<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) of the
                         Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 1999

                         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                           (I.R.S. employer
 incorporation or organization)                            Identification No.)

 104 Windsor Center Drive, East Windsor, NJ                08520
 (Address of Principal Executive Offices)                  (Zip Code)

                                 (609) 443-9300
              (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                                                              No
         [X]                                                              [ ]

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

<TABLE>
<CAPTION>
       Class                                             August 13, 1999
       -----                                             ---------------
<S>                                                      <C>
       Common Stock, $.15 par value                      15,687,114
</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 six months ended June 30, 1999 and 1998.........         3

           Consolidated Condensed Balance Sheets
              as of June 30, 1999 and December 31, 1998.................................         4

           Consolidated Condensed Statements of Cash Flows for the six
              months ended June 30, 1999 and 1998.......................................         5

           Notes to Consolidated Condensed Financial Statements.........................       6 - 8

           Item 2 - Management's Discussion and Analysis of Financial
                    Condition and Results of Operations.................................      9 - 15

PART II    OTHER INFORMATION

           Item 1 - Legal Proceedings...................................................        16

           Item 2 - Changes in Securities and Use of Proceeds...........................        16

           Item 4 - Submission of Matters to a Vote of Security Holders.................        17

           Item 6 - Exhibits and Reports on Form 8-K....................................        18

SIGNATURES .............................................................................        19
</TABLE>


                                       2
<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              Six Months Ended
                                                                June 30,                       June 30,
                                                                --------                       --------
                                                           1999           1998            1999          1998
                                                           ----           ----            ----          ----
<S>                                                      <C>           <C>             <C>           <C>
Net revenues:
     Related party sales..........................       $    8,853    $    1,l61      $   16,909    $    2,124

     Third party sales............................            1,912         9,293           3,653        17,116

     Other related party revenues.................              661           --            1,201           --
                                                         ----------    ----------      ----------    ----------
         Total net revenues ......................           11,426        10,454          21,763        19,240

Cost of sales.....................................           10,422         8,431          18,505        16,121
                                                         ----------    ----------      ----------    ----------
              Gross profit .......................            1,004         2,023           3,258         3,119
                                                         ----------    ----------      ----------    ----------
Operating expenses:

     Research and development.....................            2,008         2,022           3,938         3,791

     General and administrative...................            1,728         1,844           4,662         3,699

     Consolidation of operations..................               44           (7)              68           729

     Sales and marketing..........................            2,084         3,230           4,387         6,502
                                                         ----------    ----------      ----------    ----------
         Total operating expenses.................            5,864         7,089          13,055        14,721
                                                         ----------    ----------      ----------    ----------
              Operating loss......................          (4,860)       (5,066)         (9,797)      (11,602)
                                                         ----------    ----------      ----------    ----------
Other income (expense), net.......................              368           345             814           754
                                                         ----------    ----------      ----------    ----------
Net loss..........................................       ($  4,492)    ($  4,721)      ($  8,983)    ($ 10,848)
                                                         ==========    ==========      ==========    ==========
Basic and diluted net loss per share..............       ($   0.26)    ($   0.31)      ($   0.51)    ($   0.71)
                                                         ==========    ==========      ==========    ==========
Shares used in computing basic and
     diluted net loss per share...................       17,518,028    15,369,324      17,495,997    15,362,564
                                                         ==========    ==========      ==========    ==========
</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>
                                                                          June 30,        December 31,
                                                                            1999              1998
                                                                            ----              ----
<S>                                                                     <C>               <C>
         ASSETS
Current assets:
     Cash and cash equivalents......................................    $    27,714       $    38,390
     Accounts receivable, net.......................................            487             2,849
     Accounts receivable from related parties.......................          6,069             2,843
     Inventories....................................................          8,287             8,296
     Prepaid expenses and other current assets......................            790             1,473
                                                                        -----------       -----------
         Total current assets.......................................         43,347            53,851
Plant and equipment, net of accumulated depreciation of
     $22,267 and $19,721............................................         15,434            13,336
Other assets  ......................................................          1,808             1,719
                                                                        -----------       -----------
         Total assets...............................................    $    60,589       $    68,906
                                                                        ===========       ===========
         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable...............................................    $     1,410       $     2,684
     Accrued expenses...............................................          4,102             6,003
     Deferred revenue, current (inclusive of related party deferred
         revenue of $3,037 and $407)................................          3,083               559
                                                                        -----------       -----------
         Total current liabilities..................................          8,595             9,246
                                                                        -----------       -----------
     Deferred revenue from related party, non-current...............          5,000             5,000
                                                                        -----------       -----------
         Total liabilities..........................................         13,595            14,246
                                                                        -----------       -----------

