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

                                   FORM 10-K/A

[X]                            AMENDMENT NO. 1 TO
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

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

       For the transition period from_____________________to_____________

                         COMMISSION FILE NUMBER 0-19841

                               i-STAT CORPORATION
             (Exact name of Registrant as specified in its charter)


        DELAWARE                                       22-2542664
(State or other jurisdiction                        (I.R.S. Employer
 of incorporation or organization)                   Identification No.)


                104 WINDSOR CENTER DRIVE, EAST WINDSOR, NJ 08520
               (Address of principal executive offices) (Zip code)

                                 (609) 443-9300
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to
Section 12(g) of the Act:               COMMON STOCK, PAR VALUE $0.15 PER SHARE
                                        SERIES A PREFERRED STOCK PURCHASE RIGHTS

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Number of shares of Common Stock outstanding as of November 30, 2001: 20,060,788

The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant as of November 30, 2001 is approximately
$62,291,527. Shares of voting stock held by each executive officer and director
and by each person who owns 5% or more of any voting stock have been excluded in
that such persons may be deemed affiliates of the Registrant. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.

                       DOCUMENTS INCORPORATED BY REFERENCE
                        (To The Extent Indicated Herein)

Documents incorporated by reference are listed in the Exhibit Index. The
following items are amended:

Item 6.    Selected Consolidated Financial Data
Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K
<PAGE>
For purposes of this Form 10-K/A, and in accordance with Rule 12b-15 under the
Securities Exchange Act of 1934, as amended, i-STAT Corporation has amended and
restated in its entirety each item of its 2000 Form 10-K which has been affected
by this Amendment, which is being filed to reflect the restatement of basic and
diluted loss per share information, as described in Note 1 to the consolidated
financial statements. There was no change in the net loss for the periods
presented, and no other changes have been made.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below has been derived from
the audited financial statements of the Company. The consolidated financial
statements of the Company as of December 31, 2000 and 1999 and for each of the
years in the three-year period ended December 31, 2000, together with the notes
thereto and the related report of PricewaterhouseCoopers LLP, independent
accountants, are included elsewhere in this Report. The selected consolidated
financial data set forth below should be read in conjunction with the
consolidated financial statements, related notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Report.

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA                            Year Ended December 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                               2000           1999           1998           1997           1996
<S>                                                        <C>            <C>            <C>            <C>            <C>
Statement of Operations Data:
Net revenues ............................................  $     55,037   $     45,225   $     39,101   $     37,840   $     30,330
Cost of products sold ...................................        40,951         36,401         30,664         30,962         26,291
Research and development ................................         7,944          7,506          7,281          6,721          5,780
General and administrative ..............................         6,983          7,264          7,152          5,761          5,778
Sales and marketing .....................................         7,784          8,293         12,956         13,020         11,991
Litigation settlement ...................................         1,500             --             --             --             --
Consolidation of operations .............................            --             70          1,115             --             --
Other income, net .......................................         1,763          1,507          1,672          1,651          2,054
Loss before provision (benefit) for income taxes ........        (8,362)       (12,802)       (18,395)       (16,973)       (17,456)
Provision (benefit) for income taxes ....................          (867)            --             --             --             --
Net loss ................................................        (7,495)       (12,802)       (18,395)       (16,973)       (17,456)
Basic and diluted net loss per share, as
restated ................................................  ($      0.43)  ($      0.83)  ($      1.32)  ($      1.38)  ($      1.56)
Shares used in computing basic and diluted
net loss per share, as restated .........................    17,512,083     15,475,893     13,912,175     12,358,828     11,182,901
</TABLE>

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                                                               As of December 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                               2000           1999           1998           1997           1996
<S>                                                        <C>            <C>            <C>            <C>            <C>
Balance Sheet Data:
Cash, cash equivalents
and short-term investments ..............................  $     19,536   $     25,575   $     38,390   $     32,914   $     28,417
Working capital .........................................        21,521         31,958         44,605         38,697         33,056
Total assets ............................................        59,934         58,124         68,906         59,170         55,365
Accumulated deficit .....................................      (196,965)      (189,470)      (176,668)      (158,273)      (141,300)
Total stockholders' equity ..............................  $     41,052   $     44,663   $     54,660   $     53,045   $     46,834
</TABLE>


                                       1
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


BACKGROUND AND OVERVIEW

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

The i-STAT System currently performs blood tests for sodium, potassium,
chloride, glucose, creatinine, urea nitrogen, hematocrit, ionized calcium,
lactate, Celite(R) ACT (activated clotting time), arterial blood gases, and
bicarbonate, and derives certain other values, such as total carbon dioxide,
base excess, anion gap, hemoglobin and O2 saturation, by calculation from the
tests performed. The Company continues to engage in research and development in
order to improve its existing products and develop new products based on the
i-STAT System technology. The Company currently is developing three additional
tests for the measurement of coagulation: kaolin ACT, partial thromboplastin
time ("aPTT"), and prothombin time ("PT"). The Company is also studying the
development of cardiac marker tests. In the fourth quarter of 2000, the Company
introduced an analyzer and associated peripheral equipment, which, in addition
to having the measurement capabilities possessed by the i-STAT System,
incorporates the glucose measurement capabilities of an Abbott Laboratories
("Abbott") product. The new i-STAT 1(R) Analyzer permits a customer to run all
i-STAT cartridges as well as Abbott MediSense(R) glucose strips on one
integrated hand-held device. The new analyzer also incorporates a number of
enhancements, including a bar code reader, an improved user interface, and an
enhanced data management system which, in conjunction with a new central data
management system, enhances the customer's ability to centrally manage a widely
distributed point-of-care testing program.

Prior to November 1, 1998, the Company marketed and distributed its products in
the United States and Canada principally through its own direct sales and
marketing organization, in Japan through Japanese marketing partners, in Europe
through Hewlett-Packard Company ("HP") and in Mexico, South America, China,
Australia, and certain other Asian and Pacific Rim countries, through selected
distribution channels. Pursuant to a technology collaboration between the
Company and HP, in November 1997 HP commenced selling a patient monitoring
system (the "Integrated Analyzer"), which integrates all of the blood
diagnostics capabilities of the i-STAT System. (As part of a spinoff of its
measurement systems business in 1999, HP assigned its rights and obligations
under its agreements with the Company to Agilent Technologies, Inc.
("Agilent").) On September 2, 1998, the Company entered into a long-term sales,
marketing and research alliance with Abbott, which, among other things, has
altered significantly the manner in which the Company markets and sells its
products worldwide. The majority of the Company's revenues are now derived from
Abbott. Please see "Alliance with Abbott Laboratories" for a description of the
Company's agreements with Abbott.


RESULTS OF OPERATIONS

The Company generated revenues of approximately $55.0 million, $45.2 million and
$39.1 million in 2000, 1999 and 1998, including international revenues (as a
percentage of worldwide revenues) of $15.1 million (27.5%), $13.8 million
(30.5%) and $9.8 million (25.1%), respectively. Revenues from Abbott represented
approximately 83.5%, 78.5% and 11.7% of the Company's worldwide revenues for
2000, 1999 and 1998, respectively.

The $9.8 million (21.7%) increase in revenues from 1999 to 2000 was primarily
due to increased shipment volume of the Company's cartridges, reflecting higher
cartridge consumption by existing hospital users and the addition of new
hospital users. Cartridge shipments increased 23.8% to 9,829,225 units in 2000
from 7,941,115 units in 1999. Revenues from the increased cartridge shipments
were partially offset by lower worldwide average selling prices per cartridge,
which declined from approximately $3.84 to $3.69 per cartridge in the same
periods. For the foreseeable future, cartridge average selling prices are
expected to continue to decline because of the product pricing arrangements
applicable under the strategic alliance between the Company and Abbott. See
"Alliance with Abbott Laboratories". The increase in revenues in 2000 also
includes approximately $3.6 million from Abbott to fund certain research and
development and marketing expenses. The $6.1 million (15.7%) increase in
revenues from 1998 to 1999


                                       2
<PAGE>
was primarily due to increased shipment volume of the Company's cartridges,
reflecting higher cartridge consumption by existing hospital users and the
addition of new hospital users. Cartridge shipments increased 31.3% to 7,941,115
units from 6,046,825 units for the twelve months ended December 31, 1999 and
1998, respectively. Revenues from the increased cartridge shipments were
partially offset by lower average selling prices per cartridge, which declined
from approximately $4.66 to $3.84 per cartridge in the same periods. The
increase in revenues in the 1999 period also includes approximately $2.4 million
from Abbott to fund certain research and development and marketing expenses.

The manufacturing costs (as a percentage of product sales) associated with
product sales in 2000, 1999 and 1998 were approximately $40.9 million (79.7%),
$36.4 million (85.0%), and $30.7 million (78.6%), respectively. Cost of products
sold, as a percentage of product sales, generally decreases with increased
shipment volume of the Company's cartridges and improvements in manufacturing
productivity and yields. Cost of products sold, as a percentage of product
sales, increased in 1999 due to manufacturing process problems. The Company took
a charge in the second and third quarters of 1999 totaling $2.1 million to
write-off inventory caused by quality problems with tape gasket material
supplied by a vendor. The Company generated higher than normal manufacturing
efficiency gains in the third quarter of 1999 in rebuilding its inventory, which
had a favorable, and partially offsetting impact on cost of products sold, as a
percentage of product sales. The Company experienced a second problem in the
fourth quarter of 1999, also caused by defective tape from its tape supplier,
which resulted in a write-off of approximately $0.9 million of work-in-process
inventory and a reduced level of production. Reduced levels of production and
higher than normal scrap levels continued into the first quarter of 2000. Cost
of products sold, as a percentage of product sales, subsequently improved due to
the rebuilding of cartridge inventories, which caused fixed manufacturing costs
to be spread over a larger number of product units and improvements in cartridge
production yields. With the completion of the rebuilding of cartridge
inventories, production volumes are expected to return to more normal levels in
the first quarter of 2001.

