<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

                         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.)

       303 College Road East, Princeton, New Jersey        08540
       (Address of Principal Executive Offices)            (Zip Code)



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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.



       Yes   [X]                                           No   [ ]



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

       Class                                               July 31, 1997

       Common Stock, $.15 par value                        13,133,900
<PAGE>   2
                               i-STAT CORPORATION



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                NUMBER

<S>                                                                             <C>
PART I  FINANCIAL INFORMATION

        ITEM 1 - Financial Statements

        Consolidated Condensed Statements of Operations for the three
           months and six months ended June 30, 1997 and 1996 ............         3

        Consolidated Condensed Balance Sheets
           as of June 30, 1997 and December 31, 1996 .....................         4

        Consolidated Condensed Statements of Cash Flows for the six months
           ended June 30, 1997 and 1996 ..................................         5

        Notes to Consolidated Condensed Financial Statements .............        6-7

        ITEM 2 - Management's Discussion and Analysis of Financial
                 Condition and Results of Operations .....................        8-11


PART II OTHER INFORMATION

        ITEM 1 - Legal Proceedings .......................................        12

        ITEM 4 - Submission of Matters to a Vote of Security Holders .....        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                         Six Months Ended
                                                           June 30,                                  June 30,
                                              ---------------------------------         ----------------------------------
                                                  1997                 1996                 1997                 1996
                                                  ----                 ----                 ----                 ----

<S>                                           <C>                  <C>                  <C>                  <C>
Net sales ............................        $      9,146         $      6,740         $     16,952         $     13,151

Cost of sales ........................               7,258                6,636               13,591               12,435
                                              ------------         ------------         ------------         ------------

                  Gross profit .......               1,888                  104                3,361                  716
                                              ------------         ------------         ------------         ------------

 Operating expenses:

         Research and development ....               1,808                1,364                3,427                2,684

         General and administrative ..               1,521                1,559                2,978                2,661

         Sales and marketing .........               3,337                2,838                6,069                5,915
                                              ------------         ------------         ------------         ------------

              Total operating expenses               6,666                5,761               12,474               11,260
                                              ------------         ------------         ------------         ------------

                  Operating loss .....              (4,778)              (5,657)              (9,113)             (10,544)
                                              ------------         ------------         ------------         ------------

Other income (expense), net ..........                 293                  555                  635                1,155
                                              ------------         ------------         ------------         ------------

Net loss .............................        $     (4,485)        $     (5,102)        $     (8,478)        $     (9,389)
                                              ============         ============         ============         ============

Net loss per share ...................        $      (0.32)        $      (0.38)        $      (0.62)        $      (0.71)
                                              ============         ============         ============         ============

Shares used in computing
     net loss per share ..............          14,032,398           13,324,591           13,700,335           13,304,716
                                              ============         ============         ============         ============
</TABLE>



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



                                       3
<PAGE>   4
                               i-STAT CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEETS
           (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                June 30,        December 31,
                                                                                  1997              1996
                                                                               ---------        ------------
<S>                                                                            <C>               <C>
         ASSETS
Current assets:
     Cash and cash equivalents ........................................        $  17,492         $  28,417
     Short-term investments ...........................................           22,971                --
     Accounts receivable, net .........................................            4,464             4,948
     Inventories ......................................................            9,176             7,788
     Prepaid expenses and other current assets ........................              573               955
                                                                               ---------         ---------
         Total current assets .........................................           54,676            42,108
Plant and equipment, net of accumulated depreciation of
     $14,295 and $12,564 ..............................................           11,759            11,534
Other assets ..........................................................            1,601             1,723
                                                                               ---------         ---------
         Total assets .................................................        $  68,036         $  55,365
                                                                               =========         =========

