<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 September 30, 2000

                         Commission File Number 0-19841

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

<TABLE>
<CAPTION>
            Delaware                                     22-2542664
            --------                                     ----------
<S>                                                      <C>
            (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)
</TABLE>



                                 (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  /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                                        November 9, 2000
            -----                                        ----------------
<S>                                                      <C>
            Common Stock, $ .15 par value                18,377,045
</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, 2000 and 1999 ..........................        3

       Consolidated Condensed Balance Sheets
           as of September 30, 2000 and December 31, 1999 .............        4

       Consolidated Condensed Statements of Cash Flows
           for the nine months ended September 30, 2000 and 1999 ......        5

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

       Item 2 - Management's Discussion and Analysis of Financial
                 Condition and Results of Operations ..................   9 - 14


PART II  OTHER INFORMATION

       Item 1 - Legal Proceedings .....................................       15

       Item 6 - Exhibits and Reports on Form 8-K ......................       16


SIGNATURES ............................................................       17
</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                          Nine Months Ended
                                                            September 30,                               September 30,
                                                 ----------------------------------          ----------------------------------
                                                     2000                  1999                  2000                  1999
                                                 ------------          ------------          ------------          ------------
<S>                                             <C>                   <C>                   <C>                   <C>
Net revenues:
     Related party sales ...............          $    10,432           $     8,672           $    30,425           $    25,581
     Third party sales .................                2,196                 2,153                 6,266                 5,806
     Other related party revenues ......                  825                   552                 2,725                 1,753
                                                 ------------          ------------          ------------          ------------
       Total net revenues ..............               13,453                11,377                39,416                33,140
Cost of sales ..........................                8,351                 8,015                30,247                26,520
                                                 ------------          ------------          ------------          ------------
           Gross profit ................                5,102                 3,362                 9,169                 6,620
                                                 ------------          ------------          ------------          ------------
Operating expenses:
     Research and development ..........                1,860                 1,842                 6,129                 5,780
     General and administrative ........                1,952                 1,396                 5,378                 6,126
     Sales and marketing ...............                1,865                 1,960                 5,842                 6,347
     Litigation settlement .............                   --                    --                 1,500                    --
                                                 ------------          ------------          ------------          ------------
       Total operating expenses ........                5,677                 5,198                18,849                18,253
                                                 ------------          ------------          ------------          ------------
           Operating loss ..............                 (575)               (1,836)               (9,680)              (11,633)
                                                 ------------          ------------          ------------          ------------
Other income (expense), net ............                  461                   358                 1,406                 1,172
                                                 ------------          ------------          ------------          ------------
Net loss ...............................         $       (114)          $    (1,478)         $     (8,274)         $    (10,461)
                                                 ============          ============          ============          ============
Basic and diluted net loss per share ...         $      (0.01)          $     (0.08)         $      (0.46)         $      (0.60)
                                                 ============          ============          ============          ============
Shares used in computing basic and
     diluted net loss per share ........           18,060,265            17,566,063            17,929,929            17,519,532
                                                 ============          ============          ============          ============
</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,
                                                                                            2000               1999
                                                                                       -------------       ------------
<S>                                                                                    <C>                 <C>
         ASSETS

