<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


For  Quarter Ended September 30, 1996             Commission File Number 0-19841
                                                                         -------


                               i-STAT Corporation
             (Exact name of registrant as specified in its charter)


        Delaware                                             22-2542664
(State or other jurisdiction of                            (IRS employer
incorporation or organization)                           Identification No.)



               303 College Road East, Princeton, New Jersey 08540
                    (Address of principal executive offices)


                                 (609) 243-9300
              (Registrant's telephone number, including area code)


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


The number of shares outstanding of each of the Issuer's classes of common stock
as of the latest practicable date.

<TABLE>
<CAPTION>
             Class                                        October 25,1996
             -----                                        ---------------
<S>                                                          <C>       
  Common Stock, $ .15 par value                              11,210,617
</TABLE>
<PAGE>   2


                               i-STAT CORPORATION


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                    PAGE
                                                                                                   NUMBER
                                                                                                   ------
<S>                                                                                                <C>
PART I.     FINANCIAL INFORMATION

            ITEM 1 - Financial Statements

            Consolidated Condensed Statements of Operations for the three
               months and nine months ended September 30, 1996 and 1995 ...........................   3

            Consolidated Condensed Balance Sheets
               as of September 30, 1996 and December 31, 1995. ....................................   4

            Consolidated Condensed Statements of Cash Flows for the nine
               months ended September 30, 1996 and 1995 ...........................................   5

            Notes to Consolidated Condensed Financial Statements ..................................   6

            ITEM 2 - Management's Discussion and Analysis of Financial
                                  Condition and Results of Operations ............................. 7-9


PART II.    OTHER INFORMATION

            ITEM 1 - Legal Proceedings.............................................................  10

            ITEM 2 - Changes in Securities......................................................... N/A

            ITEM 3 - Defaults upon Senior Securities............................................... N/A

            ITEM 4 - Submission of Matters to a Vote of
                            Security Holders....................................................... N/A

            ITEM 5 - Other Information............................................................. N/A

            ITEM 6 - Exhibits and Reports on Form 8-K..............................................  11


SIGNATURES    .....................................................................................  12
</TABLE>
<PAGE>   3
                               i-STAT CORPORATION

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
           (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
                                   (unaudited)


<TABLE>
<CAPTION>
                                              Three Months Ended                      Nine Months Ended
                                                  September 30,                          September 30,
                                        --------------------------------        --------------------------------
                                            1996                1995                1996                1995
                                        ------------        ------------        ------------        ------------
<S>                                     <C>                 <C>                 <C>                 <C>         
Net sales ..........................    $      7,772        $      5,591        $     20,923        $     14,075
Cost of sales ......................          (6,650)             (5,849)            (19,085)            (16,613)
                                        ------------        ------------        ------------        ------------
             Gross profit (loss) ...           1,122                (258)              1,838              (2,538)
                                        ------------        ------------        ------------        ------------


Operating expenses:
       Research and development ....           1,512               1,326               4,196               3,979
       General and administrative ..           1,386               1,247               4,047               3,631
       Sales and marketing .........           2,724               2,636               8,639               8,019
                                        ------------        ------------        ------------        ------------
       Total operating expenses ....           5,622               5,209              16,882              15,629
                                        ------------        ------------        ------------        ------------
             Operating loss ........          (4,500)             (5,467)            (15,044)            (18,167)
                                        ------------        ------------        ------------        ------------

Other income (expenses), net .......             491                 555               1,646                 283
                                        ------------        ------------        ------------        ------------


Net loss ...........................    ($     4,009)       ($     4,912)       ($    13,398)       ($    17,884)
                                        ============        ============        ============        ============

Net loss per share .................    ($      0.30)       ($      0.37)       ($      1.01)       ($      1.52)
                                        ============        ============        ============        ============

Shares used in computing
    net loss per share .............      13,326,127          13,200,238          13,311,853          11,752,065
                                        ============        ============        ============        ============
</TABLE>