         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable .................................................        $   1,544         $   1,537
     Accrued expenses .................................................            3,217             3,754
     Deferred revenue, current ........................................            1,699             3,240
                                                                               ---------         ---------
         Total current liabilities ....................................            6,460             8,531
                                                                               ---------         ---------
Stockholders' equity:
     Preferred Stock, $.10 par value, shares authorized 7,000,000:
         Series A Junior Participating Preferred Stock, $.10 par value,
         1,500,000 shares authorized; none issued .....................               --                --
         Series B Preferred Stock, $.10 par value,
         2,138,702 shares authorized and issued .......................              214               214
     Common Stock, $.15 par value, shares authorized 25,000,000;
         shares issued 13,133,900 at June 30, 1997 and 11,215,214 at
         December 31, 1996 ............................................            1,970             1,682
     Additional paid-in capital .......................................          209,391           186,434
     Other, net .......................................................             (221)             (196)
     Accumulated deficit ..............................................         (149,778)         (141,300)
                                                                               ---------         ---------
         Total stockholders' equity ...................................           61,576            46,834
                                                                               ---------         ---------
         Total liabilities and stockholders' equity ...................        $  68,036         $  55,365
                                                                               =========         =========
</TABLE>

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



                                       4
<PAGE>   5
                               i-STAT CORPORATION
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS OF DOLLARS)
                                   (unaudited)



<TABLE>
<CAPTION>
                                                                              Six Months Ended
                                                                                  June 30,
                                                                          -------------------------
                                                                            1997             1996
                                                                          --------         --------

<S>                                                                       <C>              <C>
Cash flows from operating activities:
   Net loss ......................................................        $( 8,478)        $( 9,389)
   Adjustments to reconcile net loss to net cash used in operating
     activities ..................................................             228              (68)
   Change in assets and liabilities ..............................            (886)           1,137
                                                                          --------         --------
      Net cash used in operating activities ......................          (9,136)          (8,320)
                                                                          --------         --------

Cash flows from investing activities:
   Purchases of investments ......................................         (22,976)              --
   Sale of investments ...........................................              --            2,025
   Purchase of equipment .........................................          (1,956)          (2,790)
   Other .........................................................             (69)             (81)
                                                                          --------         --------
      Net cash used in investing activities ......................         (25,001)            (846)
                                                                          --------         --------

Cash flows from financing activities:
   Proceeds from sale of Common Stock ............................          23,245              362
                                                                          --------         --------
      Net cash provided by financing activities ..................          23,245              362
                                                                          --------         --------

Effect of currency exchange rate changes on cash .................             (33)            (115)
                                                                          --------         --------
Net decrease in cash and cash equivalents ........................         (10,925)          (8,919)
Cash and cash equivalents at beginning of period .................          28,417           47,494
                                                                          --------         --------
Cash and cash equivalents at end of period .......................        $ 17,492         $ 38,575
                                                                          ========         ========
</TABLE>



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



                                       5
<PAGE>   6
                               i-STAT CORPORATION

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)


1.       BASIS OF PRESENTATION

         The information presented as of June 30, 1997 and 1996, 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, 1996, including the Notes thereto, which were
         included as part of the Company's Annual Report on Form 10-K, File No.
         0-19841.


2.       NET LOSS PER SHARE

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

         In February 1997, the Financial Accounting Standards Board issued SFAS
         No. 128 - "Earnings Per Share" which specifies computation and
         disclosure requirements for earnings per share and is effective for
         financial statements issued after December 15, 1997. The Company does
         not anticipate that there will be a material impact on the Company's
         per share data from the implementation of this standard when adopted.


3.       INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>
                                           June 30, 1997   December 31, 1996
                                           -------------   -----------------
                                               (In thousands of dollars)

<S>                                        <C>             <C>
         Raw materials                         $2,734            $2,477
         Work in process                        1,940             1,596
         Finished goods                         4,502             3,715
                                               ------            ------
                                               $9,176            $7,788
                                               ======            ======
</TABLE>

4.       COMMON STOCK

         On June 26, 1997, the Company issued and sold to accredited investors
         1,850,000 shares of the Common Stock. The aggregate offering price for
         the shares was approximately $24.5 million.


5.       COMMITMENTS AND CONTINGENCIES

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



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

                                   (continued)

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



                                       7
<PAGE>   8
                               i-STAT CORPORATION

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


GENERAL

         The Company develops, manufactures and markets medical diagnostic
products for blood analysis that provide healthcare professionals with immediate
and accurate critical diagnostic information at the point of patient care. The
Company markets and distributes its products in the United States and Canada
principally through its own direct sales and marketing organization, in Japan
through Japanese marketing partners, in Europe through Hewlett-Packard Company
("HP") and in South America through selected distribution channels. The Company
and HP also jointly market the Company's products into the critical care
departments of hospitals in the United States which meet certain criteria. The
Company is actively planning market introduction into other foreign markets,
including but not limited to, through its arrangements with HP.