The Company incurred research and development costs (as a percentage of net
revenues) of approximately $7.9 million (14.4%), $7.5 million (16.6%) and $7.3
million (18.6%) in 2000, 1999 and 1998, respectively, consisting of costs
associated with the personnel, material, equipment and facilities necessary to
conduct new product development. Research and development expenditures may
increase over the next three years. The amount and timing of such increase will
depend upon numerous factors including the level of activity at any point in
time, the breadth of the Company's development objectives and the success of its
development programs. Revenues from Abbott of approximately $2.7 million, $1.8
million and $0.1 million for research and development activities are included in
net revenues in 2000, 1999 and 1998, respectively. Abbott currently is not
funding any of the Company's research and development programs.

The Company incurred general and administrative expenses (as a percentage of net
revenues) of approximately $7.0 million (12.7%), $7.3 million (16.1%) and $7.2
million (18.3%) in 2000, 1999 and 1998, respectively. General and administrative
expenses consisted primarily of salaries and benefits of personnel, office
costs, legal and other professional fees and other costs necessary to support
the Company's infrastructure.

The Company incurred sales and marketing expenses (as a percentage of net
revenues) of approximately $7.8 million (14.1%), $8.3 million (18.3%) and $13.0
million (33.1%) in 2000, 1999 and 1998, respectively, consisting primarily of
salaries, commissions, benefits, travel and other expenditures for sales
representatives, implementation coordinators, international marketing support,
order entry, distribution, technical services, clinical affairs, product
literature, market research, and other sales infrastructure costs. Sales and
marketing expenses in 1998 include approximately $483,000 for severance and
retention bonus amounts payable to the Company's sales representatives and sales
management personnel. The employment of the majority of the Company's sales
representatives was terminated on December 31, 1998, in connection with the
assumption by Abbott of principal responsibility for distribution of the
Company's products. As a result, sales and marketing expenses decreased in 1999.
Included in revenues are amounts billed to Abbott for services performed by the
implementation coordinators, approximating $0.9 million, $0.7 million and $0.0
million in 2000, 1999 and 1998, respectively. See "Alliance with Abbott
Laboratories".


                                       3
<PAGE>
The Company was 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,
alleged infringement by i-STAT of Customedix's U.S. Patent No. 4,342,964. The
plaintiff sought injunctive relief and an accounting for i-STAT's profits and
the damages to Customedix from such alleged infringement. The Company was
prepared to contest the case vigorously, did not believe that it had infringed
the Customedix patent and had obtained an opinion from recognized patent counsel
to the effect that no infringement had occurred. However, management concluded
that the uncertainty inherent in any litigation as well as the drain on
management's time and the Company's resources merited an out-of-court resolution
of this lawsuit. Accordingly, on June 14, 2000, the Company entered into a
settlement agreement under which the Company paid the plaintiff $1.5 million and
the plaintiff agreed to permanently withdraw the complaint and to release the
Company from any and all claims of whatsoever nature that the plaintiff may have
had against the Company, whether under the referenced Patent or otherwise. A
charge in the amount of $1.5 million was recorded in the second quarter of 2000
in connection with the settlement of this litigation.

In January 1998, the Company decided to consolidate all its cartridge assembly
operations in its manufacturing facility in Ontario, Canada. In order to
facilitate this move, the Company relocated its cartridge assembly operation
from Plainsboro, New Jersey, to its manufacturing facility in Ontario, Canada.
The relocation of cartridge assembly commenced in June 1998 and was completed in
April 1999. As a result of this consolidation of operations, 66 employees in the
cartridge assembly operations were notified during the first quarter of 1998
that their employment would be terminated. In addition, the Company's lease for
its instrument operations, engineering, customer support, selected research and
development, marketing and administrative facility in Princeton, New Jersey,
expired in September 1998. The Company relocated these activities to a 37,474
square foot leased facility in East Windsor, New Jersey. The product
distribution operations formerly located in the Company's Plainsboro, New Jersey
facility were relocated to the Company's East Windsor, New Jersey facility in
early 1999. The charge to earnings in 1998 for these relocations, including
severance and retention payments to affected employees of $1.0 million, for the
physical move of equipment, rent and utilities on the unoccupied Plainsboro
facility until that lease expired in February 1999, and for miscellaneous costs
was approximately $1.1 million. An additional charge to earnings of
approximately $0.1 million occurred in 1999. Retention payments are charged to
expense over the retention period.

Investment income was approximately $1.6 million, $1.5 million and $1.7 million
in 2000, 1999 and 1998, respectively. The changes in investment income primarily
reflect changes in the level of cash and cash equivalent balances and interest
rates. Interest income is expected to decline in the near future as cash and
cash equivalent balances decline.

In November 2000, the New Jersey Economic Development Authority approved the
Company's application to sell New Jersey State income tax benefits under the New
Jersey Technology Tax Transfer Program (the "Program"). During the fourth
quarter of 2000, the Company received $867,000 from the sale of State of New
Jersey income tax benefits expiring in 2000. The Program requires that the
Company maintain certain employment levels in New Jersey and that the proceeds
from the sale of the tax benefits be spent in New Jersey. The Company recognized
the sale of this tax benefit in 2000 as all conditions stipulated in the Program
have been met.

Net loss in 2000 decreased to approximately $7.5 million or $0.43 per share (as
restated), from $12.8 million or $0.83 per share (as restated) in 1999, and
$18.4 million or $1.32 per share (as restated) in 1998. The weighted average
number of shares used in computing basic and diluted net loss per share was
17.51 million (as restated), 15.48 million (as restated) and 13.91 million (as
restated) in 2000, 1999 and 1998, respectively. The increases in the weighted
average number of shares primarily reflect the issuance of 2 million shares of
Common Stock to Abbott in September 1998, the conversion of 2,138,702 shares of
Series B Preferred Stock into 2,138,702 shares of Common Stock in March 2000,
and the exercise of employee stock options in each year.


LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2000, the Company had cash and cash equivalents of approximately
$19.5 million, a decrease of approximately $6.1 million from the December 31,
1999 balance of approximately $25.6 million. The decrease primarily reflects
approximately $13.0 million of cash used in operating activities (partially
offset by the receipt of $10.8 million from Abbott in January 2000), equipment
purchases of approximately $7.0 million and the receipt of approximately $3.6
million, net, from the proceeds of stock option exercises. The $10.8 million
received from Abbott represents the third installment of prepayments for
guaranteed future incremental cartridge sales (as defined in the Distribution
Agreement with Abbott). (The fourth and final installment of Abbott prepayments
of $5.2 million was received in January 2001.) Working capital decreased by
approximately $10.5 million from $32.0 million to $21.5


                                       4
<PAGE>
million during 2000. Changes in working capital during the year primarily
reflect the decrease in cash and cash equivalents, an increase of approximately
$6.5 million in inventories, an increase of approximately $1.2 million in
accounts payable and accrued expenses and an increase in deferred revenue of
approximately $9.3 million. The increase in inventories reflects the build-up of
cartridge inventories to meet increased sales demand and rebuild inventory from
the production problems arising in 1999, and an increase in analyzer inventories
in preparation for the launch of the new i-STAT 1(R) Analyzer. The deferred
revenue reflects the receipt of the $10.8 million prepayment from Abbott, along
with the reclassification of the first Abbott prepayment of $5.0 million from
deferred revenue-long term to deferred revenue-current, partially offset by the
amortization of such prepayments to income as incremental cartridge sales (as
defined in the Distribution Agreement with Abbott) are generated.

The Company expects its existing cash and cash equivalents to be sufficient to
meet its obligations and its liquidity and capital requirements for the near
term. The Company regularly monitors capital raising alternatives in order to
take advantage of opportunities to supplement its current working capital upon
favorable terms, including joint ventures, strategic corporate partnerships or
other alliances and the sale of equity and/or debt securities. The Company's
need, if any, to raise additional funds to meet its working capital and capital
requirements will depend upon numerous factors, including the results of its
marketing and sales activities, its new product development efforts,
manufacturing efficiencies and manufacturing plant expansion plans, the outcome
of ongoing litigation and competitive conditions. The Company currently
anticipates that it will need to raise a significant amount of capital in order
to fund long-term product development programs and manufacturing capacity needs.

On March 16, 2000, Agilent converted and sold its holding of 2,138,702 shares of
Series B Preferred Stock (formerly held by HP) into 2,138,702 shares of Common
Stock and accordingly, is no longer a related party for financial statement
purposes.

At December 31, 2000, the Company had available for Federal income tax purposes
net operating loss carry forwards of approximately $160 million, which expire in
varying amounts through 2020. The timing and manner in which the operating loss
carry forwards may be utilized in any year by the Company will be limited by
Section 382 of the Internal Revenue Code.

International sales are invoiced and settled in U.S. dollars. However, the
cartridge price received from international partners, including Abbott, may be
affected by changes in the value of the U.S. dollar relative to local
currencies. This is because the international cartridge price is set based on
the price paid by customers in local currencies. When the value of foreign
currencies changes with respect to the U.S. dollar, the price changes due to the
foreign exchange conversion of local currency prices. Price reductions are
limited, however, by guaranteed minimum prices established for each cartridge.