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, issued and outstanding.....            214               214
     Common Stock, $.15 par value, shares authorized 25,000,000:
         shares issued and outstanding 15,677,463 at June 30, 1999
         and 15,308,995 at December 31, 1998........................          2,352             2,296
     Additional paid-in capital.....................................        233,840           230,328
     Unearned compensation..........................................        (2,131)             (169)
     Loan to officer................................................          (716)               --
     Accumulated deficit............................................      (185,651)         (176,668)
     Accumulated other comprehensive loss related to
         foreign currency translation...............................          (914)           (1,341)
                                                                        -----------       -----------
         Total stockholders' equity.................................         46,994            54,660
                                                                        -----------       -----------
         Total liabilities and stockholders' equity.................    $    60,589       $    68,906
                                                                        ===========       ===========
</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>
                                                                            Six Months Ended
                                                                                 June 30,
                                                                         1999                1998
                                                                         ----                ----
<S>                                                                    <C>             <C>
Cash flows from operating activities:
   Net loss.......................................................     ($ 8,983)       ($10,848)
   Adjustments to reconcile net loss to net cash used in operating
      activities..................................................         1,996           2,056
   Change in assets and liabilities...............................           732           1,155
                                                                       ---------       ---------
      Net cash used in operating activities.......................       (6,255)         (7,637)
                                                                       ---------       ---------
Cash flows from investing activities:
   Purchase of equipment..........................................       (3,704)         (3,398)
   Other .........................................................         (161)           (125)
                                                                       ---------       ---------
      Net cash used in investing activities.......................       (3,865)         (3,523)
                                                                       ---------       ---------
Cash flows from financing activities:
   Proceeds from issuance of Common Stock.........................           205             320
   Loan to officer................................................         (716)             --
                                                                       ---------       ---------
      Net cash provided by (used in) financing activities.........         (511)             320
                                                                       ---------       ---------

Effect of currency exchange rate changes on cash..................          (45)            (41)
                                                                       ---------       ---------
Net decrease in cash and cash equivalents.........................      (10,676)        (10,881)
Cash and cash equivalents at beginning of period..................        38,390          32,914
                                                                       ---------       ---------
Cash and cash equivalents at end of period........................     $  27,714       $  22,033
                                                                       =========       =========
</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.       GENERAL


         Basis of Presentation

         The information presented as of June 30, 1999 and 1998, 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, 1998, including the Notes thereto, which were
         included as part of the Company's Annual Report on Form 10-K, File No.
         0-19841.


         Basic and Diluted Loss per Share

         Basic and diluted 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
         calculations 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. Basic EPS excludes dilution and is
         computed by dividing income available to common stockholders by the
         weighted-average number of common shares outstanding for the period.
         Diluted EPS reflects the potential dilution that could occur if
         securities or other contracts to issue common stock were exercised or
         converted into common stock or resulted in the issuance of common stock
         that then shared in the earnings of the entity. The Company has not
         included potential common shares in the diluted per-share computation
         as the result is antidilutive.

         Options to purchase 2,883,744 shares of common stock at $1.50 - $32.58
         per share, which expire on various dates from August 1999 to February
         2009, were outstanding at June 30, 1999. These shares were not included
         in the computation of diluted EPS because the effect would be
         antidilutive due to the net loss.

         Comprehensive Income

<TABLE>
<CAPTION>
                                                      Three Months Ended     Six Months Ended
                                                           June 30,              June 30,
                                                      1999          1998      1999       1998
                                                      ----          ----      ----       ----
                                                              (In thousands of dollars)
<S>                                                <C>        <C>          <C>        <C>
         Net loss...............................   ($4,492)   ($4,721)     ($8,983)   ($10,848)
         Other comprehensive income (loss):
             Foreign currency translation.......       204         (5)         427         (12)
                                                   -------    -------      - -----    --------
         Comprehensive loss.....................   ($4,288)   ($4,726)     ($8,556)   ($10,860)
                                                   =======    =======      = =====    ========
</TABLE>

         Recently Issued Accounting Pronouncements:

         In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
         Instruments and Hedging Activities". SFAS No. 133 is effective for all
         fiscal quarters of all fiscal years beginning after June 15, 1999
         (January 1, 2000 for the Company). SFAS No. 133 requires that all
         derivative instruments be recorded on the balance sheet at their fair
         value. Changes in the fair value of derivatives are recorded each
         period in current earnings or other comprehensive income depending on
         whether a derivative is designated as part of a hedge transaction and,
         if it is, the type of hedge transaction. The Company presently does not
         have any derivative instruments or hedging activities and,
         consequently, SFAS No. 133 is not expected to have a material impact on
         the Company's results of operations, financial position or cash flow.

         Reclassification:

         Certain reclassifications have been made to 1998 amounts to conform
         them to the 1999 presentation.


                                        6
<PAGE>   7

                               i-STAT CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   (unaudited)

                                   (continued)

2.       INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>
                                    June 30, 1999         December 31, 1998
                                    -------------         -----------------
                                           (In thousands of dollars)
<S>                                 <C>                   <C>
         Raw materials                   $3,522                $2,537
         Work in process                  2,132                 3,206
         Finished goods                   2,633                 2,553
                                         ------                ------
                                         $8,287                $8,296
                                         ======                ======
</TABLE>

         Inventories at June 30, 1999 have been reduced by approximately $1.5
         million due to temporary production losses associated with one of the
         newer manufacturing processes.


3.       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. In February 1998, the Court entered
         summary judgment in favor of the Company on the issue of patent
         infringement. Accordingly, the Company has been found not to infringe,
         either literally or under the patent law "doctrine of equivalents",
         Nova's patent. The plaintiff has appealed, and appellate argument was
         held on May 5, 1999. The appellate court's opinion will be issued in
         due course. If the plaintiff should prevail on this issue, a prospect
         which the Company believes to be highly unlikely, it could have a
         material impact on the financial position, results of operations and
         cash flows of the Company. The Company has asserted and is pursuing
         counterclaims under the antitrust laws alleging that Nova commenced the
         action knowing that the patent was not infringed and that it has reason
         to believe that the patent was invalid.

