<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                       ----------------------------------

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000


                           ARGONAUT TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                       <C>
           DELAWARE                                             94-3216714
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                            Identification Number)
</TABLE>


                          887 Industrial Road, Suite G
                          San Carlos, California 94070
                    (Address of principal executive offices)

                    ----------------------------------------

                                 (650) 598-1350
              (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 [ ]

As of October 31, 2000, 18,251,629 shares of the Registrant's Common Stock,
$0.0001 par value, were issued and outstanding.



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Argonaut Technologies, Inc.
INDEX
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ITEM NO.                                                                     PAGE
<S>      <C>                                                                  <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements (Unaudited)............   3

         Condensed Consolidated Balance Sheet as of September 30, 2000
         and December 31, 1999 (Unaudited)..................................   3

         Condensed Consolidated Statement of Operations for the Three- and
         Nine-Month Periods Ended September 30, 2000 and 1999 (Unaudited)...   4

         Condensed Consolidated Statement of Cash Flows for the Nine-Month
         Periods Ended September 30, 2000 and 1999 (Unaudited)..............   5

         Notes to Condensed Consolidated Financial Statements (Unaudited)...   6

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations..............................................   8

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........  17


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings..................................................  17

Item 2.  Changes in Securities and Use of Proceeds..........................  17

Item 3.  Defaults Upon Senior Securities....................................  17

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

Item 5.  Other Information..................................................  18

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

Signatures..................................................................  18

Exhibits....................................................................  19
</TABLE>



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------------------------------------------------------------------------------
PART I: FINANCIAL INFORMATION
------------------------------------------------------------------------------

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                           ARGONAUT TECHNOLOGIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (In thousands)

<TABLE>
<CAPTION>
                                                              September 30,    December 31,
                                                                  2000             1999
                                                              -------------    ------------
                                                               (unaudited)
<S>                                                             <C>             <C>
ASSETS

Current assets:
   Cash and cash equivalents ...........................        $  74,134       $   4,946
   Available-for-sale securities .......................              925           6,127
   Accounts receivable .................................            2,037           3,462
   Inventories .........................................            2,749           2,110
   Prepaid expenses and other current assets ...........              667             589
                                                                ---------       ---------
     Total current assets ..............................           80,512          17,234

Property and equipment, net ............................            1,667           1,620
Note receivable from officer ...........................              200             200
Other assets ...........................................               26              26
                                                                ---------       ---------
                                                                $  82,405       $  19,080
                                                                =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable ....................................        $   1,037       $     865
   Accrued compensation ................................              859             756
   Other accrued liabilities ...........................              837             657
   Deferred revenue ....................................              965           2,608
   Current portion of capital lease obligations ........              327             303
   Current portion of long-term debt ...................               --           2,984
                                                                ---------       ---------
     Total current liabilities .........................            4,025           8,173

Noncurrent portion of capital lease obligations ........              219             468
Noncurrent portion of long-term debt ...................               --           1,391

Stockholders' equity:
   Convertible preferred stock .........................               --               1
   Common stock ........................................                2              --
   Additional paid-in capital ..........................          115,243          39,069
   Deferred stock compensation .........................           (3,779)         (3,106)
   Accumulated other comprehensive (loss)/income .......              (60)              2
   Accumulated deficit .................................          (33,245)        (26,918)
                                                                ---------       ---------
     Total stockholders' equity ........................           78,161           9,048
                                                                ---------       ---------
                                                                $  82,405       $  19,080
                                                                =========       =========
</TABLE>

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



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                           ARGONAUT TECHNOLOGIES, INC.

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                      (In thousands, except per share data)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Three Months Ended             Nine Months Ended
                                                    September 30,                 September 30,
                                               -----------------------       -----------------------
                                                 2000           1999           2000           1999
                                               --------       --------       --------       --------
<S>                                            <C>            <C>            <C>            <C>
Net sales ..................................   $  4,532       $  2,189       $ 12,159       $  7,954
Costs and expenses:
  Cost of sales ............................      2,158            972          5,421          3,521
  Research and development* ................      1,280          1,102          3,791          2,920
  Selling, general & administrative* .......      3,462          2,056         10,012          6,266
                                               --------       --------       --------       --------
Total cost and expenses ....................      6,900          4,130         19,224         12,707
                                               --------       --------       --------       --------
Loss from operations .......................     (2,368)        (1,941)        (7,065)        (4,753)
Interest and other income ..................        899            340          1,204            416
Interest and other expense .................       (126)          (170)          (466)          (603)
                                               --------       --------       --------       --------
Net loss ...................................   $ (1,595)      $ (1,771)      $ (6,327)      $ (4,940)
                                               ========       ========       ========       ========
Net loss per share, basic and diluted ......   $  (0.11)      $  (0.82)      $  (0.95)      $  (2.36)
                                               ========       ========       ========       ========
Weighted-average shares used in computing
net loss per share, basic and diluted ......     14,987          2,155          6,665          2,089
                                               ========       ========       ========       ========
Pro forma net loss per share, basic and
diluted ....................................   $  (0.09)      $  (0.15)      $  (0.45)      $  (0.45)
                                               ========       ========       ========       ========
Weighted-average shares used in computing
pro forma net loss per share, basic and
diluted ....................................     16,960         12,133         13,975         10,924
                                               ========       ========       ========       ========


   * Research and development expenses and selling, general and administrative
     expenses include charges for Stock-based compensation as follows:

Research and development....................   $    394       $     20       $  1,030       $     20
Selling, general and administrative.........        570             67          1,704             67
                                               --------       --------       --------       --------
                                               $    964       $     87       $  2,734       $     87
</TABLE>

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



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                           ARGONAUT TECHNOLOGIES, INC.