The Company's cartridge production is conducted through a wholly-owned
subsidiary in Canada. Most manufacturing labor and overhead costs of this
subsidiary are incurred in Canadian currency funded by U.S. dollar transfers
from the United States each week, while most raw material purchases are in U.S.
dollars. In 2000, the accumulated other comprehensive loss related to foreign
currency translation increased by approximately ($0.6) million to approximately
($1.3) million, and reflects the adjustment to translate the Canadian
subsidiary's balance sheet to U.S. dollars at the December 31, 2000 exchange
rate.

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


ALLIANCE WITH ABBOTT LABORATORIES

On September 2, 1998, the Company and Abbott entered into agreements (the
"Alliance Agreements") providing for a long-term sales, marketing and research
alliance. The Alliance Agreements comprise a Distribution Agreement, a Research
Agreement, a Stock Purchase Agreement, a Standstill Agreement and a Registration
Rights Agreement. The primary objective of the Abbott alliance is to strengthen
the Company's product marketing and distribution capability and accelerate the
development of new products.

Under the Distribution Agreement, Abbott has become, subject to the then
existing rights of the Company's other international distributors, the exclusive
worldwide distributor of the Company's hand-held blood analyzer products
(including cartridges) and any new products the Company may develop for use in
the professionally attended human healthcare delivery market. Abbott has assumed
the Company's product sales to U.S. customers that were in place as of the
inception of the Distribution Agreement (the "Base Business") at no profit to
Abbott, and the Company and


                                       5
<PAGE>
Abbott share in the incremental profits derived from product sales beyond the
Base Business. Abbott agreed to prepay to the Company a total of $25,000,000
during the first three years of the Distribution Agreement as guaranteed future
incremental product sales. Such prepayments are amortized to revenue as
incremental cartridges are sold to Abbott over the first three years of the
Agreement. Prepayments in amounts of $5,000,000, $4,000,000 and $10,800,000 were
received in September 1998, January 1999 and January 2000, respectively.
Unamortized revenue relating to these prepayments in the amounts of $10,606,000
and $1,012,000 are included in deferred revenues, current at December 31, 2000
and 1999, respectively, and $5,000,000 is included in deferred revenues from
related party, non-current at December 31, 1999. The final prepayment of
$5,200,000 was received in January 2001. Distribution under the Distribution
Agreement commenced in the United States on November 1, 1998. A subsequent
international rollout commenced in various countries during the second half of
1999. As a result of the Distribution Agreement, the majority of the Company's
revenues are now derived from Abbott.

The Distribution Agreement expires on December 31, 2003, subject to automatic
extensions for additional one-year periods unless either party provides the
other with at least 12 months prior written notice, except that the Company may
terminate the Distribution Agreement after December 31, 2001 if Abbott fails to
achieve a three-year milestone minimum growth rate in sales of the Company's
products covered by the Distribution Agreement. If the Distribution Agreement is
terminated, other than (i) by the Company for cause or for Abbott's failure to
achieve the minimum growth rate; or (ii) by Abbott, if Abbott delivers the
requisite notice terminating the Distribution Agreement after the initial term,
then, the Company will be obligated to pay to Abbott a one-time termination fee
calculated to compensate Abbott for a portion of its costs in undertaking the
distribution relationship, and residual payments for five years following
termination based on a percentage of Abbott's net sales of the Company's
products during the final twelve months of the Distribution Agreement. In the
event that such termination occurs within the first three years of the
Distribution Agreement, the Company also must refund to Abbott any prepayments
made and not yet credited to Abbott at the time of such termination.

Under the terms of the Research Agreement, the Company will conduct research and
will develop products primarily to be commercialized by Abbott. Such research
and development will be funded by Abbott and Abbott will have exclusive
worldwide commercialization rights to the products developed under the Research
Agreement subject to certain limitations. The Company and Abbott will jointly
own the intellectual property which is developed during the course of work
performed under the Research Agreement. In connection with this agreement,
revenues from Abbott of $2,697,000, $1,762,000 and $110,000 are included in net
revenues in 2000, 1999 and 1998, respectively. Abbott currently is not funding
any of the Company's research and development programs. The Research Agreement
terminates upon expiration or termination of the Distribution Agreement, unless
earlier terminated as provided therein. Upon such expiration or earlier
termination, both the Company and Abbott will be permitted to distribute the
products developed under the Research Agreement in the territory covered by the
Distribution Agreement.

Under the Stock Purchase Agreement, Abbott purchased 2,000,000 shares (the
"Purchased Shares") of the Company's Common Stock, at a price of $11.35 per
share, resulting in net proceeds of $20,641,000. The Stock Purchase Agreement,
together with the Registration Rights Agreement, contains certain terms and
conditions pertaining to the voting and transfer of the Purchased Shares.

The Standstill Agreement provides for limitations on Abbott's ability to
purchase the Company's Common Stock, or to propose any merger or business
combination with the Company or purchase of a material portion of the Company's
assets.

THE FOREGOING DESCRIPTION OF THE ALLIANCE AGREEMENTS IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE ACTUAL TEXT OF SUCH AGREEMENTS, COPIES OF WHICH
WERE FILED WITH THE COMMISSION AS EXHIBITS TO THE COMPANY'S QUARTERLY REPORT ON
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.


                                       6
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS


In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No.
133, as amended, is effective for all fiscal quarters of all fiscal years
beginning after June 15, 2000 (January 1, 2001 for the Company). SFAS No. 133
requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. The Company presently does not have any derivative
instruments or hedging activities and, consequently, the adoption of SFAS No.
133 will not have an impact on the Company's consolidated results of operations,
financial position or cash flows.


In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101") which addresses the staff's views on the
application of United States generally accepted accounting principles for
revenue recognition. The Company adopted the guidance of this bulletin in the
fourth quarter of 2000 with no impact on its financial condition or results of
operations.

ALL STATEMENTS CONTAINED IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION OTHER THAN STATEMENTS OF HISTORICAL
FINANCIAL INFORMATION, ARE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS INCLUDE STATEMENTS CONCERNING PLANS, OBJECTIVES, GOALS, STRATEGIES,
FUTURE EVENTS OR PERFORMANCE AND UNDERLYING ASSUMPTIONS AND OTHER STATEMENTS
WHICH ARE OTHER THAN HISTORICAL FACTS. ALTHOUGH THE COMPANY BELIEVES THAT ITS
EXPECTATIONS ARE BASED ON REASONABLE ASSUMPTIONS, 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, THOSE LISTED IN "FACTORS THAT MAY AFFECT
FUTURE RESULTS", IN ITEM 1 OF THIS ANNUAL REPORT ON FORM 10-K, AND OTHER RISKS
DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE COMPANY DOES NOT UNDERTAKE TO UPDATE THE RESULTS
DISCUSSED HEREIN AS A RESULT OF CHANGES IN RISKS OR OPERATING RESULTS.


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

LIST OF FINANCIAL STATEMENTS

            See page F-1 of this Report, which includes an index to consolidated
            financial statements.

LIST OF FINANCIAL STATEMENT SCHEDULES

            None

LIST OF EXHIBITS (numbered in accordance with Item 601 of Regulations S-K)

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

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

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

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

(10.4.2)**     Form of Incentive Stock Option Agreement under 1985 Stock Option
               Plan (U.S. Resident Affiliate) (Form 10-K for fiscal year ended
               December 31, 1992)*



*        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.

**       This exhibit is a management contract or compensatory plan required to
         be filed as an exhibit to this Form 10-K pursuant to Item 14(c).


                                       7
<PAGE>
(10.4.4)**     Form of Non-Statutory Stock Option Agreement under 1985 Stock
               Option Plan (U.S. Resident Affiliate) (Form 10-Q for quarter
               ended September 30, 1996)*

(10.4.6)**     Form of Non-Statutory Stock Option Agreement under 1985 Stock
               Option Plan (Ontario Resident Affiliate) (Form 10-Q for quarter
               ended September 30, 1996)*

(10.11)        Letter Agreement between the Registrant and Japanese corporate
               entities, dated August 23, 1988 (Form S-1 Registration Statement,
               File No. 33-44800)*

(10.12)        Letter Agreement between the Registrant and Japanese corporate
               entities, dated August 23, 1988 (Form S-1 Registration Statement,
               File No. 33-44800)*

(10.13)        Distribution Agreement between the Registrant and Japanese
               corporate entities, dated August 23, 1988 (Form S-1 Registration
               Statement, File No. 33-44800)*

(10.15)        Development Agreement between the Registrant and Japanese
               corporate entities, dated August 23, 1988 (Form S-1 Registration
               Statement, File No. 33-44800)*

(10.21)        Lease Agreement, dated December 23, 1991, between William S.
               Burnside (Canada) Limited, "In Trust" and the Registrant (Form
               10-K for fiscal year ended December 31, 1993)*

(10.25)**      Letter Agreement, dated April 15, 1994, between Registrant and
               Noah Kroloff (Form 10-Q for quarter ended June 30, 1994)*

(10.30)        License Agreement between the Registrant and Hewlett-Packard
               Company (Form 8-K, dated July 10, 1995 and amended on September
               11, 1995)*

(10.33)        Amendment, dated March 28, 1995 to Lease Agreement dated December
               23, 1991, between William S. Burnside (Canada) Limited, "In
               Trust" and the Registrant (Form 10-Q for quarter ended March 31,
               1996)*

(10.34)**      Letter Agreement, dated June 6, 1996 between the Registrant and
               Roger J. Mason (Form 10-Q for quarter ended June 30, 1996)*

(10.35)        Form of Officer Indemnification Agreement (Form 10-K for fiscal
               year ended December 31, 1996)*

(10.36)        Form of Director Indemnification Agreement (Form 10-K for fiscal
               year ended December 31, 1996)*

(10.38)**      1985 Stock Option Plan, as amended (Form 10-K for fiscal year
               ended December 31, 1997)*

(10.39)**      Employment Agreement, dated January 23, 1998, between the
               Registrant and William P. Moffitt (Form 10-K for fiscal year
               ended December 31, 1997)*

(10.40)**      Non-Statutory Stock Option Agreement, dated January 23, 1998,
               between the Registrant and William P. Moffitt (Form 10-K for
               fiscal year ended December 31, 1997)*

(10.41)        Lease Agreement, dated July 16, 1998, between Brandywine
               Operating Partnership L.P. and Registration (Form 10-Q for fiscal
               quarter ended June 30, 1998)*


*        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.