         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 M.
         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 and
         negligent misrepresentation, and is predicated on a "fraud on the
         market" theory 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. The Company
         believes the complaint is without merit and, on April 28, 1998, the
         Court entered summary judgment in favor of all the defendants.
         Plaintiffs appealed and, on August 10, 1999, the Appellate Division of
         the Superior Court filed an opinion sustaining the trial court's
         determination as to the negligent misrepresentation claims but
         reversing as to the common law fraud claims. The Court specifically
         stated that it expressed no opinion concerning the evidence required to
         satisfy the other elements of a common law action for securities fraud,
         the applicability of any defense, class certification or the
         appropriate scope of plaintiff class if there is certification. New
         Jersey law provides that the Company may petition the New Jersey
         Supreme Court for discretionary review of this opinion. The Company has
         made no decision whether to do so, pending further discussions with its
         counsel. Should the plaintiffs 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 is a defendant in a case entitled Customedix Corporation,
         Plaintiff v. i-STAT Corporation, Defendant. The Complaint, which was
         filed in the United States District Court for the District of
         Connecticut on December 26, 1996, alleges infringement by i-STAT of
         Customedix's U.S. Patent No. 4,342,964. The


                                        7
<PAGE>   8

                               i-STAT CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   (unaudited)

                                   (continued)

         Plaintiff seeks injunctive relief and an accounting for i-STAT's
         profits and the damages to Customedix from such alleged infringement.
         The Company intends to contest the case vigorously and does not believe
         that it has infringed the Customedix patent. The Company has obtained
         an opinion from recognized patent counsel to the effect that no
         infringement has occurred. The court has interpreted the Customedix
         patent in a way favorable to the Company and has denied Customedix's
         motion for reconsideration of that interpretation. The Company has
         moved for summary judgment of non-infringement and the court will
         schedule argument in due course. However, if the plaintiff should
         prevail in this matter, it could have a material impact on the
         financial position, results of operation and cash flows of the Company.


4.       RELATED PARTY TRANSACTIONS

         On January 4, 1999, the Company received from Abbott Laboratories
         ("Abbott") its second installment of prepayments for guaranteed future
         incremental cartridge sales (as defined in the Distribution Agreement
         with Abbott), in the amount of $4 million. This amount is carried on
         the consolidated condensed balance sheet as deferred revenue, current,
         net of amortization of such prepayment to income as incremental
         cartridge sales are generated.

         The Company generated $8,040,000 and $813,000 of net sales from Abbott
         and Hewlett-Packard Company ("HP") for the three months ended June 30,
         1999, respectively, and $15,220,000 and $1,689,000 of net sales from
         Abbott and HP for the six months ended June 30, 1999. Other related
         party revenues from Abbott include approximately $661,000 and
         $1,201,000 for the three months and six months ended June 30, 1999,
         respectively, to fund certain research and development and marketing
         expenses. At June 30, 1999, the Company had $5,624,000 and $445,000 of
         accounts receivable due from Abbott and HP, respectively. In addition,
         the Company had $3,037,000 and $407,000 of deferred revenue, current,
         and $5,000,000 and $5,000,000 of deferred revenue, non-current, from
         Abbott at June 30, 1999, respectively, and December 31, 1998,
         respectively.


5.       RESTRICTED STOCK

         On February 5, 1999, the board of directors awarded 310,000 shares of
         restricted Common Stock to four executive officers of the Company. The
         restricted Common Stock had a fair value at the date of grant of
         approximately $2,751,250. One executive officer was awarded 250,000
         shares of restricted Common Stock, 50,000 shares of which immediately
         vested on February 5, 1999, and the remaining 200,000 shares cliff vest
         on February 5, 2002. The 60,000 shares awarded to the other three
         executive officers vest over a three year period. Compensation expense
         in the amount of approximately $215,000 and $802,000 was recorded in
         connection with this award during the three months and six months ended
         June 30, 1999, respectively.

         In connection with the award of 250,000 shares to one executive
         officer, on June 30, 1999, the Company loaned the executive officer
         approximately $716,000 to pay withholding taxes. The promissory note
         for the withholding tax amount carries an interest rate of 5.37%,
         payable annually, and the principal amount of the loan is repayable
         three years from the date of the execution of a second promissory note
         for the remaining taxes which are expected to be loaned in the second
         quarter of 2000. One third of the principal amount of these loans will
         be forgiven on the anniversary date of the loan for the remaining taxes
         if the executive officer remains in the employment of the Company. The
         Company will also make a "tax gross-up" payment to the executive
         officer in connection with any taxes that may be due as result of the
         forgiveness of these loans.


                                       8
<PAGE>   9

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


GENERAL

           The Company was incorporated in Delaware in 1983 and 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's current
products, known as the i-STAT(R) System, consist of portable, hand-held
analyzers and single-use disposable cartridges, each of which simultaneously
performs different combinations of commonly ordered blood tests in approximately
two minutes. The i-STAT System also includes peripheral components that enable
the results of tests to be transmitted by infrared means to both a proprietary
information system for managing the user's point-of-care testing program and to
the user's information systems for billing and archiving.

           The i-STAT System currently performs blood tests for sodium,
potassium, chloride, glucose, creatinine, urea nitrogen, hematocrit, ionized
calcium, arterial blood gases, and bicarbonate, and to derive certain other
values, such as total carbon dioxide, base excess, anion gap, hemoglobin and O2
saturation, by calculation from the tests performed. The Company continues to
engage in research and development in order to improve its existing products and
develop new products based on the i-STAT System technology. The Company
currently is developing a test for lactate and three tests for the measurement
of coagulation: partial thromboplastin time ("aPTT"), activated clotting time
("ACT") and prothombin time ("PT"). The Company is also studying the development
of cardiac marker tests, and other tests to measure enzymes and other analytes.
Subject to receipt of clearance to market by the FDA, the Company expects to
commence commercialization of its first coagulation test by the end of 1999.