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      Nine Months Ended
                                                                         September 30,
                                                                   -----------------------
                                                                     2000           1999
                                                                   --------       --------
<S>                                                                <C>            <C>
Cash flows from operating activities:
   Net loss ....................................................   $ (6,327)      $ (4,940)
   Adjustments to reconcile net loss to net cash used
     in operating activities:
     Depreciation and amortization .............................        542            550
     Amortization of deferred stock compensation ...............      2,060             65
     Issuance of equity for noncash benefits ...................        674             22
     Change in cumulative translation adjustment ...............        (62)            15
     Changes in assets and liabilities:
       Accounts receivable .....................................      1,425            856
       Inventories .............................................       (639)           413
       Prepaid expenses and other current assets ...............        (78)          (102)
       Accounts payable ........................................        172           (102)
       Accrued compensation ....................................        103           (131)
       Other accrued liabilities ...............................        180           (180)
       Deferred Revenue ........................................     (1,643)            40
                                                                   --------       --------
         Net cash used in operating activities .................     (3,593)        (3,494)
                                                                   --------       --------

Cash flows from investing activities:
   Capital expenditures, net ...................................       (589)          (507)
   Sale (purchase) of available-for-sale securities ............      5,202         (2,386)
                                                                   --------       --------
         Net cash provided by (used in) investing activities ...      4,613         (2,893)
                                                                   --------       --------

Cash flows from financing activities:
   Proceeds from long-term debt ................................       --            1,000
   Repayments of long-term debt ................................     (4,375)          (447)
   Principal payments on capital lease obligations .............       (225)          (397)
   Proceeds from issuance of common stock, net .................     72,768             80
   Proceeds from issuance of convertible preferred stock, net...         --         14,961
                                                                   --------       --------
         Net cash provided by financing activities .............     68,168         15,197
                                                                   --------       --------

Net increase in cash and cash equivalents ......................     69,188          8,810
Cash and cash equivalents at beginning of period ...............      4,946          2,261
                                                                   --------       --------

Cash and cash equivalents at end of period .....................   $ 74,134       $ 11,071
                                                                   ========       ========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
   Cash paid for interest ......................................   $    365       $    462
                                                                   ========       ========

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
  Deferred stock compensation ..................................   $  2,733       $    360
                                                                   ========       ========
</TABLE>

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



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                           ARGONAUT TECHNOLOGIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

     In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments, which the Company considers necessary to present
fairly the financial information included herein. This Quarterly Report on Form
10-Q should be read in conjunction with the audited financial statements and
notes thereto included in the Registration Statement under Form S-1, (No.
333-35782) dated July 18, 2000 as filed with the Securities and Exchange
Commission. The interim results presented herein are not necessarily indicative
of the results of operations that may be expected for the full fiscal year
ending December 31, 2000, or any other future period.

NOTE 2 - INVENTORIES

Inventories consist of the following(in thousands):

<TABLE>
<CAPTION>
                                 September 30,   December 31,
                                     2000           1999
                                 ------------    ------------
<S>                                 <C>             <C>
     Raw materials ............     $1,570          $1,175
     Work-in-process ..........        852             208
     Finished goods ...........        327             727
                                    ------          ------
                                    $2,749          $2,110
                                    ======          ======
</TABLE>

NOTE 3 - NET LOSS PER SHARE

     Net loss per share has been computed according to Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," which requires disclosure of
basic and diluted earning per share. Basic earnings per share excludes any
dilutive effects of options, shares subject to repurchase, warrants, and
convertible securities. Diluted earnings per share include the impact of
potentially dilutive securities (calculated using the treasury stock and
as-if-converted method). Following the guidance given by the Securities and
Exchange Commission Staff Accounting Bulletin No. 98, common stock, and
preferred stock that has been issued or granted for nominal consideration prior
to the anticipated effective date of the initial public offering must be
included in the calculation of basic and diluted net loss per common share as if
these shares had been outstanding for all periods presented. To date, the
Company has not issued or granted shares for nominal consideration.

     Pro forma net loss per share includes shares issuable upon the conversion
of outstanding shares of preferred stock (using the as-if-converted method) from
the original date of issuance.

<TABLE>
<CAPTION>
                                                 Three Months Ended      Nine Months Ended
                                                    September 30,          September 30,
                                                 ------------------      ------------------
                                                  2000        1999        2000        1999
                                                 ------      ------      ------      ------
<S>                                              <C>          <C>         <C>         <C>
Basic and diluted:
  Weighted-average shares of common stock
  outstanding used in net loss per share,
  basic and diluted ..........................   14,987       2,155       6,665       2,089

 Adjustments to reflect Weighted-average
  effect of assumed conversion of preferred
  stock ......................................    1,973       9,978       7,310       8,835
                                                 ------      ------      ------      ------

Weighted-average shares used in proforma net
  loss per share, basic and diluted ..........   16,960      12,133      13,975      10,924
                                                 ------      ------      ------      ------
</TABLE>


NOTE 4 - COMPREHENSIVE INCOME (LOSS)

     Comprehensive income (loss) is comprised of net loss and other items of
comprehensive income (loss). Other comprehensive income (loss) includes
unrealized



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gains and losses on the Company's available-for-sale investments and foreign
currency translation adjustments.