**       This exhibit is a management contract or compensatory plan required to
         be filed as an exhibit to this Form 10-K pursuant to Item 14(c).


                                       8
<PAGE>
(10.42)        Common Stock Purchase Agreement, dated as of August 3, 1998,
               between Registrant and Abbott Laboratories (Form 10-Q for fiscal
               quarter ended June 30, 1998)*

(10.43)        Standstill Agreement, dated as of August 3, 1998, between
               Registrant and Abbott Laboratories (Form 10-Q for fiscal quarter
               ended June 30, 1998)*

(10.44)        Form of Registration Rights Agreement entered into by Registrant
               and Abbott Laboratories on September 2, 1998 (Form 10-Q for
               fiscal quarter ended June 30, 1998)*

(10.45)        Marketing and Distribution Agreement, dated as of August 3, 1998,
               between Registrant and Abbott Laboratories (Form 10-Q for fiscal
               quarter ended June 30, 1998)*

(10.46)        Funded Research & Development and License Agreement, dated as of
               August 3, 1998, between Registrant and Abbott Laboratories (Form
               10-Q for fiscal quarter ended June 30, 1998)*

(10.48)**      Form of Director Non-Statutory Stock Option Agreement*

(10.49)        Lease Agreement dated August 27, 1998, between Urigold Holdings
               Ltd. and the Registrant (Form 10-K for the fiscal year ended
               December 31, 1998)*

(10.50)**      i-STAT Corporation Equity Incentive Plan, as amended*

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

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

(10.54)**      Form of Director Restricted Share Award Agreement*

(10.55)        Form of Agreement Relating to State of New Jersey Technology
               Business Tax Certificate Program*

(21)           Subsidiaries of the Registrant (Form S-1 Registration Statement,
               File No. 33-44800)*

(23)           Consent of PricewaterhouseCoopers LLP, Independent Accountants

(24)           Powers of Attorney, executed by certain officers of the
               Registrant and the individual members of the Board of Directors,
               authorizing such officers of the Registrant to file amendments to
               this Report, are located on the signature page of this Report.*


*        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.

**       This exhibit is a management contract or compensatory plan required to
         be filed as an exhibit to this Form 10-K pursuant to Item 14(c).


                                       9
<PAGE>
                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.

                                      i-STAT CORPORATION

                                      By: /s/ Roger J. Mason
                                          ----------------------------------
                                           Roger J. Mason
                                           Vice President of Finance,
                                           Treasurer and Chief Financial Officer


                                       10
<PAGE>
                               i-STAT CORPORATION
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
DESCRIPTION                                                                               PAGE
<S>                                                                                <C>
Report of Independent Accountants................................................          F-2

Consolidated Statements of Operations for each of the
three years in the period ended December 31, 2000................................          F-3

Consolidated Balance Sheets as of December 31, 2000 and 1999.....................          F-4

Consolidated Statements of Changes in Stockholders' Equity
for each of the three years in the period ended December 31, 2000................          F-5

Consolidated Statements of Cash Flows for each of the
three years in the period ended December 31, 2000................................          F-6

Notes to Consolidated Financial Statements.......................................  F-7 to F-21
</TABLE>


                                      F-1
<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF i-STAT CORPORATION:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows present fairly, in all material respects, the financial position of i-STAT
Corporation and its subsidiary (the "Company") at December 31, 2000 and 1999,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As described in Note 1, the Company has revised its 2000, 1999, and 1998 basic
and diluted net loss per share amounts.

PricewaterhouseCoopers LLP
Florham Park, New Jersey
February 6, 2001, except for
Note 1 as to which the
date is November 30, 2001


                                      F-2
<PAGE>
                               i-STAT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

In thousands of dollars, except share and per share data                               For the Years Ended December 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                                                2000*                1999*                1998*
<S>                                                                         <C>                  <C>                  <C>
Net revenues:
     Related party product sales ....................................       $     42,419         $     35,456         $      7,617
     Third party product sales ......................................              8,972                7,351               31,374
     Other related party revenues ...................................              3,646                2,418                  110
                                                                            --------------------------------------------------------
         Total net revenues .........................................             55,037               45,225               39,101
                                                                            --------------------------------------------------------
Cost of products sold ...............................................             40,951               36,401               30,664
Research and development ............................................              7,944                7,506                7,281
General and administrative ..........................................              6,983                7,264                7,152
Sales and marketing .................................................              7,784                8,293               12,956
Litigation settlement ...............................................              1,500                   --                   --
Consolidation of operations .........................................                 --                   70                1,115
                                                                            --------------------------------------------------------
         Total operating cost and expenses ..........................             65,162               59,534               59,168
                                                                            --------------------------------------------------------
               Operating loss .......................................            (10,125)             (14,309)             (20,067)
Other income (expense):
     Investment income ..............................................              1,636                1,507                1,694
     Other ..........................................................                127                   --                  (22)
                                                                            --------------------------------------------------------
         Other income (expense), net ................................              1,763                1,507                1,672
     Loss before provision (benefit) for income taxes ...............             (8,362)             (12,802)             (18,395)
     Provision (benefit) for income taxes ...........................               (867)                  --                   --
                                                                            --------------------------------------------------------
Net loss ............................................................       ($     7,495)        ($    12,802)        ($    18,395)
                                                                            ========================================================

Basic and diluted net loss per share ................................       ($      0.43)*       ($      0.83)*       ($      1.32)*
                                                                            ========================================================

Shares used in computing basic and
diluted net loss per share ..........................................         17,512,083*          15,475,893*          13,912,175*
                                                                            ========================================================
</TABLE>

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

              *As restated, see Note 1.


                                      F-3
<PAGE>
                               i-STAT CORPORATION
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
In thousands of dollars, except share and per share data                                                        December 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          2000              1999
<S>                                                                                                     <C>               <C>
Assets
Current assets:
     Cash and cash equivalents .................................................................        $  19,536         $  25,575
     Accounts receivable, net of reserve for doubtful accounts of $28
         in 2000 and $128 in 1999 ..............................................................              868               413
     Accounts receivable from related parties ..................................................            3,607             4,185
     Inventories (Note 2) ......................................................................           15,402             8,886
     Prepaid expenses and other current assets .................................................              884             1,185
                                                                                                        ----------------------------
         Total current assets ..................................................................           40,297            40,244
Plant and equipment, net (Note 3) ..............................................................           17,766            15,936
Intangible assets, net (Note 4) ................................................................            1,627             1,501
Other assets ...................................................................................              244               443
                                                                                                        ----------------------------
         Total assets ..........................................................................        $  59,934         $  58,124
                                                                                                        ============================
Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable ..........................................................................        $   3,464         $   2,269
     Accrued expenses (Note 5) .................................................................            4,488             4,453
     Deferred revenue (inclusive of related party deferred revenue of
         $10,675 in 2000 and $1,545 in 1999) ...................................................           10,824             1,564
                                                                                                        ----------------------------
         Total current liabilities .............................................................           18,776             8,286
                                                                                                        ----------------------------
Deferred revenue from related party, non-current ...............................................              106             5,175
                                                                                                        ----------------------------
         Total liabilities .....................................................................           18,882            13,461
                                                                                                        ----------------------------

Commitments and Contingencies

Stockholders' Equity:
     Preferred Stock, $0.10 par value, shares authorized 7,000,000:
         Series A Junior Participating Preferred Stock, $0.10 par value,
              1,500,000 shares authorized; none issued at December 31, 2000
              and December 31, 1999 ............................................................               --                --
         Series B Preferred Stock, $0.10 par value, shares authorized, 2,138,702;
              shares issued and outstanding -0- at December 31, 2000
              and 2,138,702 at December 31, 1999 ...............................................               --               214
     Common Stock, $0.15 par value, shares authorized 25,000,000:
         shares issued 18,436,654 at December 31, 2000
         and 15,761,630 at December 31, 1999 ...................................................            2,766             2,364
     Treasury Stock, at cost, 40,817 shares at December 31, 2000 and
         -0- shares at December 31, 1999 .......................................................             (750)               --
     Additional paid-in capital ................................................................          238,814           234,487
     Unearned compensation .....................................................................             (764)           (1,547)
     Loan to officer, net ......................................................................             (717)             (716)
     Accumulated deficit .......................................................................         (196,965)         (189,470)
     Accumulated other comprehensive loss ......................................................           (1,332)             (669)
                                                                                                        ----------------------------
          Total stockholders' equity ...........................................................           41,052            44,663
                                                                                                        ----------------------------
         Total liabilities and stockholders' equity ............................................        $  59,934         $  58,124
                                                                                                        ============================
</TABLE>

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


                                      F-4
<PAGE>
                               i-STAT CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                               Preferred
                                                 Stock                       Common Stock
                                               -----------------------------------------------------------------

                                                                                       Additional
In thousands of dollars,                          Par       Number of       Par         Paid-in         Treasury    Unearned
except share and per share data                  Value       Shares        Value        Capital           Stock   Compensation
---------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>       <C>            <C>          <C>              <C>       <C>
Balance, December 31, 1997...................    $ 214     13,203,527     $ 1,981      $ 209,594         ($ 13)      ($ 181)
Net loss for 1998............................
Other comprehensive loss on foreign
 currency translation adjustments............