           Prior to November 1, 1998, the Company marketed and distributed its
products in the United States and Canada principally through its own direct
sales and marketing organization, in Japan through a Japanese marketing partner,
Fuso, Inc. ("Fuso"), in Europe through Hewlett-Packard Company ("HP") and in
Mexico, South America, China, Australia, and certain other Asian and Pacific Rim
countries, through selected distribution channels. Pursuant to a technology
collaboration between the Company and HP, in November 1997 HP commenced selling
a patient monitoring system (the "Integrated Analyzer") which integrates all of
the blood diagnostics capabilities of the i-STAT System. On September 2, 1998,
the Company entered into a long-term sales, marketing and research alliance with
Abbott Laboratories ("Abbott") which, among other things, is expected both to
significantly affect the Company's research and development programs and alter
the manner in which the Company markets and sells its products worldwide. Abbott
commenced distribution of the i-STAT System on November 1, 1998. The majority of
the Company's revenues are now derived from Abbott. Please see "Long-Term Sales
and Marketing Alliance with Abbott Laboratories" under Item 7 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1998, for a
description of the Company's agreements with Abbott. Copies of such agreements
were filed with the Commission as exhibits to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1998.

RESULTS OF OPERATIONS

           THREE MONTHS ENDED JUNE 30, 1999

           The Company generated revenues of approximately $11.4 million and
$10.5 million for the three months ended June 30, 1999 and 1998, respectively,
including international revenues (as a percentage of total revenues) of $2.9
million (25.4%) and $3.1 million (29.7%), respectively. Abbott, HP and Fuso
accounted for 92.1% of the Company's revenues for the three months ended June
30, 1999. Revenues from Abbott represented approximately 76.1% and 0% of the
Company's worldwide revenues for the three months ended June 30, 1999 and 1998,
respectively. Revenues from HP represented approximately 7.1% and 11.1% of the
Company's worldwide revenues for the three months ended June 30, 1999 and 1998,
respectively. Sales to Fuso represented approximately 8.9% and 10.7% of the
Company's worldwide revenues for the three months ended June 30, 1999 and 1998,
respectively.

           The $1.0 million (9.2%) increase in revenues was primarily due to
increased shipment volume of the Company's cartridges, reflecting higher
cartridge consumption by existing hospital customers and the addition of new


                                        9
<PAGE>   10

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)


hospital customers in the U.S. and internationally. Worldwide cartridge
shipments increased 19.2% to 1,932,800 units in the three months ended June 30,
1999, from 1,621,300 units in the three months ended June 30, 1998. Revenues
from the increased cartridge shipments were partially offset by lower worldwide
average selling prices per cartridge, which declined from approximately $4.68 to
$4.04 per cartridge in the same periods. Cartridge average selling prices are
expected to continue to decline because of the product transfer pricing
arrangements between the Company and Abbott. The increase in revenues in 1999
also includes approximately $661,000 from Abbott to fund certain research and
development and marketing expenses.

           Gross profit (as a percentage of sales) decreased by approximately
$1.0 million to $1.0 million (8.8%) in the quarter ended June 30, 1999, compared
with a gross profit of $2.0 million (19.4%) in the quarter ended June 30, 1998.
The decrease in gross profit was primary due to a charge of approximately $1.7
million resulting from temporary production losses associated with one of the
newer manufacturing processes. Excluding these temporary losses, gross profit
(as a percentage of sales) increased by approximately $0.7 million to $2.7
million (23.4%) in the quarter ended June 30, 1999. The improvement in gross
profit was primarily due to increased production volume of the Company's
cartridges, which caused fixed manufacturing costs to be spread over a larger
number of product units, and the receipt of approximately $661,000 from Abbott
to fund certain research and development and marketing expenses. The increase in
gross profit was partially offset by lower average selling prices per cartridge
and lower average selling prices for analyzers, in each case because of the
transfer pricing arrangements between the Company and Abbott.

           The Company incurred research and development costs (as a percentage
of sales) of approximately $2.0 million (17.6%) and $2.0 million (19.3%) for the
three months ended June 30, 1999 and 1998, respectively, consisting of costs
associated with the personnel, material, equipment and facilities necessary for
conducting new product development. The Company's current research and
development program includes the development of tests for lactate and
coagulation, some of which are expected to move into the commercialization phase
by the end of 1999. The Company also is studying the development of cardiac
marker tests, and other tests to measure enzymes and other analytes.
Consequently, research and development expenditures are expected to increase
over the next three years. The amount and timing of such increase will depend
upon numerous factors including the level of activity at any point in time, the
breadth of the Company's development objectives and the success of its
development programs. Some portion of these expenditures may be funded by
Abbott, and revenues and gross profit in the three months ended June 30, 1999,
include approximately $0.5 million of such funding.

           The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $1.7 million (15.1%) and $1.8 million
(17.6%) for the three months ended June 30, 1999 and 1998, 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 Company incurred consolidation of operations expenses of
approximately $44,000 and ($7,000) for the three months ended June 30, 1999 and
1998, respectively, in connection with the relocation of the Company's cartridge
assembly operations from Plainsboro, New Jersey, to its manufacturing facility
in Ontario, Canada.

