPLX. The following table shows the quarterly high and low closing
price on NASDAQ for a share of the Company's Common Stock for each quarter in
the years ended December 31, 1999 and 1998 and for the quarter ended March 31,
2000:

<TABLE>
<CAPTION>
                                        2000               1999               1998
                                   --------------    ----------------    --------------
YEAR ENDED DECEMBER 31,            HIGH      LOW      HIGH      LOW      HIGH      LOW
-----------------------            -----    -----    ------    ------    -----    -----
<S>                                <C>      <C>      <C>       <C>       <C>      <C>
First Quarter....................  $5.00    $3.50    $2.50     $2.125    $5.06    $3.18
Second Quarter...................     --       --    $5.62     $4.563    $4.87    $2.62
Third Quarter....................     --       --    $4.375    $3.25     $3.25    $1.62
Fourth Quarter...................     --       --    $4.00     $3.00     $3.93    $2.00
</TABLE>

     As of March 31, 2000 there were approximately 528 holders of record of the
Company's Common Stock.

     The Company has not paid any dividends on its Common Stock since its
inception and does not intend to pay any dividends in the foreseeable future.

     During the first quarter of 1999, a member of the Company's Board of
Directors and a shareholder, Mr. Herman Gross, invested $100,000 in exchange for
47,058 shares of Common Stock.

     During the first quarter of 1999, a member of the Company's Board of
Directors and shareholder, Mr. David Himick, invested $1,000,000 in exchange for
502,500 shares of Common Stock and 75,000 warrants to purchase Common Stock with
a maturity date of December 31, 2001 and an exercise price of $2.00 per share.

     On September 3, 1998, the Company loaned $600,000 to Jordan
Pharmaceuticals, Inc. ("Jordan"), a California corporation, in exchange for a
one-year promissory note. On October 31, 1998, the Company converted the
promissory note into 120,000 shares of Jordan's Series A Preferred Stock.
Pursuant to a stock option agreement dated October 31, 1998, Jordan had a right
to repurchase the shares of Series A Preferred Stock plus any paid-in-kind
shares owned by the Company (in lieu of interest paid in cash), at a purchase
price of $5.00 per share. On March 31, 1999, Jordan exercised its option with
respect to all the shares for total consideration of $627,000.

     On March 24, 1999, the Company signed a commitment for a private placement
of up to $4,500,000 aggregate principal amount of 6% Convertible Debentures due
2004 ("the 6% Debentures"). The initial purchase of $2,500,000 aggregate
principal amount of 6% Debentures was made on April 27, 1999. The 6% Debentures
accrue interest at the rate of 6% per annum, payable quarterly in arrears in
cash. The 6% Debentures are convertible at any time at the option of the holders
into shares of the Company's Common Stock at the lesser of a fixed conversion
price of $3.06 per share or a floating conversion price at the time of
conversion if the floating conversion price is less than $3.06 per share. The 6%
Debentures may be wholly or partially redeemed at the option of the Company for
an amount not to exceed 130% of the face value thereof plus accrued and unpaid
interest at any time after the date of issuance. The Company and the 6%
Debenture holders have limited put and call options, respectively, for
additional 6% Debentures. In connection with the Bridge Transactions the Company
agreed not to exercise its put right under the 6% Debentures. Net proceeds from
the financing were $2,060,000 after deducting fees and expenses. The financing
also included the issuance of a warrant to purchase 500,000 shares of Common
Stock at an initial exercise price of $3.38 per share. As of March 31, 2000, the
holders of the 6% Debentures had converted $1,808,000 of the outstanding
principal balance into 600,747 shares of Common Stock at conversion prices
ranging from $2.96 to $3.06 per share.

     On March 31, 1999, the Company paid the outstanding principal balance of
$250,000, and all accrued interest thereon, of a one-year term promissory note
to an officer of the Company, Mr. Carl Sahi.

                                       17
<PAGE>   19

     On April 15, 1999, $300,000 of the Company's five-year term notes held by
existing shareholders were converted into 153,633 shares of the Company's Common
Stock at a conversion price of $1.95 per share.

     On May 3, 1999, an officer of the Company, Mr. Thomas Sutton, exercised an
option to purchase 30,000 shares of Common Stock at an exercise price of $2.75.

     On July 19, 1999, at the Annual Meeting of Shareholders, the Company
amended its Certificate of Incorporation to increase the authorized number of
shares of Common Stock from 18,000,000 to 25,000,000.

     On September 19, 1999, an officer of the Company, Carl Sahi, exercised a
warrant to purchase 125,000 shares of common stock granted in September 1992 in
a cashless exercise in exchange for 67,470 shares of common stock.

  Bridge Transactions

     On October 21, 1999, the Company issued to Appaloosa and entities
affiliated therewith a 7.5% non-convertible secured note in the aggregate
principal amount of $3 million. In connection with the issuance of the $3
million note, the Company also issued to the Purchasers (i) a five-year warrant
to purchase up to 1.0 million shares of the Company's common stock, no par value
(the "Common Stock") at an initial exercise price of $3.00 per share (the "$3
Warrants") and (ii) a nine-year warrant to purchase up to 1.5 million shares of
Common Stock at an initial exercise price of $5.00 per share (the "$5
Warrants"). At the Purchaser's election and contingent upon the satisfaction of
certain criteria at the closing of the Permanent Financing, or within six months
and one day thereafter, the exercise price of the $3 Warrants will increase to
$4.00 per share of Common Stock. The exercise price of the $5 Warrants will
increase to $7.00 per share of Common Stock upon the earlier of the closing of
the Permanent Financing and October 21, 2000.

     On January 5, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $1.65 million.
In connection with the issuance of the $1.65 million note, the Company also
agreed to issue and sell on the earlier of (i) April 30, 2000 and (ii) the
closing of the Permanent Financing, five-year warrants to acquire up to 200,000
shares of Common Stock at an initial exercise price of $3.00 per share.

     On April 3, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $2.2 million.
No warrants or convertible securities were issued in connection with this note.

                                       18
<PAGE>   20

ITEM 6.  SELECTED FINANCIAL DATA

     The following selected financial data should be read in conjunction with
the Financial Statements and related Notes appearing elsewhere in this Form
10-K:

<TABLE>
<CAPTION>
                                                     FOR THE YEAR ENDED DECEMBER 31,
                                     ----------------------------------------------------------------
                                        1999          1998          1997         1996         1995
                                     -----------   -----------   ----------   ----------   ----------
                                                          (DOLLARS IN THOUSANDS)
<S>                                  <C>           <C>           <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:
Total revenue......................  $     7,024   $     9,307   $    5,042   $    2,743   $      914
                                     -----------   -----------   ----------   ----------   ----------
Total operating costs and
  expenses.........................        9,890        11,678       13,568       14,116       12,496
Financing expenses, net............        2,367           589        3,786        1,497        1,455
                                     -----------   -----------   ----------   ----------   ----------
Net loss before extraordinary
  items............................  $    (5,233)  $    (2,960)  $  (12,312)  $  (12,870)  $  (13,037)
                                     -----------   -----------   ----------   ----------   ----------
Extraordinary item:
  Loss on early extinguishment of
     debt, net of income taxes of
     nil...........................           --            --           --           --          979
Net loss after extraordinary
  item.............................       (5,233)       (2,960)     (12,312)     (12,870)     (14,016)
Less: Imputed dividend on preferred
  stock............................           --            --         (500)          --           --
                                     -----------   -----------   ----------   ----------   ----------
Net loss applicable to common
  stock............................  $    (5,233)  $    (2,960)     (12,812)  $  (12,870)  $  (14,016)
                                     ===========   ===========   ==========   ==========   ==========
Net loss (basic and diluted) per
  common share before extraordinary
  item.............................  $     (0.39)  $     (0.24)  $    (1.37)  $    (1.89)  $    (2.48)
                                     ===========   ===========   ==========   ==========   ==========
Net loss (basic and diluted) per
  common share after extraordinary
  item.............................                                                        $    (2.67)
                                                                                           ==========
Weighted average common shares
  outstanding......................   13,540,922    12,263,870    9,320,800    6,815,936    5,256,997
                                     ===========   ===========   ==========   ==========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                     ----------------------------------------------------------------
                                        1999          1998          1997         1996         1995
                                     -----------   -----------   ----------   ----------   ----------
<S>                                  <C>           <C>           <C>          <C>          <C>
BALANCE SHEET DATA:
Working capital (deficiency).......  $       702   $      (754)  $      (33)  $   (1,413)  $   12,017
Total assets.......................        9,647         9,152       11,688       12,820       23,389
Long-term debt.....................        2,262         2,403        3,204        7,407        9,099
Total shareholders' equity
  (deficit)........................        3,728         2,477        4,158         (713)      10,751
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The discussions set forth in this Management's Discussion and Analysis of
the Results of Operations and Financial Condition and elsewhere herein contain
certain statements which are not historical facts and are considered
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements can be identified by the use of such
forward-looking terminology as "believes," "expects," "may," "will," "should,"
or "anticipates" or negatives thereof or other derivations thereon or comparable
terminology, or discussions of strategy that involve risks and uncertainties.
The Company's actual results could differ materially from those projected in the
forward-looking statements as a result of, among other factors, the Company's
expectation regarding gross profit and operating income, general economic
conditions and growth in the safety medical products industry, competitive
factors and pricing pressures, changes in product mix, product demand, risk of
dependence on third party suppliers, ability to obtain financing, and other risk
factors and uncertainties detailed in this report, described from time to time
in the Company's other Securities and

                                       19
<PAGE>   21

Exchange Commission filings, or discussed in the Company's press releases. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements.

OVERVIEW

     Since its inception in September 1987 through December 31, 1999, the
Company has incurred cumulative ongoing losses totaling $68,105,000. During this
period, the Company's principal focus has been the design, development, testing
and evaluation of its safety blood collection needle and accessory products, and
the design and development of the molds, needle assembly machines and production
processes needed for manufacturing the blood collection safety needle, as well
as the design and development of new products. The Company has also focused its
efforts on developing strategic partnerships with other health care companies in
order to bring other products to market featuring its patented internal blunting
technology.

     With the addition of a new blood collection needle assembly and packaging
system in 1996, the Company believes it will have sufficient capacity to meet
its production needs for blood collection needles for 2000. For the Company to
achieve profitability, further reductions in manufacturing costs and increases
in product sales of its blood collection needles are necessary, as well as the
addition of new product lines.

     In January 1997, the Company entered into a Development and Licensing
Agreement and a Supply Agreement with Johnson & Johnson Medical ("JJM").
Pursuant to the original agreements, the Company would develop and manufacture
safety needle assemblies for JJM, to become part of a new safety I.V. catheter
to be manufactured and sold by JJM, utilizing the Company's patented
self-blunting needle design.

     In April 1998, the Company amended the original Development and License
Agreement and canceled the Supply Agreement with JJM. The amended terms included
certain changes in the licensing and royalty agreements as well as the transfer
of manufacturing of the safety needle assemblies to JJM, in exchange for an
initial milestone payment of $3,500,000 with an additional $500,000 payable upon
the completion of certain milestones. The revised agreement also provided for an
additional $300,000 payable to the Company for initial capital equipment
purchases during 1998.

     In December of 1998, the Company completed the construction of an automated
assembly machine for JJM under the terms of the amended agreement, and the
equipment was transferred to JJM's manufacturing facility. During the first
quarter of 1999, the Company continued to perform services for JJM under the
terms of the agreement; however, by the end of the first quarter of 1999,
substantially all of the contractual obligations had been met by the Company.
During the second, third and fourth quarters of 1999, the Company continued to
provide consulting and engineering work for JJM for the I.V. catheter project;
however, this revenue is outside of the original agreements with JJM.

     On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation (subsequently known as Kendall Healthcare Products
Company("Kendall")), a subsidiary of Tyco and a major supplier of sharps
containers in the United States. The agreement allows Kendall to purchase and
distribute Bio-Plexus Drop-It(R) Needle Disposal Containers and Drop-It(R) Quick
Release Needle Holders. The agreement has an initial term of three years, and
will be automatically renewed for an additional year, unless either party
notifies the other of its intent not to renew.

     On October 23, 1998 the Company entered into an exclusive License Agreement
and Design, Development and Asset Transfer Agreement for a PICC Introducer
Catheter with TFX Medical ("TFX"), a division of Teleflex Incorporated, the
industry's dominant supplier of PICC Introducers. The License Agreement includes
certain minimum annual volume requirements and ongoing royalties on the sale of
PICC Introducer Catheters featuring the Company's Punctur-Guard(R) technology.
Under the Design, Development and Asset Transfer Agreement, the Company will
design and develop safety needle assemblies to be used with the TFX Peelable
Catheter, and will modify existing manufacturing equipment to be transferred to
TFX pursuant to the terms and conditions of the agreement. On July 26, 1999, an
agreement was entered into with TFX to modify the License Agreement dated
October 23, 1998. The amended agreement includes additional

                                       20
<PAGE>   22

licensing fees and changes in royalty revenue in exchange for TFX's right to
exclusively market to one of its customers.

     In October 1998, the Company entered into a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific is one of the world leaders in serving science,
providing more than 245,000 products and services to research, healthcare,
industrial, educational and government customers in 145 countries. The
distribution agreement allows Fisher HealthCare to purchase and distribute all
of the Bio-Plexus blood collection products.

     On February 21, 2000, the Company entered into a distribution agreement
with McKessonHBOC Medical Group of Richmond, Virginia. McKessonHBOC's Supply
Management Business is a leading distributor of medical-surgical supplies to
more than 5,000 hospitals nationwide. The agreement allows McKessonHBOC to
purchase and distribute the Company's products on a non-exclusive basis without
territorial limitations or restrictions. The agreement is in effect for a period
of five years and shall continue automatically in effect for successive terms of
five years each until terminated by either party.

     The Company believes that similar arrangements may be possible with one or
more healthcare companies for its blood collection needle line, the winged
intravenous set and other future products, and intends to continue to pursue
this strategy during 2000. Such arrangements could assist the Company in raising
additional capital and help fund research and development of new products, as
well as accelerate the rate of sales growth. However, such arrangements could
also decrease the revenue per unit for the Company, as a result of sharing
revenue with strategic partners. The Company believes the overall benefits and
potential for greater market share outweigh the disadvantages that may result
from such arrangements.

  Years Ended December 31, 1999 and 1998

     The Company had total product sales of $5,498,000 for the year ended
December 31, 1999, compared with product sales of $5,086,000 for the prior year.
The increase was attributable to increased sales of medical devices of
$1,813,000 due to the continued expansion of its domestic account base and
better pricing on its products, and was partially offset by a decrease in sales
of equipment associated with joint venture projects due to the completion of the
I.V. catheter project in the first quarter of 1999.

     The Company had revenues from services totaling $1,426,000 for the year
ended December 31, 1999, compared to $4,171,000 for the prior year. The decrease
was primarily attributable to lower billable engineering time associated with
the I.V. catheter development project for JJM of $1,094,000 for the year and
decreased deferred revenue of $1,750,000 also associated with the JJM I.V.
catheter development project.

     Product costs were $3,754,000 for the year ended December 31, 1999,
compared to $6,355,000 for the prior year. The decrease in these costs resulted
primarily from lower costs of $1,538,000 associated with the I.V. catheter
project for JJM and lower manufacturing costs of $1,064,000 associated with the
blood collection needle product line.

     Service costs were $87,000 for the year ended December 31, 1999, compared
to $267,000 for the prior year. These costs represent engineering time billed
for various development projects The decrease in these costs is the result of
the completion of the I.V. catheter development project during the first quarter
of 1999.

     Research and development expenses were $1,112,000 for the year ended
December 31, 1999, compared to $463,000 for the prior year. The increase in
these costs resulted primarily from a decrease of $841,000 in 1999 of deferred
revenue related to the development of the I.V. catheter for JJM, which was
amortized into income as a reduction in research and development expenses during
1998. Partially offsetting this increase was lower actual research and
development expenses related to projects in 1999 as compared to 1998.

     Selling, general and administrative expenses were $4,937,000 for the year
ended December 31, 1999, compared with $4,593,000 for the prior year. This
increase resulted from increases of approximately $350,000 and $238,000
associated with general management and sales and marketing expenses,
respectively. These increases were partially offset by decreases in the areas of
building costs, human resource costs and accounting expenses.

                                       21
<PAGE>   23

     Financing expenses for the year ended December 31, 1999 were $2,367,000
compared to $589,000 for the prior year. The increase resulted from the
amortization of $1,245,000 of debt discount associated with the First Bridge
Warrants issued in connection with the First Bridge Note which was issued in the
fourth quarter of 1999. In addition, the Company recorded $355,000 of debt
discount associated with 500,000 warrants issued in connection with the 6%
Convertible Debenture financing in the second quarter of 1999. The Company also
recorded a $121,000 charge to interest expense to record the intrinsic value of
the conversion feature of the 6% Debentures and an additional $260,000 of
deferred financing expenses associated with the 6% Convertible Debenture
financing. Partially offsetting these charges were reductions of approximately
$136,000 in interest expense related to equipment leases.

  Years Ended December 31, 1998 and 1997

     The Company had product sales of $5,086,000 for the year ended December 31,
1998, compared with revenues of $3,542,000 for the prior year. The increase of
$1,544,000 included approximately $93,000 attributable to the expansion of its
domestic account base and better pricing on its products, and $1,451,000 in
sales of equipment to JJM on the I.V. catheter development project. The Company
had revenues from services totaling $4,171,000 for the year ended December 31,
1998 as compared to $0 in the prior year. Of this amount, $1,313,000 resulted
from progress payments by JJM for engineering time on the I.V. catheter capital
equipment development project, and $2,625,000 from the recognition of deferred
revenue related to the I.V. catheter development project.