For the three and nine-months ended September 30, 2000 and 1999, comprehensive
net income (loss) is as follows (in thousands):

<TABLE>
<CAPTION>
                                             Three Months Ended         Nine Months Ended
                                                September 30,             September 30,
                                            ---------------------      --------------------
                                              2000         1999          2000        1999
                                            ---------    --------      --------    --------
<S>                                         <C>          <C>           <C>         <C>
Net loss ................................   $ (1,595)    $ (1,771)     $ (6,327)   $ (4,940)
Other comprehensive income/(loss) .......        (25)          (4)          (62)        (15)
                                            ---------    --------      --------    --------
Comprehensive income/(loss)                 $ (1,620)    $ (1,775)     $ (6,389)   $ (4,955)
                                            =========    ========      ========    ========
</TABLE>

NOTE 5 - STOCKHOLDERS' EQUITY

     A 0.88-for-one reverse stock split of the Company's common stock became
effective July 2000 prior to the initial public offering. As a result of this
stock split, the conversion ratio of the Company's preferred stock was
automatically amended to 0.88-for-one share pursuant to the Company's Amended
and Restated Certificate of Incorporation. All common shares, options and per
share amounts in the accompanying consolidated financial statements have been
adjusted retroactively to reflect the stock split.

     On July 24, 2000, the Company completed its initial public offering of
4,600,000 shares of common stock at $15.00 per share, with the Company receiving
proceeds, net of underwriting commissions, of $64.2 million. On August 7, 2000,
the Company sold an additional 690,000 shares of common stock in connection with
the exercise of an over-allotment option granted to the underwriters and
received proceeds, net of underwriting commissions, of approximately $9.6
million. Combined net proceeds from the initial public offering including all
related costs was approximately $72.5 million. Upon the closing of the initial
public offering, all the outstanding shares of Series A, B, C, and D preferred
stock converted into 0.88 shares of common stock.

NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Financial Instruments and for Hedging Activities" ("SFAS 133") which provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. In June 1999, FASB issued Financial
Accounting Standards No. 137 which deferred the effective date of SFAS 133 to
fiscal years beginning after June 15, 2000. The adoption of SFAS 133 is not
anticipated to have an impact on the Company's results of operations of
financial conditions when adopted as the Company holds no derivative financial
instruments and does not currently engage in hedging activities.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"). SAB 101 summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition. The
adoption of SAB 101 had no significant impact on the Company's revenue
recognition policy or results of operations.

     In March 2000, the FASB issued No. 44 ("FIN 44"), "Accounting for Certain
Transactions Involving Stock Compensation - an Interpretation of APB 25". This
Interpretation clarifies (a) the definition of employee for purposes of applying
Opinion 25, (b) the criteria for determining whether a plan qualifies as a
noncompensatory plan, (c) the accounting consequences of various modifications
to the terms of a previously fixed stock option or award, and (d) the accounting
for an exchange of stock compensation awards in a business combination. This
Interpretation is effective July 1, 2000, but certain conclusions in this
Interpretation cover specific events that occur after either December 15, 1998,
or January 12, 2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effects of applying this
Interpretation are



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recognized on a prospective basis from July 1, 2000. The adoption of FIN 44 does
not have a material impact on the Company's financial statements.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The discussion below and other parts of this Form 10-Q contain certain
forward-looking statements that are based on the beliefs of the Company's
management, as well as assumptions made by, and information currently available
to, the Company's management. We desire to take advantage of the "Safe Harbor"
provisions of the Private Securities Litigation Reform Act of 1995 and of
Section 21E of the Securities Exchange Act of 1934. The Company's future
results, performance or achievements could differ materially from those
expressed in, or implied by, any such forward-looking statements. Factors that
might cause differences include, but are not limited to, those discussed in the
section entitled "Additional Factors That May Effect Future Results" and those
appearing elsewhere in this Form 10-Q. The Company assumes no obligation to
update such forward-looking statements. The following presentation of
management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the Management's Discussion and
Analysis of Financial Condition and Results of Operations and financial
statements and notes thereto included in the Company's Registration Statement on
Form S-1 (No. 333-35782) which was declared effective by the Securities and
Exchange Commission on July 18, 2000.

     Except for historical information contained herein, the matters discussed
in the following discussion are forward-looking statements involving risks and
uncertainties that could cause actual results to differ materially from those in
such forward-looking statements. Examples of such forward-looking statements
include statements about the possible impact of future product and technology
platform introductions, statements about future expenses, including deferred
stock compensation charges, as well as potential related revenues, statements
about anticipated future lower costs of sales related to increased production
volumes and improvements in our manufacturing process and statements about our
expectations as to the duration of our negative cash flow from operations and
the sufficiency of existing cash reserves for the next 24 months.

OVERVIEW

     During 2000, the Company continued to expand its sales and marketing
organization in the United States and in Europe to build the necessary
infrastructure to more broadly market its products. As part of this expansion,
we hired a Vice President of Sales for Europe and formed a marketing alliance
with Zinsser Analytic GmbH, whereby Zinsser sells Argonaut's products in
Germany. This quarter Argonaut extended its marketing alliance with Zinsser
Analytic GmbH, whereby Argonaut will sell Zinsser's products exclusively in the
United States, Canada and Japan.

     The Company markets eight instrument products including two new instruments
launched in 2000, the Surveyor and the Endeavor. These two new instruments were
developed specifically for synthesis requirements in clinical development. With
the addition of these instruments, Argonaut's products cover the complete range
of lead optimization, pre-clinical and clinical development for our customers.
Revenues from the sales of our instrument products are recognized when delivery
and installation of the product is complete. The Company also derives revenues
from the sale of reagents and other instrument consumables.

     During the second quarter, Argonaut entered into a strategic collaboration
with MediChem Research to jointly develop an instrument to enable chemists to
increase the throughput and productivity in process development laboratories by
rationally designing experimental protocols, and then conducting unattended
reaction optimization experiments.