Current assets:
     Cash and cash equivalents .................................................         $  22,129          $  25,575
     Accounts receivable, net ..................................................               735                413
     Accounts receivable from related parties ..................................             3,631              4,185
     Inventories ...............................................................            14,717              8,886
     Prepaid expenses and other current assets .................................             1,227              1,185
                                                                                         ---------          ---------
         Total current assets ..................................................            42,439             40,244
Plant and equipment, net of accumulated depreciation of
     $26,607 and $24,761 .......................................................            17,034             15,936
Other assets ...................................................................             1,944              1,944
                                                                                         ---------          ---------
         Total assets ..........................................................         $  61,417          $  58,124
                                                                                         =========          =========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable ..........................................................         $   3,613          $   2,269
     Accrued expenses ..........................................................             5,036              4,453
     Deferred revenue (inclusive of related party deferred
         revenue of $7,859 in 2000 and $1,545 in 1999) .........................             7,989              1,564
                                                                                         ---------          ---------
         Total current liabilities .............................................            16,638              8,286
                                                                                         ---------          ---------
     Deferred revenue from related party, non-current ..........................             5,123              5,175
                                                                                         ---------          ---------
         Total liabilities .....................................................            21,761             13,461
                                                                                         ---------          ---------
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, shares authorized 2,138,702:
         shares issued and outstanding -0- at September 30, 2000
         and 2,138,702 at December 31, 1999 ....................................                --                214
     Common Stock, $.15 par value, shares authorized 25,000,000:
         shares issued and outstanding 18,366,757 at September 30, 2000
         and 15,761,630 at December 31, 1999 ...................................             2,755              2,364
     Treasury Stock, at cost, 40,817 shares at September 30, 2000 and
         -0- shares at December 31, 1999 .......................................              (750)                --
     Additional paid-in capital ................................................           238,306            234,487
     Unearned compensation .....................................................              (958)            (1,547)
     Loan to officer, net ......................................................              (771)              (716)
     Accumulated deficit .......................................................          (197,744)          (189,470)
     Accumulated other comprehensive loss related to
         foreign currency translation ..........................................            (1,182)              (669)
                                                                                         ---------          ---------
         Total stockholders' equity ............................................            39,656             44,663
                                                                                         ---------          ---------
         Total liabilities and stockholders' equity ............................         $  61,417          $  58,124
                                                                                         =========          =========
</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,
                                                                                             --------------------------------
                                                                                               2000                    1999
                                                                                             --------                --------
<S>                                                                                          <C>                     <C>
Cash flows from operating activities:
    Net loss ......................................................................       $   (8,274)             $  (10,461)
    Adjustments to reconcile net loss to net cash provided by
       (used in) operating activities .............................................             (242)                  2,778
    Change in assets and liabilities ..............................................            7,380                     136
                                                                                          ----------              ----------
        Net cash used in operating activities .....................................           (1,136)                 (7,547)
                                                                                          ----------              ----------
Cash flows from investing activities:
    Purchase of equipment .........................................................           (5,051)                 (5,335)
    Other .........................................................................             (105)                   (210)
                                                                                          ----------              ----------
        Net cash used in investing activities .....................................           (5,156)                 (5,545)
                                                                                          ----------              ----------

Cash flows from financing activities:
    Proceeds from issuance of Common Stock ........................................            3,863                     338
    Purchase of Treasury Stock ....................................................             (750)                     --
    Loan to officer ...............................................................             (257)                   (716)
                                                                                          ----------              ----------
        Net cash provided by (used in) financing activities .......................            2,856                    (378)
                                                                                          ----------              ----------
    Effect of currency exchange rate changes on cash ..............................              (10)                    (65)
                                                                                          ----------              ----------
    Net decrease in cash and cash equivalents .....................................           (3,446)                (13,535)
    Cash and cash equivalents at beginning of period ..............................           25,575                  38,390
                                                                                          ----------              ----------
    Cash and cash equivalents at end of period ....................................       $   22,129              $   24,855
                                                                                          ==========              ==========
</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)

                                   (continued)


1.    GENERAL

      Basis of Presentation

      The information presented as of September 30, 2000 and 1999, 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,
      1999, 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. Series B preferred shares have been included in the
      calculations since their date of issuance and through conversion in March
      2000, as they were 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 2,665,443 shares of common stock at $1.50 - $32.58 per
      share, which expire on various dates from November 2000 to September 2010,
      were outstanding at September 30, 2000. 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                  Nine Months Ended
                                                            September 30,                      September 30,
                                                       2000              1999              2000              1999
                                                     --------          --------          --------          --------
                                                                        (In thousands of dollars)
<S>                                                <C>               <C>               <C>               <C>
      Net loss .............................         $   (114)        $  (1,478)        $  (8,274)        $ (10,461)
      Other comprehensive income (loss):
          Foreign currency translation .....             (366)              105              (513)              532
                                                     --------          --------          --------          --------