     Product costs were $6,355,000 for the year ended December 31, 1998,
compared to $5,764,000 for the prior year. The 1998 amount includes the cost of
equipment sales to JJM, as well as cost of goods sold related to safety medical
products. The decrease in product costs for safety medical products is primarily
the result of lower manufacturing costs associated with the blood collection
needle line.

     Service costs for 1998 were $267,000 for the year ended December 31, 1998.
These costs represented engineering time billed on the I.V. catheter development
project with JJM.

     Research and development expenses were $463,000 for the year ended December
31, 1998, compared to $1,056,000 for the prior year. The decrease in these costs
in 1998 resulted primarily from engineering costs billed to JJM on the capital
equipment project and recognized under costs of goods sold, and the recognition
of $841,000 of deferred revenue related to the development of the I.V. catheter
for JJM recorded as a reduction in research and development expenses during
1998.

     Other operating and engineering costs were $1,857,000 for the year ended
December 31, 1998, compared with $1,053,000 for the prior year. The increase of
$804,000 in these costs represents the net increase between the write-off of
obsolete capital equipment totaling $1,359,000 in 1998 compared to $512,000 in
the prior year.

     Selling, general and administrative expenses were $4,593,000 for the year
ended December 31, 1998, compared with $6,748,000 for the prior year. This
decrease resulted from decreases of approximately $1,448,000 associated with
workforce reductions in sales and marketing and general management, $595,000
associated with legal and accounting fees, professional fees and insurance
expenses, and $100,000 associated with the consolidation of its facilities into
one location.

     Financing expenses for the year ended December 31, 1998 were $589,000
compared to $3,786,000 for the prior year. The decrease resulted from lower
interest expense associated with equipment lease financing, and, in the prior
year, a one-time charge of $640,000 related to the conversion of warrants to
common stock and a charge of $1,665,000 related to the amortization of the debt
discount.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's need for additional funds has continued from period to
period, as a result of its ongoing losses from operations and its continued
efforts to develop new products. To date, the Company has financed its
operations primarily through borrowings and the sale of equity securities.
Through December 31, 1999, the Company had received net proceeds of
approximately $34,706,000 through borrowings and the sale of debt securities and
$50,464,000 through the sale of equity securities. Of the net equity proceeds,
$17,575,000 was
                                       22
<PAGE>   24

received from its 1995 public offering, $14,191,000 was received from the
Company's initial public offering and the balance of $18,698,000 was received
through the private placement of equity securities.

     As of December 31, 1999, the Company's principal source of liquidity was
cash and short-term investments totaling $867,000. The Company invests its
excess cash with a local bank in a short-term investment account backed by
Treasury obligations and other federal agency obligations.

     Cash used in operating activities for the year ended December 31, 1999
totaled $3,961,000 and was primarily due to a net loss for the period of
$5,233,000. Also contributing were increases in accounts receivable and
inventory balances of $344,000 and $238,000, respectively, due to higher sales
in 1999 and anticipated higher sales volumes in the future. In addition, there
were decreases in accrued product replacement costs of $222,000 as a result of
the completion of a product recall in the fourth quarter of 1998, and in
deferred revenue resulting from the recognition into income of $875,000 of
development funds associated with the JJM I.V. catheter project during the first
quarter of 1999. Partially offsetting these uses of cash, were depreciation and
amortization expenses of $2,565,000, the writedown of equipment totaling
$280,000, and increased accounts payable of $248,000.

     Net cash used by investing activities amounted to $12,000 primarily due to
investments in fixed assets of $536,000 and patent costs of $103,000, offset by
the Company's conversion of a loan to Jordan Pharmaceuticals, Inc. in the amount
of $600,000 into shares of Jordan Series A Preferred Stock. Pursuant to the
terms of the stock option agreement, Jordan exercised its option to repurchase
the shares for total consideration to the Company of $627,000.

     Net cash provided by financing activities amounted to $4,305,000 for the
year ended December 31, 1999. The increase in cash is attributable to proceeds
from the sale of stock of $1,100,000, proceeds from long-term debt of
$2,060,000, and proceeds from notes payable of $2,750,000, partially offset by
the repayment of debt totalling $1,833,000.

     The Company's primary cash requirement for 2000 will be for working capital
to expand its operations for its current product lines as well as to launch new
products, to repay outstanding debt, and to continue research and development
activities on other new products. The Company is considering the development of
a strategic partnership with one or more healthcare companies to assist in
bringing additional products to market featuring the internal blunting
technology.

     In order to satisfy its current and anticipated need for capital, the
Company has entered into the Bridge Transactions and, pending receipt of
Stockholder Approval, will consummate the Permanent Financing. See
"Business -- Convertible Note Financing."

     Upon the closing of the Permanent Financing the Company will have issued to
the Purchasers the following securities:

     - the Convertible Notes;

     - the Permanent Financing Shares; and

     - warrants to purchase up to 4.2 million shares of Common Stock (comprised
       of the First Bridge Warrants, the Second Bridge Warrants and the $7
       Warrants)

     The Permanent Financing will generate aggregate proceeds to the Company of
$17.5 million. After repayment of the Bridge Notes, the Company will realize net
proceeds of approximately $8.4 million which will be available for general
working capital purposes, subject to the terms and conditions of the Permanent
Financing transaction agreements.

     The Company is continuing to explore additional financing alternatives and
potential strategic relationships which may provide the Company with additional
sources of working capital. There can be no assurances that the Company will be
able to secure such additional sources of working capital. Failure to raise
needed capital may have a material adverse impact on the Company's operations,
development plans and cash flows.

                                       23
<PAGE>   25

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Item 14 for an index to Financial Statements and Financial Statement
Schedules. Such Financial Statements and Financial Statement Schedules are
incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     There were no changes in or disagreements with Accountants during the
reporting period.

                                    PART III

ITEM 10.  EXECUTIVE OFFICERS AND DIRECTORS OF THE REGISTRANT

     The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME                                           AGE                       POSITION
----                                           ---                       --------
<S>                                            <C>    <C>
Richard D. Ribakove(2)(3)....................  45     Chairman of the Board and Director
Carl R. Sahi(1)..............................  43     President, Chief Executive Officer and Director
Thomas K. Sutton.............................  40     Executive Vice President
Kimberley A. Cady............................  34     Vice President, Finance and Chief Financial
                                                      Officer
Lucio Improta................................  55     Vice President, International Business
                                                      Development
Richard L. Higgins...........................  57     Director
David Himick(1)(2)(3)(4).....................  74     Director
Herman Gross(2)(4)...........................  82     Director
</TABLE>

---------------
(1) Member of 1995 Non-Employee Directors' Stock Option Plan Committee.

(2) Member of Compensation Committee.

(3) Member of Audit Committee.

(4) Member of Finance Committee.

     Mr. Ribakove is a Director of the Company and the Chairman of the Board of
Directors of the Company, and an attorney in private practice in New York City.
Mr. Ribakove has been a Director of the Company since its founding in September
1987. He is also the Vice President of Mooney-General Paper Co., a large
distributor of paper products. He is a graduate of Hofstra University with a
Bachelor's degree in Business Administration and is a graduate of Brooklyn Law
School.

     Mr. Sahi is a Director of the Company and the Company's President and Chief
Executive Officer. Mr. Sahi founded the Company in September 1987 and has been a
Director since that time. Between October 1997 and December 1998, Mr. Sahi
served as the Company's Vice President, Technology and Business Development and
Treasurer and from September 1987 to October 1997, Mr. Sahi served as President
of the Company. Prior to 1987, Mr. Sahi had seven years of entrepreneurial
experience in developing products, services and small companies. His experience
includes the development of a polyvinyl chloride gasketed plastic bottle cap,
the formation and management of a company that assembled plastic immunoassay
diagnostic test kits and the formation, management and sale of a janitorial
maintenance company. Mr. Sahi is the principal inventor of the Company's
self-blunting needle and founded the Company in order to design, develop,
manufacture and market that product. Mr. Sahi has three years of undergraduate
business education, holds a Bachelor's degree in Pathobiology from the
University of Connecticut and has six years of graduate training in Chemistry.

     Mr. Sutton was appointed Executive Vice President in 1998. He has
responsibility for Marketing and Sales, Human Resources, Quality Assurance,
Engineering and Operations. Mr. Sutton previously served as the Company's Vice
President, U.S. Marketing and Sales from November 1996 to March 1998. Mr. Sutton
has extensive experience in marketing and sales of safety medical needles. Prior
to his work at the Company, Mr. Sutton managed the Protectiv I.V. Catheter
Safety System brand for Johnson & Johnson Medical.

                                       24
<PAGE>   26

("JJM"). Mr. Sutton served as Product Director for five years at JJMI
(1991-1996), and was a Sales Manager and Representative prior to holding that
position. Mr. Sutton was in commercial banking for six years with the South
Carolina National Bank, rising to the level of Vice President. Mr. Sutton holds
a Bachelor of Science degree in Business Administration and a Master's degree in
Business Administration, both from the University of South Carolina.

     Ms. Cady is the Company's Vice President, Finance and Chief Financial
Officer. Between 1994 and 1996, Ms. Cady served as the Company's Cost Accountant
and between 1996 and 1998 as the Company's Controller. Ms. Cady has twelve years
of accounting and finance experience encompassing both public and private
accounting, specializing in manufacturing. From 1989 to 1994, Ms. Cady was
employed with Gerber Technology, Inc., a subsidiary of Gerber Scientific, Inc.,
most recently as their Supervisor of Cost Accounting. Prior to this, she was
employed as an auditor with the public accounting firm of Deloitte & Touche,
LLP. Ms. Cady holds a Bachelor of Science degree in Business Administration from
Bryant College.

     Mr. Improta served as the Company's Vice President, International Business
Development from January 1997 until September 1999. Prior to his joining the
Company, Mr. Improta was acting as a consultant to the Company through FRC
International, to help establish distributors in Europe. His prior experience
included employment with a number of medical products companies including
Becton, Dickinson & Company, Ital-Gamma and Abbott Laboratories.

     Mr. Higgins is a Director of the Company and between January 1998 and
December 1999 he served as the Company's President and Chief Executive Officer.
He joined the Company on a part-time basis as a consultant in May 1992 and
became a full time employee in September 1993. From July 1996 to January 1998,
Mr. Higgins served as the Company's Vice President, Finance. From February 1992
through September 1993, Mr. Higgins was self-employed as a business consultant.
From June 1966 through February 1992, Mr. Higgins was employed by the State of
Connecticut during which time he helped establish the Connecticut Development
Authority ("CDA"). He served as the CDA's Executive Director from 1975 to 1992.
Mr. Higgins holds a Bachelor of Arts degree from the University of Connecticut.

     Mr. Himick is a Director of the Company, a retired business executive, and
a business consultant. Mr. Himick became a Director of the Company in April
1997. He was the founder of several companies including Commercial Wire Rope &
Supply of Detroit, Commercial Wire Rope & Supply of Flint, Commercial Wire Rope
& Supply of Toledo, and Detroit Chain Products Co. He was a Director for
Heritage Federal Savings Bank located in Taylor, Michigan between 1982 and 1993
and a Director of Heritage Bankcorp Inc. (the holding company of Heritage
Federal Savings), between 1989 and 1993. Mr. Himick currently serves on the
Board of Directors of Community Bank of Dearborn and the Board of Directors of
Dearborn Bancorp (the holding company of Community Bank of Dearborn), both of
which positions he assumed in 1994.

     Mr. Gross is a Director of the Company and a retired business executive. He
became a Director of the Company in November 1998. He was Chairman of Elliot
International, a company that imports apparel, from 1948 to 1981. He is a
graduate of both City College of New York and Harvard Law School class of 1940.
Mr. Gross is a member of the New York Bar. He brings to the Company his
knowledge of finance, the international market and his understanding of patent
law.

     There is no family relationship between any of the executive officers or
Directors of the Company.

     Executive officers of the Company are elected by the Board of Directors on
an annual basis and serve at the discretion of the Board. Members of the Board
of Directors are elected annually at the annual meeting of shareholders.

     The Board of Directors has a Compensation Committee, a Finance Committee,
an Audit Committee and a 1995 Non Employee Directors' Stock Option Plan
Committee. The Compensation Committee administers the Company's 1991 Long Term
Incentive Plan. The Finance Committee reviews and approves proposals for
financing the Company. The Audit Committee reviews the results and scope of the
annual audit and other services provided by the Company's independent auditors.
The 1995 Non-Employee Directors' Stock Option Plan Committee administers the
Company's 1995 Non-Employee Directors' Stock Option Plan.
                                       25
<PAGE>   27

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act")
requires directors and executive officers and persons, if any, owning more than
ten percent of a class of the Company's equity securities ("10% Stockholders")
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of the Company's equity and
equity derivative securities. Based solely upon a review of the copies of such
reports furnished to the Company, or written representations from reporting
persons, the Company believes that during 1999 Mr. Gross was delinquent in
filing Form 4's. representing the conversion of loans made to the Company into
shares of Common Stock, the granting of warrants issued in connection with such
loans, and Common Stock purchase transactions. The Company also believes that
Mr. Himick was delinquent in filing a Form 4 representing the conversion of a
loan made to the Company into shares of Common Stock and the granting of
warrants issued in connection with the loan. A report on Form 3 was not timely
filed for Ms. Cady upon her becoming an officer of the Company. Each is now in
compliance.

ITEM 11.  EXECUTIVE COMPENSATION

     Included below are tables which set forth certain information concerning
compensation paid by the Company to its chief executive officer and all other
executive officers with annual compensation in excess of $100,000 for the year
ended December 31, 1999 (the "Named Executive Officers"). The tables include
columns related to stock options and stock appreciation rights ("SARS")
(contractual rights to compensation measured by increases in the value of the
common stock payable in stock and/or cash). No SARS have been issued by the
Company.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                        LONG-TERM
                                                                       COMPENSATION
                                                                       ------------
                                               ANNUAL COMPENSATION      SECURITIES
                                              ---------------------     UNDERLYING        OTHER
NAME AND PRINCIPAL POSITION           YEAR    SALARY($)    BONUS($)    OPTIONS/SARS    COMPENSATION
---------------------------           ----    ---------    --------    ------------    ------------
<S>                                   <C>     <C>          <C>         <C>             <C>
Carl R. Sahi(1).....................  1999     180,000
  President and Chief Executive
  Officer                             1998     190,769
                                      1997     220,000

Richard L. Higgins(2)...............  1999     180,017                    50,000
  Director                            1998     180,017                   100,000
                                      1997     100,000                    25,000

Thomas K. Sutton(3).................  1999     125,000                    32,500
  Executive Vice President            1998     119,077                    30,000
                                      1997     103,000      14,401(4)     30,000

Lucio Improta(5)....................  1999     165,318
                                      1998     150,000
                                      1997     144,231                    30,000          4,248(6)
</TABLE>

---------------
(1) Mr. Sahi became President and Chief Executive Officer on September 21, 1999.
    He became Treasurer of the Company on July 24, 1997 and Vice President,
    Business Technology and Development on October 29, 1997. Mr. Sahi served as
    President of the Company from September 1987 to October 1997.

(2) Mr. Higgins was a Named Executive Officer of the Company in 1997, holding
    the office of Vice President, Finance. On January 6, 1998, Mr. Higgins was
    elected to the offices of President and Chief Executive Officer of the
    Company. Mr. Higgins stepped down as President and Chief Executive Officer
    on September 21, 1999, subsequently retired from the Company on December 31,
    1998, but continues to serve on the Company's Board of Directors.

(3) Mr. Sutton first became an employee of the Company in November 1996.

(4) Represents a signing bonus paid to Mr. Sutton in 1997.

(5) Mr. Improta terminated employment with the Company on September 16, 1999.

(6) Represents premiums paid for a personal term life insurance policy. Mr.
    Improta has no interest in any cash surrender value under the insurance
    policy.

                                       26
<PAGE>   28

                       OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                     POTENTIAL REALIZABLE
                                                                                       VALUE AT ASSUMED
                          NUMBER OF      PERCENT OF                                     ANNUAL RATES OF
                          SECURITIES    TOTAL OPTIONS    EXERCISE                  STOCK VALUE APPRECIATION
                          UNDERLYING     GRANTED TO      OR BASE                       FOR OPTION($)(1)
                           OPTIONS      EMPLOYEES IN      PRICE      EXPIRATION    -------------------------
NAME                      GRANTED(#)        1999          ($/SH)        DATE           5%            10%
----                      ----------    -------------    --------    ----------    ----------    -----------
<S>                       <C>           <C>              <C>         <C>           <C>           <C>
Richard L. Higgins......    50,000           33%           2.16       04/01/09       $68,000       $172,000
Thomas K. Sutton........    32,500           21%           2.16       04/01/09       $44,200       $111,800
</TABLE>

---------------
(1) Represents the potential realizable value of each grant assuming the market
    price of the underlying security appreciates in value from the date of grant
    to the end of the option term at 5% and 10% annually.

