<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 March 31, 2000

                         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     /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                                                 April 28, 2000
    -----                                                 --------------
<S>                                                       <C>
    Common Stock, $ .15 par value                         18,233,608
</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 ended March 31, 2000 and 1999.............    3

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

          Consolidated Condensed Statements of Cash Flows
              for the three months ended March 31, 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 - 12


PART II   OTHER INFORMATION

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

          Item 6 - Exhibits and Reports on Form 8-K..........................   14


SIGNATURES...................................................................   15
</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
                                                         March 31,
                                              -------------------------------
                                                  2000                1999
                                                  ----                ----
<S>                                           <C>                <C>
Net revenues:
     Related party sales ...........          $      8,703       $      8,126
     Third party sales .............                 1,506              1,672
     Other related party revenues ..                   945                539
                                              ------------       ------------
         Total net revenues ........                11,154             10,337
Cost of sales ......................                10,762              8,083
                                              ------------       ------------
              Gross profit .........                   392              2,254
                                              ------------       ------------

Operating expenses:
     Research and development ......                 2,154              1,930
     General and administrative ....                 1,515              2,958
     Sales and marketing ...........                 1,898              2,303
                                              ------------       ------------
         Total operating expenses ..                 5,567              7,191
                                              ------------       ------------
              Operating loss .......                (5,175)            (4,937)
                                              ------------       ------------

Other income (expense), net ........                   506                446
                                              ------------       ------------
Net loss ...........................          $     (4,669)      $     (4,491)
                                              ============       ============
Basic and diluted net loss per share          $      (0.26)      $      (0.26)
                                              ============       ============
Shares used in computing basic and
     diluted net loss per share ....            17,765,224         17,473,965
                                              ============       ============
</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>
                                                                                      March 31,      December 31,
                                                                                         2000            1999
                                                                                      ---------      ------------
<S>                                                                                   <C>            <C>
         ASSETS
Current assets:
     Cash and cash equivalents .................................................      $  32,824       $  25,575
     Accounts receivable, net ..................................................            550             413
     Accounts receivable from related parties ..................................          3,188           4,185
     Inventories ...............................................................          8,854           8,886
     Prepaid expenses and other current assets .................................          1,221           1,185
                                                                                      ---------       ---------
         Total current assets ..................................................         46,637          40,244
Plant and equipment, net of accumulated depreciation of
     $25,994 and $24,761 .......................................................         16,282          15,936
Other assets ...................................................................          1,995           1,944
                                                                                      ---------       ---------
         Total assets ..........................................................      $  64,914       $  58,124
                                                                                      =========       =========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable ..........................................................      $   2,110       $   2,269
     Accrued expenses ..........................................................          3,737           4,453
     Deferred revenue (inclusive of related party deferred
         revenue of $11,244 in 2000 and $1,545 in 1999) ........................         11,264           1,564
                                                                                      ---------       ---------
         Total current liabilities .............................................         17,111           8,286
                                                                                      ---------       ---------
     Deferred revenue from related party, non-current ..........................          5,158           5,175
                                                                                      ---------       ---------
         Total liabilities .....................................................         22,269          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 March 31, 2000
         and 2,138,702 at December 31, 1999 ....................................           --               214
     Common Stock, $.15 par value, shares authorized 25,000,000:
         shares issued and outstanding 18,260,690 at March 31, 2000
         and 15,761,630 at December 31, 1999 ...................................          2,739           2,364
     Treasury Stock, at cost, 40,817 shares at March 31, 2000 and
         -0- shares at December 31, 1999 .......................................           (750)           --
     Additional paid-in capital ................................................        237,504         234,487
     Unearned compensation .....................................................         (1,344)         (1,547)
     Loan to officer, net ......................................................           (716)           (716)
     Accumulated deficit .......................................................       (194,139)       (189,470)
     Accumulated other comprehensive loss related to
         foreign currency translation ..........................................           (649)           (669)
                                                                                      ---------       ---------
         Total stockholders' equity ............................................         42,645          44,663
                                                                                      ---------       ---------
         Total liabilities and stockholders' equity ............................      $  64,914       $  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>
                                                                            Three Months Ended
                                                                                 March 31,
                                                                         -----------------------
                                                                           2000           1999
                                                                         --------       --------
<S>                                                                      <C>            <C>
Cash flows from operating activities:
    Net loss ......................................................      $ (4,669)      $ (4,491)
    Adjustments to reconcile net loss to net cash used in operating
       activities .................................................           154          1,019
    Change in assets and liabilities ..............................        10,843            675
                                                                         --------       --------
       Net cash provided by (used in) operating activities ........         6,328         (2,797)
                                                                         --------       --------