     The Company recently initiated a new technology program to evaluate and
potentially develop a novel microchemistry platform that could be used in a
variety of drug development applications. The program will commence with a
focused and closely monitored six to twelve month feasibility study. If the
results of the feasibility study are promising, the next stage would involve
establishing a two to three year technology access program that would require
incremental expenditures in 2001 and 2002. The Company has yet to determine the
potential cost of this program but would mitigate it by seeking financial
participation from alliance partners and co-developers. Should the Company fail
to obtain such financial participation, there can be no assurances that the
Company will proceed with the program beyond the feasibility study.


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     The Company recorded deferred stock compensation in connection with the
grant of stock options to employees prior to its initial public offering of
approximately $6.0 million through June 30, 2000 and recorded additional stock
compensation of $0.5 million in July 2000 prior to our initial public offering.
These amounts are recorded as a component of stockholders' equity and are being
amortized as charges to operations. We expect to record amortization of deferred
stock compensation for the remainder of 2000 of approximately $0.7 million, and
approximately $1.8 million, $0.9 million, $0.3 million and $34,000 for 2001,
2002, 2003 and 2004, respectively.

     The Company also recorded stock compensation for options granted to
consultants that are periodically re-measured as they vest, in accordance with
SFAS 123 and EITF 96-18. Accordingly, stock based compensation expense in
connection with options issued to consultants is included in the disclosure
shown in the Condensed Consolidated Statement of Operations.

RESULTS OF OPERATIONS

Net Sales

     Net sales increased to $4.5 million for the three months ended September
30, 2000 from $2.2 million in the same period of 1999. Net sales for the nine
months ended September 30, 2000 increased to $12.2 million from $8.0 million for
the same period of the prior year. These increases were due to higher sales in
both instruments and chemistry products. The increase in instrument sales was
primarily due to the recent introduction of two new instruments, the Surveyor
and the Endeavor, as well as strong growth in all the other product groups.

Cost of sales

     Cost of sales increased to $2.2 million in the third quarter of 2000 from
$1.0 million in the third quarter of 1999. Cost of sales for the nine months
ended September 30, 2000 was $5.4 million compared to $3.5 million for the same
period of the prior year. These increases were primarily attributable to higher
sales volume and also the continuation of higher initial production costs for
the recently launched Surveyor and Endeavor. We expect this initial production
cost to decrease in future quarters as we attain greater production volumes and
further refine our manufacturing process.

Research and development expenses

     Research and development expenses increased to $1.3 million in the third
quarter of 2000 from $1.1 million in the third quarter of 1999. For the nine
months ended September 30, 2000 research and development expenses increased to
$3.8 million from $2.9 million for the same period of the prior year. These
increases were primarily attributable to charges for stock based compensation.
Personnel levels and related costs remained relatively constant in 2000 and
1999.

Selling, general and administrative expenses

     Selling, general and administrative expenses increased to $3.5 million in
the third quarter of 2000 from $2.1 million in the same period of 1999. For the
nine months ended September 30, 2000 selling, general and administrative
expenses increased to $10.0 million from $6.3 million for the same period of the
prior year. These expenses consist primarily of salaries and related costs for
executive, sales and marketing, finance and other administrative personnel and
the cost of facilities. The increases were primarily attributable to the further
expansion of our direct sales force in the United States and Europe and also to
the charges for stock based compensation.

Interest and other income

     Interest and other income increased for the three and nine-month period
ended September 30, 2000 as compared to 1999 primarily because of greater levels
of funds



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<PAGE>   10

available for investments. This was substantially influenced by the proceeds
received from the Company's last private financing round in the second quarter
of 1999 and the initial public offering in the third quarter of 2000.

Interest and other expense

     Interest and other expense was reduced during the three and nine-month
periods of 2000 as we continue to pay down our debt obligations.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 2000, the Company had cash, cash equivalents and
available-for-sale securities of $75.1 million compared to $11.1 million at
December 31, 1999. The increase was primarily due to the completion of the
Company's initial public offering off set by cash used in ongoing operations. In
July 2000, the Company completed its initial public offering of its common stock
and raised gross proceeds of approximately $69.0 million in cash. In August
2000, the Company sold an additional 690,000 shares of common stock in
connection with the exercise of an over-allotment option granted to the
underwriters and raised gross proceeds of approximately $10.4 million. After
deducting approximately $6.9 million in combined underwriting commissions and
other transaction related expenses, the net proceeds were approximately $72.5
million.

     Net cash used to support operating activities has historically fluctuated
based on the timing of payment of accounts payable balances, receipts of
customer deposits, receipt of payments of accounts receivable balances, changes
in inventory balances resulting from varying levels of manufacturing activities,
the timing of research and development projects, expansion of our sales and
marketing organization and fluctuations in the Company's net loss. Net cash used
in operating activities totaled $3.6 million and $3.5 million during the nine
months ended September 30, 2000 and 1999, respectively. Net cash used in
operations was primarily due to the Company's net losses for the nine months
ended September 30, 2000 and 1999 of $6.3 million and $4.9 million,
respectively. The increase in net cash used in operations was partially offset
by non-cash charges for stock based compensation.

     Net cash provided by (used in) investing activities totaled $4.6 million
and ($3.0) million for the nine months ended September 30, 2000 and 1999,
respectively. This increase in the first nine months of 2000 was primarily
attributable to proceeds from the sale and maturity of available-for-sale
securities to provide cash to fund the Company's ongoing operating activities.

     Net cash provided by financing activities totaled $68.2 million and $15.2
million for the nine months ended September 30, 2000 and 1999, respectively. The
increase was primarily due to the Company's initial public offering in the third
quarter of 2000.