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

                                       3
<PAGE>   4
                               i-STAT CORPORATION

                      CONSOLIDATED CONDENSED BALANCE SHEETS
           (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                   September 30,     December 31,
                                                                                       1996             1995
                                                                                   -------------     ------------
<S>                                                                                 <C>              <C>      
         ASSETS
Current assets:
    Cash and cash equivalents ...............................................       $  33,600        $  47,494
    Short-term investments ..................................................            --              2,025
    Accounts receivable, net ................................................           3,679            4,053
    Inventories .............................................................           8,414            9,003
    Prepaid expenses and other current assets ...............................             581              688
                                                                                    ---------        ---------
        Total current assets ................................................          46,274           63,263

Plant and equipment, net of accumulated depreciation of $11,771 and $9,758 ..          11,061            9,163

Other assets ................................................................           1,569            1,624
                                                                                    ---------        ---------

        Total assets ........................................................       $  58,904        $  74,050
                                                                                    =========        =========


         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable ........................................................       $   1,228        $   1,554
    Accrued expenses ........................................................           3,014            2,527
    Deferred revenue, current ...............................................           3,310             --
                                                                                    ---------        ---------
        Total current liabilities ...........................................           7,552            4,081

Deferred revenue, non-current ...............................................             793            6,375
                                                                                    ---------        ---------

        Total liabilities ...................................................           8,345           10,456
                                                                                    ---------        ---------

Stockholders' equity:
    Preferred Stock, $.10 par value, shares authorized 7,000,000:
        Series A Junior Participating Preferred Stock, $.10 par value,
            1,500,000 shares authorized; none issued ........................            --               --

        Series B Preferred Stock, $.10 par value,
           2,138,702 shares authorized and issued ...........................             214              214

    Common Stock, $.15 par value, shares authorized 25,000,000; shares issued
        11,187,634 at September 30, 1996 and 11,123,698 at
        December 31, 1995 ...................................................           1,678            1,669
    Additional paid-in capital ..............................................         186,148          188,698
    Other, net ..............................................................            (239)          (3,143)
    Accumulated deficit .....................................................        (137,242)        (123,844)
                                                                                    ---------        ---------
        Total stockholders' equity ..........................................          50,559           63,594
                                                                                    ---------        ---------

        Total liabilities and stockholders' equity ..........................       $  58,904        $  74,050
                                                                                    =========        =========
</TABLE>


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

                                       4
<PAGE>   5
                               i-STAT CORPORATION

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS OF DOLLARS)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                         September 30,
                                                                      --------------------
                                                                      1996            1995
                                                                      ----            ----
<S>                                                                <C>             <C>      
Cash flows from operating activities:
   Net loss ................................................       ($13,398)       ($17,884)
   Adjustments to reconcile net loss to net cash used in
   operating activities ....................................           (121)            966
   Change in assets and liabilities ........................          1,375          (5,952)
                                                                   --------        --------

         Net cash used in operating activities .............        (12,144)        (22,870)
                                                                   --------        --------

Cash flows from investing activities:
   Purchase of investments .................................           --           (10,032)
   Sale of investments .....................................          2,025          27,527
   Purchase of equipment ...................................         (3,930)         (2,727)
   Other ...................................................           (116)           (195)
                                                                   --------        --------

         Net cash provided by (used in) investing activities         (2,021)         14,573
                                                                   --------        --------
Cash flows from financing activities:
   Proceeds from sale of Common Stock ......................            366             439
   Proceeds from sale of Preferred Stock ...................           --            59,244
   Purchase of Treasury Stock ..............................             (2)           --
                                                                   --------        --------

         Net cash provided by financing activities .........            364          59,683
                                                                   --------        --------

Effect of currency exchange rate changes on cash ...........            (93)            (23)
                                                                   --------        --------
Net increase (decrease) in cash and cash equivalents .......        (13,894)         51,363
Cash and cash equivalents at beginning of period ...........         47,494           4,719
                                                                   --------        --------
Cash and cash equivalents at end of period .................       $ 33,600        $ 56,082
                                                                   ========        ========
</TABLE>


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

                                        5
<PAGE>   6
                               i-STAT CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)

1.     BASIS OF PRESENTATION
       The information presented as of September 30, 1996 and 1995, and for the
       periods then ended, is unaudited, but includes all adjustments
       (consisting only of normal recurring accruals) which the management of
       i-STAT Corporation (the "Company") believes to be necessary for the fair
       presentation of results for the periods presented. The results for the
       interim periods are not necessarily indicative of results to be expected
       for the year. The year end consolidated condensed balance sheet data was
       derived from the audited financial statements, but does not include all
       disclosures required by generally accepted accounting principles. These
       condensed financial statements should be read in conjunction with the
       Company's audited financial statements for the year ended December 31,
       1995 which were included as part of the Company's Annual Report on Form
       10-K, File No. 0-19841.