         The Company's revenues are affected principally by the number of
hospitals using the i-STAT System and the rate at which i-STAT's disposable
cartridges are used by these hospitals. This, in turn, is highly dependent upon
the willingness of hospitals to adapt their traditional blood diagnostic testing
approaches to the point-of-care system advocated by the Company. During 1996 the
Company began to focus its marketing efforts primarily on potential large scale
adopters of the i-STAT System. Such high volume customers tend to require a
longer sales cycle because the objective is to have these customers re-engineer
or replace their "stat" lab departments with the i-STAT System rather than use
the i-STAT System as a supplement to their existing arrangements. To further
this strategy, in the first quarter of 1997 the Company expanded its policy of
offering substantial price discounts to high volume users. The Company believes
that this strategy will accelerate the rate of market penetration for its
products and thus have a beneficial long-term effect upon revenue growth.
However, the near-term rate of growth in sales revenue and gross margin will be
adversely impacted by both the longer sales cycle and the lower cartridge prices
that such high volume customers may receive.

         The Company anticipates that, during the second half of 1997,
additional revenues will be realized from the introduction of the HP Integrated
Analyzer in May 1997. However, the extent of the impact upon revenues will be
affected by both the scope of such introduction and the likelihood that some of
the initial purchasers of the Integrated Analyzer will be existing users of the
hand-held analyzer sold by the Company. Therefore, net cartridge revenue growth
attributable to usage of the HP Integrated Analyzer may not, in the near term,
be significant.

RESULTS OF OPERATIONS

         THREE MONTHS ENDED JUNE 30, 1997

         The Company generated revenues of approximately $9.1 million and $6.7
million for the three months ended June 30, 1997 and 1996, respectively,
including international revenues (as a percentage of total revenues) of $2.3
million (25.1%) and $2.2 million (32.4%), respectively. Sales to the Company's
Japanese marketing partners represented approximately 18.5% and 28.6% of the
Company's worldwide sales for the three months ended June 30, 1997 and 1996,
respectively (including deferred Japanese revenue of approximately $0.8 million
in each period).

         The $2.4 million (35.7%) increase in revenues was primarily due to
increased shipment volume of the Company's cartridges reflecting higher
cartridge consumption by existing hospital customers and the addition of new
hospital customers in the U.S. and internationally. Worldwide cartridge
shipments increased 50.1% to 1,097,693 units in the three months ended June 30,
1997, from 731,300 units in the three months ended June 30, 1996. Revenues from
the increased cartridge shipments were partially offset by lower worldwide
average selling prices per cartridge, which declined from approximately $6.01 to
$5.40 per cartridge in the same periods. Cartridge average selling prices are
expected to continue to decline as the customer mix shifts to higher volume
customers receiving lower cartridge prices. Analyzer and other equipment sales
accounted for approximately $0.7 million of the increase in revenues. This
increase primarily reflects the commencement of shipments in the second quarter
of 1997 of components for the HP Integrated Analyzer.

         Gross profit increased by approximately $1.8 million to $1.9 million in
the quarter ended June 30, 1997 compared with a gross profit of $0.1 million in
the quarter ended June 30, 1996. The improvement in gross profit was primarily
due to increased shipment volume of the Company's cartridges. To the extent that
sales volume increases, the Company expects its gross profit to improve as
manufacturing costs (including direct labor and a large component of overhead)
are spread over a larger number of product units. The improvement in gross
margin also reflects improvements in factory yields and productivity.



                                       8
<PAGE>   9
                               i-STAT CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

         The Company incurred research and development costs (as a percentage of
sales) of approximately $1.8 million (19.8%) and $1.4 million (20.2%) for the
three months ended June 30, 1997 and 1996, 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 the measurement of
creatinine, ionized magnesium and coagulation, which are scheduled to move into
the production phase over the next seven to thirteen months. The Company also is
studying the development of tests to measure enzymes, hematology parameters
(such as platelets and white blood cell counts) and other analytes.
Consequently, research and development expenditures are expected to increase
significantly during 1997 - 1999. 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, the availability of
capital to fund new product development and the success of its development
programs.