     The Company expects to have negative cash flows from operations through at
least mid 2001. In addition, we expect to incur increasing development expenses,
as well as expenses for additional personnel for production and
commercialization efforts, and we may never generate positive cash flows. Our
future capital requirements depend on a number of factors, including market
acceptance of our products, the resources we devote to developing and supporting
our products, continued progress of our research and development of potential
products, the need to acquire licenses to new technology and the availability of
other financing. We believe that our current cash balances will be sufficient to
fund our operations at least through the next 24 months. To the extent that our
capital resources are insufficient to meet future capital requirements, we will
need to raise additional capital or incur indebtedness to fund our operations.
There can be no assurance that additional debt or equity financing will be
available on acceptable terms, if at all. If adequate funds are not available,
we may be required to delay, reduce the scope of, or eliminate, our operations
or obtain funds through arrangements with collaborative partners or others that
may require us to relinquish rights to certain technologies or products that we
might otherwise seek to retain.

RECENT ACCOUNTING PRONOUNCEMENTS



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     In June 1998, the Financial Accounting Standards Board ("FASB") issued
statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Financial Instruments and for Hedging Activities" ("SFAS 133") which provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. In June 1999, FASB issued Financial
Accounting Standards No. 137 which deferred the effective date of SFAS 133 to
fiscal years beginning after June 15, 2000. The adoption of SFAS 133 is not
anticipated to have an impact on the Company's results of operations of
financial conditions when adopted as the Company holds no derivative financial
instruments and does not currently engage in hedging activities.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"). SAB 101 summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition. The
adoption of SAB 101 had no significant impact on the Company's revenue
recognition policy or results of operations.

     In March 2000, the FASB issued No. 44 ("FIN 44"), "Accounting for Certain
Transactions Involving Stock Compensation - an Interpretation of APB 25". This
Interpretation clarifies (a) the definition of employee for purposes of applying
Opinion 25, (b) the criteria for determining whether a plan qualifies as a
noncompensatory plan, (c) the accounting consequences of various modifications
to the terms of a previously fixed stock option or award, and (d) the accounting
for an exchange of stock compensation awards in a business combination. This
Interpretation is effective July 1, 2000, but certain conclusions in this
Interpretation cover specific events that occur after either December 15, 1998,
or January 12, 2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effects of applying this
Interpretation are recognized on a prospective basis from July 1, 2000. The
adoption of FIN 44 does not have a material impact on the Company's financial
statements.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF OPERATING LOSSES, AND WE MAY NEVER ACHIEVE OR SUSTAIN
PROFITABILITY AND MAY BE REQUIRED TO RAISE ADDITIONAL FUNDS IF THE LOSSES
CONTINUE.

     We have incurred operating losses and negative cash flow from operations
since our inception. As of September 30, 2000, we had an accumulated deficit of
$33.2 million. We recorded net losses of $6.2 million in 1997, $5.7 million in
1998, $7.6 million in 1999 and $6.3 million for the nine months ended September
30, 2000. We expect to continue to incur operating and net losses and negative
cash flow from operations, which may increase, for the foreseeable future due in
part to anticipated increases in expenses for research and development and
expansion of our sales and marketing capabilities. We may never become
profitable.

     We anticipate that our existing cash and cash equivalents will be
sufficient to fund our currently planned operations through at least the next 24
months. However, this expectation is based on our current operating plan, which
could change as a result of many factors, and we could require additional
funding sooner than anticipated. To the extent our capital resources are
insufficient to meet our future capital requirements, we will have to raise
additional funds to continue the development and commercialization of our
products. Funds may not be available on favorable terms, if at all. To the
extent that we raise additional capital through the sale of equity, the issuance
of those securities could result in dilution to our stockholders.

IF OUR PRODUCTS DO NOT BECOME WIDELY USED IN THE LIFE SCIENCES INDUSTRY, IT IS
UNLIKELY THAT WE WILL EVER BECOME PROFITABLE.

     Pharmaceutical, biotechnology and life science companies have historically
performed chemistry development using traditional laboratory methods. To date,
our products have not been widely adopted by the life sciences industry. The
commercial success of our products will depend upon the adoption of these
products as a method to develop chemical compounds for the life sciences and
other industries. In order



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<PAGE>   12

to be successful, our products must meet the performance and pricing
requirements for chemistry development within the life sciences and other
industries. Market acceptance will depend on many factors, including our ability
to:

     +    convince prospective customers that our products are a cost-effective
          alternative to traditional methods and other technologies that may be
          introduced for chemistry development;

     +    convince prospective customers that our products provide the same
          quality and accuracy as traditional methods and other new technologies
          which may be developed;

     +    manufacture products in sufficient quantities with acceptable quality
          and at an acceptable cost; and

     +    install and service sufficient quantities of our products.

If we cannot achieve these objectives, our products will not gain market
acceptance.

OUR PRODUCT DEVELOPMENT EFFORTS MAY NOT PRODUCE COMMERCIALLY VIABLE PRODUCTS.

     We intend to devote significant personnel and financial resources to
research and development activities to develop new products. We may not be
successful in developing new products, and we may never realize any benefits
from such research and development activities. Our ability to increase our
revenues and achieve and sustain profitability is dependent upon our ability to
successfully develop new and commercially viable products.

BECAUSE WE RECEIVE REVENUES PRINCIPALLY FROM LIFE SCIENCE AND CHEMICAL
COMPANIES, THE CAPITAL SPENDING POLICIES OF THESE ENTITIES HAVE A SIGNIFICANT
EFFECT ON THE DEMAND FOR OUR PRODUCTS.