      Comprehensive loss ...................         $   (480)         $ (1,373)         $ (8,787)         $ (9,929)
                                                     ========          ========          ========          ========
</TABLE>

      Recently Issued Accounting Pronouncements:

      In June 1998, the Financial Accounting Standard Board issued SFAS No. 133,
      "Accounting for Derivative Instruments and Hedging Activities". SFAS No.
      133, as amended, is effective for all fiscal quarters of all fiscal years
      beginning after June 15, 2000 (January 1, 2001 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.

      In December 1999, the Securities and Exchange Commission issued Staff
      Accounting Bulletin No. 101 ("SAB 101") which addresses the staff's views
      on the application of United States generally accepted accounting
      principles for revenue recognition. The Company will be required to adopt
      the guidance of this bulletin no later than the fourth quarter of 2000.
      The Company does not expect SAB 101 to have a material impact on its
      financial condition or results of operations.


                                       6
<PAGE>   7
                               i-STAT CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   (unaudited)

                                   (continued)



      Reclassification:

      Certain reclassifications have been made to 1999 amounts to conform them
      to the 2000 presentations.

2.    INVENTORIES

      Inventories consist of the following:

<TABLE>
<CAPTION>
                                                  September 30, 2000     December 31, 1999
                                                          (In thousands of dollars)
<S>                                                 <C>                    <C>
        Raw materials ........................       $      6,298           $      3,402
        Work in process ......................              3,377                  2,764
        Finished goods .......................              5,042                  2,720
                                                     ------------          -------------
                                                     $     14,717           $      8,886
                                                    =============          =============
</TABLE>



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 (the "Patent"). In February 1998, the Court entered summary
      judgment in favor of the Company on the issue of patent infringement. The
      plaintiff appealed the dismissal to the Federal Circuit which affirmed two
      of the grounds of the dismissal (proper interpretation of the Patent and
      the fact that the Company does not literally infringe), but remanded the
      case back to the District Court with instructions to reconsider whether
      the Company's device performs a certain measurement in a substantially
      equivalent way to a method covered by the Patent, and therefore infringes
      under the "doctrine of equivalents." A jury trial was initially scheduled
      to commence on November 6, 2000, but has been postponed in order to allow
      the Company to present argument that certain evidence pertaining to the
      plaintiff's interpretation of the Patent should serve as the basis for
      dismissal of the case. A decision on this point is unlikely to occur prior
      to the beginning of 2001. The Company believes that it will prevail in
      this case, but should the plaintiff prevail, it could have a material and
      adverse impact on the financial position, results of operations and cash
      flows of the Company.

4.    RELATED PARTY TRANSACTIONS

      In January 2000, the Company received from Abbott Laboratories ("Abbott")
      the third installment of prepayments for guaranteed future incremental
      cartridge sales (as defined in the Distribution Agreement with Abbott), in
      the amount of $10.8 million. The first installment of $5.0 million is
      carried on the consolidated condensed balance sheet as deferred revenue,
      non-current, and will be amortized to income after the other installments
      have been fully amortized to income. Subsequent installments are carried
      on the consolidated condensed balance sheet as deferred revenue, current,
      net of amortization of such prepayments to income as incremental cartridge
      sales are generated.

      The Company generated $10,432,000 and $8,309,000 of net sales from Abbott
      for the three months ended September 30, 2000 and 1999, respectively, and
      $30,286,000 and $23,525,000 for the nine months ended September 30, 2000
      and 1999, respectively. Other related party revenues from Abbott comprise
      approximately $825,000 and $552,000 for the three months ended September
      30, 2000 and 1999, respectively, and $2,725,000 and $1,753,000 for the
      nine months ended September 30, 2000 and 1999, respectively, and represent
      reimbursement of certain research and development and marketing expenses.
      At September 30, 2000, the Company had $3,631,000 of accounts receivable
      due from Abbott. In addition, the Company had $7,859,000 and $1,545,000 of
      deferred revenue, current, and $5,123,000 and $5,175,000 of deferred
      revenue, non-current, from Abbott at September 30, 2000, and December 31,
      1999, respectively.