           The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $2.1 million (19.2%) and $3.2 million (30.9%) for the
three months ended June 30, 1999 and 1998, respectively, consisting primarily of
salaries, benefits, travel, and other expenditures for sales representatives,
implementation coordinators, international marketing support, order entry,
distribution, technical services, product literature, market research, clinical
studies and other sales infrastructure costs. A portion of the costs of the
implementation coordinators is reimbursed by Abbott, and revenues and gross
profit in the three months ended June 30, 1999, include approximately $0.2
million of such reimbursement. The dollar decrease from period to period is
primarily attributable to the reduction in field sales and sales management
personnel following the assumption by Abbott of principal responsibility for the
marketing and sales of the i-STAT System.

           Other income, net, of approximately $0.4 million and $0.3 million for
the three months ended June 30,


                                       10
<PAGE>   11

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)


1999 and for the three months ended June 30, 1998, respectively, primarily
reflects interest income earned on cash and cash equivalents balances.

           Net loss for the three months ended June 30, 1999 decreased 4.9% to
approximately $4.5 million, or 26 cents per share, compared with a net loss of
approximately $4.7 million, or 31 cents per share, for the first quarter of
1998. The weighted average number of shares used in computing basic and diluted
net loss per share was approximately 17.518 million and 15.369 million in the
1999 and 1998 periods, respectively. The increase in the number of shares in
1999 primarily reflects the issuance of 2 million shares of Common Stock to
Abbott in September 1998.


           SIX MONTHS ENDED JUNE 30, 1999

           The Company generated revenues of approximately $21.8 million and
$19.2 million for the six months ended June 30, 1999 and 1998, respectively,
including international revenues (as a percentage of total revenues) of $5.2
million (23.7%) and $5.6 million (29.0%), respectively. Abbott, HP and Fuso
accounted for 91.6% of the Company's revenues for the six months ended June 30,
1999. Revenues from Abbott represented approximately 75.4% and 0% of the
Company's worldwide revenues for the six months ended June 30, 1999 and 1998,
respectively. Revenues from HP represented approximately 7.8% and 11.0% of the
Company's worldwide revenues for the six months ended June 30, 1999 and 1998,
respectively. Sales to Fuso represented approximately 8.4% and 10.8% of the
Company's worldwide sales for the six months ended June 30, 1999 and 1998,
respectively.

           The $2.5 million (13.1%) increase in revenues was primarily due to
increased shipment volume of the Company's cartridges, 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 25.8% to 3,654,900 units in the six months ended June 30,
1999, from 2,905,875 units in the six months ended June 30, 1998. Revenues from
the increased cartridge shipments were partially offset by lower worldwide
average selling prices per cartridge, which declined from approximately $4.77 to
$4.12 per cartridge in the same periods. Cartridge average selling prices are
expected to continue to decline because of the product transfer pricing
arrangements between the Company and Abbott. The increase in revenues also
includes approximately $1,201,000 from Abbott to fund certain research and
development and marketing expenses.

           Gross profit (as a percentage of sales) increased by approximately
$0.2 million to $3.3 million (15.0%) in the six months ended June 30, 1999,
compared with a gross profit of $3.1 million (16.2%) in the six months ended
June 30, 1998. The improvement in gross profit was primarily due to increased
production volume of the Company's cartridges, which caused fixed manufacturing
costs to be spread over a larger number of product units, and the receipt of
approximately $1,201,000 from Abbott to fund certain research and development
and marketing expenses. The increase in gross profit was partially offset by
lower average selling prices per cartridge and lower average selling prices for
analyzers, in each case because of the transfer pricing arrangements between the
Company and Abbott. Additionally, the increase in gross profit was also
partially offset by a charge of approximately $1.7 million resulting from
temporary production losses associated with one of the newer manufacturing
processes in the second quarter of 1999. Excluding these temporary production
losses, gross profit (as a percentage of sales) increased by approximately $1.8
million to $4.9 million (22.6%) in the six months ended June 30, 1999.

           The Company incurred research and development costs (as a percentage
of sales) of approximately $4.0 million (18.1%) and $3.8 million (19.7%) for the
six months ended June 30, 1999 and 1998, respectively, consisting of costs
associated with the personnel, material, equipment and facilities necessary for
conducting new product development. The Company's current research and
development program includes the development of tests for lactate and
coagulation, some of which are expected to move into the commercialization phase
by the end of 1999. The Company also is studying the development of cardiac
marker tests, and other tests to measure enzymes and other analytes.
Consequently, research and development expenditures are expected to increase
over the next three years. The amount and timing of such increase will depend
upon numerous factors including the level of activity at any point in time, the
breadth of the Company's development objectives and the success of its
development programs.


                                       11
<PAGE>   12

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)

Some portion of these expenditures may be funded by Abbott, and revenues and
gross profit in the six months ended June 30, 1999, include approximately $0.9
million of such funding.

           The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $4.7 million (21.4%) and $3.7 million
(19.2%) for the six months ended June 30, 1999 and 1998, 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 dollar increase from year to year is primarily
attributable to fees for special consulting services to assist in the
development of manufacturing strategies and capacity plans, and to identify
business development opportunities, and a non-cash compensation expense
associated with grants to employees of 310,000 restricted shares of Common Stock
in the six months ended June 30, 1999.