      Total comprehensive loss...............
Shares issued at $1.50 to $12.625 per share
 under the 1985 Stock Option Plan (Note 8)...                  90,260          13            149
Private placement of Common Stock............               2,000,000         300         20,341
Restricted Stock issued at $15.938 per
 share.......................................                     750                         12                        (12)
Restricted Stock issued at $16.438 per
 share.......................................                   3,000                         49                        (49)
Restricted Stock issued at $16.50 per
 share.......................................                  12,000           2            196                       (198)
Amortization of unearned compensation
 related to Restricted Stock.................                                                                           271
Retirement of Treasury Stock.................                    (542)                       (13)           13
                                               ----------------------------------------------------------------------------------
Balance, December 31, 1998...................      214     15,308,995       2,296        230,328           --          (169)
Net loss for 1999............................
Other comprehensive gain on foreign
 currency translation adjustments............

      Total comprehensive loss...............
Shares issued at $1.50 to $10.50 per share
 under the 1985 Stock Option Plan (Note 8)...                 125,132          19            857
Restricted Stock issued at $8.875 per share..                 310,000          47          2,704                     (2,751)
Restricted Stock issued at $9.25 per share...                  14,412           2            131                       (133)
Restricted Stock issued at $9.75 per share...                   3,091                         30                        (30)
Compensation related to options issued.......                                                437                       (479)
Amortization of unearned compensation
 related to Restricted Stock.................                                                                         2,015
Loan to Officer..............................
                                               ----------------------------------------------------------------------------------
Balance, December 31, 1999...................      214     15,761,630       2,364        234,487           --        (1,547)
Net loss for 2000............................
Other comprehensive loss on foreign
 currency translation adjustments............

      Total comprehensive loss...............
Shares issued at $1.50 to $16.75 per share
 under the 1985 Stock Option Plan and
 the Equity Incentive Plan (Note 8)..........                 526,066          79          4,303
Restricted Stock issued at $13.00 per share..                  10,256           2            131                       (133)
Conversion of Series B Preferred Stock
 to Common Stock.............................     (214)     2,138,702         321           (107)
Amortization of unearned compensation
 related to Restricted Stock.................                                                                           916
Purchase of Treasury Stock...................                                                             (750)
Loan to Officer..............................
Forgiveness of Loan to Officer...............
                                               ----------------------------------------------------------------------------------
Balance, December 31, 2000...................    $  --     18,436,654     $ 2,766      $ 238,814        ($ 750)      ($ 764)
                                               ==================================================================================
</TABLE>

<TABLE>
<CAPTION>



                                                          Accumulated
                                                             Other                        Total
In thousands of dollars,                       Loan to   Comprehensive  Accumulated   Stockholders'
except share and per share data                Officer        Loss        Deficit        Equity
---------------------------------------------------------------------------------------------------
<S>                                            <C>       <C>            <C>           <C>
Balance, December 31, 1997...................   $  --       ($ 277)     ($ 158,273)   $ 53,045
Net loss for 1998............................                              (18,395)
Other comprehensive loss on foreign
 currency translation adjustments............               (1,064)
                                                           -----------------------
      Total comprehensive loss...............                                          (19,459)
Shares issued at $1.50 to $12.625 per share
 under the 1985 Stock Option Plan (Note 8)...                                              162
Private placement of Common Stock............                                           20,641
Restricted Stock issued at $15.938 per
 share.......................................
Restricted Stock issued at $16.438 per
 share.......................................
Restricted Stock issued at $16.50 per
 share.......................................
Amortization of unearned compensation
 related to Restricted Stock.................                                              271
Retirement of Treasury Stock.................
                                               ----------------------------------------------------
Balance, December 31, 1998...................      --       (1,341)       (176,668)     54,660
Net loss for 1999............................                              (12,802)
Other comprehensive gain on foreign
 currency translation adjustments............                  672
                                                           -----------------------
      Total comprehensive loss...............                                          (12,130)
Shares issued at $1.50 to $10.50 per share
 under the 1985 Stock Option Plan (Note 8)...                                              876
Restricted Stock issued at $8.875 per share..
Restricted Stock issued at $9.25 per share...
Restricted Stock issued at $9.75 per share...
Compensation related to options issued.......                                              (42)
Amortization of unearned compensation
 related to Restricted Stock.................                                            2,015
Loan to Officer..............................     (716)                                   (716)
                                               ----------------------------------------------------
Balance, December 31, 1999...................     (716)       (669)       (189,470)     44,663
Net loss for 2000............................                               (7,495)
Other comprehensive loss on foreign
 currency translation adjustments............                 (663)
                                                           -----------------------
      Total comprehensive loss...............                                           (8,158)
Shares issued at $1.50 to $16.75 per share
 under the 1985 Stock Option Plan and
 the Equity Incentive Plan (Note 8)..........                                            4,382
Restricted Stock issued at $13.00 per share..
Conversion of Series B Preferred Stock
 to Common Stock.............................
Amortization of unearned compensation
 related to Restricted Stock.................                                              916
Purchase of Treasury Stock...................                                             (750)
Loan to Officer..............................     (257)                                   (257)
Forgiveness of Loan to Officer...............      256                                     256
                                               ----------------------------------------------------
Balance, December 31, 2000...................   ($ 717)   ($ 1,332)     ($ 196,965)   $ 41,052
                                               ====================================================
</TABLE>

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


                                      F-5
<PAGE>
                               i-STAT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
In thousands of dollars, except share and per share data                                        For the Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                2000          1999          1998
<S>                                                                                           <C>           <C>           <C>
Cash flows from operating activities:
     Net loss ............................................................................    ($ 7,495)     ($12,802)     ($18,395)
     Adjustment to reconcile net loss to net cash
     used in operating activities:
         Depreciation and amortization ...................................................       4,790         4,362         4,591
         Accounts receivable provision ...................................................          --            --           103
         Gains on disposal of equipment ..................................................         (86)           (4)           --
         Amortization of deferred revenue ................................................      (6,887)       (4,013)         (218)
         Expense related to restricted stock .............................................       1,172         2,015           271

Change in assets and liabilities:
     Accounts receivable .................................................................        (455)        2,436         1,875
     Accounts receivable from related parties ............................................         578        (1,342)       (2,464)
     Inventories .........................................................................      (6,679)         (325)       (2,596)
     Prepaid expenses and other current assets ...........................................         292            98          (660)
     Accounts payable ....................................................................       1,245          (486)          568
     Accrued expenses ....................................................................          78        (1,648)        2,321
     Restricted cash, letter of credit ...................................................         199           147          (219)
     Deferred revenue ....................................................................      11,077         5,193         5,559
                                                                                              -------------------------------------
         Net cash used in operating activities ...........................................      (2,171)       (6,369)       (9,264)
                                                                                              -------------------------------------

Cash flows from investing activities:
     Purchase of equipment ...............................................................      (6,973)       (6,250)       (5,925)
     Cost of intangible assets ...........................................................        (261)         (294)         (193)
     Proceeds from sale of equipment .....................................................          99            20            --
                                                                                              -------------------------------------
         Net cash used in investing activities ...........................................      (7,135)       (6,524)       (6,118)
                                                                                              -------------------------------------

Cash flows from financing activities:
     Proceeds from issuance of Common Stock ..............................................       4,382           834           162
     Net proceeds from private placement of Common Stock .................................          --            --        20,641
     Retirement (purchase) of Treasury Stock .............................................        (750)           --            13
     Loan to officer .....................................................................        (257)         (716)           --
     Other ...............................................................................          --            --            29
                                                                                              -------------------------------------
         Net cash provided by financing activities .......................................       3,375           118        20,845
                                                                                              -------------------------------------
Effect of currency exchange rate changes on cash .........................................        (108)          (40)           13
                                                                                              -------------------------------------
     Net increase (decrease) in cash and cash equivalents ................................      (6,039)      (12,815)        5,476
     Cash and cash equivalents at beginning of year ......................................      25,575        38,390        32,914
                                                                                              -------------------------------------
     Cash and cash equivalents at end of year ............................................    $ 19,536      $ 25,575      $ 38,390
                                                                                              =====================================
Supplemental disclosure of cash flow information:
     Cash paid for income taxes ..........................................................    $     --      $     --      $     --
                                                                                              =====================================
Supplemental disclosures of cash flow information
and non cash investing and financing activities:
     Equipment purchases included in accounts payable at year end ........................    $    143      $    276      $    181
                                                                                              =====================================
     Conversion of Preferred Stock to Common Stock .......................................    $   (214)     $     --      $     --
                                                                                              =====================================
</TABLE>

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


                                      F-6
<PAGE>
                               i-STAT CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS

The accompanying consolidated financial statements include the accounts of
i-STAT Corporation and i-STAT Canada Limited, collectively known as i-STAT or
the Company. All significant inter-company accounts and transactions have been
eliminated in consolidation. The Company develops, manufactures and markets
medical diagnostic products for blood analysis that provide health care
professionals with immediate and accurate critical diagnostic information at the
point of patient care. Since November 1998, the Company's products are marketed
and distributed principally to hospitals by Abbott Laboratories ("Abbott") in
connection with the Company's alliance with Abbott (see Note 11).

The Company operates in a high technology, emerging market environment that
involves significant risks and uncertainties which may cause results to vary
significantly from reporting period to reporting period. These risks include,
but are not limited to, 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 and dependence
upon strategic corporate partners for assistance in development of new markets.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include investments with original maturities of three
months or less.