                                       7
<PAGE>   8
                               i-STAT CORPORATION
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   (unaudited)

                                   (continued)




      On March 16, 2000, Agilent Technologies, Inc., a subsidiary of
      Hewlett-Packard Company, converted its holding of 2,138,702 shares of
      Series B Preferred Stock into 2,138,702 shares of Common Stock, and sold
      its holding and is no longer a related party.

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 vest on February 5,
      2002. The 60,000 shares awarded to the other three executive officers vest
      over a three year period.

      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 of
      approximately $257,000 which amount was loaned on April 13, 2000 at an
      interest rate of 6.36%. One third of the principal amount of these loans
      will be forgiven on each 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 a result of the
      forgiveness of these loans.

      Compensation expenses in the amount of approximately $307,000 and $288,000
      were recorded in connection with these awards, the loan forgiveness and
      the associated tax gross-up payment during the three months ended
      September 30, 2000 and 1999, respectively, and $875,000 and $1,090,000
      during the nine months ended September 30, 2000 and 1999, respectively.




                                       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, lactate, Celite(R) ACT (activated clotting time), arterial blood
gases, and bicarbonate, and derives 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
three additional tests for the measurement of coagulation: kaolin ACT, partial
thromboplastin time ("aPTT"), and prothrombin time ("PT"). The Company is also
studying the development of cardiac marker tests, and other tests to measure
enzymes and other analytes. The Company has developed an analyzer and
associated peripheral equipment, which, in addition to having the measurement
capabilities currently possessed by the i-STAT System, incorporates the glucose
measurement capabilities of an Abbott Laboratories ("Abbott") product. The new
analyzer is known as the i-STAT(R)1 Analyzer. On October 5, 2000, the Company
received Food and Drug Administration ("FDA") clearance to market the new
analyzer. The Company expects to commence marketing the i-STAT(R)1 Analyzer in
the fourth quarter of 2000.

           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 Japanese marketing partners,
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 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 which, among other things, has
altered significantly the manner in which the Company markets and sells its
products worldwide. 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, 1999 for a description of the Company's agreements with
Abbott. Copies of such agreements were filed with the Securities and Exchange
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 SEPTEMBER 30, 2000

         The Company generated revenues of approximately $13.5 million and
$11.4 million for the three months ended September 30, 2000 and 1999,
respectively, including international revenues (as a percentage of total
revenues) of $3.5 million (26.0%) and $3.0 million (26.1%), respectively.
Revenues from Abbott represented approximately 83.7% and 77.9% of the Company's
worldwide revenues for the three months ended September 30, 2000 and 1999,
respectively.

         The $2.1 million (18.2%) increase in revenues was primarily due to
increased shipment volumes of the Company's cartridges, reflecting higher
cartridge consumption by existing hospital users and the addition of new
hospital accounts in the United States and internationally. Worldwide cartridge
shipments increased 27.3% to 2,525,050 units in the three months ended September
30, 2000, from 1,983,665 units in the three months ended September 30, 1999.
Revenues from the increased cartridge shipments were offset by lower worldwide
average selling prices per cartridge, which declined from approximately $3.79 to
$3.77 per cartridge in the same periods. Cartridge average selling prices are
expected to continue to decline because of the product transfer pricing
arrangements applicable under the strategic alliance between the Company and
Abbott. The increase in

                                       9
<PAGE>   10
                              i-STAT CORPORATION
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                  (continued)


revenues also reflects an increase of approximately $0.3 million in
reimbursements from Abbott to fund certain research and development and
marketing expenses (the "Abbott Reimbursements"). The Abbott Reimbursements are
shown as "Other related party revenues" on the consolidated condensed statements
of operations.