     We market our products to pharmaceutical, biotechnology, life science and
other chemical research companies, and the capital spending policies of these
entities can have a significant effect on the demand for our products. These
policies are based on a wide variety of factors, including the resources
available for purchasing research equipment, the spending priorities among
various types of research equipment and the policies regarding capital
expenditures. In particular, the volatility of the public stock market for
biotechnology companies has at certain times significantly impacted their
ability to raise capital, which has directly affected their capital spending
budgets. In addition, continued consolidation within the pharmaceutical industry
will likely delay and may potentially reduce capital spending by pharmaceutical
companies involved in such consolidations. Any decrease or delay in capital
spending by life science companies could cause our revenues to decline and harm
our profitability.

OUR PRODUCTS HAVE LENGTHY SALES CYCLES, WHICH COULD CAUSE OUR OPERATING RESULTS
TO FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER.

     Our ability to obtain customers for our products depends in significant
part upon the perception that our products can help accelerate efforts in drug
development. The sale of many of our products typically involves a significant
technical evaluation and commitment of capital by customers. Accordingly, the
sales cycles of many of our products are lengthy and subject to a number of
significant risks that are beyond our control, including customers' budgetary
constraints and internal acceptance reviews. Our revenues could fluctuate
significantly from quarter to quarter, due to this lengthy and unpredictable
sales cycle. In particular, our operating results in the first and third
quarters have historically been depressed. A large portion of our expenses,
including expenses for facilities, equipment and personnel, are relatively
fixed. Accordingly, if our revenues decline or do not grow as we anticipate, we
might not be able to correspondingly reduce our operating expenses. Our failure
to achieve our anticipated levels of revenues could significantly harm our
operating results for a particular fiscal period. Due to the possibility of
fluctuations in our operating results, we believe that quarter-to-quarter
comparisons of our operating results are not always a good indication of our
future performance.



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<PAGE>   13

OUR DIRECT SALES FORCE MAY NOT BE SUFFICIENTLY LARGE TO SUCCESSFULLY ADDRESS THE
MARKET FOR OUR PRODUCTS.

     We sell a major portion of our products through our own sales force. We
believe that we will need to expand our direct sales and marketing force to
successfully address the market for our products. We may not be able to build an
efficient and effective sales and marketing force. Our failure to build an
efficient and effective sales and marketing force could negatively impact sales
of our products, thus reducing our revenues and profitability.

FAILURE TO EXPAND OUR INTERNATIONAL SALES AS WE INTEND WOULD REDUCE OUR ABILITY
TO BECOME PROFITABLE.

     We will need to sell a significant number of our products outside of the
United States, to achieve our sales objectives. To be successful in our
international effort we will need to expand our direct sales force to conduct
international operations and develop relationships with international dealers
and distributors. We may not be able to expand our sales force or identify,
attract or retain suitable international dealers and distributors. As a result,
we may be unsuccessful in our international expansion efforts. We must continue
to establish and expand foreign operations and hire additional personnel to run
these operations, in order to expand our presence into international markets.

International operations involve a number of risks and burdens not typically
present in domestic operations, including:

     +    preferences of certain customers to purchase goods manufactured in
          their own country or geographic market;

     +    difficulties in staffing and managing foreign operations;

     +    licenses, tariffs and other trade barriers;

     +    changes in regulatory requirements;

     +    potentially adverse tax consequences; and

     +    political and economic instability.

     In addition, we conduct a portion of our business in Japanese yen and other
non-U.S. dollar currencies. As a result, currency fluctuations between the U.S.
dollar and the currencies in which we do business will cause us to incur foreign
currency translation gains and losses. To date, our foreign currency translation
gains and losses have been immaterial. Our international operations will also be
subject to the risks associated with the imposition of legislation and
regulations relating to the import or export of high technology products. We
cannot predict whether tariffs or restrictions upon the exportation or
importation of our products will be implemented by the United States or other
countries.

IF WE LOSE OUR EXCLUSIVE LICENSE TO PROPRIETARY TECHNOLOGY INCORPORATED INTO OUR
PRODUCTS WE MAY BE UNABLE TO CONTINUE SELLING THOSE PRODUCTS.

     We have developed some of our products based on proprietary technology
originally developed by third parties. We currently have exclusive licenses to
use such technology in our products that are subject to termination in certain
events. In particular, our license to proprietary technology belonging to Symyx,
which is incorporated into our Endeavor product, is subject to termination at
Symyx's or our option upon six months prior notice at any time after December
31, 2000. Our sales of this product do not currently constitute a material
portion of our revenue. We estimate that sales of this product will constitute
approximately 10 to 15% of our revenues this year. This estimate depends on a
variety of factors, including increased demand, and we cannot be certain that
this estimate will be accurate. If licensors terminate our licenses to any such
technology, our revenues would decline.

IF WE HAVE DIFFICULTY MANAGING OUR GROWTH, OUR ABILITY TO INCREASE OUR REVENUES
AND BECOME PROFITABLE WOULD BE DAMAGED.



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<PAGE>   14

     Our growth has placed significant demands on our management and other
resources. Our future success will depend on our ability to manage our growth,
including:

     +    continuing to train, motivate, manage and retain our existing
          employees and to attract and assimilate new employees;

     +    manufacturing on a timely basis increasing quantities of current
          products and new products under development while maintaining product
          quality;

     +    expanding and improving our domestic and international sales and
          marketing capabilities; and

     +    developing and improving our operational, financial, accounting and
          other internal systems and controls consistent with our pace of
          growth.

     If we are unable to manage our growth, our operations would suffer.

IF WE ARE UNABLE TO RETAIN THE PRINCIPAL MEMBERS OF OUR MANAGEMENT TEAM AND
OTHER KEY EMPLOYEES OR TO RECRUIT SALES, SUPPORT AND OTHER ADDITIONAL PERSONNEL,
OUR OPERATING RESULTS COULD SUFFER.