2.     NET LOSS PER SHARE
       Net loss per share is calculated using the weighted average number of
       common shares and preferred shares outstanding for all periods presented.
       Preferred shares have been included in the calculation since their date
       of issuance as they are convertible into common shares on a 1:1 basis and
       have substantially the same characteristics as common stock. Options
       outstanding are not included in the calculation as they are
       anti-dilutive.

3.     INVENTORIES
       Inventories consist of the following:
<TABLE>
<CAPTION>
                            September 30, 1996        December 31, 1995
                            ------------------        -----------------
<S>                             <C>                       <C>       
       Raw materials            $ 2,432,000               $3,113,000
       Work in process            1,718,000                1,146,000
       Finished goods             4,264,000                4,744,000
                                -----------               ----------
                                $ 8,414,000               $9,003,000
                                ===========               ==========
</TABLE>

4.     COMMITMENTS AND CONTINGENCIES
       The Company is a defendant in a case entitled Nova Biomedical
       Corporation, Plaintiff v. i-STAT Corporation, Defendant. The Complaint,
       which was filed in the United States District Court for the District of
       Massachusetts on June 27, 1995, alleges infringement by i-STAT of Nova's
       U.S. Patent No. 4,686,479. The Plaintiff seeks unspecified damages and
       that the damages be trebled. Nova also is asking for attorneys' fees and
       prejudgement interest. The case currently is in the pre-trial discovery
       stage. Management intends to contest the case vigorously and does not
       believe that it has infringed the Nova patent. The Company has obtained
       an opinion from recognized patent counsel to the effect that no
       infringement has occurred. However, if the plaintiff should prevail in
       this matter, it could have a material impact on the financial position,
       results of operations and cash flows of the Company. The Company has
       asserted counterclaims under the antitrust laws alleging that Nova
       commenced the action knowing that the patent was not infringed and that
       it had reason to believe that the patent was invalid and unenforceable.

          The Company is a defendant in a class action complaint entitled Susan
       Kaufman, on behalf of herself and all others similarly situated,
       Plaintiff, v. i-STAT Corporation, William P. Moffitt, Lionel N. Sterling,
       Imants R. Lauks and Matthias Plum, Jr. The class action was brought by
       Susan Kaufman on her behalf and on behalf of all purchasers of the
       Company's Common Stock between May 9, 1995 and March 19, 1996. The
       complaint, which was filed in the Superior Court of New Jersey in Mercer
       County on June 19, 1996, alleges New Jersey common law "fraud on the
       market" in connection with certain sales of i-STAT stock by the Company's
       chief executive officer, chief technology officer and two outside
       directors during a nine-month period. The plaintiffs seek unspecified
       compensatory damages, interest and payment of all costs and expenses
       incurred in connection with the class action. Management believes the
       complaint is without merit and intends to vigorously contest it. However,
       if the plaintiff should prevail in this matter, it could have a material
       impact on the financial position, results of operations and cash flows of
       the Company.