         Gross profit (as a percentage of sales) increased by approximately
$1.7 million to $5.1 million (37.9%) in the quarter ended September 30, 2000,
compared with a gross profit of $3.4 million (29.6%) in the quarter ended
September 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,
improvements in cartridge production yields, and an increase of approximately
$0.3 million in Abbott Reimbursements. The increase in cartridge production
volume in the three months ended September 30, 2000 reflects the increase in
sales, plus the rebuilding of cartridge inventories following a reduced level
of production during the first quarter of 2000. 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 $1.9 million (13.8%) and $1.8 million (16.2%) for
the three months ended September 30, 2000 and 1999, 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 three additional
tests for the measurement of coagulation: kaolin ACT, partial thromboplastin
time ("aPTT"), and prothrombin time ("PT"). 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 success of the Company's development programs and its
financial resources. Some portion of these expenditures may be funded by
Abbott. During the quarter ended September 30, 2000, the Company completed
development of an analyzer and associated peripheral equipment, which, in
addition to having the measurement capabilities currently possessed by the
i-STAT System, incorporates the glucose measurement capabilities of an Abbott
product. On October 5, 2000, the Company received FDA clearance to market the
new analyzer. Revenues and gross profit in the three months ended September 30,
2000 and 1999, include approximately $0.6 million and $0.4 million,
respectively, of Abbott Reimbursements.

         The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $2.0 million (14.5%) and $1.4 million
(12.3%) for the three months ended September 30, 2000 and 1999, respectively.
General and administrative expenses consisted primarily of salaries and
benefits of personnel, office costs, legal and other professional fees and
other costs necessary to support the Company's infrastructure. The increase in
general and administrative expenses primarily reflects additional legal and
consulting costs associated with ongoing litigation.

         The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $1.9 million (13.9%) and $2.0 million (17.2%) for the
three months ended September 30, 2000 and 1999, respectively, consisting
primarily of salaries, benefits, travel, and other expenditures for sales
representatives, implementation coordinators, international marketing support,
order entry, distribution, technical services, clinical affairs, product
literature, market research, and other sales infrastructure costs. A portion of
the costs of the implementation coordinators is covered by the Abbott
Reimbursements, and revenues and gross profit in the three months ended
September 30, 2000 and 1999, include approximately $0.2 million and $0.1
million, respectively, of such Reimbursements.

         Other income, net, of approximately $0.5 million and $0.4 million for
the three months ended September 30, 2000 and 1999, respectively, primarily
reflects interest income earned on cash and cash equivalents balances.

         Net loss for the three months ended September 30, 2000 was
approximately $0.1 million, or 1 cent per share, compared with a net loss of
approximately $1.5 million, or 8 cents per share, for the third quarter of
1999. The weighted average number of shares used in computing basic and diluted
net loss per share was approximately 18.060 million and 17.566 million in the
2000 and 1999 periods, respectively.




                                       10
<PAGE>   11
                              i-STAT CORPORATION
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                  (continued)




         NINE MONTHS ENDED SEPTEMBER 30, 2000

         The Company generated revenues of approximately $39.4 million and
$33.1 million for the nine months ended September 30, 2000 and 1999,
respectively, including international revenues (as a percentage of total
revenues) of $10.3 million (26.2%) and $8.1 million (24.5%), respectively.
Revenues from Abbott represented approximately 83.8% and 76.3% of the Company's
worldwide revenues for the nine months ended September 30, 2000 and 1999,
respectively. The $6.3 million (19.0%) increase in revenues was primarily due
to increased shipment volume of the Company's cartridges, reflecting higher
cartridge consumption by existing hospital users and the addition of new
hospital accounts in the United States and internationally. Worldwide cartridge
shipments increased 27.3% to 7,177,450 units in the nine months ended September
30, 2000, from 5,638,615 units in the nine months ended September 30, 1999.
Revenues from the increased cartridge shipments were partially offset by lower
worldwide average selling prices per cartridge, which declined from
approximately $4.00 to $3.71 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 reflects an increase in shipment volumes of the
Company's analyzers and peripheral equipment, and an increase of approximately
$1.0 million in Abbott Reimbursements.