FOREIGN CURRENCY TRANSLATION/TRANSACTIONS

Consolidated Balance Sheet amounts have been translated using exchange rates in
effect at the balance sheet dates and the translation adjustments have been
included in the accumulated other comprehensive loss as a separate component of
Consolidated Stockholders' Equity. The Consolidated Statements of Operations has
been translated using the average exchange rates in effect each year. The
transaction gains and losses, which are not material, have been included in
other income.

INVENTORIES

Inventories are carried at the lower of actual cost or market and cost is
accounted for on the first-in first-out (FIFO) basis.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost and are depreciated on a straight-line
basis over their useful lives which are estimated to be three to five years.
Leasehold improvements are amortized over five years or the term of the lease,
whichever is less. The cost of major additions and betterments are capitalized;
maintenance and repairs which do not improve or extend the life of the
respective assets are charged to expenses as incurred. When depreciable assets
are retired or sold the cost and related accumulated depreciation are removed
from the accounts and any resulting gain or loss is reflected in the
Consolidated Statements of Operations.

PATENTS, LICENSES AND TRADEMARKS

Costs to obtain and maintain patents, licenses and trademarks are capitalized
and amortized on a straight-line basis over their estimated useful lives or a
period of 17 years, whichever is shorter. The Company reviews these items on a
regular basis for realization.

VALUATION OF LONG-LIVED ASSETS

In accordance with the Statement of Financial Accounting Standards ("SFAS") No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", the Company periodically evaluates the carrying value
of long-lived assets to be held and used, including intangible assets. The
carrying value of long-lived assets is considered impaired when the anticipated
undiscounted cash flows are less than the carrying value. In that event, a loss
is recognized based on the amount by which the carrying value exceeds the fair
market value of long-lived assets. Fair market value is determined primarily
using the anticipated cash flows discounted at a rate commensurate with the risk
involved.


                                      F-7
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


UNEARNED COMPENSATION

Unearned compensation related to stock options and Restricted Stock awards is
amortized over the period during which the options vest or Restricted Stock
awards are earned.

INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes" ("SFAS No. 109"), which requires an asset and
liability approach for financial accounting and reporting of income taxes. In
addition, deferred income taxes are adjusted for changes in income tax rates.
SFAS No. 109 requires that deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax asset will not be realized.

REVENUE RECOGNITION

Revenues are recorded at the time of shipment of products and when title and
risk of loss transfers or upon performance of services. Revenues from service
contracts are recognized in earnings over the term of the contract.

BASIC AND DILUTED LOSS PER SHARE (RESTATED)

Basic loss per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted loss per share reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the Company. The Company has not included
potentially dilutive common shares in the diluted per-share computation for all
periods presented, as the result is antidilutive due to the Company's net loss.
The Company has restated its net loss per share for 2000, 1999, and 1998 to
exclude the Series B Preferred Shares from the calculation of basic and diluted
net loss per share. The impact of restating the basic and diluted net loss per
share was to increase the 2000, 1999, and 1998 basic and diluted net loss per
share by $0.01, $0.10, and $0.17, respectively. There was no change in the net
loss for 2000, 1999 and 1998. In addition, as discussed in Note 7, the Series
B Preferred shares were converted into Common Stock on March 16, 2000.


Options to purchase 2,580,686 shares of Common Stock at $1.50 - $32.58 per
share, which expire on various dates from March 2001 to November 2010, were
outstanding at December 31, 2000. These shares were not included in the
computation of diluted EPS because the effect would be antidilutive due to the
net loss.

COMPREHENSIVE INCOME

SFAS No. 130, "Reporting Comprehensive Income", requires foreign currency
translation adjustments, which prior to adoption were reported separately in
stockholders' equity, to be included in other comprehensive earnings. The only
components of accumulated other comprehensive loss for the Company are foreign
currency translation adjustments.

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                            2000        1999        1998
--------------------------------------------------------------------------------
<S>                                             <C>        <C>         <C>
     Net loss ...............................   ($7,495)   ($12,802)   ($18,395)
     Other comprehensive income (loss):
         Foreign currency translation .......      (663)        672      (1,064)
                                                --------------------------------
     Comprehensive loss .....................   ($8,158)   ($12,130)   ($19,459)
                                                ================================
</TABLE>

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

The Company's significant concentrations of credit risk are with its cash and
cash equivalents and accounts receivable. Substantially all the Company's cash
and cash equivalents at December 31, 2000 were invested in the securities of a
single U.S. Government Agency. Accounts receivable are generally with
distributors such as Abbott, Hewlett-Packard Company ("HP"), FUSO, Inc., and
Heska. The Company provides credit to its customers on an unsecured basis after
evaluating their credit status.


                                      F-8
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


SEGMENT INFORMATION

The Company operates within one business segment comprising the i-STAT(R)
System. The i-STAT System consists of a portable handheld analyzer and
single-use, disposable cartridges, which are interdependent on one another in
the functionality of the system.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133, as
amended, is effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000 (January 1, 2001 for the Company). SFAS No. 133 requires
that all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each period in
current earnings or other comprehensive income depending on whether a derivative
is designated as part of a hedge transaction and, if it is, the type of hedge
transaction. The Company presently does not have any derivative instruments or
hedging activities and, consequently, the adoption of SFAS No. 133 will not have
an impact on the Company's consolidated results of operations, financial
position or cash flow.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101") which addresses the staff's views on the
application of United States generally accepted accounting principles for
revenue recognition. The Company adopted the guidance of this bulletin in the
fourth quarter of 2000 with no impact on its financial condition or results of
operations.

2. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                                       December 31,
--------------------------------------------------------------------------------
                                                         2000              1999
<S>                                                    <C>                <C>
Raw materials .............................            $ 5,696            $3,402
Work-in-process ...........................              3,700             2,764
Finished goods ............................              6,006             2,720
                                                       -------------------------
                                                       $15,402            $8,886
                                                       =========================
</TABLE>

3. PLANT AND EQUIPMENT

Plant and equipment, net, consists of the following:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                                        December 31,
--------------------------------------------------------------------------------
                                                            2000         1999
<S>                                                       <C>          <C>
Equipment loaned to customers ........................    $  2,052     $  2,418
Manufacturing equipment ..............................      37,364       33,100
Furniture and fixtures ...............................       1,318        1,092
Leasehold improvements ...............................       4,378        4,087
                                                          ----------------------
                                                            45,112       40,697
Less accumulated depreciation and amortization .......     (27,346)     (24,761)
                                                          ----------------------
                                                          $ 17,766     $ 15,936
                                                          ======================
</TABLE>

Depreciation expense was approximately $4,644,000, $4,224,000 and $4,412,000 for
the years ended December 31, 2000, 1999 and 1998, respectively. Accumulated
depreciation and amortization includes accumulated depreciation on loaned
equipment of approximately $1,947,000 and $2,033,000 for the years ended
December 31, 2000 and 1999, respectively.

Maintenance and repairs expense for the years ended December 31, 2000, 1999 and
1998 was approximately $1,026,000, $938,000 and $865,000, respectively.


                                      F-9
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


4. INTANGIBLE ASSETS

Intangible assets, net, consist of the following:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                                      December 31,
--------------------------------------------------------------------------------
                                                          2000            1999
<S>                                                     <C>             <C>
Patents, licenses and trademarks ...............        $ 2,448         $ 2,187
Less accumulated amortization ..................           (821)           (686)
                                                        ------------------------
                                                        $ 1,627         $ 1,501
                                                        ========================
</TABLE>

Amortization expense was approximately $135,000, $138,000 and $179,000 for the
years ended December 31, 2000, 1999 and 1998, respectively.

5. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                                         December 31,
--------------------------------------------------------------------------------
                                                             2000          1999
<S>                                                         <C>           <C>
Accrued employee incentive awards ..................        $  861        $  601
Payroll and withholding taxes ......................         1,038           880
Professional fees ..................................           484           383
Accrued commissions ................................           273           276
Other ..............................................         1,832         2,313
                                                            --------------------
                                                            $4,488        $4,453
                                                            ====================
</TABLE>

6. LEASING TRANSACTIONS

The Company's leases for its manufacturing facilities in Ontario, Canada expire
in February 2004, subject to, at the Company's option, renewal for one five-year
term in the lease of 42,454 square feet of space. Rent expense for these
facilities was approximately $667,000, $456,000 and $368,000 for the years ended
December 31, 2000, 1999 and 1998, respectively. The Company's lease for its
administrative, marketing and selected research and development facility in
Princeton, New Jersey, expired on September 30, 1998. Rent expense for this
facility was approximately $379,000 for the year ended December 31, 1998. The
Company relocated these activities to a 37,474 square foot leased facility in
East Windsor, New Jersey. The lease expires on September 30, 2003, subject, at
the Company's option, to one five-year option to renew. Rent expense for this
facility was approximately $708,000, $656,000 and $164,000 for 2000, 1999 and
1998, respectively. At December 31, 2000, other assets include $187,000 in
restricted cash which acts as collateral for the leasehold improvements made in
the facility.


The Company's lease for its assembly facility in Plainsboro, New Jersey expired
in February 1999 (the assembly operation was relocated to the Ontario, Canada,
location). Rent expense for this facility was approximately $56,000 and $492,000
for the years ended December 31, 1999 and 1998, respectively.