           The Company incurred consolidation of operations expenses of
approximately $68,000 and $729,000 for the six months ended June 30, 1999 and
1998, respectively, in connection with the relocation of the Company's cartridge
assembly operations from Plainsboro, New Jersey, to its manufacturing facility
in Ontario, Canada.

           The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $4.4 million (20.2%) and $6.5 million (33.8%) for the
six months ended June 30, 1999 and 1998, respectively, consisting primarily of
salaries, benefits, travel, and other expenditures for sales representatives,
implementation coordinators, international marketing support, order entry,
distribution, technical services, product literature, market research, clinical
studies and other sales infrastructure costs. A portion of the costs of the
implementation coordinators is reimbursed by Abbott, and revenues and gross
profit in the six months ended June 30, 1999, include approximately $0.3 million
of such reimbursement. The dollar decrease from period to period is primarily
attributable to the reduction in field sales and sales management personnel
following the assumption by Abbott of principal responsibility for the marketing
and sales of the i-STAT System.

           Other income, net, of approximately $0.8 million for each of the six
months ended June 30, 1999 and June 30, 1998, primarily reflects interest income
earned on cash and cash equivalents balances.

           Net loss for the six months ended June 30, 1999 decreased 17.2% to
approximately $9.0 million, or 51 cents per share, compared with a net loss of
approximately $10.9 million, or 71 cents per share, for the six months ended
June 30, 1998. The weighted average number of shares used in computing basic and
diluted net loss per share was approximately 17.496 million and 15.363 million
in the 1999 and 1998 periods, respectively. The increase in the number of shares
from June 1998 primarily reflects the issuance of 2 million shares of Common
Stock to Abbott in September 1998.


LIQUIDITY AND CAPITAL RESOURCES

           At June 30, 1999, the Company had cash and cash equivalents of
approximately $27.7 million, a decline of approximately $10.7 million from the
December 31, 1998 balance of approximately $38.4 million. The decrease primarily
reflects approximately $6.3 million of cash used in operating activities,
equipment purchases of approximately $3.7 million and a loan to an officer of
approximately $0.7 million to pay withholding taxes in connection with a
restricted stock grant during the six months ended June 30, 1999. Working
capital decreased by approximately $9.8 million from $44.6 million to $34.8
million during the same period, primarily reflecting the decrease in cash and
cash equivalents. Changes in working capital during the six months ended June
30, 1999, also reflect a reduction of approximately $1.9 million in accrued
expenses which primarily reflects the payment of accrued 1998 sales commissions
and management bonuses, and the payment of accrued retention bonuses, severance
payments and vacation pay in connection with both a reduction in sales force
following assumption by Abbott of principal responsibility for marketing and
sales, and the consolidation of cartridge assembly operations in the Company's
manufacturing facility in Ontario, Canada. Changes in working capital also
include an increase of approximately $2.5 million in deferred revenue, which
reflects the receipt of $4.0 million from Abbott in January 1999, representing
the second installment of prepayments for guaranteed future incremental
cartridge sales, partially


                                       12
<PAGE>   13

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)


offset by the amortization of such prepayments to income as incremental
cartridge sales (as defined in the Distribution Agreement with Abbott) are
generated, by the amortization to income of approximately $0.4 million of
deferred research and development reimbursements from Abbott and by the
amortization of deferred service contract revenues. The Company expects its
existing funds to continue to decline until its revenues are sufficient to
support its growth, but, together with payments due from Abbott in respect of
guaranteed product sales, 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 marketing and sales
activities, its new product development efforts, manufacturing efficiencies and
competitive conditions.

           The impact of inflation on the Company's business has been minimal
and is expected to be minimal for the near-term.


                                       13
<PAGE>   14

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)


IMPACT OF YEAR 2000

           The "Year 2000" or "Y2K" issue is the result of computer programs
being written using two digits rather than four to define the applicable year.
Any of the Company's computer programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.

           The Company has identified its Year 2000 risks in five categories:
internal business operations software, internal manufacturing control software,
software used in computer controlled manufacturing equipment, software used in
computer-controlled products and external noncompliance by suppliers and
customers.

           INTERNAL BUSINESS OPERATIONS SOFTWARE: The Company runs its financial
and inventory operations using a commercially available package supplied by QAD
Inc. running on a UNIX operating system supplied by HP. The Company's computer
networks are controlled by software provided by Microsoft Corporation and
Novell(R) Inc., and applications used for miscellaneous business operations are
supplied by Microsoft Corporation. All the above mentioned products are
certified Year 2000 compliant by these vendors.

           INTERNAL MANUFACTURING CONTROL SOFTWARE: Certain manufacturing
operations are managed by internally developed software tools. Date handling
software operations in most of these tools utilize software routines that are
part of the software "platform" upon which these tools operate. These platforms,
primarily supplied by Microsoft, are certified Y2K compliant. The Company has
identified only a few exceptions but has determined these tools either to be
compliant or not significant to the production process.

           SOFTWARE USED IN COMPUTER CONTROLLED MANUFACTURING EQUIPMENT: The
Company has identified all pieces of computer controlled manufacturing equipment
used in production processes and determined that where date handling functions
are significant to the production process, the functions are Y2K compliant.

           SOFTWARE USED IN COMPUTER CONTROLLED PRODUCTS: Certain products made
by the Company have software components developed and maintained by the Company.
The Company has completed the software changes and testing necessary to certify
substantially all of these products as Y2K compliant. The Company regularly
distributes software updates for these products as part of its normal business
practices. To date, the cost of providing the updated, Y2K compliant software to
customers has been at no incremental cost to the Company.