         Gross profit (as a percentage of sales) increased by approximately
$2.6 million to $9.2 million (23.3%) in the nine months ended September 30,
2000, compared with a gross profit of $6.6 million (20.0%) in the nine months
ended September 30, 1999. Gross profit in the prior year included a charge of
approximately $2.1 million resulting from temporary production losses
associated with one of the newer manufacturing processes in the second quarter
of 1999. Gross profit in the first half of 2000 was negatively impacted by
manufacturing process problems caused by defective tape from a tape supplier
that resulted in high scrap levels and a reduced level of production during the
first quarter of 2000. 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 an
increase of approximately $1.0 million in Abbott Reimbursements. 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 $6.1 million (15.5%) and $5.8 million (17.4%) for
the nine months ended September 30, 2000 and 1999, 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 three additional
tests for the measurement of coagulation: kaolin ACT, partial thromboplastin
time ("aPTT"), and prothrombin time ("PT"). 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 success of the Company's development programs and its
financial resources. Some portion of these expenditures may be funded by
Abbott. During the quarter ended September 30, 2000 the Company completed
development of an analyzer and associated peripheral equipment, which, in
addition to having the measurement capabilities currently possessed by the
i-STAT System, incorporates the glucose measurement capabilities of an Abbott
product. On October 5, 2000, the Company received FDA clearance to market the
new analyzer. Revenues and gross profit in the nine months ended September 30,
2000 and 1999 include approximately $2.2 million and $1.3 million,
respectively, of Abbott Reimbursements.

         The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $5.4 million (13.6%) and $6.1 million
(18.4%) for the nine months ended September 30, 2000 and 1999, respectively.
General and administrative expenses consisted primarily of salaries and
benefits of personnel, office costs, legal and other professional fees and
other costs necessary to support the Company's infrastructure. The decrease of
approximately $0.7 million primarily reflects fees in the 1999 period for
special consulting services to assist in the development of manufacturing
strategies and capacity plans, and to identify business development
opportunities, partially offset by increases in legal and consulting costs
associated with ongoing litigation.

          The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $5.8 million (14.8%) and $6.3 million (19.1%) for the
nine months ended September 30, 2000 and 1999, respectively, consisting
primarily of salaries, benefits, travel, and other expenditures for sales
representatives, implementation coordinators, international marketing support,

                                       11
<PAGE>   12
                              i-STAT CORPORATION
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                  (continued)




order entry, distribution, technical services, product literature, market
research, clinical studies and other sales infrastructure costs. The dollar
decrease from period to period is primarily attributable to cost reductions
following the assumption by Abbott of principal responsibility for the marketing
and sales of the i-STAT System. A portion of the costs of the implementation
coordinators are covered by the Abbott Reimbursements, and revenues and gross
profit in the nine months ended September 30, 2000 and 1999, include
approximately $0.5 million and $0.5 million of such Reimbursements,
respectively.

         The Company incurred costs of $1.5 million in the nine months ended
September 30, 2000 in settlement of the patent infringement litigation with
Customedix Corporation.

         Other income, net, of approximately $1.4 million and$1.2 million for
each of the nine months ended September 30, 2000 and September 30, 1999,
primarily reflects interest income earned on cash and cash equivalents
balances.