As of December 31, 2000, future minimum lease payments are as follows:

<TABLE>
<CAPTION>
Year Ending December 31:  IN THOUSANDS OF DOLLARS               Operating Leases
--------------------------------------------------------------------------------
<S>                                                             <C>
2001.........................................................       $    1,580
2002.........................................................            1,543
2003.........................................................            1,342
2004.........................................................              129
Thereafter...................................................              --
                                                                    ----------
Total minimum lease payments.................................       $    4,594
                                                                    ==========
</TABLE>


                                      F-10
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


7. PREFERRED STOCK

The Company has authorized 7,000,000 shares of Preferred Stock. The rights,
preferences, qualifications, and voting powers are determined by the Board of
Directors at the time of issuance. In June 1995 the Board designated 1,500,000
shares as Series A Junior Participating Preferred Stock that may be issued in
the future in connection with certain shareholder protection measures. Also in
June 1995 the Board designated 2,138,702 shares as Series B Preferred Stock (the
"Series B Stock"). The Series B Stock was issued to HP at $28.50 per share in
July 1995 for net proceeds of approximately $59.2 million. There were 2,138,702
shares of Series B Stock issued and outstanding at December 31, 1999. During
1999, HP transferred its holding of Series B Stock to its then subsidiary,
Agilent Technologies, Inc. ("Agilent"). On March 16, 2000, Agilent converted its
holding of 2,138,702 shares of Series B Preferred Stock into 2,138,702 shares of
Common Stock, and sold its holding.


On June 29, 1995, the Company declared a dividend distribution of rights (each,
a "Right") to purchase a certain number of units at a price of $104.00, subject
to adjustment. The Rights are deemed to attach to and trade together with the
Common Stock. Each unit is equal to one one-hundredth of a share of Series A
Junior Participating Preferred Stock of the Company. Rights are distributed in
connection with issuances of shares of Common Stock. The Rights are not
exercisable until the occurrence of certain events enumerated in the Stockholder
Protection Agreement between the Company and First Union National Bank, the
Company's rights agent. Until a Right is exercised no holder of Rights will have
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Stock), including, without limitation, the right to
vote or to receive dividends.


                                      F-11
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


8. STOCK OPTIONS AND RESTRICTED STOCK

As incentives to Company personnel and others, the Board of Directors from time
to time grants options to purchase shares of the Company's Common Stock. Most
options are granted under the 1985 Stock Option Plan or Equity Incentive Plan
("the Plans"). The maximum number of issuable shares of Common Stock is
5,300,000 of which 1,279,489 are available for grant at December 31, 2000.
Options under the 1985 Stock Option Plan can be issued until November 26, 2005,
and options under the Equity Incentive Plan can be issued until March 31, 2008.
The option price generally is based upon the fair market value of the Company's
Common Stock at the time of the grant. Unexercised options issued under the
Plans expire five to ten years from the date of grant or three months following
termination of the optionee's employment, whichever occurs first.

On December 14, 1998, upon unanimous consent of the Board of Directors, 824,277
previously issued and outstanding stock options with an exercise price greater
than $6.125 were cancelled, except for outstanding options held by outside Board
members, the Medical Advisory Board and executive officers of the Company. Stock
options were reissued to the holders of the cancelled options to purchase
824,277 shares at $6.125, the market value on the date of grant.

The table below is a summary of stock option activity for the years 1998, 1999,
and 2000.

<TABLE>
<CAPTION>
                                                                                                      Weighted
                                                                                     Options          Average            Weighted
                                                                                     Granted          Exercise           Average
                                                                   Options             and           Price per          Fair Value
                                                                 Exercisable       Exercisable         Share            per Option
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>               <C>               <C>                <C>
Balance December 31, 1997......................................      937,322                          $  14.69
Balance December 31, 1997......................................                     1,637,704         $  16.10
Options granted................................................                       778,559         $  15.44          $   15.27
Options exercised..............................................                       (90,260)        $   1.75
Options forfeited..............................................                      (184,138)        $  17.91
Options cancelled..............................................                      (824,277)        $  16.57
Options granted................................................                       824,277         $   6.12
                                                                 -----------------------------------------------------------------
Balance December 31, 1998......................................    1,087,030                          $  12.71
Balance December 31, 1998......................................                     2,141,865         $  12.30
Options granted................................................                     1,070,063         $   9.30          $    9.21
Options exercised..............................................                      (125,132)        $   6.99
Options forfeited..............................................                      (227,299)        $  11.77
                                                                 -----------------------------------------------------------------
Balance December 31, 1999......................................    1,349,002                          $  12.19
Balance December 31, 1999......................................                     2,859,497         $  11.45
Options granted................................................                       474,047         $  13.16          $   13.28
Options exercised..............................................                      (526,066)        $   8.33
Options forfeited..............................................                      (226,792)        $  14.29
                                                                 -----------------------------------------------------------------
Balance December 31, 2000......................................    1,167,008                          $  12.49
Balance December 31, 2000......................................                     2,580,686         $  12.15
                                                                 =================================================================
</TABLE>

The weighted average remaining contractual lives of outstanding options at
December 31, 2000 was approximately 6.53 years.


                                      F-12
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Company applies the provisions of Opinion 25 ("APB 25") and related
Interpretations in accounting for its stock based compensation plans.
Accordingly, compensation expense has been recognized in the financial
statements in respect to the above plans to the extent required by APB 25. Had
compensation costs for the above plans been determined based on the fair value
at the grant dates for awards under those plans consistent with the method of
SFAS No. 123, "Accounting for Stock Based Compensation", the Company's net loss
and net loss per share would have been increased to the pro forma amounts below:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA                  2000        1999        1998
-----------------------------------------------------------------------------------------------
<S>                                                          <C>         <C>         <C>
Pro forma net loss ........................................  ($ 11,914)  ($ 17,125)  ($ 22,035)
Pro forma basic and diluted net loss per share, as restated  ($   0.68)  ($   1.11)  ($   1.58)
</TABLE>

As options vest over a varying number of years, and awards are generally made
each year, the pro forma impacts shown here may not be representative of future
pro forma expense amounts due to the annual grant of options by the Company. The
pro forma additional compensation expense of approximately $4,419,000,
$4,323,000 and $3,640,000 for 2000, 1999 and 1998, respectively, was calculated
based on the fair value of each option grant using the Black-Scholes model with
the following weighted average assumptions used for grants:

<TABLE>
<CAPTION>
                                            2000            1999          1998
--------------------------------------------------------------------------------
<S>                                       <C>           <C>             <C>
Dividend yield.........................    0%            0%              0%
Expected volatility....................   71.29         62.00           60.00
Risk free interest rate................    6.71%         5.44%           5.49%
Expected option lives..................    5 years       5 years         5 years
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 2000.

<TABLE>
<CAPTION>
                                    OPTIONS OUTSTANDING                                            OPTIONS EXERCISABLE


                               Number               Weighted           Weighted                Number                Weighted
        Range of             Outstanding            Average             Average             Exercisable               Average
     Exercise Price          at 12/31/00         Remaining Life     Exercise Price          at 12/31/00           Exercise Price
--------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                 <C>                <C>                     <C>                   <C>
$  1.50 - $  2.25                 1,000               0.20              $   1.50                  1,000           $       1.50
$  6.13 - $  9.06               743,523               6.60              $   7.22                411,146           $       6.88
$  9.25 - $ 13.00             1,132,165               7.11              $  11.18                365,301           $      10.48
$ 14.10 - $ 21.00               509,127               5.84              $  16.62                210,690           $      16.28
$ 22.56 - $ 32.58               194,871               4.68              $  24.97                178,871           $      25.09
--------------------------------------------------------------------------------------------------------------------------------
$  1.50 - $ 32.58             2,580,686               6.53              $  12.15              1,167,008           $      12.49
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-13
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


On February 5, 1999, the Board of Directors awarded 310,000 shares of restricted
Common Stock to four executive officers of the Company. The restricted Common
Stock had a fair value at the date of grant of approximately $2,751,250. One
executive officer was awarded 250,000 shares of restricted Common Stock, 50,000
shares of which immediately vested on February 5, 1999, and the remaining
200,000 shares cliff vest on February 5, 2002. The 60,000 shares awarded to the
other three executive officers vest over a three year period.

In connection with the award of 250,000 shares to one executive officer, on June
30, 1999, the Company loaned the executive officer approximately $716,000 to pay
withholding taxes. The promissory note for the withholding tax amount carries an
interest rate of 5.37%, payable annually, and the principal amount of the loan
is repayable three years from the date of the execution of a second promissory
note for the remaining taxes. The second promissory note, executed in April 2000
of approximately $257,000 carries an interest rate of 6.36%, payable annually.
One third of the principal amount of these loans will be forgiven on each
anniversary date of the loan for the remaining taxes if the executive officer
remains in the employment of the Company. The Company will also make a "tax
gross-up" payment to the executive officer in connection with any taxes that may
be due as result of the forgiveness of these loans.

Compensation expense in the amount of approximately $1,180,000 and $1,379,000
was recorded in connection with these awards, the loan forgiveness and the
associated tax gross-up payment during the years ended December 31, 2000 and
1999 respectively.

During 2000, 10,256 shares of restricted Common Stock were awarded to outside
directors of the Board of Directors as part of their annual compensation. The
restricted Common Stock had a fair value of $133,000 at the date of grant, which
was recorded as compensation expense in 2000. During 1999, 17,503 shares of
restricted Common Stock were awarded to outside directors of the Board of
Directors as part of their annual compensation. The restricted Common Stock had
a fair value of $163,000 at the date of grant, which was recorded as
compensation expense in 1999.

The Company has a restricted stock plan whereby the Company can award shares of
Common Stock to employees, other than its executive officers. The sale or
transfer of the shares is limited during the restricted period, not exceeding
four years. For the year ended December 31, 2000 and 1999, no shares of
restricted Common Stock were awarded. For the year ended December 31, 1998, the
Company awarded 15,750 shares of restricted Common Stock which had a fair value
at the date of grant of approximately $259,000. Compensation under the plan is
charged to earnings over the restriction period and amounted to approximately
$22,000, $141,000, and $271,000 in 2000, 1999, and 1998, respectively.