           EXTERNAL NON COMPLIANCE BY SUPPLIERS AND CUSTOMERS: The Company is
engaged in the process of monitoring the Y2K program status of critical
suppliers. The Company has established appropriate contingency plans for
suppliers that are not able to supply sufficient certification. These
contingency plans may include establishing alternative suppliers and/or
accumulating inventory as appropriate. By the year 2000 the Company's revenues
are expected to be substantially derived from a few authorized distributors,
including Abbott and HP. The Company believes that these companies have adequate
Y2K compliance programs in place. Accordingly, it has no reason to believe that
additional operational risks are presented by the Company's relationship with
its most significant customers.

           The cost of the Company's activities related to the Year 2000 project
have not been, nor are expected to be, material. Where modifications have been
required they have been incremental additions to software upgrades driven by
other business needs. The principal Company resource allocated to the Y2K issue
has been, and is expected to be, management time. Such internal personnel costs
allocated to the Y2K issue are estimated to have been less than $150,000 through
December 31, 1998, and are expected to be less than $50,000 in 1999.


                                       14
<PAGE>   15

                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (continued)


           Despite the Company's activities in regards to the Year 2000 issue,
there can be no assurance that Year 2000 problems will not result in an
interruption in, or failure of, certain normal business activities or
operations, that may have a material adverse effect on the Company's results of
operations, liquidity or financial condition.


RECENT ACCOUNTING PRONOUNCEMENTS

           In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999 (January 1,
2000 for the Company). SFAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. The Company presently
does not have any derivative instruments or hedging activities and consequently,
SFAS No. 133 is not expected to have a material impact on the Company's results
of operations, financial position or cash flows.


SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

           CERTAIN STATEMENTS IN THIS "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS," RELATE TO FUTURE EVENTS AND
EXPECTATIONS AND AS SUCH CONSTITUTE "FORWARD-LOOKING STATEMENTS," WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE WORDS
"BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS," AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS WHICH MAY
CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS AND TO VARY
SIGNIFICANTLY FROM REPORTING PERIOD TO REPORTING PERIOD. SUCH FACTORS INCLUDE,
AMONG OTHERS, COMPETITION FROM EXISTING MANUFACTURERS AND MARKETERS OF BLOOD
ANALYSIS PRODUCTS WHO HAVE GREATER RESOURCES THAN THE COMPANY, ECONOMIC
CONDITIONS AFFECTING THE COMPANY'S TARGET MARKETS, THE UNCERTAINTY OF NEW
PRODUCT DEVELOPMENT INITIATIVES, THE ABILITY TO ATTRACT AND RETAIN KEY
SCIENTIFIC, TECHNOLOGICAL AND MANAGEMENT PERSONNEL, DEPENDENCE UPON LIMITED
SOURCES FOR PRODUCT MANUFACTURING COMPONENTS, UPON A SINGLE MANUFACTURING
FACILITY AND UPON INNOVATIVE AND HIGHLY TECHNICAL MANUFACTURING TECHNIQUES,
MARKET RESISTANCE TO NEW PRODUCTS AND POINT OF CARE BLOOD DIAGNOSIS,
INCONSISTENCY IN CUSTOMER ORDER PATTERNS, DOMESTIC AND INTERNATIONAL REGULATORY
CONSTRAINTS, UNCERTAINTIES OF INTERNATIONAL TRADE, PENDING AND POTENTIAL
DISPUTES CONCERNING OWNERSHIP OF INTELLECTUAL PROPERTY, AVAILABILITY OF CAPITAL
UPON FAVORABLE TERMS AND DEPENDENCE UPON AND CONTRACTUAL RELATIONSHIPS WITH
STRATEGIC PARTNERS, PARTICULARLY ABBOTT LABORATORIES. SEE ADDITIONAL DISCUSSION
UNDER "FACTORS THAT MAY AFFECT FUTURE RESULTS" IN THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998, AND OTHER FACTORS DETAILED FROM
TIME TO TIME IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.


                                       15
<PAGE>   16

                               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. In February 1998, the Court entered summary judgment in favor of the
Company on the issue of patent infringement. Accordingly, the Company has been
found not to infringe, either literally or under the patent law "doctrine of
equivalents", Nova's patent. The plaintiff has appealed, and appellate argument
was held on May 5, 1999. The appellate court's opinion will be issued in due
course. If the plaintiff should prevail on this issue, a prospect which the
Company believes to be highly unlikely, it could have a material impact on the
financial position, results of operations and cash flows of the Company. The
Company had asserted and is pursuing counterclaims under the antitrust laws
alleging that Nova commenced the action knowing that the patent was not
infringed and that it has reason to believe that the patent was invalid.