         Net loss for the nine months ended September 30, 2000 decreased 20.9%
to approximately $8.3 million, or 46 cents per share, compared with a net loss
of approximately $10.5 million, or 60 cents per share, for the nine months
ended September 30, 1999. The weighted average number of shares used in
computing basic and diluted net loss per share was approximately 17.930 million
and 17.519 million in the 2000 and 1999 periods, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2000, the Company had cash and cash equivalents of
approximately $22.1 million, a decrease of approximately $3.5 million from the
December 31, 1999 balance of approximately $25.6 million. The decrease reflects
approximately $11.9 million of cash used in operating activities and equipment
purchases of approximately $5.1 million, partially offset by the receipt of
$10.8 million from Abbott in January 2000 and the receipt of approximately $3.1
million, net, from the proceeds of stock option exercises. The $10.8 million
received from Abbott represents the third installment of prepayments for
guaranteed future incremental cartridge sales (as defined in the Distribution
Agreement with Abbott). Working capital decreased by approximately $6.2 million
from $32.0 million to $25.8 million during the same period. Changes in working
capital during the nine months ended September 30, 2000, primarily reflect the
decrease in cash and cash equivalents, a decrease of approximately $0.3 million
in accounts receivable, an increase of approximately $6.0 million in
inventories, and an increase of approximately $2.0 million in accounts payable
and accrued expenses. The increase in inventories reflects the build-up of
cartridge inventories to meet increased sales demand, and an increase in
analyzer inventories in preparation for the launch of the new i-STAT(R)1
Analyzer. Changes in working capital also include an increase of approximately
$6.4 million in deferred revenue, which reflects the receipt of the $10.8
million prepayment from Abbott, partially offset by the amortization of such
prepayments to income as incremental cartridge sales (as defined in the
Distribution Agreement with Abbott) are generated.

         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 future incremental cartridge 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 and the level of Abbott Reimbursements,
manufacturing efficiencies and manufacturing plant expansion plans, the outcome
of ongoing litigation and competitive conditions.

         On March 16, 2000, Agilent Technologies, Inc., a subsidiary of HP,
converted its holding of 2,138,702 shares of Series B Preferred Stock into
2,138,702 shares of Common Stock, and sold its holding and is no longer a
related party.

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

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No.
133, as amended, is effective for all fiscal quarters of all fiscal years
beginning after June 15, 2000 (January 1, 2001 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.

                                       12
<PAGE>   13
                              i-STAT CORPORATION
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                  (continued)




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 consolidated results of operations, financial position
or cash flows.

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101") which addresses the staff's views on the
application of the United States generally accepted accounting principles for
revenue recognition. The Company will be required to adopt the guidance of this
bulletin no later than the fourth quarter of 2000. The Company does not expect
SAB 101 to have a material impact on its financial condition or results of
operations.




                                       13
<PAGE>   14
                              i-STAT CORPORATION
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                  (continued)




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, 1999, AND OTHER FACTORS DETAILED FROM
TIME TO TIME IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.




                                       14
<PAGE>   15
                              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 "Patent"). In February 1998, the Court entered summary judgment
in favor of the Company on the issue of patent infringement. The plaintiff
appealed the dismissal to the Federal Circuit which affirmed two of the grounds
of the dismissal (proper interpretation of the Patent and the fact that the
Company does not literally infringe), but remanded the case back to the District
Court with instructions to reconsider whether the Company's device performs a
certain measurement in a substantially equivalent way to a method covered by the
Patent, and therefore infringes under the "doctrine of equivalents." A jury
trial was initially scheduled to commence on November 6, 2000, but has been
postponed in order to allow the Company to present argument that certain
evidence pertaining to the plaintiff's interpretation of the Patent should serve
as the basis for dismissal of the case. A decision on this point is unlikely to
occur prior to the beginning of 2001. The Company believes that it will prevail
in this case, but should the plaintiff prevail, it could have a material and
adverse impact on the financial position, results of operations and cash flows
of the Company.




                                       15
<PAGE>   16
                                  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)*

            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)*

            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.




                                       16
<PAGE>   17
                              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:  November 13, 2000





                                           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)




                                       17
<PAGE>   18
                                  EXHIBIT INDEX



Exhibit No.

      27          Financial Data Schedule