                                       6
<PAGE>   7
                               i-STAT CORPORATION

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


GENERAL

      The Company develops, manufactures and markets medical diagnostic products
for blood analysis that provide health care professionals with immediate and
accurate critical diagnostic information at the point of patient care. The
Company markets and distributes its products in the United States and Canada
principally through its own direct sales and marketing organization, in Japan
through Japanese marketing partners and in South America through selected
distribution channels. In February 1996, the Hewlett Packard Company ("HP")
began marketing and distributing the Company's products in certain countries in
Europe through its distribution arrangements with the Company. In April 1996,
the Company and HP entered into a marketing agreement pursuant to which HP and
the Company have begun to jointly market the Company's products into the
critical care departments of hospitals in the United States which meet certain
criteria. The Company is actively planning market introduction into other
foreign markets, including but not limited to, through its arrangements with HP.
During the first three quarters of 1996, international sales as a component of
total sales increased to approximately 34% from approximately 19% in the same
period in 1995. This was due primarily to the introduction of the Company's
blood gas product in Japan, increases in the unit transfer prices specified in
the Company's contracts with its Japanese partners, increased amortization of
deferred revenue, and changes in the Company's U.S. marketing strategy discussed
below. This is not necessarily indicative of a trend. Deferred Japanese revenue
is currently being amortized to income at the rate of approximately $3.2 million
per year ($0.8 million and $2.4 million for the three and nine months ended
September 30, 1996, respectively). Such deferred revenue will be fully amortized
by December 31, 1997, when the period of exclusivity under the Company's
agreements with its Japanese marketing partners comes up for review. Sales to
its Japanese marketing partners represented approximately 81% and 68% of the
Company's international sales (including deferred revenue) during the first nine
months of 1996 and 1995, respectively.

      This management's discussion and analysis of financial condition and
results of operations contains both historical financial information and forward
looking statements. The Company operates in a high technology, emerging market
environment that involves significant risks and uncertainties which may cause
actual results to vary from such forward looking statements and to vary
significantly from reporting period to reporting period. These risks include,
among others, competition from existing manufacturers and marketers of blood
analysis products who have greater resources than the Company, the uncertainty
of new product development initiatives, difficulties in transferring new
technology to the manufacturing stage, market resistance to new products,
domestic and international regulatory constraints, uncertainties of
international trade and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

      THREE MONTHS ENDED SEPTEMBER 30, 1996

      The Company generated revenues of approximately $7.8 million and $5.6
million for the quarters ended September 30, 1996 and 1995, respectively,
including international revenues of $2.4 million and $1.2 million, respectively.
The $2.2 million (39.0%) increase in revenues was primarily due to increased
shipment volume of the Company's cartridges and analyzers, reflecting higher
cartridge consumption by existing hospital customers and the addition of new
hospital customers in the U.S. and internationally. Worldwide cartridge
shipments increased 28.7% to 795,567 units from 618,040 units and worldwide
analyzer shipments increased 77.1% to 611 units from 345 units for the three
months ended September 30, 1996 and 1995, respectively. Other elements of the
increase in revenues included 1) recognition of an additional $0.3 million of
deferred revenue, due to a change of accounting estimate in 1996, from the
Company's Japanese marketing partners, 2) higher average selling prices per unit
of the Company's analyzers, and 3) slightly higher worldwide average selling
prices per unit of the Company's cartridges reflecting higher average Japanese
selling prices per unit which were largely offset by lower average selling
prices per unit in the U.S. as a result of a shift to higher volume U.S.
customers that receive lower cartridge list prices. The near term rate of sales
revenue growth may continue to be impacted by the Company's recent marketing
focus on potential large scale adopters of the i-STAT System. Such higher volume
customers tend to require a longer sales cycle as the marketing focus with
respect to such customers is on having these customers re-engineer or replace
their "stat" lab departments with the i-STAT System, as compared to other
potential customers who may be using the i-STAT System as a supplement to their
existing laboratory arrangements.

                                       7
<PAGE>   8
      The Company experienced a gross profit of $1.1 million in the quarter
ended September 30, 1996 compared with a gross loss of $0.3 million in the
quarter ended September 30, 1995. The improvement in gross margin was primarily
due to increased shipment volume of the Company's cartridges and analyzers. To
the extent that sales volume increases, the Company expects its gross profit to
improve as manufacturing costs (including direct labor and a large component of
overhead) are spread over a larger number of product units. The additional
deferred revenue and higher average selling prices noted above also contributed
to the gross margin improvement.

      The Company incurred research and development costs (as a percentage of
sales) of approximately $1.5 million (19.5%) and $1.3 million (23.7%) for the
quarters ended September 30, 1996 and 1995, respectively, consisting of costs
associated with the personnel, material, equipment and facilities necessary for
conducting new product development.