Cash flows from investing activities:
    Purchase of equipment .........................................        (1,480)        (1,863)
    Other .........................................................           (61)           (45)
                                                                         --------       --------
       Net cash used in investing activities ......................        (1,541)        (1,908)
                                                                         --------       --------

Cash flows from financing activities:
    Proceeds from issuance of Common Stock ........................         3,178            105
    Purchase of Treasury Stock ....................................          (750)          --
    Other .........................................................          --               (2)
                                                                         --------       --------
       Net cash provided by financing activities ..................         2,428            103
                                                                         --------       --------
    Effect of currency exchange rate changes on cash ..............            34             20
                                                                         --------       --------
    Net increase (decrease) in cash and cash equivalents ..........         7,249         (4,582)
    Cash and cash equivalents at beginning of period ..............        25,575         38,390
                                                                         --------       --------
    Cash and cash equivalents at end of period ....................      $ 32,824       $ 33,808
                                                                         ========       ========
</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 March 31, 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. 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 2,702,848 shares of common stock at $1.50 - $32.58
         per share, which expire on various dates from June 2000 to February
         2010, were outstanding at March 31, 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 March 31,
                                                     ----------------------------
                                                        2000              1999
                                                        ----              ----
                                                       (In thousands of dollars)
<S>                                                   <C>               <C>
Net loss ...................................          $(4,669)          $(4,491)
Other comprehensive income (loss):

     Foreign currency translation ..........               20               223
                                                      -------           -------
Comprehensive loss .........................          $(4,649)          $(4,268)
                                                      =======           =======
</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, 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.

         Reclassification:

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


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

                                   (unaudited)

                                   (continued)


2.       INVENTORIES


         Inventories consist of the following:

<TABLE>
<CAPTION>
                                                       March 31, 1999   December 31, 1999
                                                       --------------   -----------------
                                                            (In thousands of dollars)
<S>                                                    <C>              <C>
Raw materials.......................................        $3,682           $3,402
Work in process ....................................         2,964            2,764
Finished goods .....................................         2,208            2,720
                                                            ------           ------
                                                            $8,854           $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. 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 is the equivalent of the
         patented device and therefore infringes under the "doctrine of
         equivalents." The Company has submitted to the Court a motion for
         summary judgment in its favor on the "doctrine of equivalents," and
         oral argument on this motion has been set for late Spring 2000. Should
         the plaintiff prevail on this issue, it could have a material and
         adverse impact on the financial position, results of operations and
         cash flows of the Company.

         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. The
         plaintiffs have 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 Company appealed the
         reversal and a hearing certification of the appeal was held at the New
         Jersey Supreme Court on May 1, 2000. A decision is expected within
         several months. Should the plaintiff prevail on this issue, it could
         have a material and adverse 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 plaintiff has admitted that
         the Company does not literally infringe and is only pursuing
         infringement under the doctrine of equivalents. In February 2000, the
         Court denied the Company's


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

                                   (unaudited)