     We are highly dependent on the principal members of our management team and
scientific staff. In particular, we are highly dependent on David Binkley, our
President and Chief Executive Officer, Lissa Goldenstein, our Senior Vice
President and Chief Business Officer, Jan Hughes, our Senior Vice President and
Chief Technical Officer, John Supan, our Vice President, Finance and Chief
Financial Officer, and Lori Lehman our Vice President, Business Development. Our
loss of the services of any of these persons could delay or reduce our product
development and commercialization efforts. None of the principal members of our
management team and scientific staff have entered into employment agreements
with us nor do we have any key person life insurance on such individuals. We
believe that we will need to recruit additional sales and customer support
personnel with the requisite backgrounds and expertise. Hiring such personnel is
very competitive in our industry. In addition, we will require additional
personnel in the areas of chemistry research, product development, manufacturing
and finance and administration. In particular, it is difficult to attract and
retain qualified individuals with the requisite experience in chemistry. We may
not be able to attract and retain the requisite personnel, which could seriously
harm our ability to manage our business.

BECAUSE WE HAVE LIMITED SOURCES OF PRODUCTION AND SUPPLIERS, OUR ABILITY TO
PRODUCE AND SUPPLY OUR PRODUCTS COULD BE IMPAIRED.

     We outsource most of the assembly of our products to vendors. Our reliance
on our outside vendors exposes us to risks including:

     +    the possibility that one or more of our vendors could terminate their
          services at any time without notice;

     +    reduced control over pricing, quality and timely delivery, due to the
          difficulties in switching to alternative vendors; and

     +    the potential delays and expenses of seeking alternative sources of
          manufacturing services.

     Consequently, in the event that components from our suppliers or work
performed by our vendors are delayed or interrupted for any reason, our ability
to produce and deliver our products would decline.

RISKS RELATED TO OPERATING IN OUR INDUSTRY

THE LIFE SCIENCES INDUSTRY IS HIGHLY COMPETITIVE AND SUBJECT TO RAPID
TECHNOLOGICAL CHANGE, AND WE MAY NOT HAVE THE RESOURCES NECESSARY TO
SUCCESSFULLY COMPETE.



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<PAGE>   15

     We compete with companies in the United States and abroad that are engaged
in the development and production of similar products. We face competition
primarily from the following three sectors:

     +    companies marketing conventional products based on traditional
          chemistry methodologies;

     +    pharmaceutical companies developing their own instruments; and

     +    companies marketing products based upon parallel synthesis and other
          innovative technologies, such as Mettler-Toledo AG and several smaller
          instrument and reagent companies.

     Many of our competitors have access to greater financial, technical,
research, marketing, sales, distribution, service and other resources than we
do. We face, and will continue to face, intense competition from organizations
serving the life sciences industry that are developing or marketing competing
products and technologies. These organizations may develop products or
technologies that are superior to our products or technologies in terms of
performance, cost or both.

     We may need to develop new applications for our products to remain
competitive. Our present or future products could be rendered obsolete or
uneconomical by technological advances by one or more of our current or future
competitors. In addition, the introduction or announcement of new products by us
or by others could result in a delay of or decrease in sales of existing
products, as customers evaluate these new products. Our future success will
depend on our ability to compete effectively against current technology as well
as to respond effectively to technological advances.

IF WE INFRINGE ON OR MISAPPROPRIATE THE PROPRIETARY RIGHTS OF OTHERS OR WE ARE
UNABLE TO PROTECT OUR OWN INTELLECTUAL PROPERTY RIGHTS, OUR REVENUES COULD BE
HARMED.

     We may be sued for infringing on the intellectual property rights of
others. Intellectual property litigation is costly, and, even if we prevail, the
cost of such litigation could affect our profitability. In addition, litigation
is time consuming and could divert management attention and resources away from
our business. If we do not prevail in any litigation, in addition to any damages
we might have to pay, we could be required to stop the infringing activity or
obtain a license. We may not be able to obtain required licenses on acceptable
terms, or at all. In addition, some licenses may be nonexclusive, and therefore,
our competitors may have access to the technology licensed to us. If we fail to
obtain a required license or are unable to design around a patent, we may be
unable to sell some of our products, which could harm our ability to compete and
result in a decline in our revenues.

     Our success will depend on our ability to obtain and enforce patents on our
technology and to protect our trade secrets. Any patents we own may not afford
meaningful protection for our technology and products. Others may challenge our
patents and, as a result, our patents could be narrowed, invalidated or rendered
unenforceable. In addition, our current and future patent applications may not
result in the issuance of patents to us in the United States or foreign
countries. Moreover, competitors may develop products similar to ours that are
not covered by our patents.

     We try to protect our unpatented trade secrets by requiring our employees,
consultants and advisors to execute confidentiality agreements. However, we
cannot guarantee that these agreements will provide us with adequate protection
against improper use or disclosure of our trade secrets. Further, others may
independently develop substantially equivalent proprietary information and
techniques. If we are unable to protect our proprietary information and
techniques, our ability to exclude certain competitors from the market will be
limited.

RISKS RELATED TO OUR RECENTLY COMPLETED INITIAL PUBLIC OFFERING

OUR STOCK PRICE HAS BEEN HIGHLY VOLATILE, AND YOUR INVESTMENT COULD SUFFER A
DECLINE IN VALUE.



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     The trading price of our common stock has been highly volatile and could
continue to be subject to wide fluctuations in price in response to various
factors, many of which are beyond our control, including:

     +    actual or anticipated variations in quarterly operating results;

     +    failure to achieve, or changes in, financial estimates by securities
          analysts;

     +    announcements of new products or services or technological innovations
          by us or our competitors;

     +    conditions or trends in the pharmaceutical, biotechnology and life
          science industries;

     +    announcements by us of significant acquisitions, strategic
          partnerships, joint ventures or capital commitments;

     +    additions or departures of key personnel;

     +    sales of our common stock; and

     +    developments regarding our patents or other intellectual property or
          that of our competitors.