      The Company incurred general and administrative expenses (as a percentage
of sales) of approximately $1.4 million (17.8%) and $1.2 million (22.3%) for the
quarters ended September 30, 1996 and 1995, respectively. General and
administrative expenses consisted primarily of salaries and benefits of
personnel, office costs, professional fees and other costs necessary to support
the Company's infrastructure. The increase primarily reflects the Company's
increased need for management personnel and other services to support its
continuing growth, and legal fees and expenses associated with the defense of
the Nova patent infringement action.

      The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $2.7 million (35.0%) and $2.6 million (47.1%) for the
quarters ended September 30, 1996 and 1995, respectively, consisting primarily
of salaries, benefits, travel, and other expenditures for sales representatives,
product literature, market research, clinical studies and other infrastructure
costs.

      The decrease in other income (expense), net, to $0.5 million for the three
months ended September 30, 1996 from $0.6 million for the three months ended
September 30, 1995, primarily reflects lower interest income earned on lower
cash, cash equivalents and short-term investment balances in 1996. Interest
income is expected to continue to decline in the near future as cash and cash
equivalent balances decline.

      NINE MONTHS ENDED SEPTEMBER 30, 1996

      The Company generated revenues of approximately $20.9 million and $14.1
million for the nine months ended September 30, 1996 and 1995, including
international revenues of $7.1 million and $2.6 million, respectively. The $6.9
million (48.7%) increase in revenues was primarily due to increased shipment
volume of the Company's cartridges and analyzers primarily as a result of both
higher cartridge consumption by existing hospital customers and the addition of
new hospital customers in the U.S. and internationally. Worldwide cartridge
shipments increased 44.3% to 2,146,592 units from 1,487,141 units and worldwide
analyzer shipments increased 75.2% to 1,701 units from 971 for the nine months
ended September 30, 1996 and 1995, respectively. Other elements of the increase
in revenues included 1) recognition of an additional $1.5 million of deferred
revenue, due to a change in accounting estimate in 1996, from the Company's
Japanese marketing partners, 2) higher average selling prices per unit of the
Company's analyzers, and 3) slightly higher worldwide average selling prices per
unit of the Company's cartridges reflecting higher average Japanese selling
prices per unit which were partially offset by lower average selling prices per
unit in the U.S. as a result of a shift to higher volume U.S.
customers that receive lower cartridge list prices.

         The manufacturing costs associated with product sales for the nine
months ended September 30, 1996 and 1995 were approximately $19.1 million and
$16.6 million, respectively. This resulted in a gross profit of $1.8 million in
the 1996 period, compared with a gross loss of $2.5 million in the 1995 period.
The improvement in gross margin was primarily due to increased shipment volume
of the Company's cartridges and analyzers. To the extent that sales volume
increases, the Company expects its gross profit to improve as manufacturing
costs (including direct labor and a large component of overhead) are spread over
a larger number of product units. The additional deferred revenue and higher
average selling prices noted above also contributed to the gross margin
improvement. The increase in manufacturing costs from 1995 to 1996 was primarily
attributable to the increase in materials, personnel and equipment necessary to
support the volume of product being produced and the anticipated requirements
throughout the remainder of 1996.




                                       8
<PAGE>   9
      The Company incurred research and development costs (as a percentage of
sales) of approximately $4.2 million (20.1%) and $3.9 million (28.3%) for the
nine months ended September 30, 1996 and 1995, respectively, consisting of costs
associated with the personnel, material, equipment and facilities necessary for
conducting new product development.

      The Company incurred general and administrative expenses (as a percentage
of sales) of approximately $4.0 million (19.3%) and $3.6 million (25.8%) for the
nine months ended September 30, 1996 and 1995, respectively. General and
administrative expenses consisted primarily of salaries and benefits of
personnel, office costs, professional fees, and other costs necessary to support
the Company's infrastructure. The year-to-year increase reflects the Company's
increased need for management personnel and other services to support its
continuing growth, and legal fees and expenses associated with the defense of
the Nova patent infringement action.