                                   (continued)


         motion for summary judgment on the basis that there remained certain
         factual issues to be decided, and the Company is awaiting the Court's
         decision on its motion to reconsider that denial. If the plaintiff
         should prevail in this matter, it could have a material and adverse
         impact on the financial position, results of operation 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. This amount, and the
         second installment of $4.0 million which was received in January 1999,
         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 $8,565,000 of net sales from Abbott for the three
         months ended March 31, 2000. Other related party revenues from Abbott
         comprise approximately $945,000 for the three months ended March 31,
         2000, to fund certain research and development and marketing expenses.
         At March 31, 2000, the Company had $3,033,000 of accounts receivable
         due from Abbott. In addition, the Company had $11,244,000 and
         $1,545,000 of deferred revenue, current, and $5,158,000 and $5,175,000
         of deferred revenue, non-current, from Abbott at March 31, 2000,
         respectively, and December 31, 1999, respectively.

         On March 16, 2000, Agilent Technologies, Inc. ("Agilent"), 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. The Company
         generated $138,000 of net sales from Agilent for the three months ended
         March 31, 2000.


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.

         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 were 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 result of the forgiveness of these loans.

         Compensation expenses in the amount of approximately $271,000 and
         $587,000 were recorded in connection with these awards, the loan
         forgiveness and the associated tax gross-up payment during the three
         months ended March 31, 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 System(R), 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 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 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. The Company also is in the
process of developing an analyzer and associated peripheral equipment which, in
addition to having the measurement capabilities currently possessed by the
i-STAT System, will incorporate the glucose measurement capabilities of an
Abbott Laboratories ("Abbott") product.

           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 (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 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 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 MARCH 31, 2000

         The Company generated revenues of approximately $11.2 million and $10.3
million for the three months ended March 31, 2000 and 1999, respectively,
including international revenues (as a percentage of total revenues) of $2.8
million (25.5%) and $2.3 million (21.9%), respectively. Revenues from Abbott
represented approximately 85.3% and 74.7% of the Company's worldwide revenues
for the three months ended March 31, 2000 and 1999, respectively.

         The $0.8 million (7.9%) increase in revenues was primarily due to
increased shipment volume of the Company's portable clinical analyzer and
peripheral equipment, and an increase of approximately $0.4 million in
reimbursements from Abbott to fund certain research and development and
marketing expenses (the "Abbott Reimbursements"). Worldwide cartridge shipments
increased 19.9% to 2,064,875 units in the three months ended March 31, 2000,
from 1,722,100 units in the three months ended March 31, 1999. However,
cartridge shipments in the first quarter of 2000 were constrained by
manufacturing process problems, and demand (shipments plus backorders) was
approximately 37% above the level of shipments in the three months ended March
31, 1999. Revenues from the increased cartridge shipments were offset by lower
worldwide average selling prices per cartridge, which declined from
approximately $4.22 to $3.33 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.


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

                                   (continued)


         Gross profit (as a percentage of sales) decreased by approximately $1.9
million to $0.4 million (3.5%) in the quarter ended March 31, 2000, compared
with a gross profit of $2.3 million (21.8%) in the quarter ended March 31, 1999.
Gross profit in the first quarter of 2000 was reduced by manufacturing process
problems caused by defective tape from its tape supplier which resulted in high
scrap levels and a reduced level of production. In addition, the impact on
gross profit of the increase in the shipment volume of the Company's cartridges
and the increase in Abbott Reimbursements in the quarter ended March 31, 2000,
was offset by lower average selling prices because of the transfer pricing
arrangement between the Company and Abbott and the Company's inability to
supply some of its higher priced cartridges.

         The Company incurred research and development costs (as a percentage of
sales) of approximately $2.2 million (19.3%) and $1.9 million (18.7%) for the
three months ended March 31, 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 tests for coagulation, one of
which, Celite(R) ACT (activated clotting time), received Food and Drug
Administration clearance to market in early 2000. The Company also is studying
the development of cardiac marker tests, and other tests to measure enzymes and
other analytes. The Company also is in the process of developing an analyzer and
associated peripheral equipment which, in addition to having the measurement
capabilities currently possessed by the i-STAT System, will incorporate the
glucose measurement capabilities of an Abbott product. 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. Revenues and gross
profit in the three months ended March 31, 2000 and 1999, include approximately
$0.8 million and $0.4 million, respectively, of such funding.