         The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $1.5 million (16.6%) and $1.6 million
(23.1%) for the three months ended June 30, 1997 and 1996, respectively. General
and administrative expenses consisted primarily of salaries and benefits of
personnel, office costs, professional fees and other costs necessary to support
the Company's infrastructure.

         The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $3.3 million (36.5%) and $2.8 million (42.1%) for the
three months ended June 30, 1997 and 1996, respectively, consisting primarily of
salaries, benefits, travel, and other expenditures for sales representatives,
product literature, market research, clinical studies and other sales and
marketing costs. The dollar increase from year to year is attributable to
increased marketing activities, higher commissions on increasing sales, and the
hiring of management and other marketing personnel necessary to support the
Company's planned growth in product sales.

         The decrease in other income (expense), net, to $0.3 million for the
three months ended June 30, 1997, from $0.6 million for the three months ended
June 30, 1996, primarily reflects lower interest income earned on lower cash and
cash equivalents balances in 1997. Interest income is expected to increase in
the near future on higher cash and cash equivalent balances following the
issuance of Common Stock in June 1997 (see "Liquidity and Capital Resources,"
below).


SIX MONTHS ENDED JUNE 30, 1997

         The Company generated revenues of approximately $17.0 million and $13.2
million for the six months ended June 30, 1997 and 1996, respectively, including
international revenues (as a percentage of total revenues) of $4.5 million
(26.8%) and $4.7 million (34.7%), respectively. Sales to the Company's Japanese
marketing partners represented approximately 20.0% and 29.4% of the Company's
worldwide sales for the six months ended June 30, 1997 and 1996, respectively
(including deferred Japanese revenue of approximately $1.5 million in each
period).

         The $3.8 million (28.9%) increase in revenues was primarily due to
increased shipment volume of the Company's cartridges reflecting higher
cartridge consumption by existing hospital customers and the addition of new
hospital customers in the U.S. and internationally. Worldwide cartridge
shipments increased 51.1% to 2,041,668 units in the six months ended June 30,
1997, from 1,351,025 units in the six months ended June 30, 1996. Revenues from
the increased cartridge shipments were partially offset by lower worldwide
average selling prices per cartridge, which declined from approximately $5.91 to
$5.51 per cartridge in the same periods. Cartridge average selling prices are
expected to continue to decline as the customer mix shifts to higher volume
customers receiving lower cartridge prices. Analyzer and other equipment sales
accounted for approximately $0.3 million of the increase in revenues. The
increase primarily reflects the commencement of shipments in the second quarter
of 1997 of components for the HP Integrated Analyzer, partially offset by lower
revenues from sales of the Company's hand-held analyzer.



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

         Gross profit increased by approximately $2.7 million to $3.4 million in
the six months ended June 30, 1997 compared with a gross profit of $0.7 million
in the six months ended June 30, 1996. The improvement in gross profit was
primarily due to increased shipment volume of the Company's cartridges. To the
extent that sales volume increases, the Company expects its' gross profit to
improve as manufacturing costs (including direct labor and a large component of
overhead) are spread over a larger number of product units. The improvement in
gross margin also reflects improvements in factory yields and productivity.

         The Company incurred research and development costs (as a percentage of
sales) of approximately $3.4 million (20.2%) and $2.7 million (20.4%) for the
six months ended June 30, 1997 and 1996, 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 the measurement of
creatinine, ionized magnesium and coagulation, which are scheduled to move into
the production phase over the next seven to thirteen months. The Company also is
studying the development of tests to measure enzymes, hematology parameters
(such as platelets and white blood cell counts) and other analytes.
Consequently, research and development expenditures are expected to increase
significantly during 1997-1999. 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, the availability of
capital to fund new product development and the success of its development
programs.

         The Company incurred general and administrative expenses (as a
percentage of sales) of approximately $3.0 million (17.6%) and $2.7 million
(20.2%) for the six months ended June 30, 1997 and 1996, respectively. General
and administrative expenses consisted primarily of salaries and benefits of
personnel, office costs, professional fees, and other costs necessary to support
the Company's infrastructure. The increase primarily reflects the Company's
increased need for management personnel and other services to support its
continuing growth.