      The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $8.6 million (41.3%) and $8.0 million (57.0%) for the
nine months ended September 30, 1996 and 1995, respectively, consisting
primarily of salaries, benefits, travel and other expenditures for sales
representatives, product literature, market research, clinical studies and other
sales infrastructure costs. The dollar increase from 1995 to 1996 is
attributable to increased marketing activities, and the hiring of management and
other marketing personnel necessary to support the Company's planned growth in
product sales.

      The increase in other income (expense), net, to $1.6 million for the nine
months ended September 30, 1996 from $0.3 million for the nine months ended
September 30, 1995, in part reflects additional interest income earned on
significantly higher cash, cash equivalents and short-term investment balances
in the corresponding 1996 period. Such higher balances reflect the receipt of
net proceeds of approximately $59.2 million in connection with the issuance of
Series B Preferred Stock to HP in July 1995. The Company also recorded a charge
against other income (expense), net, of $0.4 million in the nine months ended
September 30, 1995 relating to the implementation of stockholder protection
measures and a proposed offering of securities that was terminated. Interest
income is expected to decline in the near future as cash and cash equivalent
balances decline.

LIQUIDITY AND CAPITAL RESOURCES

      At September 30, 1996, the Company had cash and cash equivalents of
approximately $33.6 million, a decline of $13.9 million from the December 31,
1995 balance of approximately $47.5 million, primarily reflecting cash used in
operating activities for the nine months ended September 30, 1996. The Company
expects its existing funds to continue to decline until its revenues are
sufficient to support its growth, but to be sufficient to meet its obligations
and its liquidity and capital requirements for the near term. The Company
regularly monitors capital raising alternatives in order to take advantage of
opportunities to supplement its current working capital upon favorable terms,
including joint ventures, strategic corporate partnerships or other alliances
and the sale of equity and/or debt securities. The Company's need, if any, to
raise additional funds to meet its working capital and capital requirements will
depend upon numerous factors, including the results of its product marketing and
sales activities, its new product development efforts, manufacturing
efficiencies and competitive conditions.

      The change in other, net, under stockholders' equity from ($3.1) million
at December 31, 1995 to ($0.2) million at September 30, 1996 primarily reflects:
1) the change of estimate in respect to the Company's Strategic Milestone Stock
Award Program of $2.3 million, and 2) treasury stock of $0.7 million which was
retired in the first quarter of 1996. During the first quarter of 1996 the
Company achieved its first milestone under its Strategic Milestone Stock Award
Program. In connection with the achievement of this milestone, an aggregate
amount of $33,000 will be recognized as a non-cash compensation expense over a
27 month period. This represents a reduction of approximately $2.3 million from
amounts previously estimated as of December 31, 1995. The difference relates to
changes in the price of the Company's Common Stock since the milestone first
appeared likely to be achieved.

                                       9
<PAGE>   10
                               i-STAT CORPORATION


                PART II - OTHER INFORMATION



                ITEM 1.    LEGAL PROCEEDINGS

                The Company is a defendant in a case entitled Nova Biomedical
                Corporation, Plaintiff v. i-STAT Corporation, Defendant. The
                Complaint, which was filed in the United States District Court
                for the District of Massachusetts on June 27, 1995, alleges
                infringement by i-STAT of Nova's U.S. Patent No. 4,686,479. The
                Plaintiff seeks unspecified damages and that the damages be
                trebled. Nova also is asking for attorneys' fees and
                prejudgement interest. The case currently is in the pre-trial
                discovery stage. Management intends to contest the case
                vigorously and does not believe that it has infringed the Nova
                patent. The Company has obtained an opinion from recognized
                patent counsel to the effect that no infringement has occurred.
                However, if the plaintiff should prevail in this matter, it
                could have a material impact on the financial position, results
                of operations and cash flows of the Company. The Company has
                asserted counterclaims under the antitrust laws alleging that
                Nova commenced the action knowing that the patent was not
                infringed and that it had reason to believe that the patent was
                invalid and unenforceable.