         The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $1.5 million (13.6%) and $2.9 million
(28.4%) for the three months ended March 31, 2000 and 1999, 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 decrease of approximately $1.4 million
primarily reflects fees of approximately $0.9 million during the three months
ended March 31, 1999 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
which was approximately $0.3 million higher in the three months ended March 31,
1999.

         The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $1.9 million (17.0%) and $2.3 million (22.3%) for the
three months ended March 31, 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 reimbursed by Abbott, and revenues and gross
profit in the three months ended March 31, 2000 and 1999, include approximately
$0.2 million and $0.1 million, respectively, 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 $0.5 million and $0.4 million for
the three months ended March 31, 2000 and 1999, respectively, primarily reflects
interest income earned on cash and cash equivalents balances.

         Net loss for the three months ended March 31, 2000 was approximately
$4.7 million, or 26 cents per share, compared with a net loss of approximately
$4.5 million, or 26 cents per share, for the first quarter of 1999. The weighted
average number of shares used in computing basic and diluted net loss per share
was approximately 17.765 million and 17.474 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)


LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2000, the Company had cash and cash equivalents of
approximately $32.8 million, an increase of approximately $7.2 million from the
December 31, 1999 balance of approximately $25.6 million. The increase primarily
reflects the receipt of a $10.8 million prepayment from Abbott against future
incremental product sales and the receipt of approximately $2.4 million from the
proceeds of stock option exercises, partially offset by approximately $4.5
million of cash used in operating activities, and equipment purchases of
approximately $1.5 million. Working capital decreased by approximately $2.4
million from $32.0 million to $29.6 million during the same period. Changes in
working capital during the three months ended March 31, 2000, primarily reflect
the increase in cash and cash equivalents, a decrease of approximately $1.0
million in accounts receivable from related parties, and a reduction of
approximately $0.7 million in accrued expenses which primarily reflects the
payment of accrued 1999 annual incentive bonuses. Changes in working capital
also include an increase of approximately $9.7 million in deferred revenue,
which reflects the receipt of $10.8 million from Abbott in January 2000,
representing the third installment of prepayments for guaranteed future
incremental cartridge sales, 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,
manufacturing efficiencies 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 ("FASB") 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, 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 consolidated results of
operations, financial position or cash flows.


                                       11
<PAGE>   12
                               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.


                                       12
<PAGE>   13
                               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. 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 is the equivalent
of the patented device and therefore infringes under the "doctrine of
equivalents." The Company has submitted to the Court a motion for summary
judgment in its favor on the "doctrine of equivalents," and oral argument on
this motion has been set for late Spring 2000. Should the plaintiff prevail on
this issue, it could have a material and adverse impact on the financial
position, results of operations and cash flows of the Company.

           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. The plaintiffs have 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 Company appealed the reversal and a hearing
certification of the appeal was held at the New Jersey Supreme Court on May 1,
2000. A decision is expected within several months. Should the plaintiff prevail
on this issue, it could have a material and adverse 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
plaintiff has admitted that the Company does not literally infringe and is only
pursuing infringement under the doctrine of equivalents. In February 2000, the
Court denied the Company's motion for summary judgment on the basis that there
remained certain factual issues to be decided, and the Company is awaiting the
Court's decision on its motion to reconsider that denial. If the plaintiff
should prevail in this matter, it could have a material and adverse impact on
the financial position, results of operation and cash flows of the Company.


                                       13
<PAGE>   14
                                  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)*

         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.


                                       14
<PAGE>   15
                               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:      May 4, 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)


                                       15
<PAGE>   16
                                  EXHIBIT INDEX

Exhibit No.

27       Financial Data Schedule