         The Company incurred sales and marketing expenses (as a percentage of
sales) of approximately $6.1 million (35.8%) and $5.9 million (45.0%) for the
six months ended June 30, 1997 and 1996, respectively, consisting primarily of
salaries, benefits, travel and other expenditures for sales representatives,
product literature, market research, clinical studies and other sales and
marketing costs.

         The decrease in other income (expense), net, to $0.6 million for the
six months ended June 30, 1997, from $1.2 million for the six months ended June
30, 1996, primarily reflects lower interest income earned on lower cash and cash
equivalents balances in 1997. Interest income is expected to increase in the
near future on higher cash and cash equivalent balances following the issuance
of Common Stock in June 1997.


LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 1997, the Company had cash, cash equivalents, and
short-term investments of approximately $40.5 million, an increase of $12.1
million from the December 31, 1996 balance of approximately $28.4 million,
primarily reflecting net proceeds of approximately $23.1 million from the
private placement of 1,850,000 shares of Common Stock in June 1997, partially
offset by approximately $9.1 million of cash used in operating activities and
equipment purchases of approximately $2.0 million during the six months ended
June 30, 1997. Working capital increased by approximately $14.6 million from
$33.6 million to $48.2 million during the same period, primarily reflecting the
increase in cash, cash equivalents, and short-term investments. The Company
expects its existing funds to be sufficient to meet its obligations and its
liquidity and capital requirements for the near term. The Company regularly
monitors capital raising alternatives in order to take advantage of
opportunities to supplement its current working capital upon favorable terms,
including joint ventures, strategic corporate partnerships or other alliances
and the sale of equity and/or debt securities. The Company's need, if any, to
raise additional funds to meet its working capital and capital requirements will
depend upon numerous factors, including the results of its product marketing and
sales activities, its new product development efforts, manufacturing
efficiencies and competitive conditions.



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

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

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



                                       11
<PAGE>   12
                               i-STAT CORPORATION



PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

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



                                       12
<PAGE>   13
                               i-STAT CORPORATION



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

         The Company held its Annual Meeting of Stockholders on June 26, 1997,
at which time two matters were submitted to a vote of stockholders. A
description of the matters voted upon and a voting tabulation for each matter is
as follows:

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

<TABLE>
<CAPTION>
                                                          Number of Votes
                                            --------------------------------------------------------------
            Name of Nominee                    For       Against/Withheld   Abstentions   Broker Non-Votes
            ----------------------------------------------------------------------------------------------
<S>                                         <C>          <C>                <C>           <C>
            J. Robert Buchanan, M.D         11,832,805        32,942            N/A            N/A
            ----------------------------------------------------------------------------------------------
            Curtis J. Crawford              11,833,005        32,742            N/A            N/A
            ----------------------------------------------------------------------------------------------
            James A. Cyrier                 11,832,905        32,842            N/A            N/A
            ----------------------------------------------------------------------------------------------
            Richard Hodgson                 11,832,805        32,942            N/A            N/A
            ----------------------------------------------------------------------------------------------
            Imants R. Lauks                 11,833,005        32,742            N/A            N/A
            ----------------------------------------------------------------------------------------------
            William P. Moffitt              11,833,005        32,742            N/A            N/A
            ----------------------------------------------------------------------------------------------
            Matthias Plum, Jr               11,833,005        32,742            N/A            N/A
            ----------------------------------------------------------------------------------------------
            Lionel N. Sterling              11,833,005        32,742            N/A            N/A
            ----------------------------------------------------------------------------------------------
</TABLE>


         II.      Ratification of the appointment of Coopers & Lybrand L.L.P. as
                  independent accountants to audit the Company's books and
                  accounts for the year 1997.

<TABLE>
<CAPTION>
                                                          Number of Votes
                                            --------------------------------------------------------------
                                               For       Against/Withheld   Abstentions   Broker Non-Votes
                                            --------------------------------------------------------------
<S>                                                      <C>                <C>           <C>

                                            11,824,420        18,907          22,420           N/A
</TABLE>



                                       13
<PAGE>   14
                               i-STAT CORPORATION



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

                 The Company filed a Current Report on Form 8-K on June 26,
                 1997, covering "Other Events" which disclosed the recent
                 issuance of 1,850,000 shares of the Company's Common Stock.



                                       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:    August 6, 1997





                                            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.       DESCRIPTION

   27             Financial Data Schedule