                The Company is a defendant in a class action complaint entitled
                Susan Kaufman, on behalf of herself and all others similarly
                situated, Plaintiff, v. i-STAT Corporation, William P. Moffitt,
                Lionel N. Sterling, Imants R. Lauks and Matthias Plum, Jr. The
                class action was brought by Susan Kaufman on her behalf and on
                behalf of all purchasers of the Company's Common Stock between
                May 9, 1995 and March 19, 1996. The complaint, which was filed
                in the Superior Court of New Jersey in Mercer County on June 19,
                1996, alleges New Jersey common law "fraud on the market" in
                connection with certain sales of i-STAT stock by the Company's
                chief executive officer, chief technology officer and two
                outside directors during a nine-month period. The plaintiff seek
                unspecified compensatory damages, interest and payment of all
                costs and expenses incurred in connection with the class action.
                Management believes the complaint is without merit and intends
                to vigorously contest it. However, if the plaintiff should
                prevail in this matter, it could have a material impact on the
                financial position, results of operations and cash flows of the
                Company.

                                       10
<PAGE>   11
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              3.1      Restated Certificate of Incorporation *

              3.2      By-Laws **

              3.3      Certificate of Designation, Preferences and Rights of
                       Series A Preferred Stock **

              3.4      Certificate of Designation, Preferences and Rights of
                       Series B Preferred Stock **

              4.1      Stockholder Protection Agreement, dated as of June 26,
                       1995, between i-STAT Corporation and First Union National
                       Bank (formerly First Fidelity Bank, National Association)
                       **

              10.4.3   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (U.S. Resident Non-Affiliate)

              10.4.4   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (U.S. Resident Affiliate)

              10.4.5   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (Ontario Resident Non-Affiliate)

              10.4.6   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (Ontario Resident Affiliate)

              10.4.7   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (Quebec Resident Non-Affiliate)

              10.4.8   Form of Non-Statutory Stock Option Agreement under 1985
                       Stock Option Plan (Quebec Resident Affiliate)

              27       Financial Data Schedule

         (b)   Reports on form 8-K

              During the quarter for which this Report on Form 10-Q is
              filed, no reports on Form 8-K were filed.

         *    These items are hereby incorporated by reference from the
              exhibits to the Company's Form S-8/S-3 Registration
              Statement (File No. 33-48889) and are made a part of this
              Report.

         **   These items are hereby incorporated by reference from the
              exhibits to the Company's Current Report on Form 8-K, dated
              July 10, 1995 and amended on September 11, 1995, and are
              made a part of this Report.


                                       11
<PAGE>   12
                               i-STAT CORPORATION


                                   SIGNATURES


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



DATE:  October 30, 1996



                                            i-STAT CORPORATION
                                               (Registrant)




                                      BY:  /s/William P. Moffitt
                                           ---------------------
                                           William P. Moffitt
                                           President and Chief
                                           Executive Officer
                                           (Principal Executive Officer)




                                      BY:   /s/Roger J. Mason
                                           ---------------------
                                           Roger J. Mason
                                           Vice President of Finance,
                                           Treasurer and Chief Financial
                                           Officer
                                           (Principal Financial Officer)


                                       12
<PAGE>   13
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
   No.                       Description
-------                      -----------

<S>      <C>
3.1      Restated Certificate of Incorporation *

3.2      By-Laws **

3.3      Certificate of Designation, Preferences and Rights of Series A
         Preferred Stock **

3.4      Certificate of Designation, Preferences and Rights of Series B
         Preferred Stock **

4.1      Stockholder Protection Agreement, dated as of June 26, 1995, between
         i-STAT Corporation and First Union National Bank (formerly First
         Fidelity Bank, National Association) **

10.4.3   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (U.S. Resident Non-Affiliate)

10.4.4   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (U.S. Resident Affiliate)

10.4.5   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (Ontario Resident Non-Affiliate)

10.4.6   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (Ontario Resident Affiliate)

10.4.7   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (Quebec Resident Non-Affiliate)

10.4.8   Form of Non-Statutory Stock Option Agreement under 1985 Stock Option
         Plan (Quebec Resident Affiliate)

27       Financial Data Schedule
</TABLE>


*        These items are hereby incorporated by reference from the exhibits to
         the Company's Form S-8/S-3 Registration Statement (File No. 33-48889)
         and are made a part of this Report.

**       These items are hereby incorporated by reference from the exhibits to
         the Company's Current Report on Form 8-K, dated July 10, 1995 and
         amended on September 11, 1995, and are made a part of this Report.