                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
                                                               NUMBER OF UNEXERCISED       VALUE OF UNEXERCISED IN-THE-
                                       SHARES                   OPTIONS/ WARRANTS AT        MONEY OPTIONS/ WARRANTS AT
                                      ACQUIRED                   DECEMBER 31, 1999              DECEMBER 31, 1999
                                         ON       VALUE     ----------------------------   ----------------------------
NAME                                  EXERCISE   REALIZED   EXERCISABLE    UNEXERCISABLE   EXERCISABLE    UNEXERCISABLE
----                                  --------   --------   ------------   -------------   ------------   -------------
<S>                                   <C>        <C>        <C>            <C>             <C>            <C>
Thomas K. Sutton....................   30,000    $97,500       32,500         30,000         $59,800         $37,500
</TABLE>

            REPORT OF COMPENSATION COMMITTEE ON REPRICING OF OPTIONS

     The Company's 1991 Long-Term Incentive Plan (the "Plan") is intended to
encourage Company employees, through their individual efforts, to improve the
Company's overall performance and to promote profitability by providing them an
opportunity to participate in the increased values they help create. In January
1999, the Compensation Committee determined that the imbalance between the
exercise price of certain of the stock options then outstanding (equal to the
respective market prices for Common Stock at the times they were granted) and
the lower market prices which prevailed for the Company's Common Stock at that
time did not provide an incentive for employees holding such options. To restore
that incentive, the Board of Directors, upon the recommendation of the
Committee, extended to all of the Company's employees, including executive
officers, holding stock options, the opportunity, at such employee's election,
to receive a repriced option under the Plan, exercisable at $2.75 per share,
which was $.50 greater than the market price of the Company's Common Stock on
the date of repricing.

     The Compensation Committee, based on its assessment of the performance of
the Company's executive officers and to enhance the incentive for the executive
officers to implement the Company's business plan, also recommended, and the
Board of Directors approved, the extension to each of the executive officers
holding stock options, the opportunity, at his or her election, to exchange the
options held by such executive officer having an exercise price per share of
$4.75 or more for new options having an exercise price per share of $2.75, which
was $.50 greater than the market price of the Company's Common Stock at the time
the Board of Directors approved the repricing. Options to purchase an aggregate
of 245,000 shares of Common Stock were affected by the repricing. Except as
modified as described above, each new option continues to be governed by the
same terms as applied to the surrendered. The surrendered options were currently
exercisable.

     The participation by executive officers in the repricing program is shown
in the table entitled "Ten-Year Options Repricings" below.

                                          Compensation Committee,

                                          Richard Ribakove
                                          David Himick
                                          Herman Gross

                                       27
<PAGE>   29

                          TEN-YEAR OPTIONS REPRICINGS

<TABLE>
<CAPTION>
                                                                                                 LENGTH OF
                                          NUMBER OF                                               ORIGINAL
                                         SECURITIES    MARKET PRICE     EXERCISE                OPTION TERM
                                         UNDERLYING      OF STOCK       PRICE AT                REMAINING AT
                                           OPTIONS      AT TIME OF      TIME OF       NEW($)      DATE OF
                                         REPRICED OR   REPRICING OR   REPRICING OR   EXERCISE   REPRICING OR
NAME                            DATE       AMENDED     AMENDMENT($)   AMENDMENT($)    PRICE      AMENDMENT
----                           -------   -----------   ------------   ------------   --------   ------------
<S>                            <C>       <C>           <C>            <C>            <C>        <C>
Richard L. Higgins...........  3/15/99       5,000         2.25           9.25         2.75          5
  Chief Executive Officer      3/15/99      25,000         2.25           6.25         2.75          8
                               3/15/99     100,000         2.25           4.75         2.75          9

Thomas K. Sutton.............  3/15/99      30,000         2.25           6.25         2.75          8
  Executive Vice President     3/15/99      30,000         2.25           4.75         2.75          9

Kimberley A. Cady............  3/15/99       2,500         2.25           9.25         2.75          5
  Chief Financial Officer and  3/15/99      22,500         2.25           4.75         2.75          9
  Vice President, Finance

Lucio Improta................  10/1/99      30,000        3.313           7.75         2.75          7
  Vice President,
  International Business
  Development
</TABLE>

EMPLOYMENT AGREEMENTS

     There are no employment agreements between the Company and its executive
officers.

     All employees have executed confidentiality agreements with the Company.

COMPENSATION OF DIRECTORS

     Non-employee members of the Board of Directors ("Outside Directors")receive
an automatic annual grant of options for 1,000 shares of Common Stock upon their
election or re-election to the Board of Directors. The options are granted under
the 1995 Non-Employee Directors' Stock Option Plan (the "Directors' Plan") which
was adopted on July 6, 1995 at the Company's 1995 Annual Meeting of
Shareholders.

     Only Outside Directors are eligible to receive grants of options under the
Directors' Plan. Participants who had served as directors prior to the adoption
of the Directors' Plan automatically received an option for 1,000 shares of
Common Stock for each calendar year they served as a director. During the term
of the Directors' Plan, Outside Directors automatically receive a grant of an
option for 1,000 shares of Common Stock on their election or re-election.
Messrs. Ribakove, Himick and Gross have all received an automatic grant for
1,000 shares of common stock for 1999. All options granted vest one (1) year
after the date of grant, are exercisable for a term that is the lesser of one
(1) year from the termination as a director or five (5) years from the date of
grant, and have an exercise price equal to the fair market value of the
underlying shares of Common Stock on the date of grant. Vesting is accelerated
upon the death, disability, or retirement of a participant. Should a participant
terminate his or her service as a director for any other reason, shares not
fully vested under an option will be forfeited. Payment of the option exercise
price may be made in cash or by transfer to the Company of shares of Common
Stock having a fair market value equal to the option exercise price, or by
withholding from the shares that would otherwise be issued under an option, that
number of shares having a fair market value equal to the option exercise price.

     There are fifty thousand (50,000) shares of Common Stock reserved for
issuance under the Directors' Plan. There were 28,000 shares subject to
outstanding options as of December 31, 1999. There are also five-thousand
(5,000) shares subject to an outstanding option that was issued to an Outside
Director of the Company outside of the Director's Plan.

     Outside Directors also received $2,500 per quarter, paid in Common Stock
valued at 85% of the 30 day average market price for the stock for the 30
trading days prior to the month in which payments would be made. During 1999,
17,376 shares were issued to Outside Directors as compensation.

                                       28
<PAGE>   30

     On August 20, 1999, the Board of Directors voted to approve the repricing
of existing stock options issued under the Directors' Plan that were in excess
of $4.25 per share if the market value of the stock on that date was equal to or
greater than $4.25. The options were repriced at $4.25 in an effort to more
appropriately value the options given the decline in the Company's stock price
since the original grant dates.

     On October 18, 1999, the Board of Directors awarded 15,000 warrants to the
Chairman of the Board for services in connection with the Appaloosa financing
transaction.

INCENTIVE PLAN

     In May 1991 the Company adopted its 1991 Long Term Incentive Plan (as
amended, the "Plan"). Pursuant to the Plan, the Compensation Committee of the
Board (the "Committee") has the power to make grants or awards to persons who,
in the judgment of the Committee, have contributed or will contribute, to the
long-term success of the Company. The Board generally may amend, suspend or
terminate the Plan in whole or in part. However, amendments which materially
increase the benefits accruing to participants under the Plan, increase the
number of shares of Common Stock reserved for purposes of the Plan or materially
modify the requirements as to eligibility to participate in the Plan must also
be approved by the Company's shareholders. Awards and grants under the Plan may
be made in a variety of forms, including warrants to purchase Common Stock,
stock options, incentive stock options within the meaning of Section 422 of the
Internal Revenue Code ("ISOs"), and restricted stock. Stock options may be
accompanied by SARS, and restricted stock may be accompanied by grants of
performance shares (contractual rights to compensation measured by increases in
the value of the Common Stock payable in cash). The Committee in its discretion
determines who receives grants or awards under the Plan, the number of warrants,
options, ISOs, SARs, performance shares, and shares of restricted stock, the
option price, and the duration of the awards. One Million (1,000,000) shares
have been reserved for issuance under the Plan, including 542,650 shares subject
to outstanding options under the Plan as of December 31, 1999. There were 32,917
options exercised under the Plan during 1999. The exercise prices of options
awarded under the Plan were the fair market value of the underlying shares at
the time of the award, as determined by the Compensation Committee of the Board
of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Messrs. Ribakove, Himick and Gross are the members of the Compensation
Committee. Each is an Outside Director of the Company. No executive officers of
the Company serve on the Compensation Committee (or in a like capacity) for any
other entity.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

  Introduction

     The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company, administers the Company's 1991
Long-Term Incentive Plan, and sets specific compensation levels for executive
officers of the Company. The goal of the Compensation Committee is to provide
such levels and forms of compensation as will allow the Company to attract,
retain, and motivate persons important to the growth and success of the Company.
Outside Directors serve as members of the Compensation Committee.

  Compensation Programs

     Base Salary.  The Committee establishes base salaries for each of the
executive officers based upon their position with the Company, their experience
level and their individual performance. Base salaries are subject to adjustment
by the Compensation Committee, from time to time, in its discretion.

     Bonuses.  Each executive officer is eligible to receive a cash bonus at the
election of the Compensation Committee. The bonus may be awarded at any time
during the year and may be based on a specific goal or achievement or overall
performance of the executive officer.

                                       29
<PAGE>   31

     Incentive Plan.  Executive officers are eligible to participate in the
Company's 1991 Long-Term Incentive Plan (the "Incentive Plan") Grants under the
Incentive Plan may be made in a variety of forms including warrants to purchase
Common Stock, stock options, incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
restricted stock. Stock options may be accompanied by stock appreciation rights
and restricted stock may be accompanied by grants of performance shares
(contractual rights to compensation measured by increases in the value of Common
Stock payable in cash). Only grants of stock options have been made under the
Incentive Plan. Vesting periods for executive officers vary. Generally, the
options were provided through initial grants at or near the date of hire and
subsequent grants as the Compensation Committee deemed appropriate. The intent
of the grants was to create an incentive for the recipient to remain at the
Company and to provide a long-term incentive to achieve or exceed the Company's
goals.

  Repricing of Stock Options

     On January 20, 1999 at the recommendation of the Compensation Committee at
a meeting of the Board of Directors, a decision was made to reduce the exercise
prices on employee stock options as of that date which were previously awarded
under the 1991 Long Term Incentive Plan to $2.75 per share. This reduction was
made in an effort to more appropriately value the options given the decline in
the Company's stock price since the original grant dates.

  Compensation of Chief Executive Officer

     Mr. Higgins was the Chief Executive Officer of the Company during 1999 up
until his retirement from the Company on September 21, 1999. His compensation
consisted of a base salary plus bonus. In 1999, he received an annual base
salary of $180,017 and was awarded 50,000 stock options to purchase the
Company's Common Stock at an exercise price of $2.16 per share.

     Mr. Sahi was elected to the position of Chief Executive Officer on
September 21, 1999. His compensation for 1999 consisted of a base salary of
$180,000.

  Code Section 162 (m)

     In 1993, the Code was amended to add Section 162(m). Section 162(m) places
a limit of $1,000,000 on the amount of compensation that may be deducted by a
public company in any year with respect to certain of the Company's higher paid
executives. Certain performance-based compensation that has been approved by
shareholders is not subject to the deduction limitation. The 1999 cash
compensation of the Company's executive officers was well below the level where
this limitation would apply. The Company believes that options granted under the
Incentive Plan are excluded from the Section 162(m) limitation as performance-
based compensation.

                                          Compensation Committee,

                                          Richard Ribakove
                                          David Himick
                                          Herman Gross

                                       30
<PAGE>   32

                            STOCK PERFORMANCE GRAPH

     The following graph compares the cumulative total stockholder return on the
Company's Common Stock for the fiscal year ended December 31, 1999 with the
cumulative total stockholder return on the Nasdaq Stock Market (U.S.) Index and
the S&P Healthcare Composite Index. The comparison assumes $100 was invested on
June 20, 1994, at the initial public offering price in the Company's Common
Stock and in each of the indices and assumes reinvestment of dividends.

                     COMPARISON OF CUMULATIVE TOTAL RETURN
      FOR THE PERIOD ENDED DECEMBER 31, 1995 TO DECEMBER 31, 1999 BETWEEN
           BIO-PLEXUS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX AND
                       THE S&P HEALTHCARE COMPOSITE INDEX

[LINE GRAPH]

<TABLE>
<CAPTION>
         BIO-PLEXUS, INC.    NASDAQ STOCK INDEX   S&P HEALTHCARE
                                                     COMPOSITE
                                                       INDEX
<S>       <C>                <C>                  <C>
               145.00              102.98             125.59

               142.50              108.40             127.37

               147.50              111.61             131.13

               145.00              115.13             134.67

               110.00              118.11             138.16

               120.00              127.67             144.01

               118.75              137.04             150.89

               120.00              139.83             150.64

               122.50              143.05             163.79

               117.50              142.22             168.40

               100.00              145.56             176.77

12/31/95       102.50              144.79             186.08

               108.75              145.51             196.65

               112.50              151.06             193.48

                97.50              151.57             191.97

               121.25              164.12             188.28

               115.00              171.65             196.01

               100.00              163.92             199.63

                90.00              149.32             189.82

                76.25              157.70             196.90

                76.25              169.76             213.03

                85.00              167.88             215.08

                60.00              178.29             233.15

12/31/96        90.00              178.14             223.12

                75.63              190.78             247.51

                62.50              180.23             251.12

                46.25              168.48             233.87

                56.25              173.73             253.02

                45.00              193.41             268.50

                32.50              199.35             294.25

                27.50              220.36             299.98

                56.25              220.04             275.69

                56.25              233.08             291.65

                58.75              220.94             294.69

                53.75              222.11             307.19

12/31/97        47.50              218.28             320.66

                41.25              225.19             343.02

                36.88              246.37             362.22

                41.25              255.46             374.88

                33.13              259.76             383.74

                30.00              245.34             376.34

                28.75              262.48             403.87

                26.25              259.41             406.01

                23.75              208.13             360.43

                17.50              237.03             403.22

                28.75              247.26             417.81

                26.25              272.27             443.32

12/31/98        23.75              307.59             462.43

                21.25              352.32             464.71

                25.00              320.74             470.34

                22.50              344.07             482.91

                56.25              353.74             452.88

                48.75              345.59             439.87

                45.63              376.45             460.49

                43.75              370.97             434.35

                40.00              385.66             450.08

                32.50              385.04             414.71

                30.00              413.02             464.68

                40.00              457.08             466.36

12/31/99        40.00              555.69             424.32
</TABLE>

                                       31
<PAGE>   33

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 31, 2000 (unless otherwise
specified) for: (i) each person who is known by the Company to beneficially own
more than 5% of the Common Stock; (ii) each of the Company's directors; (iii)
each of the Company's Named Executive Officers; and (iv) all of the directors
and executive officers as a group.

<TABLE>
<CAPTION>
                                                              AMOUNT AND NATURE    PERCENT OF CLASS
NAME AND ADDRESS(1)                                             OF BENEFICIAL        BENEFICIALLY
OF BENEFICIAL OWNER                                             OWNERSHIP(2)            OWNED
-------------------                                           -----------------    ----------------
<S>                                                           <C>                  <C>
Appaloosa Management L.P. and David A. Tepper(3)............      2,700,000              15.8%
Herman Gross(4).............................................      1,672,110              11.6%
Richard L. Higgins..........................................         63,625                 *
Carl R. Sahi................................................        500,970               3.5%
David Himick(5).............................................      1,604,396              11.1%
Kimberley A. Cady(6)........................................         85,000                 *
Richard D. Ribakove(7)......................................         62,614                 *
Thomas K. Sutton(8).........................................         24,950                 *
All directors and executive officers as a group (7
  persons)..................................................      3,956,165              27.0%
</TABLE>

---------------
 *  Less than 1% of the class.

(1) Unless otherwise indicated, the address of each named holder is c/o
    Bio-Plexus, Inc., 129 Reservoir Road, Vernon, Connecticut 06066.

(2) Beneficial ownership is determined in accordance with the rules of the
    Securities and Exchange Commission and generally includes voting or
    investment power with respect to securities. Shares of Common Stock subject
    to options, warrants and convertible notes currently exercisable or
    convertible, or exercisable or convertible within sixty (60) days, are
    deemed outstanding for computing the percentage of the person holding such
    options but are not deemed outstanding for computing the percentage of any
    other person. Except as indicated by footnote, and subject to community
    property laws where applicable, the persons named in the table have sole
    voting and investment power with respect to all shares of Common Stock shown
    as beneficially owned by them.

(3) Based on the Schedule 13D filed jointly with the Commission on November 1,
    1999, as amended by Amendment No. 1 filed jointly on January 5, 2000, by
    Appaloosa and David A. Tepper, the sole stockholder and President of
    Appaloosa Partners Inc., the general partner of Appaloosa. Includes 1
    million shares of Common Stock issuable upon the exercise of the $3 warrants
    and 1.5 million shares of common stock issuable upon exercise of the $5
    warrants issued to the purchasers upon the closing of the first bridge loan
    and 200,000 shares issuable upon the exercise of the warrants that will be
    issued in connection with a second bridge loan.

(4) Includes 75,000 shares of Common Stock issuable upon the exercise of
    warrants and 2,000 shares issuable upon the exercise of options owned by Mr.
    Gross which are presently exercisable.

(5) Includes 145,378 shares of Common Stock owned jointly by Mr. Himick and his
    wife and as to which they share voting and investment power and 77,000
    shares of Common Stock issuable upon the exercise of warrants and options
    owned by Mr. Himick which are presently exercisable.