     In addition, the stock market in general, and the Nasdaq National Market
and the market for technology companies in particular, have experienced
significant price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies. Further, there
has been particular volatility in the market prices of securities of life
science companies. These broad market and industry factors may seriously harm
the market price of our common stock, regardless of our operating performance.
In the past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted. A
securities class action suit against us could result in substantial costs,
potential liabilities and the diversion of management's attention and resources.

THERE MAY NOT BE AN ACTIVE, LIQUID TRADING MARKET FOR OUR COMMON STOCK.

     There is no guarantee that an active trading market for our common stock
will be maintained on the Nasdaq National Market. You may not be able to sell
your shares quickly or at the market price if trading in our stock is not
active.

OUR PRINCIPAL STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS OWN APPROXIMATELY
55% OF OUR COMMON STOCK, WHICH MAY PREVENT NEW INVESTORS FROM INFLUENCING
CORPORATE DECISIONS.

     Our stockholders who currently own over 5% of our common stock, our
directors and executive officers beneficially own approximately 55% of our
outstanding common stock. These stockholders will be able to exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and the approval of significant corporate
transactions. This concentration of ownership may also delay or prevent a change
in control of us even if beneficial to our other stockholders.

THE LARGE NUMBER OF SHARES OF OUR COMMON STOCK WHICH WILL SOON BECOME ELIGIBLE
FOR PUBLIC SALE COULD CAUSE OUR STOCK PRICE TO DECLINE.

     The market price of our common stock could decline as a result of sales of
substantial amounts of our common stock in the public market, or the perception
that these sales could occur. In addition, these factors could make it more
difficult for us to raise funds through future offerings of common stock. All of
the shares sold in our recently completed initial public offering will be freely
transferable without restriction or further registration under the Securities
Act, except for any shares purchased by our "affiliates," as defined in Rule 144
of the Securities Act. The remaining shares of common stock outstanding will be
"restricted securities" as defined in Rule 144. These shares may be sold in the
future without registration



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under the Securities Act, to the extent permitted by Rule 144 or other
exemptions under the Securities Act, subject to certain "lock-up restrictions.

     We registered on September 22, 2000, 4,059,147 shares of common stock that
are reserved for issuance upon exercise of options granted under our stock
option and employee stock purchase plans. These shares can be sold in the public
market upon issuance, subject to restrictions under the securities laws
applicable to resales by affiliates and "lock-up" restrictions.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER AND BYLAWS AND UNDER DELAWARE LAW COULD
MAKE A THIRD-PARTY ACQUISITION OF US DIFFICULT.

     Our certificate of incorporation and bylaws contain provisions that could
make it more difficult for a third party to acquire us, even if doing so might
be deemed beneficial by our stockholders. These provisions could limit the price
that investors might be willing to pay in the future for shares of our common
stock. We are also subject to certain provisions of Delaware law that could
delay, deter or prevent a change in control of us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our market risk disclosures have not changed significantly from those set
forth in the Management's Discussion and Analysis of Financial Condition and
Results of Operations in our Form S-1 filing dated July 18, 2000 for the year
ended December 31, 1999.

-------------------------------------------------------------------------------
PART II.  OTHER INFORMATION
-------------------------------------------------------------------------------

ITEM 1: LEGAL PROCEEDINGS

     The Company is not currently involved in any material legal proceedings.

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     In July 2000, by written consent our stockholders approved the following:
(i) an amendment of our then-effective Certificate of Incorporation to
effectuate a 0.88-for-1 reverse stock split, (ii) the amendment of our
Certificate of Incorporation following the closing of our initial public
offering to, among other things, establish certain defensive strategies for the
protection of our stockholders' value, authorize one class of undesignated
Preferred Stock consisting of 10,00,000 shares, and authorize an increase in the
authorized number of shares of Common Stock to 120,000,000, (iii) the amendment
of our Bylaws following the closing of our initial public offering to, among
other things, adopt defensive strategies for the protection of our stockholders'
value, (iv) the adoption of our 2000 Employee Stock Purchase Plan and 2000
Incentive Stock Plan and (v) the approval of the form of Indemnification
Agreement for execution by our officers and directors.



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<PAGE>   18

ITEM 5: OTHER INFORMATION

     Not applicable.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

a:   Exhibits

     Exhibit 27.1 - Financial Data Schedule.

b:   Reports on Form 8-K

     There were no reports on Form 8-K filed during the quarter ended September
     30, 2000.



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--------------------------------------------------------------------------------
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.

                                        ARGONAUT TECHNOLOGIES, INC.

Date: November 13, 2000                 By: /s/ DAVID P. BINKLEY
                                           -------------------------------------
                                           David P. Binkley, Ph.D.
                                           PRESIDENT, CHIEF EXECUTIVE OFFICER
                                           (DULY AUTHORIZED AND PRINCIPAL
                                           EXECUTIVE OFFICER)

                                        By: /s/ JOHN T. SUPAN
                                           -------------------------------------
                                           John T. Supan
                                           VICE PRESIDENT, FINANCE AND
                                           CHIEF FINANCIAL OFFICER
                                           (DULY AUTHORIZED AND PRINCIPAL
                                           FINANCIAL OFFICER)




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--------------------------------------------------------------------------------
INDEX TO EXHIBITS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
EXHIBIT
<S>            <C>
Exhibit 27.1 - Financial Data Schedule
</TABLE>