           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 M. 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 and negligent misrepresentation, and is predicated on a "fraud on the
market" theory 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. The Company believes the complaint is without merit and,
on April 28, 1998, the Court entered summary judgment in favor of all the
defendants. Plaintiffs appealed and, on August 10, 1999, the Appellate Division
of the Superior Court filed an opinion sustaining the trial court's
determination as to the negligent misrepresentation claims but reversing as to
the common law fraud claims. The Court specifically stated that it expressed no
opinion concerning the evidence required to satisfy the other elements of a
common law action for securities fraud, the applicability of any defense, class
certification or the appropriate scope of plaintiff class if there is
certification. New Jersey law provides that the Company may petition the New
Jersey Supreme Court for discretionary review of this opinion. The Company has
made no decision whether to do so, pending further discussions with its counsel.
Should the plaintiffs 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 is a defendant in a case entitled Customedix Corporation,
Plaintiff v. i-STAT Corporation, Defendant. The Complaint, which was filed in
the United States District Court for the District of Connecticut on December 26,
1996, alleges infringement by i-STAT of Customedix's U.S. Patent No. 4,342,964.
The Plaintiff seeks injunctive relief and an accounting for i-STAT's profits and
the damages to Customedix from such alleged infringement. The Company intends to
contest the case vigorously and does not believe that it has infringed the
Customedix patent. The Company has obtained an opinion from recognized patent
counsel to the effect that no infringement has occurred. The court has
interpreted the Customedix patent in a way favorable to the Company and has
denied Customedix's motion for reconsideration of that interpretation. The
Company has moved for summary judgment of non-infringement and the court will
schedule argument in due course. However, if the plaintiff should prevail in
this matter, it could have a material impact on the financial position, results
of operation and cash flows of the Company.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

           The Company entered into Stock Option Agreements with two principals
of an investment banking firm, pursuant to which one principal was granted an
Option to purchase up to 23,529 shares, and one principal was granted an Option
to purchase up to 15,686 shares, of the Company's Common Stock for $9.06 per
share, in exchange for services rendered by the investment banking firm on
behalf of the Company. The Options are currently exercisable and expire on May
15, 2003, which is the fourth anniversary of the effective date of the
Agreements. In issuing the Option, the Company relied on the exemption from
registration contained in Section 4(2) of the Securities Act of 1933.


                                       16
<PAGE>   17

                               i-STAT CORPORATION


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

           The company held its Annual Meeting of Stockholders on June 10, 1999,
at which time three matters were submitted to a vote of stockholders. A
description of the matters voted upon and a voting tabulation for each matter is
as follows:

         I.       Election of five members to the Board of Directors, each to
                  serve until the next annual meeting.

<TABLE>
<CAPTION>
                                                                     Number of Votes
                                           ---------------------------------------------------------------------
              Name of Nominee                  For         Against/Withheld     Abstentions     Broker Non-Votes
              ---------------                  ---         ----------------     -----------     ----------------
<S>                                        <C>             <C>                  <C>             <C>
              J. Robert Buchanan, M.D.     14,550,294           129,150             N/A                N/A

              Stephen D. Chubb             14,550,494           128,950             N/A                N/A

              Richard Hodgson              14,574,579           104,865             N/A                N/A

              William P. Moffitt           14,550,328           129,116             N/A                N/A

              Lionel N. Sterling           14,550,494           128,950             N/A                N/A
</TABLE>


         II.      Amendment to the 1998 Stock Option Plan (A) to employ
                  Restricted Share Awards as a form of Compensation and (B) to
                  change the name of the 1998 Plan to the "i-STAT Corporation
                  Equity Incentive Plan."

<TABLE>
<CAPTION>
                                               For         Against/Withheld     Abstentions    Broker Non-Votes
                                               ---         ----------------     -----------    ----------------
<S>                                                        <C>                  <C>            <C>
                                            12,695,861         1,926,312          57,271            N/A
</TABLE>


         III.     Ratification of the appointment of PricewaterhouseCoopers LLP,
                  as independent accountants to audit the Company's books and
                  accounts for the year 1999.

<TABLE>
<CAPTION>
                                                                      Number of Votes
                                           --------------------------------------------------------------------
                                               For         Against/Withheld     Abstentions    Broker Non-Votes
                                               ---         ----------------     -----------    ----------------
<S>                                                        <C>                  <C>            <C>
                                           14,517,541           97,129            64,774            N/A
</TABLE>


                                       17
<PAGE>   18

                                  EXHIBIT INDEX


ITEM  6.   EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

         3.1      Restated Certificate of Incorporation (Form S-8/S-3
                  Registration Statement, File No. 33-48889)*

         3.2      By-Laws (Form 10-K for fiscal year ended December 31, 1996)*

         3.3      Certificate of Designation, Preferences and Rights of Series A
                  Preferred Stock (Form 8-K, dated July 10, 1995 and amended on
                  September 11, 1995)*

         3.4      Certificate of Designation, Preferences and Rights of Series B
                  Preferred Stock (Form 8-K, dated July 10, 1995 and amended on
                  September 11, 1995)*

         4.1      Stockholder Protection Agreement, dated as of June 26, 1995,
                  between Registrant and First Fidelity Bank, National
                  Association (Form 8-K, dated July 10, 1995 and amended on
                  September 11, 1995)*

         10.50    i-STAT Corporation Equity Incentive Plan (Form 10-Q for fiscal
                  quarter ended March 31, 1999)*

         10.51    Form of Executive Officer Restricted Share Award Agreement
                  under Equity Incentive Plan (Form 10-Q for fiscal quarter
                  ended March 31, 1999)*

         10.52    Form of Restricted Share Award Agreement with President and
                  Chief Executive Officer (Form 10-Q for fiscal quarter ended
                  March 31, 1999)*


         27       Financial Data Schedule


         *        These items are hereby incorporated by reference from the
                  exhibits of the filing or report indicated (except where
                  noted, Commission File No. 0-19841) and are hereby made a part
                  of this Report.

         (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.


                                       18
<PAGE>   19

                               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:      August 13, 1999


                                                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 and
                                              Accounting Officer)


                                       19
<PAGE>   20

                                  EXHIBIT INDEX


   Exhibit No.    Description

        27        Financial Data Schedule


                                       20