(6) Includes 85,000 shares of Common Stock issuable upon the exercise of options
    owned by Ms. Cady which are presently exercisable.

(7) Includes 28,430 shares of Common Stock owned jointly by Mr. Ribakove and his
    wife in tenancy by their entirety. As to such shares, Mr. Ribakove and his
    wife share voting and investment power. Also includes 29,000 shares of
    Common Stock issuable upon the exercise of warrants and options owned by Mr.
    Ribakove which are presently exercisable, and 600 shares of Common Stock
    held in custodial accounts for the Ribakoves' minor children.

                                       32
<PAGE>   34

(8) Includes 10,000 shares of Common Stock issuable upon the exercise of options
    owned by Mr. Sutton which are presently exercisable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a) The following documents are filed as part of this report:

        (1) FINANCIAL STATEMENTS

     Listed on page F-1 of the Financial Statements.

     (b) Reports on Form 8-K

     No reports on Form 8-K were filed by the Registrant during the fourth
quarter ended December 31, 1999.

     A report on Form 8-K was filed on February 24, 2000 reporting an
     adjournment of a Special Shareholders Meeting that was to be held on
     February 28, 2000.

     A report on Form 8-K was filed on March 31, 2000 reporting the Company's
1999 financial results.

     (c) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
  1.2        Form of Advest, Inc. Warrant...........    Incorporated by reference to Exhibit
                                                        1.2 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
  1.3        Form of Advest, Inc. Registration
             Rights Agreement.......................    Incorporated by reference to Exhibit
                                                        1.3 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
  3.1        Certificate of Incorporation of the
             Company, as amended....................    Incorporated by reference to Exhibit
                                                        3.1 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended September 30, 1998 (File No.
                                                        0-24128).
  3.2        Bylaws of the Company, as amended......    Incorporated by reference to Exhibit
                                                        3.2 to the Registrant's Annual Report
                                                        on Form 10-K filed on April 13, 1998
                                                        (File No. 0-24128).
  4.5        Promissory Note, dated October 28,
             1994, between the Company and Victor
             and Margaret DeMattia..................    Incorporated by reference to Exhibit
                                                        4.5 to the Registrant's Annual Report
                                                        on Form 10-K filed on March 30, 1995
                                                        (File No. 0-24128).
 10.1        Lease, dated March 7, 1989, between the
             Company and T&S Limited Partnership, as
             amended................................    Incorporated by reference to Exhibit
                                                        10.1 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
</TABLE>

                                       33
<PAGE>   35

<TABLE>
<CAPTION>
EXHIBIT
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.4        Purchase and Sale Agreement, as
             amended, for 129 Reservoir Road,
             Vernon, Connecticut, dated October 28,
             1994, between the Company and Victor
             and Margaret DeMattia..................    Incorporated by reference to Exhibit
                                                        10.4 to the Registrant's Annual Report
                                                        on Form 10-K filed on March 30, 1995
                                                        (File No. 0-24128).
 10.6        Marketing and Distribution Agreement
             dated March 16, 1995, between the
             Company and Allegiance.................    Incorporated by reference to Exhibit
                                                        10.6 to the Registrant's Amendment No.
                                                        2 to Annual Report on Form 10-K filed
                                                        on June 30, 1995 (File No. 0-24128).
 10.7        1991 Long-Term Incentive Plan..........    Incorporated by reference to Exhibit
                                                        10.7 to the Registrant's Amendment No.
                                                        2 to Annual Report on Form 10-K filed
                                                        on June 30, 1995 (File No. 0-24128).
 10.12       Master Equipment Lease Agreement dated
             as of March 8, 1995, between the
             Company and Financing for Science
             International, Inc. ...................    Incorporated by reference to Exhibit
                                                        10.12 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24128).
 10.13       1995 Non-Employee Directors' Stock
             Option Plan............................    Incorporated by reference to Exhibit
                                                        10.13 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24118).
 10.15       Letter Agreement with Aberlyn Capital
             Management Limited Partnership.........    Incorporated by reference to Exhibit
                                                        10.15 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24128).
 10.16       Employment Agreement dated January 13,
             1997 between the Company and Lucio
             Improta................................    Incorporated by reference to Exhibit
                                                        10.15 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on March 31, 1997 (File No.
                                                        0-24128).
 10.17       Term Sheet dated August 1, 1997
             describing arrangement between the
             Company and Ronald Haverl..............    Incorporated by reference to Exhibit
                                                        10.17 to the Registrant's Annual Report
                                                        on Form 10-K/A filed on April 30, 1998
                                                        (File No. 0-24128).
 10.18       Development and License Agreement dated
             January 28, 1997 by and between the
             Company and Johnson & Johnson Medical,
             Inc. ..................................    Incorporated by reference to Exhibit
                                                        10.18 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
</TABLE>

                                       34
<PAGE>   36

<TABLE>
<CAPTION>
EXHIBIT
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.19       Supply Agreement dated January 28, 1997
             by and between the Company and Johnson
             & Johnson Medical, Inc. ...............    Incorporated by reference to Exhibit
                                                        10.18 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.20       Term Promissory Note issued to Carl R.
             Sahi*..................................    Incorporated by reference to Exhibit
                                                        10.20 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.21       Warrant for shares of common stock
             issued to Carl R. Sahi*................    Incorporated by reference to Exhibit
                                                        10.21 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.22       Subscription Agreement dated April 27,
             1999 by and between the Company and
             Ramius Capital Group, LLC..............    Incorporated by reference to Exhibit
                                                        10.22 to the Registrant's Form S-3
                                                        filed on May 18, 1999, as amended (File
                                                        No. 333-79671).
 10.23       Form of Debenture dated April 27, 1999
             by and between the Company and Ramius
             Capital Group, LLC.....................    Incorporated by reference to Exhibit
                                                        10.23 to the Registrant's Form S-3
                                                        filed on May 18, 1999, as amended (File
                                                        No. 333-79671).
 10.23a      Letter Agreement dated September 13,
             1999 between the Company and Ramius
             Capital Group, LLC.....................    Incorporated by reference to Exhibit
                                                        10.23a to the Registrant's Form S-3
                                                        filed on May 18, 1999, as amended (File
                                                        No. 333-79671).
 10.24       Form of Warrant granted by the Company
             to Ramius Capital Group, LLC...........    Incorporated by reference to Exhibit
                                                        10.24 to the Registrant's Form S-3
                                                        filed on May 18, 1999, as amended (File
                                                        No. 333-79671).
 10.25       Registration Rights Agreement by and
             between the Company and Ramius Capital
             Group, LLC.............................    Incorporated by reference to Exhibit
                                                        10.25 to the Registrant's Form S-3
                                                        filed on May 18, 1999, as amended (File
                                                        No. 333-79671).
 10.30       7.5% Secured Note dated as of October
             21, 1999 between the Company and
             Appaloosa Investment Limited
             Partnership I, L.P.....................    Filed with this Report.

 10.30(1a)   First Amendment to 7.5% Secured Note
             dated as of December 30, 1999..........    Filed with this Report.

 10.30(2a)   Second Amendment to 7.5% Secured note
             dated as of April 3, 2000..............    Filed with this Report.

 10.31       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $3.00 per Share......    Filed with this Report.
</TABLE>

                                       35
<PAGE>   37

<TABLE>
<CAPTION>
EXHIBIT
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.32       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $5.00 per Share......    Filed with this Report.
 10.33       Form of Convertible Note Purchase
             Agreement..............................    Filed with this Report.
 10.34       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $7.00 per Share......    Filed with this Report.
 10.35       Registration Rights Agreement between
             the Company, Appaloosa Investment
             Limited Partnership I, L. P. and
             certain entities related thereto.......    Filed with this Report.
 10.36       Form of Rollover Registration Rights
             Agreement..............................    Filed with this Report.
 10.37       Security Agreement between the Company
             and Appaloosa Investment Limited
             Partnership I, L.P. ...................    Filed with this Report.
 10.38       Letter Agreement dated October 21, 1999
             between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 10.39       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $3.00 per Share......    Filed with this Report.
 10.40       15% Secured Note dated as of January 5,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 10.40(1a)   First Amendment to 15% Secured Note
             dated as of April 3, 2000 between the
             Company and Appaloosa Investment
             Limited Partnership I, L.P.............    Filed with this Report.
 10.41       Form of Warrant to Purchase Shares of
             Common Stock of the Company............    Filed with this Report.
 10.42       15% Secured Note dated as of April 3,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 10.43       Letter Agreement dated as of April 3,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 23          Consent of Mahoney Sabol & Company,
             L.L.P..................................    Filed with this report.
 27          Financial Data Schedule................    Filed with this report.
</TABLE>

---------------
* This exhibit is a management or employment contract required to be filed as an
  exhibit to this Form 10-K pursuant to Item 14(c).

                                       36
<PAGE>   38

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                          BIO-PLEXUS, INC. (REGISTRANT)

                                          By:       /s/ CARL R. SAHI
                                            ------------------------------------
                                                        Carl R. Sahi
                                             President, Chief Executive Officer
                                                        and Director

                                          By:     /s/ KIMBERLEY A. CADY
                                            ------------------------------------
                                                     Kimberley A. Cady
                                                Chief Financial Officer and
                                                  Vice President, Finance

Dated: April 14, 2000

     Pursuant to the requirements of Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                     SIGNATURE                                     TITLE                       DATE
                     ---------                                     -----                       ----
<C>                                                  <S>                                  <C>
               By: /s/ CARL R. SAHI                  President, Chief Executive           April 14, 2000
  ----------------------------------------------     Officer and Director
                   Carl R. Sahi

            By: /s/ RICHARD D. RIBAKOVE              Chairman and Director                April 14, 2000
  ----------------------------------------------
                Richard D. Ribakove

            By: /s/ RICHARD L. HIGGINS               Director                             April 14, 2000
  ----------------------------------------------
                Richard L. Higgins

               By: /s/ DAVID HIMICK                  Director                             April 14, 2000
  ----------------------------------------------
                   David Himick

               By: /s/ HERMAN GROSS                  Director                             April 14, 2000
  ----------------------------------------------
                   Herman Gross
</TABLE>

                                       37
<PAGE>   39

                                BIO-PLEXUS, INC.

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
FINANCIAL STATEMENTS:                                         PAGE
---------------------                                         ----
<S>                                                           <C>
Report of Independent Accountants...........................  F-2
Balance Sheets at December 31, 1999 and 1998................  F-3
Statements of Operations for the years ended December 31,
  1999, 1998 and 1997.......................................  F-4
Statements of Changes in Shareholders' Equity (Deficit) for
  the years ended December 31, 1999, 1998 and 1997..........  F-5
Statements of Cash Flows for the years ended December 31,
  1999, 1998, and 1997......................................  F-6
Notes to Financial Statements...............................  F-7
</TABLE>

     All schedules are omitted because they are not applicable or the required
information is shown in the Financial Statements or Notes thereto.

                                       F-1
<PAGE>   40

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
  of Bio-Plexus, Inc.

     We have audited the balance sheets of Bio-Plexus, Inc. as of December 31,
1999 and 1998 and the related statements of operations, shareholders' equity
(deficit) and cash flows for each of the three years ended December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bio-Plexus, Inc. as of December 31, 1999 and
1998, and the results of its operations and its cash flows for each of the three
years ended December 31, 1999 in conformity with generally accepted accounting
principles.

     The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has an accumulated deficit due to recurring
net losses, and will require additional capital in 2000 to fund continuing
operations. These items raise substantial doubt about the Company's ability to
continue as a going concern through December 31, 2000. Management's plans in
regards to these matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

MAHONEY SABOL & COMPANY, LLP

Hartford, Connecticut
March 17, 2000

                                       F-2
<PAGE>   41

                                BIO-PLEXUS, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  1999            1998
                                                              ------------    ------------
<S>                                                           <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $    867,000    $    535,000
  Accounts receivable.......................................       908,000         564,000
  Inventories:
     Raw materials..........................................       621,000       1,164,000
     Work-in-process........................................       474,000         470,000
     Finished goods.........................................     1,167,000         390,000
                                                              ------------    ------------
                                                                 2,262,000       2,024,000
                                                              ------------    ------------
  Other current assets......................................       173,000         246,000
                                                              ------------    ------------
          Total current assets..............................     4,210,000       3,369,000
                                                              ------------    ------------
Investment in Jordan Pharmaceuticals (Note 3)...............            --         600,000
Fixed assets, net (Note 4)..................................     4,384,000       4,661,000
Deferred debt financing expenses............................       465,000          10,000
Patents, net of amortization................................       335,000         252,000
Other assets................................................       253,000         260,000
                                                              ------------    ------------
                                                              $  9,647,000    $  9,152,000
                                                              ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt (Note 5)................  $    899,000    $  1,811,000
  Note payable (Note 5).....................................     1,340,000         250,000
  Accounts payable and accrued expenses.....................       786,000         528,000
  Accrued interest payable..................................        55,000          28,000
  Accrued vacation..........................................       202,000         196,000
  Other accrued employee costs..............................       226,000         213,000
  Product replacement costs.................................            --         222,000
  Deferred revenue (Note 12)................................            --         875,000
                                                              ------------    ------------
          Total current liabilities.........................     3,508,000       4,123,000
                                                              ------------    ------------
Other long-term debt, net (Note 5)..........................     2,262,000       2,403,000
Redeemable common stock warrants (Note 7)...................       149,000         149,000
Commitments and contingencies (Note 10).....................            --              --
Shareholders' equity (Note 7):
  Convertible preferred stock, no par value, 3,000,000
     authorized, no shares issued and outstanding...........            --              --
  Common stock, no par value, 25,000,000 authorized,
     14,083,807 and 12,793,165 shares issued and
     outstanding............................................    71,833,000      65,349,000
  Accumulated deficit.......................................   (68,105,000)    (62,872,000)
                                                              ------------    ------------
          Total shareholders' equity........................     3,728,000       2,477,000
                                                              ------------    ------------
                                                              $  9,647,000    $  9,152,000
                                                              ============    ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-3
<PAGE>   42

                                BIO-PLEXUS, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          FOR THE YEAR ENDED DECEMBER 31,
                                                     ------------------------------------------
                                                        1999           1998            1997
                                                     -----------    -----------    ------------
<S>                                                  <C>            <C>            <C>
Revenue:
  Product..........................................  $ 5,498,000    $ 5,086,000    $  3,542,000
  Services.........................................    1,426,000      4,171,000              --
  Licensing fees (Note 12).........................      100,000         50,000       1,500,000
                                                     -----------    -----------    ------------
          Total revenue............................    7,024,000      9,307,000       5,042,000
                                                     -----------    -----------    ------------
Costs and expenses:
  Product..........................................    3,754,000      6,355,000       5,764,000
  Services.........................................       87,000        267,000              --
  Research and development.........................    1,112,000        463,000       1,056,000
  Selling, general and administrative..............    4,937,000      4,593,000       6,748,000
                                                     -----------    -----------    ------------
          Total operating costs and expenses.......    9,890,000     11,678,000      13,568,000
                                                     -----------    -----------    ------------
Operating Loss.....................................   (2,866,000)    (2,371,000)     (8,526,000)
                                                     -----------    -----------    ------------
Financing Expenses:
  Amortization of deferred debt financing..........      266,000         63,000         382,000
  Other financing expense (Note 5).................    2,158,000        633,000       3,551,000
  Other income.....................................      (57,000)      (107,000)       (147,000)
                                                     -----------    -----------    ------------
          Total financing expenses.................    2,367,000        589,000       3,786,000
                                                     -----------    -----------    ------------
Net loss...........................................   (5,233,000)    (2,960,000)    (12,312,000)
Less: Imputed dividend on preferred stock (Note
  7)...............................................           --             --         500,000
                                                     -----------    -----------    ------------
Net loss applicable to common stock................  $(5,233,000)   $(2,960,000)   $(12,812,000)
                                                     ===========    ===========    ============
Net loss (basic and diluted) per common share......  $     (0.39)   $     (0.24)   $      (1.37)
                                                     ===========    ===========    ============
Weighted average common shares outstanding.........   13,540,922     12,263,870       9,320,800
                                                     ===========    ===========    ============
</TABLE>

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

                                       F-4
<PAGE>   43

                                BIO-PLEXUS, INC.

            STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                  CONVERTIBLE
                                       COMMON STOCK             PREFERRED STOCK
                                 ------------------------   ------------------------   ACCUMULATED
                                   SHARES       AMOUNT        SHARES       AMOUNT        DEFICIT         TOTAL
                                 ----------   -----------   ----------   -----------   ------------   ------------
<S>                              <C>          <C>           <C>          <C>           <C>            <C>
Balance -- December 31, 1996...   7,046,552   $46,887,000                $        --   $(47,600,000)  $   (713,000)
Exercise of stock options......      36,000        50,000                                                   50,000
Cash proceeds from sale........     997,000     2,493,000    1,250,000     5,000,000                     7,493,000
Conversion of preferred
  stock........................   1,931,291     4,929,000   (1,250,000)   (5,000,000)                      (71,000)
Conversion of notes payable....   1,791,627     7,145,000                                                7,145,000
Conversion of warrants.........     335,317     2,566,000                                                2,566,000
Net loss before imputed
  dividend.....................                                                         (12,312,000)   (12,312,000)
                                 ----------   -----------   ----------   -----------   ------------   ------------
Balance -- December 31, 1997...  12,137,787    64,070,000           --            --    (59,912,000)     4,158,000
Exercise of stock options......      21,000        29,000                                                   29,000
Cash proceeds from sale........     634,378     1,250,000                                                1,250,000
Net loss.......................                                                          (2,960,000)    (2,960,000)
                                 ----------   -----------   ----------   -----------   ------------   ------------
Balance -- December 31, 1998...  12,793,165    65,349,000           --            --    (62,872,000)     2,477,000
Exercise of stock options......      32,917        89,000                                                   89,000
Cash proceeds from sale........     549,558     1,100,000                                                1,100,000
Board of Directors' fees.......      17,376        43,000                                                   43,000
Conversion of notes payable....     544,753     1,467,000                                                1,467,000
Conversion of warrants.........     146,038            --                                                       --
Warrants issued with debt......                 3,785,000                                                3,785,000
Net loss.......................                                                          (5,233,000)    (5,233,000)
                                 ----------   -----------   ----------   -----------   ------------   ------------
Balance -- December 31, 1999...  14,083,807   $71,833,000           --   $        --   $(68,105,000)  $  3,728,000
                                 ==========   ===========   ==========   ===========   ============   ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-5
<PAGE>   44

                                BIO-PLEXUS, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                             FOR THE YEAR ENDED DECEMBER 31,
                                                        ------------------------------------------
                                                           1999           1998            1997
                                                        -----------    -----------    ------------
<S>                                                     <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss..............................................  $(5,233,000)   $(2,960,000)   $(12,812,000)
Adjustments to reconcile net loss to cash used by
  operating activities:
  Depreciation and amortization.......................      552,000        923,000       1,343,000
  Inducement expense on conversion....................                                     640,000
  Imputed dividend....................................                                     500,000
  Writedown of equipment to net realizable value (Note
    4)................................................      280,000      1,359,000         512,000
  Amortization of deferred debt financing expenses....      266,000         63,000         382,000
  Amortization of debt discount (Note 5)..............    1,747,000         59,000       1,819,000
  Decrease (increase) in assets:
    Accounts receivable...............................     (344,000)      (169,000)         (9,000)
    Inventories.......................................     (238,000)      (117,000)        (51,000)
    Notes receivable..................................                     152,000
  Increase (decrease) in liabilities:
    Accounts payable and accrued expenses.............      248,000        (91,000)     (1,074,000)
    Accrued interest payable..........................       27,000          2,000          (1,000)
    Accrued vacation and other accrued employee
       costs..........................................       19,000        (43,000)        (10,000)
    Accrued product replacement costs (Note 14).......     (222,000)       222,000
    (Decrease) increase in deferred revenue (Note
       12)............................................     (875,000)        34,000         841,000
  Other...............................................     (188,000)       155,000         164,000
                                                        -----------    -----------    ------------
    Net cash used in operating activities.............   (3,961,000)      (411,000)     (7,756,000)
                                                        -----------    -----------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases and construction of fixed assets............     (536,000)       (82,000)       (409,000)
Long-term investment (Note 3).........................      627,000       (600,000)
Cost of patents.......................................     (103,000)      (115,000)       (108,000)
                                                        -----------    -----------    ------------
    Net cash used in investing activities.............      (12,000)      (797,000)       (517,000)
                                                        -----------    -----------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of convertible preferred stock.....                                   5,000,000
Proceeds from sale of common stock (Note 7)...........    1,100,000      1,250,000       2,493,000
Proceeds from exercise of common stock warrants.......                                     282,000
Proceeds from exercise of common stock options........       91,000         29,000          50,000
Redemption of common stock (Note 7)...................                     (20,000)
Proceeds from long-term debt (Note 5).................    2,060,000        300,000       4,700,000
Increase in notes payable (Note 5)....................    2,750,000        250,000
Proceeds from sale and leaseback......................      137,000                        369,000
Repayments of long-term debt..........................   (1,833,000)    (1,568,000)     (4,441,000)
                                                        -----------    -----------    ------------
    Net cash provided by financing activities.........    4,305,000        241,000       8,453,000
                                                        -----------    -----------    ------------
    Net (decrease) increase in cash and cash
       Equivalents....................................      332,000       (967,000)        180,000
    Cash and cash equivalents, beginning of Period....      535,000      1,502,000       1,322,000
                                                        -----------    -----------    ------------
    Cash and cash equivalents, end of period..........  $   867,000    $   535,000    $  1,502,000
                                                        ===========    ===========    ============
Supplemental cash flow disclosures:
  Cash payments of interest...........................  $   412,000    $   572,000    $  1,093,000
  Cash payments of income taxes.......................        4,000          4,000           9,000
  Surrender of debt upon warrant exercise.............                                   2,265,000
  Surrender of debt upon conversion to equity.........       83,000                      5,787,000
</TABLE>

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

                                       F-6
<PAGE>   45

                                BIO-PLEXUS, INC.

                         NOTES TO FINANCIAL STATEMENTS

1. FORMATION AND OPERATIONS OF THE COMPANY

     Bio-Plexus, Inc. (the "Company") was incorporated in Connecticut on
September 4, 1987. The Company was formed for the purpose of the design,
development, manufacture and sale of medical products. The Company's operations
consist of two business segments: Safety Medical Products and Accessories and
Joint Venture Design and Development.

     The products included in the Company's Safety Medical Products and
Accessories segment include safety blood collection needles, needle holders, and
needle disposal containers. The Company sells its products to hospitals, medical
centers, and certain distributors both domestically and internationally. Since
its inception, the Company has devoted substantially all of its efforts to the
development and marketing of a series of safety blood collection needles and
accessories marketed under the Punctur-Guard(R) trademark and the development
and construction of needle assembly systems used to manufacture the
Punctur-Guard(R) needles. The Company has funded its operating losses since
inception through loans and the sale of debt and equity securities.

     The Joint Venture Design and Development segment includes all contract
design and development revenue and associated costs resulting from joint
ventures and strategic partnerships with other healthcare companies. The primary
source of these revenues to date has been the development contract with Johnson
& Johnson Medical ("JJM") for the design and development of a new safety I.V.
catheter to be manufactured and sold by JJM. (See Note 12).

     Product sales growth continued to expand in 1999 and the Company continued
to achieve increased manufacturing capacity and reduce costs, which will enable
the Company to meet the expected increased demand for its products in 2000. The
Company also plans to pursue new opportunities for additional strategic
partnerships to assist with the funding and development costs of other new
products. However, in order to generate adequate cash flows to fund operations,
the Company will need to achieve significant revenue growth and continue to
reduce manufacturing costs. Accordingly, the Company will require additional
capital in 2000 to fund operations.

  Convertible Note Financing

     On September 21, 1999, the Company received a commitment from Appaloosa
Management, L.P., of Chatham, New Jersey ("Appaloosa") for a total financing
package of $17.5 million (the "Permanent Financing"). The Permanent Financing is
currently scheduled to be consummated in April 2000 after receipt of stockholder
approval.

  Bridge Transactions

     Pending consummation of the Permanent Financing, on October 21, 1999, the
Company issued to Appaloosa and entities affiliated therewith (the "Purchasers")
a 7.5% non-convertible secured note in the aggregate principal amount of $3
million (the "First Bridge Note"). In January 2000, the interest rate on the
First Bridge Note was increased to 12% per annum. In connection with the
issuance of the First Bridge Note, the Company also issued to the Purchasers (i)
a five-year warrant to purchase up to 1.0 million shares of the Company's common
stock, no par value (the "Common Stock") at an initial exercise price of $3.00
per share (the "$3 Warrants") and (ii) a nine-year warrant to purchase up to 1.5
million shares of Common Stock at an initial exercise price of $5.00 per share
(the "$5 Warrants") (the $3 Warrants and $5 Warrants are collectively referred
to herein as the "First Bridge Warrants"). At the Purchaser's election and
contingent upon the satisfaction of certain criteria at the closing of the
Permanent Financing, or within six months and one day thereafter, the exercise
price of the $3 Warrants will increase to $4.00 per share of Common Stock. The
exercise price of the $5 Warrants will increase to $7.00 per share of Common
Stock upon the earlier of

                                       F-7
<PAGE>   46
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the closing of the Permanent Financing and October 21, 2000. The $5 Warrants
contain a net-exercise provision.

     On January 5, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $1.65 million
(the "Second Bridge Note"). In connection with the issuance of the Second Bridge
Note, the Company also agreed to issue and sell on the earlier of (i) April 30,
2000 and (ii) the closing of the Permanent Financing, five-year warrants to
acquire up to 200,000 shares of Common Stock at an initial exercise price of
$3.00 per share (the "Second Bridge Warrants"). The Second Bridge Warrants
contain a net-exercise provision.

     On April 3, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $2.2 million
(the "Third Bridge Note"). No warrants or convertible securities were issued in
connection with the Third Bridge Note. The First Bridge Note, the Second Bridge
Note and the Third Bridge Note are collectively referred to as the "Bridge
Notes". The issuance of the Bridge Notes, the First Bridge Warrants and the
Second Bridge Warrants are collectively referred to as the "Bridge
Transactions".

     The Bridge Notes are not convertible into shares of Common Stock and are
required to be paid-in-full (together with accrued interest) at the closing of
the Permanent Financing.

  Permanent Financing

     In order to consummate the Permanent Financing, the Company is required by
the rules of The NASDAQ Stock Market ("NASDAQ") to obtain the approval of a
majority of the Company's stockholders of the terms and conditions of the
Permanent Financing (the "Investment Proposal"). In addition, the Connecticut
Business Corporation Act requires that the Company obtain stockholder approval
of (i) an amendment to the Company's certificate of incorporation (the "Charter
Amendment Proposal") and (ii) an amendment to the Company's 1991 Long-Term
Incentive Plan (the "Incentive Plan Amendment Proposal"). The Charter Amendment
and the Incentive Plan Amendment Proposal are required by the terms of the
Permanent Financing. The approval of the Company's stockholders of the
Investment Proposal, the Charter Amendment Proposal and the Incentive Plan
Amendment Proposal is collectively referred to as "Stockholder Approval".

     If Stockholder Approval is obtained, the Company will issue to the
Purchasers (i) $16.75 million of zero-coupon, secured convertible notes due 2005
(the "Convertible Notes"), (ii) 250,000 shares of Common Stock at a purchase
price of $3.00 per share (the "Permanent Financing Shares") and (iii) nine-year
warrants to purchase up to 1.5 million shares of Common Stock at an initial
exercise price of $7.00 per share (the "$7 Warrants"). The Convertible Notes are
convertible into shares of Common Stock at an initial conversion priced $3.00.
The $7 Warrants contain a net-exercise provision.

     The Permanent Financing will generate aggregate proceeds to the Company of
$17.5 million. After repayment of the Bridge Notes, the Company will realize net
proceeds of approximately $8.4 million which will be available, along with
existing resources, for general working capital purposes, subject to the terms
and conditions of the Permanent Financing transaction agreements.

  Going Concern

     The Company is continuing to explore additional financing alternatives and
potential strategic relationships which may provide the Company with additional
sources of working capital. The Company has an accumulated deficit due to
recurring net losses from its inception of $68,105,000. Furthermore, the Company
will need to raise working capital in addition to that anticipated from
Appaloosa to fund operations during 2000. The Appaloosa agreements contain
certain restrictions with regard to the Company's ability to raise

                                       F-8
<PAGE>   47
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

funds from other sources. Accordingly, there can be no assurances that the
Company will be able to secure any additional sources of working capital.

     There are risks and uncertainties surrounding management's plans. The
Company's failure to successfully implement its plan, including raising
sufficient capital, through a strategic partnership or otherwise, would have an
unfavorable effect on the Company's ability to continue as a going concern. The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern through December 31, 2000. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

  Cash and Cash Equivalents

     The Company considers all highly liquid investments purchased with an
initial maturity of three months or less to be cash equivalents.

  Short-Term Investments

     The Company may invest its excess cash with a local bank in a short-term
investment account backed by either US Treasury bonds or federal agency
obligations.

  Inventories

     All inventories are stated at cost using the weighted average valuation
method. Included in inventory totals were allowance for obsolescence of $299,000
and $56,000 at December 31, 1999 and 1998, respectively.

  Revenue Recognition

     Product sales and related costs are recorded by the Company upon shipment
of product to the customer or distributor.

     Equipment sales as a result of strategic partnerships are progress billed
and revenue is recognized in the billing period.

     The Company's strategic partnerships resulted in the recognition of
development contract or "service" revenue. Pursuant to the terms of the
agreements with these strategic partners, product and process development
services are progress billed as performed and revenue is recognized over the
estimated project period.

  Long-Term Investments

     The company utilized the cost method in connection with the valuation of
its long-term investment (see Note 3).

                                       F-9
<PAGE>   48
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

  Fixed Assets

     Fixed assets are stated at cost and are depreciated using the straight-line
method over the estimated useful lives of the assets, which range from 3-30
years. Maintenance and repair expenditures are charged to expense as incurred.

  Deferred Debt Financing Expenses and Debt Discount

     Financing expenses and debt discount incurred in connection with the
issuance of long-term debt are amortized using the interest method over the term
of the debt.

  Income Taxes

     The Company uses the liability method of accounting for income taxes, as
set forth in Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." Under this method, deferred tax liabilities and assets are
recognized for the expected future tax consequences of temporary differences
between the carrying amounts and the tax basis of assets and liabilities.

  Patents

     Patent costs are capitalized as incurred and amortized on a straight-line
basis over the shorter of the legal term or estimated economic life of the
patent.

  Effect of New Accounting Standards

     In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), "Earnings per Share", which establishes new
standards for the computation and disclosure of earnings per share ("EPS"). The
new statement requires dual presentation of "basic" EPS and "diluted" EPS. Basic
EPS is based on the weighted average number of common shares outstanding for the
period, excluding any dilutive common share equivalents. Diluted EPS reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted. The Company adopted SFAS 128 for
the periods presented. In determining net loss per common share, common stock
equivalents (see Note 8) are excluded from the computation as their effect is
anti-dilutive.

     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information" effective for periods beginning December 15, 1997. The Statement
requires that a public enterprise report financial and descriptive information
about its reportable operating segments. Operating segments are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision-maker in deciding how to
allocate resources and in assessing performance. In fiscal 1998, with the onset
of the development contract with JJM, the Company began internally reporting two
distinct segments: Safety Medical Products and Joint Venture Design and
Development. The Company adopted SFAS 131 for the periods presented (see Note
13).

  Reclassification

     Certain reclassifications have been made to the 1997 and 1998 financial
statements to conform to the 1999 presentation.

3. LONG-TERM INVESTMENT

     On September 2, 1998, the Company loaned $600,000 to Jordan
Pharmaceuticals, Inc. ("Jordan"), a California corporation, in exchange for a
one-year promissory note. On October 31, 1998, the Company

                                      F-10
<PAGE>   49
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

converted the promissory note into 120,000 shares of Jordan Series A Preferred
Stock. Interest that had accrued on the note from September 2, 1998 until the
date of conversion was paid in 526 shares of Jordan Series A Preferred Stock.
For the period September 30, 1998 through December 31, 1998, the Company
received a dividend in the amount of 2,411 shares of Jordan Series A Preferred
Stock.

     Pursuant to a stock option agreement dated October 31, 1998, Jordan had the
right to repurchase the shares of Series A Preferred Stock plus any paid-in-kind
shares owned by the Company (in lieu of interest paid in cash), at a purchase
price of $5.00 per share. On March 31, 1999, Jordan exercised its option with
respect to all of the shares for total consideration of $627,000. The investment
was valued in the financial statements using the cost method, as the percentage
of the voting stock held as an investment by the Company was insufficient to
exercise significant influence over Jordan.

4. FIXED ASSETS

     Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                                    DECEMBER 31,    DECEMBER 31,
                                                        1999            1998
                                                    ------------    ------------
<S>                                                 <C>             <C>
Fixed assets under capital lease:
  Machinery and equipment.........................  $ 2,580,000     $ 2,580,000
  Production molds................................    2,029,000       1,892,000
  Office furniture and equipment..................      472,000         472,000
                                                    -----------     -----------
     Total under capital lease....................    5,081,000       4,944,000
  Land and building...............................    2,438,000       2,438,000
  Machinery and equipment.........................      120,000         155,000
  Construction-in-progress........................      311,000         336,000
  Production molds................................      910,000         779,000
  Office furniture and equipment..................      226,000         191,000
  Leasehold improvements..........................           --         169,000
                                                    -----------     -----------
                                                      9,086,000       9,012,000
  Less: accumulated depreciation..................   (4,702,000)     (4,351,000)
                                                    -----------     -----------
                                                    $ 4,384,000     $ 4,661,000
                                                    ===========     ===========
</TABLE>

     At December 31, 1999 and 1998, the Company had approximately $5,081,000 and
$4,944,000, respectively, of fixed assets subject to a sale-leaseback
arrangement with third party lessors (see Note 5).

     Depreciation expense was $532,000 in 1999, $909,000 in 1998, and $1,333,000
in 1997.

     Beginning in 1996 and continuing into 1999, certain of the Company's fixed
assets were written down to net realizable value and were subsequently written
off, as the manner in which these assets were used by the Company had changed.
These fixed assets consisted of primarily the Company's first generation
production machinery and equipment used to manufacture its blood collection
needle product line. This machinery and equipment was internally constructed,
lower volume equipment that was phased out over this time period in favor of
higher volume, more automated, more efficient production machinery and
equipment. Total losses resulting from these write-downs and subsequent
write-offs amounted to $280,000 in 1999, $1,359,000 in 1998, and $512,000 in
1997, and such losses were reported in product costs on the statements of
operations in those years.

                                      F-11
<PAGE>   50
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT

  Secured Term Notes Payable

     Pending consummation of the Permanent Financing, on October 21, 1999, the
Company issued to the Purchasers the First Bridge Note. In January 2000, the
interest rate on the First Bridge Note was increased to 12% per annum. In
connection with the issuance of the First Bridge Note the Company also issued to
the Purchasers (i) the $3 Warrants and (ii) the $5 Warrants. At the Purchaser's
election and contingent upon the satisfaction of certain criteria at the closing
of the Permanent Financing, or within six months and one day thereafter, the
exercise price of the $3 Warrants will increase to $4.00 per share of Common
Stock. The exercise price of the $5 Warrants will increase to $7.00 per share of
Common Stock upon the earlier of the closing of the Permanent Financing and
October 21, 2000. The $5 Warrants contain a net-exercise provision. The fair
value of the Bridge Warrants of approximately $2,905,000 at the date of issuance
was recorded as a discount against the Note Payable obligation. Such discount is
charged to interest expense over the term of the First Bridge Note.

     The balance of long-term debt is as follows:

<TABLE>
<CAPTION>
                                                     DECEMBER 31,    DECEMBER 31,
                                                         1999            1998
                                                     ------------    ------------
<S>                                                  <C>             <C>
6% Convertible Debenture, net of unamortized
  discount of $405,000.............................   $  928,000      $       --
Capital lease obligations, net of unamortized
  discount of $9,000 and $35,000...................      969,000       1,909,000
Facility mortgage payable..........................    1,264,000       1,295,000
Unsecured Term Notes...............................           --         710,000
Term notes.........................................           --         300,000
                                                      ----------      ----------
                                                       3,161,000       4,214,000
Less: current portion..............................      899,000       1,811,000
                                                      ----------      ----------
                                                      $2,262,000      $2,403,000
                                                      ==========      ==========
</TABLE>

     The aggregate maturities of long-term debt, including capital lease
obligations, over the next five years and thereafter are as follows:
2000 -- $907,000; 2001 -- $62,000; 2002 -- $68,000; 2003 -- $74,000; 2004 --
$1,400,000; thereafter -- $1,063,000.

  Convertible Debentures

     On January 30, 1997, pursuant to Regulation S of the Securities Act of
1933, the Company issued 5% Convertible Debentures (the "5% Debentures") due
February 4, 1999 in the aggregate principal sum of $5,000,000. Of the 5%
Debenture proceeds, approximately $1,665,000 was allocated to common stock
during the first quarter to reflect the intrinsic value of the conversion
feature. This amount was calculated at the date of the issue as the difference
between the most beneficial conversion price and the then fair value of the
common stock. The corresponding debt discount was charged to other financing
expenses. At December 31, 1997, all outstanding 5% Debentures had been converted
into shares of common stock. Under the terms of the 5% Debentures, if the
conversions resulted in total shares issued greater than 1,350,000 shares in
aggregate, then the Company would redeem any remaining 5% Debentures at the
price paid plus accrued interest thereon. Based upon the total debenture
conversions, the number of shares exceeded 1,350,000. Upon reaching the limit of
1,350,000 shares, the Company satisfied the remaining outstanding 5% Debentures
balance of $1,537,000 by issuing 100,000 shares at a value of $2.73 per share
and a cash payment of $1,264,000.

                                      F-12
<PAGE>   51
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     On March 24, 1999, the Company signed a commitment for a private placement
of up to $4,500,000 aggregate principal amount of its 6% Convertible Debentures
due June 30, 2004 ("the 6% Debentures"). The initial purchase of $2,500,000
aggregate principal amount of 6% Debentures was made on April 27, 1999. The 6%
Debentures accrue interest at the rate of 6% per annum, payable quarterly in
arrears in cash. The 6% Debentures are convertible at any time at the option of
the holders into shares of the Company's common stock at the lesser of a fixed
conversion price of $3.06 per share or a floating conversion price at the time
of the conversion if the floating price is less than $3.06 per share. The 6%
Debentures may be wholly or partially redeemed at the option of the Company for
an amount not to exceed 130% of the face value thereof plus accrued and unpaid
interest at any time after the date of issuance. The Company and the 6%
Debenture holders have limited put and call options, respectively, for
additional debentures. In connection with the Bridge Transactions, the Company
agreed not to exercise its put right under the Debentures. Net proceeds from the
financing were $2,060,000 after deducting fees and expenses. Approximately
$121,000 was allocated to common stock during the second quarter to reflect the
intrinsic value of the conversion feature. This amount was calculated at the
commitment date as the difference between the most beneficial conversion price
and the then fair value of the common stock. The corresponding debt discount was
charged to interest expense. The financing also included a warrant to purchase
500,000 shares of common stock at an exercise price of $3.38. The fair value of
the warrants at the date of issuance was recorded as a discount on the debenture
which will be amortized over the term of the debenture. During 1999, the holder
of the Debentures converted a total of approximately $1,167,000 of the
outstanding principal balance into 391,120 shares of common stock.

  Capital Lease Obligations

     On April 1, 1994, the Company and a lessor agreed to a $2,000,000 expansion
to a previous sale-leaseback agreement for certain machinery and molds. The
lease term was 42 months from the date specific equipment is leased with
interest at a rate of 15%. As an inducement, the Company issued the lessor and
its affiliate warrants to purchase 47,500 shares of common stock at $9 per
share. The warrants are exercisable through April 30, 2001. The fair value of
the warrants on the date of issuance was recorded as a deferred financing
expense.

     On March 8, 1995, the Company entered a five-year sale-leaseback financing
agreement in amounts up to $2,000,000 with an equipment lessor on certain
machinery and molds. Monthly rent expense equals 2.14% of the equipment leased
and is payable monthly in advance. The Company has the option to purchase all
but not less than all of the leased equipment at the end of the lease term for
the then current market value of the equipment, which shall not be less than 10%
or more than 15% of the equipment cost. In June 1995, the Company utilized
approximately $1,000,000 of the commitment, and as an inducement, the Company
issued the lessor warrants to purchase 6,355 shares of Common Stock at an
exercise price of $13.63 per share with an exercise period of five years. The
fair value of the warrants at the date of issuance was recorded as a discount on
the lease obligation.

     On June 28, 1996, the Company and the lessor agreed to a $2,000,000
expansion of the sale-leaseback financing agreement to finance the purchase of a
new needle production machine. The lease term was four years and monthly rent
payments equal 2.50% of the equipment leased and is payable monthly in advance.
The Company has the option to purchase all but not less than all of the leased
equipment at the end of the lease term for the then current market value of the
equipment, which shall not be less than 15% or more than 20% of the equipment
cost. At December 31,1999, the Company had approximately $849,000 outstanding
under the expanded $2,000,000 financing agreement. As an inducement, the Company
issued the lessor warrants to purchase 16,851 shares of common stock at an
exercise price of $11.28 per share with an exercise period of five years. The
fair value of the warrants at the date of issuance was recorded as a discount on
the lease obligation.

                                      F-13
<PAGE>   52
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     In addition, the Company entered into a Reserve Pledge and Security
Agreement with the lessor requiring the Company to establish a Security Reserve
of $250,000, as additional collateral for the lessor which was recorded within
other assets in the Company's financial statements.

     On September 19, 1996, the Company entered a three-year sale-leaseback
Master Lease Agreement for amounts up to $150,000 with an equipment lessor for
certain machinery and equipment. Monthly rent expense equaled 3.32% of the
equipment leased and was payable monthly in advance. The Company exercised its
option to purchase certain leased equipment at the end of the lease term for the
then current market value of the equipment. On July 23, 1999, the Company
extended the Master Lease Agreement for sixty months through an additional lease
agreement of approximately $137,000 for the purchase of production tooling. The
Company has the option to purchase the tooling at the end of the lease term for
$1.00. The lease requires monthly payments and incurs interest at approximately
9.7% per annum. At December 31, 1999 the Company had approximately $129,000
outstanding under the additional lease agreement.

  Facility Mortgage

     On October 28, 1994, the Company acquired a manufacturing and warehouse
facility for $1,500,000. The seller in the form of a note, which bears interest
at 9% per annum, provided financing of $1,350,000 of the purchase price.
Interest only was payable for the first two years of the note. Principal and
interest payments began in October 1996, and are based on a twenty-year
amortization schedule with a balloon payment due on November 1, 2009. The note
is secured by a first mortgage on the facility.

  Unsecured Term Notes

     During 1993, the Company sold $4,230,000 of unsecured term notes with
detachable warrants to purchase 469,996 shares of common stock at $9 per share.
Subsequent to December 31, 1993 and through February 15, 1994, the Company sold
an additional $628,000 of unsecured term notes with warrants to purchase 69,814
shares of common stock at $9 per share. The term notes bear interest at 8%.
One-third of the principal amount of the notes matured on December 31, 1997 and
the remainder matured on December 31, 1998. The warrants were exercisable until
December 31, 1998.

     During 1996, certain warrant holders exercised warrants for shares of
common stock, simultaneously surrendering $1,109,500 of unsecured term notes,
with a net book value of $849,500 in lieu of paying cash.

     On January 16, 1997, the Company advised certain holders of warrants that
it was reducing the exercise price from $9.00 to $7.00 on warrants issued with
the unsecured term notes. At the same time, the Company advised the warrant
holders that if the warrants were exercised into shares of common stock by
simultaneously surrendering the related unsecured term notes, the Company would
make payments in lieu of interest through 1997 at a rate of 8%. As a result of
the transaction, warrant holders surrendered approximately $2,184,000 of the
term notes, and exercised warrants for 311,967 shares of common stock. A one
time 1997 charge of $640,000 resulted due to the reduction in the warrant
exercise price and cash payments in lieu of interest through 1997.

     In January 1999, the principal balance remaining of $710,000 was paid to
retire the debt. All outstanding warrants expired on December 31, 1998, and none
were exercised during 1998.

  Term Notes

     On September 8, 1998, the Company received $250,000 from an officer of the
Company in exchange for a one-year promissory term note with warrants to
purchase common stock. The term note incurred interest at 8% per annum and was
payable quarterly in arrears commencing on December 8, 1998. With the note,
there were 30,000 common stock warrants issued with a three-year life and an
exercise price of $2.09 per share. On

                                      F-14
<PAGE>   53
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

March 31, 1999, the Company paid the outstanding principal balance of $250,000
and all accrued interest thereon.

     In December 1998, the Company received $300,000 in exchange for five-year
term notes with warrants. The term notes incurred interest at a rate of 8% per
annum, and interest was payable quarterly in arrears. On April 15, 1999 the term
notes were converted in entirety into 153,633 shares of the Company's common
stock (see Note 7).

6. INCOME TAXES

     Deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                    --------------------------
                                                       1999           1998
                                                    -----------    -----------
<S>                                                 <C>            <C>
Costs capitalized for tax purposes................  $    26,000    $   133,000
  Research tax credits............................      659,000        612,000
  Net operating losses............................   25,738,000     24,965,000
                                                    -----------    -----------
Gross deferred tax assets.........................   26,423,000     25,710,000
Less: valuation allowance.........................   26,423,000     25,710,000
                                                    -----------    -----------
Net deferred tax assets...........................  $        --    $        --
                                                    ===========    ===========
</TABLE>

     The Company has provided a valuation allowance for the full amount of
deferred tax assets since the realization of these future benefits cannot be
reasonably assured as of the end of each related year. If the Company achieves
profitability, the deferred tax assets would be available to offset future
income taxes.

     At December 31, 1999, the Company has available federal net operating loss
carryforwards of approximately $67,469,000 and research and development tax
credit carryforwards of approximately $659,000. The federal carryforwards expire
in years 2002 through 2019. State of Connecticut net operating loss
carryforwards of approximately $56,550,000 expire in years 2000 through 2004.

     As defined in the Internal Revenue Code, certain substantial ownership
changes limit the utilization of the available net operating loss and tax credit
carry forwards. The Company has experienced a number of substantial ownership
changes, which limit the amount of pre-change loss carry forwards that can be
utilized in any one taxable year as follows:

<TABLE>
<CAPTION>
  DATE NOL                                       FEDERAL LOSS
WAS GENERATED                                    CARRY FORWARD    ANNUAL LIMITATION
-------------                                    -------------    -----------------
<S>                                              <C>              <C>
9/87 -- 12/89..................................   $   333,000        $   32,000
1/90 -- 12/91..................................   $ 1,807,000        $  386,000
1/92 -- 06/94..................................   $11,749,000        $1,437,000
</TABLE>

     The remaining $53,580,000 of federal net operating loss carry forwards is
not limited unless a substantial ownership change occurs in the future.

7. SHAREHOLDERS' EQUITY

  Capital Stock Transactions

     On July 30, 1997, the Company initiated a private offering of up to 250
units of its Series A convertible preferred stock and common stock. Each unit
consisted of 5,000 shares of Series A preferred stock and 1,000 shares of common
stock. Under the terms of the offering, each unit had a purchase price of
$20,000, and, if fully subscribed, would raise $5,000,000 before offering
expenses. The preferred shares were convertible to common stock at any time at
the option of the holder, at the greater of $2.50, or 85% of the average closing
bid

                                      F-15
<PAGE>   54
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

price of the common stock for the ten days prior to the date the Company
received a conversion notice. Of the offering proceeds, $500,000 was recorded as
a dividend to reflect the intrinsic value of the preferred shares' conversion
feature. As of December 31, 1997, the initial private placement offering was
fully subscribed at $5,000,000, and 1,250,000 shares of Series A preferred stock
were issued and immediately converted into 1,931,291 shares of common stock.

     On July 19, 1999, at the Annual Meeting of Shareholders, the Company
amended its Certificate of Incorporation to increase the authorized number of
shares of common stock from 18,000,000 to 25,000,000. On July 20, 1998, at the
Annual Meeting of Shareholders, the Company increased the authorized number of
shares of common stock from 15,000,000 to 18,000,000 and amended its
Certification of Incorporation to include the elimination of the Class A Common
Stock and the elimination of the Series A Preferred Stock.

     On September 11, 1998, a member of the Company's board of directors and
shareholder invested $250,000 in exchange for 124,378 shares of common stock
issued at $2.01 per share.

     On November 10, 1998, a member of the Company's board of directors invested
$1,000,000 in exchange for 510,000 shares of common stock and 75,000 warrants
with a maturity date of December 31, 2001 and an exercise price of $2.00 per
share.

     On January 4, 1999, a member of the Company's board of directors and
existing shareholder invested $1,000,000 in exchange for 502,500 shares of
common stock and 75,000 warrants with a maturity date of December 31, 2001 and
an exercise price of $2.00 per share.

     On March 24, 1999, a member of the Company's board of directors and
existing shareholder invested $100,000 in exchange for 47,058 shares of common
stock.

     In connection with the issuance of the 6% Convertible Debentures on March
24, 1999 (see Note 5), approximately $121,000 was allocated to common stock
during 1999 to reflect the intrinsic value of the conversion feature of the
Debentures. This amount was calculated at the commitment date as the difference
between the most beneficial conversion price and the then fair value of the
common stock. The corresponding debt discount was charged to interest expense.
During 1999, the holder of the Debentures converted a total of approximately
$1,167,000 of the outstanding principal balance into 391,120 shares of common
stock.

     On April 15, 1999, the holders of $300,000 term notes converted the notes
in their entirety into 153,633 shares of the Company's common stock.

     On May 3, 1999, an officer of the Company exercised an option to purchase
30,000 shares of common stock at an exercise price of $2.75 per share.

     On September 19, 1999, an officer and existing shareholder of the Company
exercised a warrant to purchase 125,000 shares of common stock in a cashless
transaction in exchange for 67,470 shares of common stock.

  Class A Common

     During 1992, 10,000 shares each of Class A common stock was awarded to two
principal officers of the Company and entitled them to 500 votes for each share
of Class A common stock held on any matter submitted to the shareholders of the
Company for action. The Class A Common Stock was mandatorily redeemable by the
Company on January 1, 1998, and cash payments in the amounts of $10,000 were
made to each of two individuals during the second quarter of 1998.

  Warrants

     In September 1992, the Company granted warrants to purchase 125,000 shares
of common stock at $6 per share to each of its two principal officers. These
warrants are exercisable for a period of five years from the
                                      F-16
<PAGE>   55
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

date of grant. On July 24, 1997, the warrant exercise period was extended to
September 19, 1999. On September 1, 1998, one of the officers exercised the
warrant in a cashless exercise in exchange for 78,559 shares of common stock. On
September 19, 1999 the second officer exercised the warrant in a cashless
exercise in exchange for 67,470 shares of common stock.

     On April 30, 1993, the Company entered into a $2,000,000 sale-leaseback
agreement with a lessor primarily to finance the purchase and construction of
needle assembly machines and production molds. As an inducement, the Company
issued the lessor and its affiliate warrants to purchase up to 47,500 shares of
common stock at $9 per share. The warrants are exercisable through April 30,
2000.

     On July 27, 1993, the Company and the Connecticut Development Authority
("CDA"), an instrumentality of the State of Connecticut, entered into a
$1,000,000 loan agreement, of which $600,000 was advanced in 1993. As an
inducement, the Company issued the CDA a warrant to purchase 100,200 shares of
common stock at $9 per share ("1993 CDA Warrant"). The 1993 CDA Warrant is
exercisable through August 1, 2000. The CDA may require the Company to purchase
the 1993 CDA Warrant at any time between July 27, 1998 and August 1, 2000 at a
price of $3.40 per share.

     On October 28, 1993, the Company and a lessor agreed to a $575,000 increase
in a sale-leaseback agreement for certain machinery and molds. As an inducement,
the Company issued the lessor and its affiliate warrants to purchase 11,876
shares of common stock at $9 per share. The warrants are exercisable through
December 1, 2000.

     In connection with the sale of $4,858,000 of unsecured term notes in 1993
through February 15, 1994 (see Note 5), the Company issued warrants to purchase
539,810 shares of common stock at $9 per share. On January 16, 1997, the Company
advised certain holders of warrants that it was reducing the exercise price from
$9.00 to $7.00 on warrants issued with the unsecured term notes. At the same
time, the Company advised the warrant holders that if the warrants were
exercised into shares of common stock by simultaneously surrendering the related
unsecured term notes, the Company would make payments in lieu of interest
through 1997 at a rate of 8%. As a result of the transaction, warrant holders
surrendered approximately $2,184,000 of the term notes, and exercised warrants
for 311,967 shares of common stock. A one-time charge of $640,000 resulted in
1997 due to the reduction in the warrant exercise price and cash payments in
lieu of interest through 1997. The warrants were exercisable until December 31,
1998. No warrants were exercised during 1998, and on December 31, 1998, the
balance of the warrants expired.

     In March 1994, the Company granted warrants to purchase 16,667 shares of
common stock at $9 per share to a financing company. The warrants were granted
in consideration for a commitment by the financing company to purchase any
shares which may have been returned by investors if the Company had been
required to make a rescission offer to certain investors of its common stock and
convertible preferred stock. The warrants are exercisable at any time until
April 30, 2001.

     On April 1, 1994, the Company and a lessor agreed to a $2,000,000 expansion
of a sale-leaseback agreement for certain machinery and molds. As an inducement,
the Company issued the lessor and its affiliate warrants to purchase 47,500
shares of common stock at $9 per share. The warrants are exercisable through
April 30, 2001.

     On March 7, 1995, the Company issued the CDA warrants to purchase 40,000
shares of common stock at $14.66 per share ("1995 CDA Warrant") in connection
with a $2,500,000 loan from the CDA. The fair value of the warrants on the date
of issuance of $204,000 was recorded as a discount on the debt and a
corresponding increase to common stock. The warrants are exercisable through
March 6, 2002.

     On June 15, 1995, as an inducement for a sale-leaseback commitment with an
equipment leasing company (see Note 5), the Company issued warrants to purchase
6,355 shares of common stock at an exercise price of $13.63 per share with an
exercise period of five years.

                                      F-17
<PAGE>   56
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     On June 15, 1995 the Company and the CDA entered into a Warrant
Modification Agreement pursuant to which: (i) each of the CDA Warrants may be
exercised by surrender of the instruments evidencing the Company's indebtedness
incurred in connection with the issuance of such warrant; (ii) the Company
agreed to permit the CDA's net exercise of the CDA Warrants based upon the
difference between the fair market value (as defined) of the Company's common
stock on the date of such exercise and the respective exercise price; provided,
however, that the CDA shall exercise its warrants first by surrender of debt, as
described above; (iii) the CDA waived the right to redeem the 1995 CDA Warrant;
and (iv) the CDA agreed to partially exercise the 1993 CDA Warrant by
surrendering the CDA Notes in exchange for shares of common stock and agreed to
receive a replacement redeemable warrant exercisable at $9.00 per share for the
balance of the shares subject to the 1993 CDA Warrant. The warrants are
exercisable at any time between July 27, 1998 and August 1, 2000. Effective July
1, 1995, the CDA partially exercised the 1993 CDA Warrant for 57,531 shares of
common stock and received a replacement warrant for the unexercised portion of
the 1993 CDA Warrant or 42,669 shares of common stock.

     On August 4, 1995 the Company sold to certain investors in a private
placement $4,000,000 of notes with detachable warrants for common stock. The
161,551 Private Placement Warrants are exercisable at $12.38 per share. They are
not exercisable until the first anniversary of issuance and expire on the fifth
anniversary of issuance. On January 29, 1997, certain warrants related to these
Private Placement Notes were exercised for 35,714 shares of common stock at an
exercise price of $7 per common share. Net proceeds to the Company as a result
of the exercise were $250,000.

     On August 7, 1995, the Company received a commitment to provide $1,000,000
of additional financing from one of its equipment lenders. As an inducement to
obtain the commitment, the Company granted warrants to purchase 12,255 shares of
Common Stock at an exercise price of $12.24 per share. The warrants are
exercisable from August 7, 1996 through August 6, 2003.

     On June 28, 1996, as an inducement for a sale-leaseback commitment with an
equipment leasing company (see Note 5), the Company issued warrants to purchase
16,851 shares of common stock at an exercise price of $11.28 per share with an
exercise period of five years.

     On September 8, 1998, the Company received $250,000 from an officer of the
company in exchange for a one-year promissory term note with warrants. With the
note, there were 30,000 common stock warrants issued with a three-year life and
an exercise price of $2.09 per share.

     On November 10, 1998, a member of the Company's board of directors and
existing shareholder invested $1,000,000 in exchange for 510,000 shares of
common stock and 75,000 warrants with a maturity date of December 31, 2001 and
an exercise price of $2.00 per share.

     On January 4, 1999, a member of the Company's board of directors and
existing shareholder invested $1,000,000 in exchange for 502,500 shares of
common stock and 75,000 warrants with a maturity date of December 31, 2001 and
an exercise price of $2.00 per share.

     On April 27, 1999, in connection with the issuance of the 6% Convertible
Debentures (see Note 5), the Company granted to the holder of the Debentures a
warrant to purchase 500,000 shares of the Company's common stock at an exercise
price of $3.38 per share.

     On April 27, 1999, the Company granted warrants to certain investment
banking firms and professionals to purchase an aggregate of 28,572 shares of the
Company's common stock at an exercise price of $4.38 per share and an aggregate
of 56,547 shares of the Company's common stock at an exercise price of $3.54 per
share. The warrants are exercisable through April 27, 2004.

     On October 18, 1999, the Company granted warrants to purchase 15,000 shares
of the Company's common stock to its Chairman of the Board. The warrants are
exercisable through October 18, 2004 at an exercise price of $3.81.
                                      F-18
<PAGE>   57
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     Pending consummation of the Permanent Financing, on October 21, 1999, the
Company issued to the Purchasers the First Bridge Note. In January 2000, the
interest rate on the First Bridge Note was increased to 12% per annum. In
connection with the issuance of the First Bridge Note the Company also issued to
the Purchasers (i) the $3 Warrants and (ii) the $5 Warrants. At the Purchaser's
election and contingent upon the satisfaction of certain criteria at the closing
of the Permanent Financing, or within six months and one day thereafter, the
exercise price of the $3 Warrants will increase to $4.00 per share of Common
Stock. The exercise price of the $5 Warrants will increase to $7.00 per share of
Common Stock upon the earlier of the closing of the Permanent Financing and
October 21, 2000. The $5 Warrants contain a net-exercise provision.

     Pursuant to the provisions of certain of the warrant documents, the Company
must recalculate the number of shares and exercises prices of the warrants if
the Company subsequently issues shares of stock at prices lower than the
original exercise prices of the warrants. Because the Company has issued shares
below the warrant exercises prices of certain of the above warrants, a
recalculation was performed as of December 31, 1999. This recalculation resulted
in 267,712 additional warrants outstanding with adjusted exercise prices ranging
from $3.30 to $8.46.

     The Company has reserved shares of common stock as follows:

<TABLE>
<CAPTION>
                                                     DECEMBER 31,    DECEMBER 31,
                                                         1999            1998
                                                     ------------    ------------
<S>                                                  <C>             <C>
Warrants...........................................   3,957,704         850,693
Stock Options......................................     809,083         842,000
                                                      ---------       ---------
                                                      4,766,787       1,692,693
                                                      =========       =========
</TABLE>

8. STOCK PLAN

     The Company established the 1991 Long Term Incentive Plan (the "Plan")
under which the Board of Directors may grant awards to employees and directors
of the Company. Awards will be granted at the fair value of the common stock at
the time of grant, as determined by the Board of Directors. Awards under the
Plan may be made in a variety of forms, including stock options, incentive stock
options (within the meaning of Section 422A of the Internal Revenue Code of
1986) and restricted stock. Stock appreciation rights may accompany stock
options, and restricted stock may be accompanied by grants of performance
shares. All awards under the Plan have been stock options. Such options
generally vest over a period of three to five years and are exercisable over a
period of ten years from the date of grant.

     On July 17, 1996 at the Annual Meeting of Shareholders, an amendment to the
1991 Long-Term Incentive Plan was adopted which increased the number of shares
of common stock subject to the Incentive Plan from 750,000 to 1,000,000. A
committee of outside directors administers the Incentive Plan; imposes limits on
awards to executives; eliminates sequential exercise of outstanding options;
imposes restrictions on the cash exercise of stock appreciation rights in
certain circumstances; and effects certain other technical and conforming
changes.

     A summary of stock option activity under the Plan is as follows:

<TABLE>
<CAPTION>
                                                       NUMBER OF     EXERCISE
                                                        OPTIONS        PRICE
                                                       ---------    -----------
<S>                                                    <C>          <C>
Outstanding at December 31, 1996.....................   326,100
Granted -- 1997......................................   189,800     4.00 - 9.50
Canceled -- 1997.....................................   (53,750)           9.25
Exercised -- 1997....................................   (36,000)           1.38
                                                       --------
</TABLE>

                                      F-19
<PAGE>   58
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                       NUMBER OF     EXERCISE
                                                        OPTIONS        PRICE
                                                       ---------    -----------
<S>                                                    <C>          <C>
Outstanding at December 31, 1997.....................   426,150

Granted -- 1998......................................   192,500     4.00 - 4.75
Canceled -- 1998.....................................  (168,750)    4.00 - 9.25
Exercised -- 1998....................................   (21,000)           1.38
                                                       --------
Outstanding at December 31, 1998.....................   428,900

Granted -- 1999......................................   153,000     2.16 - 2.56
Canceled -- 1999.....................................    (6,833)    2.75 - 9.25
Exercised -- 1999....................................   (32,917)           2.75
                                                       --------
Outstanding at December 31, 1998.....................   542,150
                                                       ========
</TABLE>

     There are 483,816 stock options exercisable under the Plan at December 31,
1999.

     The following summarizes additional information about stock options
outstanding at December 31, 1999:

<TABLE>
<CAPTION>
              OPTIONS
            OUTSTANDING                                       OPTIONS
           --------------    WEIGHTED                       EXERCISABLE
               NUMBER         AVERAGE                          NUMBER
           OUTSTANDING AT    REMAINING       WEIGHTED      EXERCISABLE AT      WEIGHTED
EXERCISE    DECEMBER 31,    CONTRACTUAL      AVERAGE        DECEMBER 31,       AVERAGE
 PRICE          1999           LIFE       EXERCISE PRICE        1999        EXERCISE PRICE
--------   --------------   -----------   --------------   --------------   --------------
<S>        <C>              <C>           <C>              <C>              <C>
  1.38         23,000          1.42            1.38            23,000            1.38
  2.16        150,000          9.25            2.16           150,000            2.16
  2.56          3,000          9.25            2.56                --            2.56
  2.75        343,650          7.11            2.75           288,316            2.75
  6.00         22,500          2.67            6.00            22,500            6.00
              -------                                         -------
              542,150                                         483,816
              =======                                         =======
</TABLE>

     The Company follows Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" (APB 25) and related Interpretations in
accounting for its employee stock options. Under APB 25, because the exercise
price of the Company employee stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

     Had compensation expense been recognized based on the fair value of the
options at their grant dates, as prescribed in Financial Accounting Standard No.
123, the Company's net loss and net loss per share would have been as follows:

<TABLE>
<CAPTION>
                                                YEAR ENDED           YEAR ENDED
                                             DECEMBER 31, 1999    DECEMBER 31, 1998
                                             -----------------    -----------------
<S>                                          <C>                  <C>
Net loss:
  As reported..............................     $(5,233,000)         $(2,960,000)
  Pro forma under FAS 123..................     $(7,338,000)         $(3,137,000)
Net loss per share:
  As reported..............................            (.39)                (.24)
  Pro forma under FAS 123..................            (.54)                (.26)
</TABLE>

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions for
options granted from 1995 to 1999: dividend yield of 0%, risk

                                      F-20
<PAGE>   59
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

free interest rate ranged from 5.4% to 6.23%, expected volatility factor ranged
from 114% to 118%, and an expected option term of ten years.

     On January 20, 1999, the Board of Directors voted favorably to reduce the
exercise prices effective on March 15, 1999 on existing employee stock options
awarded under the 1991 Long Term Incentive Plan to $2.75 per share. This
reduction was made in an effort to more appropriately value the options given
the decline in the Company's stock price since the original grant dates.

     At the Annual Meeting of Shareholders in 1997, the shareholders approved
the adoption of the 1995 Non-Employee Director's Stock Option Plan (the
"Directors' Plan"). The Directors' Plan includes 50,000 shares of common stock
reserved for issuance to non-employee directors. Eligible directors will receive
options for 1,000 shares of common stock upon their election and subsequent
reelection. Current non-employee directors received an option for 1,000 shares
for each calendar year they served as a director prior to the adoption of the
Directors' Plan. All options granted vest one year after the grant and have an
exercise price equal to the fair market value of the shares at the time of the
grant.

     A summary of the stock option activity under the Plan is as follows:

<TABLE>
<CAPTION>
                                                       NUMBER OF      EXERCISE
                                                        SHARES         PRICE
                                                       ---------    ------------
<S>                                                    <C>          <C>
Outstanding at December 31, 1996.....................   18,000
Granted -- 1997......................................    5,000              3.00
                                                        ------
Outstanding at December 31, 1997.....................   23,000
Granted -- 1998......................................    5,000       3.00 - 3.25
Canceled -- 1998.....................................   (7,000)     3.00 - 11.75
                                                        ------
Outstanding at December 31, 1998.....................   21,000
Granted -- 1999......................................    3,000              4.25
Canceled -- 1999.....................................   (1,000)             3.25
                                                        ------
Outstanding at December 31, 1999.....................   23,000
                                                        ======
</TABLE>

9. LEASES

     At December 31, 1999, the Company was committed under operating leases.
Minimum lease payments under these noncancelable leases in the next five years
are: 2000 -- $38,000; 2001 -- $11,000; thereafter -- $0. Rent expense was
$306,000 in 1997, $191,000 in 1998, and $62,000 in 1999.

10. COMMITMENTS AND CONTINGENCIES

     As of December 31, 1999 the Company had capital expenditure purchase
commitments outstanding of approximately $716,000, which were comprised of new
machinery & equipment and tooling for production of product.

11. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying amount for cash and cash equivalents approximates fair value
because of the short-term nature of these instruments. The carrying amount for
accounts receivable, note payable, accounts payable, accrued expenses, product
replacement costs and deferred revenues are deemed reasonable because of the
short-term nature of these items.

                                      F-21
<PAGE>   60
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     The following table represents the fair value of the Company's long-term
debt. Such values are estimated based upon the current rates that would be
offered to the Company on similar debt.

<TABLE>
<CAPTION>
        DECEMBER 31, 1999              DECEMBER 31, 1998
---------------------------------   -----------------------
      CARRYING            FAIR       CARRYING       FAIR
       AMOUNT            VALUE        AMOUNT       VALUE
---------------------  ----------   ----------   ----------
<S>                    <C>          <C>          <C>
$2,192,000             $1,740,000   $2,305,000   $1,963,000
</TABLE>

12. LICENSING AND DISTRIBUTION AGREEMENTS

     On January 28, 1997 the Company entered into a Development and License
Agreement and a Supply Agreement with Johnson & Johnson Medical, Inc. ("JJM") of
Arlington, Texas. Under the terms of the agreements, the Company would develop
and manufacture safety needle assemblies for JJM utilizing its self-blunting
technology, which would be used by JJM, under an exclusive world-wide license
granted by the Company, to manufacture and sell a new safety I.V. catheter. The
Company received $2,900,000 in licensing fees and funding to complete the
development of the safety needle assemblies and for the development of the
manufacturing equipment and tooling. JJM agreed to acquire initial production
equipment and tooling which was completed in 1998. During 1997, $1,500,000 in
licensing fee revenue was recognized. Development funding of $841,000 and
$559,000 were recognized as a reduction in research and development expenses
during 1998 and 1997, respectively.

     On April 9, 1998, the Company amended the Development and License Agreement
and canceled the Supply Agreement with JJM. The amended terms include certain
changes in the licensing and royalty agreements as well as the transfer of
manufacturing of the safety needle assemblies to JJM, in exchange for an initial
milestone payment of $3,500,000, with an additional $500,000 payable upon the
completion of certain milestones. The $3,500,000 payment was recorded as
deferred revenue and $875,000 and $2,625,000 was recognized into income during
1999 and 1998, respectively. The revised agreement also provided for an
additional $300,000 payable to the Company for initial capital equipment
purchases and the payment of certain minimum annual royalties. Capital equipment
sales to JJM amounted to approximately $164,000 during 1999.

     In December of 1998, the Company completed the construction of an automated
assembly machine for JJM under the terms of the amended agreement, and the
equipment was transferred to JJM's manufacturing facility. During the first
quarter of 1999, the Company continued to perform services for JJM under the
terms of the agreement; however, by the end of the first quarter of 1999,
substantially all of the contractual obligations had been met by the Company.
During the second and third quarters of 1999, the Company has continued to
provide consulting and engineering work for JJM for the I.V. catheter project;
however, this revenue is outside of the original agreements with JJM.

     In October 1998, the Company entered in to a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific provides more than 245,000 products and services
to research, healthcare, industrial, educational and government customers in 145
countries. The distribution agreement allows Fisher HealthCare to purchase and
distribute all of the Bio-Plexus blood collection products.

     On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation (subsequently known as Kendall Healthcare Products Company
("Kendall")), a subsidiary of Tyco and a major supplier of sharps containers in
the United States. The agreement allows Kendall to purchase and distribute
Bio-Plexus Drop-It(R) Needle Disposal Containers and Drop-It(R) Quick Release
Needle Holders. The agreement has an initial term of three years, and shall be
automatically renewed for an additional year, unless either party notifies the
other of its intent not to renew.

                                      F-22
<PAGE>   61
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     On October 23, 1998, the Company entered into an exclusive License
Agreement and Design, Development and Asset Transfer Agreement for a safety
Peripherally Inserted Central Catheter ("PICC") introducer with TFX Medical
("TFX"), a division of Teleflex Incorporated, a supplier of PICC introducers.
The License Agreement includes certain minimum annual volume requirements and
ongoing royalties on the sale of PICC introducer catheters featuring
Punctur-Guard(R) technology. Under the Design, Development and Asset Transfer
Agreement, the Company would design and develop safety needle assemblies to be
used with the TFX peelable catheter, and would modify existing manufacturing
equipment to be transferred to TFX pursuant to the terms and conditions of the
agreement. On July 26, 1999, an agreement was entered into with TFX to modify
the License Agreement dated October 23, 1998. The amended agreement included
additional licensing fees and changes in royalty revenue in exchange for TFX's
right to exclusively market to one of its customers. In the first quarter of
2000, the Company completed its obligations under the Design, Development and
Asset Transfer Agreements.

13. SEGMENT FINANCIAL DATA

     The Company's operations consist of two worldwide business segments: Safety
Medical Products and Accessories and Joint Venture Design & Development. The
Safety Medical Products and Accessories segment includes operations associated
with the manufacture of blood collection needles, needle holders and needle
disposal containers. The Joint Venture Design & Development segment includes
operations associated with product design and development, product licensing,
and the design, development and construction for machinery and tooling in
connection with joint venture partners.

     Distinct reporting by such segments was deemed necessary by management
based on the significance of reported revenues and expenses and the Company's
intention to focus operating resources in both of these areas.

     Information with respect to each of the Company's business segments is as
follows:

  Segment Revenue

<TABLE>
<CAPTION>
                                                    1999          1998          1997
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Safety Medical Products and Accessories........  $5,449,000    $3,636,000    $3,542,000
Joint Venture Design & Development.............   1,575,000     5,671,000     1,500,000
                                                 ----------    ----------    ----------
Total Consolidated Revenue.....................  $7,024,000    $9,307,000    $5,042,000
                                                 ==========    ==========    ==========
</TABLE>

  Major Customers

     The Company had one customer in the Safety Medical Products and Accessories
segment, a domestic distributor of product, which accounted for approximately
52%, 31% and 48% of consolidated revenues for 1999, 1998 and 1997, respectively.
Another domestic distributor of product in this segment accounted for
approximately 13% of consolidated revenues for 1999. The Company had export
sales in this segment of approximately $548,000 in 1999, $260,000 in 1998, and
$385,000 in 1997.

     The Company had one customer in the Joint Venture Design & Development
segment which accounted for approximately 18%, 60% and 30% of consolidated
revenues in 1999, 1998 and 1997, respectively.

                                      F-23
<PAGE>   62
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

  Segment Operating Profit (Loss)

<TABLE>
<CAPTION>
                                                1999           1998            1997
                                             -----------    -----------    ------------
<S>                                          <C>            <C>            <C>
Safety Medical Products and Accessories....  $ 2,289,000    $   435,000    $ (1,441,000)
Joint Venture Design & Development.........    1,706,000      3,361,000         173,000
                                             -----------    -----------    ------------
Total Consolidated Operating Profit
  (Loss)...................................    3,995,000      3,796,000      (1,268,000)
                                             -----------    -----------    ------------
Selling, General and Administrative
  Expenses.................................   (4,937,000)    (4,310,000)     (6,500,000)
Other......................................   (1,924,000)    (1,857,000)       (758,000)
Financing Expenses.........................   (2,367,000)      (589,000)     (3,786,000)
                                             -----------    -----------    ------------
Net Loss...................................  $(5,233,000)   $(2,960,000)   $(12,312,000)
                                             ===========    ===========    ============
</TABLE>

     For the Safety Medical Products and Accessories segment, operating profit
(loss) consists of total revenues less cost and expenses. In the Joint Venture
Design and Development segment, operating profit consists of total revenues less
costs and expenses and research and development expenses.

  Segment Capital Expenditures

<TABLE>
<CAPTION>
                                                        1999       1998        1997
                                                      --------    -------    --------
<S>                                                   <C>         <C>        <C>
Safety Medical Products and Accessories.............  $501,000    $82,000    $718,000
Joint Venture Design & Development..................        --         --          --
                                                      --------    -------    --------
Total Consolidated Capital Expenditures.............  $501,000    $82,000    $718,000
                                                      ========    =======    ========
</TABLE>

     Net identifiable assets related to Safety Medical Products and Accessories
were $2,198,000, $2,343,000, and $4,321,000 at December 31, 1999, 1998 and 1997,
respectively. Depreciation expense related to these assets was $269,000,
$729,000, and $1,091,000 for the years ended December 31, 1999, 1998 and 1997,
respectively. Due to the "service" nature of the Joint Venture Design and
Development segment, identifiable assets were not material for the periods
presented.

14. PRODUCT RECALL

     During the fourth quarter of 1998, the Company recalled certain of its
blood collection needle products due to mislabeling pertaining to the shelf-life
of certain product manufactured during the latter part of 1996 and in 1997. The
number of units was estimated to be approximately 1,600,000 units, of which
1,333,000 units were located at a foreign distributor. Domestically, replacement
product was shipped to customers, or credit was granted towards future product
shipments. These costs were recorded in cost of goods sold during the fourth
quarter of 1998. The Company agreed to ship replacement product to its foreign
distributor regarding the product in Europe. The total estimated cost of the
product in Europe was approximately $222,000, and was recorded as cost of goods
sold expense in the fourth quarter of 1998 with a corresponding short-term
liability recorded on the Company's balance sheet. Ultimately, the Company
replaced the product at its distributor in Europe. Total costs related to the
recall were approximately $275,000.

15. SUBSEQUENT EVENTS

     In January 2000, the Company entered into a distribution agreement with
Owens & Minor, a major distributor of medical products to hospitals through the
United States. Owens & Minor, a Fortune 500 company headquartered in Richmond,
Virginia, is a distributor of national brand medical and surgical supplies. The
company's distribution centers serve hospitals, integrated healthcare systems
and group purchasing organizations nationwide. The distribution agreement allows
Owens & Minor to purchase and distribute all of the Bio-Plexus blood collection
products.

                                      F-24
<PAGE>   63
                                BIO-PLEXUS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     On February 21, 2000, the Company entered into a distribution agreement
with McKessonHBOC Medical Group of Richmond, Virginia. McKessonHBOC's Supply
Management Business is a distributor of medical-surgical supplies to more than
5,000 hospitals nationwide. The agreement allows McKessonHBOC to purchase and
distribute the Company's products on a non-exclusive basis without territorial
limitations or restrictions. The agreement is in effect for a period of five
years and shall continue automatically in effect for successive terms of five
years each until terminated by either party.

     On February 29, 2000, a director of the Company effected a net exercise of
180,000 stock options in exchange for 63,625 shares of common stock.

     On January 5, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $1.65 million
(the "Second Bridge Note"). In connection with the issuance of the Second Bridge
Note the Company also agreed to issue and sell on the earlier of (i) April 30,
2000 and (ii) the closing of the Permanent Financing, five-year warrants to
acquire up to 200,000 shares of Common Stock at an initial exercise price of
$3.00 per share (the "Second Bridge Warrants"). The Second Bridge Warrants
contain a net-exercise provision.

     On April 3, 2000, the Company issued to the Purchasers a 15%
non-convertible secured note in the aggregate principal amount of $2.2 million
(the "Third Bridge Note"). No warrants or convertible securities were issued in
connection with the Third Bridge Note. The First Bridge Note, the Second Bridge
Note and the Third Bridge Note are collectively referred to as the "Bridge
Notes". The issuance of the Bridge Notes, the First Bridge Warrants and the
Second Bridge Warrants are collectively referred to as the "Bridge
Transactions".

     The Bridge Notes are not convertible into shares of Common Stock and are
required to be paid-in-full (together with accrued interest) at the closing of
the Permanent Transaction.

                                      F-25
<PAGE>   64

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
 INDEX
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
  1.2        Form of Advest, Inc. Warrant...........    Incorporated by reference to Exhibit
                                                        1.2 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
  1.3        Form of Advest, Inc. Registration
             Rights Agreement.......................    Incorporated by reference to Exhibit
                                                        1.3 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
  3.1        Certificate of Incorporation of the
             Company, as amended....................    Incorporated by reference to Exhibit
                                                        3.1 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended September 30, 1998 (File No.
                                                        0-24128).
  3.2        Bylaws of the Company, as amended......    Incorporated by reference to Exhibit
                                                        3.2 to the Registrant's Annual Report
                                                        on Form 10-K filed on April 13, 1998
                                                        (File No. 0-24128).
 10.3        Master Lease Agreement, dated April 30,
             1993, between the Company and Aberlyn
             Capital Management and its Affiliate,
             Aberlyn................................    Incorporated by reference to Exhibit
                                                        10.3 to the Registrant's registration
                                                        statement on Form S-1 filed on April 1,
                                                        1994 (File No. 33-77202).
 10.4        Purchase and Sale Agreement, as
             amended, for 129 Reservoir Road,
             Vernon, Connecticut, dated October 28,
             1994, between the Company and Victor
             and Margaret DeMattia..................    Incorporated by reference to Exhibit
                                                        10.4 to the Registrant's Annual Report
                                                        on Form 10-K filed on March 30, 1995
                                                        (File No. 0-24128).
 10.6        Marketing and Distribution Agreement
             dated March 16, 1995, between the
             Company and Allegiance.................    Incorporated by reference to Exhibit
                                                        10.6 to the Registrant's Amendment No.
                                                        2 to Annual Report on Form 10-K filed
                                                        on June 30, 1995 (File No. 0-24128).
 10.7        1991 Long-Term Incentive Plan..........    Incorporated by reference to Exhibit
                                                        10.7 to the Registrant's Amendment No.
                                                        2 to Annual Report on Form 10-K filed
                                                        on June 30, 1995 (File No. 0-24128).
 10.12       Master Equipment Lease Agreement dated
             as of March 8, 1995, between the
             Company and Financing for Science
             International, Inc. ...................    Incorporated by reference to Exhibit
                                                        10.12 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24128).
 10.13       1995 Non-Employee Directors' Stock
             Option Plan............................    Incorporated by reference to Exhibit
                                                        10.13 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24118).
</TABLE>
<PAGE>   65

<TABLE>
<CAPTION>
EXHIBIT
 INDEX
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.15       Letter Agreement with Aberlyn Capital
             Management Limited Partnership.........    Incorporated by reference to Exhibit
                                                        10.15 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on June 30, 1995 (File No.
                                                        0-24128).
 10.16       Employment Agreement dated January 13,
             1997 between the Company and Lucio
             Improta................................    Incorporated by reference to Exhibit
                                                        10.15 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on March 31, 1997 (File No.
                                                        0-24128).
 10.17       Term Sheet dated August 1, 1997
             describing arrangement between the
             Company and Ronald Haverl..............    Incorporated by reference to Exhibit
                                                        10.17 to the Registrant's Annual Report
                                                        on Form 10-K/A filed on April 30, 1998
                                                        (File No. 0-24128).
 10.18       Development and License Agreement dated
             January 28, 1997 by and between the
             Company and Johnson & Johnson Medical,
             Inc. ..................................    Incorporated by reference to Exhibit
                                                        10.18 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.19       Supply Agreement dated January 28, 1997
             by and between the Company and Johnson
             & Johnson Medical, Inc. ...............    Incorporated by reference to Exhibit
                                                        10.18 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.20       Term Promissory Note issued to Carl R.
             Sahi*..................................    Incorporated by reference to Exhibit
                                                        10.20 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.21       Warrant for shares of common stock
             issued to Carl R. Sahi*................    Incorporated by reference to Exhibit
                                                        10.21 to the Registrant's Quarterly
                                                        Report on Form 10-Q for the quarter
                                                        ended on September 30, 1998 (File No.
                                                        0-24128).
 10.22       Subscription Agreement dated April 27,
             1999 by and between the Company and
             Ramius Capital Group, LLC..............    Incorporated by reference to Exhibit
                                                        10.22 to the Registrant's Form S-3
                                                        filed on May 18, 1999 and amended on
                                                        June 23, 1999, July 30, 1999, August
                                                        24, 1999 and September 15, 1999 (File
                                                        No. 333-79671).
 10.23       Form of Debenture dated April 27, 1999
             by and between the Company and Ramius
             Capital Group, LLC.....................    Incorporated by reference to Exhibit
                                                        10.23 to the Registrant's Form S-3
                                                        filed on May 18, 1999 and amended on
                                                        June 23, 1999, July 30, 1999, August
                                                        24, 1999 and September 15, 1999 (File
                                                        No. 333-79671).
</TABLE>
<PAGE>   66

<TABLE>
<CAPTION>
EXHIBIT
 INDEX
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.23a      Letter Agreement dated September 13,
             1999 between the Company and Ramius
             Capital Group, LLC.....................    Incorporated by reference to Exhibit
                                                        10.23a to the Registrant's Form S-3
                                                        filed on May 18, 1999 and amended on
                                                        June 23, 1999, July 30, 1999, August
                                                        24, 1999 and September 15, 1999 (File
                                                        No. 333-79671).
 10.24       Form of Warrant granted by the Company
             to Ramius Capital Group, LLC...........    Incorporated by reference to Exhibit
                                                        10.24 to the Registrant's Form S-3
                                                        filed on May 18, 1999 and amended on
                                                        June 23, 1999, July 30, 1999, August
                                                        24, 1999 and September 15, 1999 (File
                                                        No. 333-79671).
 10.25       Registration Rights Agreement by and
             between the Company and Ramius Capital
             Group, LLC.............................    Incorporated by reference to Exhibit
                                                        10.25 to the Registrant's Form S-3
                                                        filed on May 18, 1999 and amended on
                                                        June 23, 1999, July 30, 1999, August
                                                        24, 1999 and September 15, 1999 (File
                                                        No. 333-79671).
 10.30       7.5% Secured Note dated as of October
             21, 1999 between the Company and
             Appaloosa Investment Limited
             Partnership I, L.P.....................    Filed with this Report.
 10.30(1a)   First Amendment to 7.5% Secured Note
             dated as of December 30, 1999..........    Filed with this Report.
 10.30(2a)   Second Amendment to 7.5% Secured note
             dated as of April 3, 2000..............    Filed with this Report.
 10.31       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $3.00 per Share......    Filed with this Report.
 10.32       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $5.00 per Share......    Filed with this Report.
 10.33       Form of Convertible Note Purchase
             Agreement..............................    Filed with this Report.
 10.34       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $7.00 per Share......    Filed with this Report.
 10.35       Registration Rights Agreement between
             the Company, Appaloosa Investment
             Limited Partnership I, L. P. and
             certain entities related thereto.......    Filed with this Report.
 10.36       Form of Rollover Registration Rights
             Agreement..............................    Filed with this Report.
 10.37       Security Agreement between the Company
             and Appaloosa Investment Limited
             Partnership I, L.P. ...................    Filed with this Report.
 10.38       Letter Agreement dated October 21, 1999
             between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 10.39       Form of Warrant to Purchase Shares of
             Common Stock of the Company at a
             Purchase Price of $3.00 per Share......    Filed with this Report.
 10.40       15% Secured Note dated as of January 5,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
</TABLE>
<PAGE>   67

<TABLE>
<CAPTION>
EXHIBIT
 INDEX
  NO.                      DESCRIPTION                             METHOD OF FILING
-------      ---------------------------------------    ---------------------------------------
<C>          <S>                                        <C>
 10.40(1a)   First Amendment to 15% Secured Note
             dated as of April 3, 2000 between the
             Company and Appaloosa Investment
             Limited Partnership I, L.P.............    Filed with this Report.
 10.41       Form of Warrant to Purchase Shares of
             Common Stock of the Company............    Filed with this Report.
 10.42       15% Secured Note dated as of April 3,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 10.43       Letter Agreement dated as of April 3,
             2000 between the Company and Appaloosa
             Investment Limited Partnership I,
             L.P....................................    Filed with this Report.
 23          Consent of Mahoney, Sabol & Company,
             LLP....................................    Filed with this report.
 27          Financial Data Schedule................    Filed with this report.
</TABLE>

---------------
* This exhibit is a management contract or employment contract required to be
  filed as an exhibit to this Form 10-K pursuant to Item 14(c).