9. DEVELOPMENT, DISTRIBUTION AND MANUFACTURING RIGHTS AGREEMENTS

In August 1988, the Company entered into development, distribution and
instrument manufacturing license agreements with two Japanese companies. Total
sales under these agreements were $5,243,000, $3,900,000 and $3,794,000 for the
years ended December 31, 2000, 1999 and 1998, respectively, including deferred
revenue of $129,000, $0 and $0, respectively. The Company also has other license
and distribution agreements, including agreements with HP and Abbott (see Notes
10 & 11).


                                      F-14
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


10. RELATED PARTY TRANSACTIONS

One director of the Company has provided consulting services to the Company.
Consulting fees incurred totaled approximately $0, $15,000 and $30,000 for the
years ended December 31, 2000, 1999 and 1998, respectively.


The Company had the following activity with Abbott and HP, primarily related to
license and distribution agreements.

<TABLE>
<CAPTION>
ABBOTT LABORATORIES  IN THOUSANDS OF DOLLARS         2000       1999      1998
--------------------------------------------------------------------------------
<S>                                                 <C>        <C>        <C>
Revenues .......................................    $45,927    $35,499    $4,515

Receivable at year end .........................    $ 3,607    $ 4,069    $2,439

Deferred revenue at year end ...................    $10,781    $ 6,474    $5,407
</TABLE>

<TABLE>
<CAPTION>
HEWLETT-PACKARD COMPANY  IN THOUSANDS OF DOLLARS      2000       1999      1998
--------------------------------------------------------------------------------
<S>                                                 <C>        <C>        <C>
Revenues .......................................    $   138    $ 2,375    $3,212

Purchases ......................................    $    41    $   816    $  728

Receivable at year end .........................    $    --    $   116    $  404
</TABLE>

HP has assigned its license agreement with the Company and its holding of Series
B Stock to Agilent. On March 16, 2000, Agilent converted its holding of
2,138,702 shares of Series B Stock into 2,138,702 shares of Common Stock and
sold its holding to two financial institutions and is no longer a related party.

11. ALLIANCE WITH ABBOTT LABORATORIES

On September 2, 1998, the Company and Abbott entered into agreements (the
"Alliance Agreements") providing for a long-term sales, marketing and research
alliance. The Alliance Agreements comprise a Distribution Agreement, a Research
Agreement, a Stock Purchase Agreement, a Standstill Agreement and a Registration
Rights Agreement. The primary objective of the Abbott alliance is to strengthen
the Company's product marketing and distribution capability and accelerate the
development of new products.

Under the Distribution Agreement, Abbott has become, subject to the then
existing rights of the Company's other international distributors, the exclusive
worldwide distributor of the Company's hand-held blood analyzer products
(including cartridges) and any new products the Company may develop for use in
the professionally attended human healthcare delivery market. Abbott has assumed
the Company's product sales to U.S. customers that were in place as of the
inception of the Distribution Agreement (the "Base Business") at no profit to
Abbott, and the Company and Abbott share in the incremental profits derived from
product sales beyond the Base Business. Abbott agreed to prepay to the Company a
total of $25,000,000 during the first three years of the Distribution Agreement
as guaranteed future incremental product sales. Such prepayments are amortized
to revenue as incremental cartridges are sold to Abbott over the first three
years of the Agreement. Prepayments in amounts of $5,000,000, $4,000,000 and
$10,800,000 were received in September 1998, January 1999 and January 2000,
respectively. Unamortized revenue relating to these prepayments in the amounts
of $10,606,000 and $1,012,000 are included in deferred revenue, current at
December 31, 2000 and 1999, respectively, and $5,000,000 is included in deferred
revenues from related party, non-current at December 31, 1999. The final
prepayment of $5,200,000 was received in January 2001. Distribution under the
Distribution Agreement commenced in the United States on November 1, 1998. A
subsequent international rollout commenced in various countries during the
second half of 1999. As a result of the Distribution Agreement, the majority of
the Company's revenues are now derived from Abbott.


                                      F-15
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Distribution Agreement expires on December 31, 2003, subject to automatic
extensions for additional one-year periods unless either party provides the
other with at least 12 months prior written notice, except that the Company may
terminate the Distribution Agreement after December 31, 2001 if Abbott fails to
achieve a three-year milestone minimum growth rate in sales of the Company's
products covered by the Distribution Agreement. If the Distribution Agreement is
terminated, other than (i) by the Company for cause or for Abbott's failure to
achieve the minimum growth rate; or (ii) by Abbott, if Abbott delivers the
requisite notice terminating the Distribution Agreement after the initial term,
then, the Company will be obligated to pay to Abbott a one-time termination fee
calculated to compensate Abbott for a portion of its costs in undertaking the
distribution relationship, and residual payments for five years following
termination based on a percentage of Abbott's net sales of the Company's
products during the final twelve months of the Distribution Agreement. In the
event that such termination occurs within the first three years of the
Distribution Agreement, the Company also must refund to Abbott any prepayments
made and not yet credited to Abbott at the time of such termination.

Under the terms of the Research Agreement, the Company will conduct research and
will develop products primarily to be commercialized by Abbott. Such research
and development will be funded by Abbott and Abbott will have exclusive
worldwide commercialization rights to the products developed under the Research
Agreement subject to certain limitations. The Company and Abbott will jointly
own the intellectual property which is developed during the course of work
performed under the Research Agreement. In connection with this agreement,
revenues from Abbott of $2,697,000, $1,762,000 and $110,000 are included in net
revenues in 2000, 1999 and 1998, respectively. Abbott currently is not funding
any of the Company's research and development programs. The Research Agreement
terminates upon expiration or termination of the Distribution Agreement, unless
earlier terminated as provided therein. Upon such expiration or earlier
termination, both the Company and Abbott will be permitted to distribute the
products developed under the Research Agreement in the territory covered by the
Distribution Agreement.

Under the Stock Purchase Agreement, Abbott purchased 2,000,000 shares (the
"Purchased Shares") of the Company's Common Stock, at a price of $11.35 per
share, resulting in net proceeds of $20,641,000. The Stock Purchase Agreement,
together with the Registration Rights Agreement, contains certain terms and
conditions pertaining to the voting and transfer of the Purchased Shares.

The Standstill Agreement provides for limitations on Abbott's ability to
purchase the Company's Common Stock, or to propose any merger or business
combination with the Company or purchase of a material portion of the Company's
assets.

THE FOREGOING DESCRIPTION OF THE ALLIANCE AGREEMENTS IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE ACTUAL TEXT OF SUCH AGREEMENTS, COPIES OF WHICH
WERE FILED WITH THE COMMISSION AS EXHIBITS TO THE COMPANY'S QUARTERLY REPORT ON
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.


                                      F-16
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. INCOME TAXES

The difference between income tax expense and the expected tax which would
result from the use of the Federal Statutory income tax rate is as follows:

<TABLE>
<CAPTION>
                                                 2000        1999        1998
--------------------------------------------------------------------------------
<S>                                             <C>         <C>         <C>
Computed tax at statutory Federal rate ....     (34.0%)     (34.0%)     (34.0%)
State income taxes, net of Federal benefits      (6.8%)       0.0%        0.0%
Foreign (income)/loss not subject to
   United States tax ......................      (4.5%)       8.1%        5.9%
Change in valuation allowance .............      32.1%       24.6%       27.8%
Other .....................................       2.9%        1.3%        0.3%
                                                --------------------------------
Income tax (benefit)/expense ..............     (10.3%)       0.0%        0.0%
                                                ================================
</TABLE>

In November 2000, the New Jersey Economic Development Authority approved the
Company's application to sell New Jersey State income tax benefits under the New
Jersey Technology Tax Transfer Program (the "Program"). During the fourth
quarter of 2000, the Company received $867,000 from the sale of State of New
Jersey income tax benefits expiring in 2000. The Program requires that the
Company maintain certain employment levels in New Jersey and that the proceeds
from the sale of the tax benefits be spent in New Jersey. The Company recognized
the sale of this tax benefit in 2000 as all conditions stipulated in the Program
have been met.

At December 31, 2000, the Company had a net operating loss carry forward of
approximately $159,611,000 for United States Federal income tax purposes which
expires in varying amounts through 2020. The Company also has unused research
and development tax credits of approximately $1,463,000 for United States
Federal income tax purposes which expire in varying amounts through 2020. The
timing and manner in which the United States Federal operating loss carry
forwards and credits may be utilized in any year by the Company will be limited
by Internal Revenue Code Section 382. The Company has unused Canadian net
operating loss carry forward of approximately $14,320,000 which expire in
varying amounts through 2004. Additionally, the Company has unused Canadian
investment tax credits of approximately $2,529,000 which expire in varying
amounts through 2010.

The Company accounts for income taxes in accordance with the provisions of SFAS
No. 109. SFAS No. 109 requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
tax liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The Company provides a valuation allowance against the net deferred tax assets
due to the uncertainty of realization. The increase in the valuation allowance
for the years ended December 31, 2000 and 1999 was approximately $4,303,000 and
$ 3,544,000 respectively.


                                      F-17
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Temporary differences and carry forwards, which give rise to the deferred tax
assets and liabilities at December 31, 2000 and 1999, are as follows:

<TABLE>
<CAPTION>
                                                           2000                   1999
                                                       Deferred Tax           Deferred Tax
IN THOUSANDS OF DOLLARS                             Assets (Liabilities)   Assets (Liabilities)
-----------------------------------------------------------------------------------------------
<S>                                                 <C>                    <C>
Net Operating Loss -- United States ..............        $ 54,268               $ 51,498
Net Operating Loss -- Canada .....................           3,168                  4,113
Net Operating Loss -- Province (Canada) ..........           1,737                  2,232
State Taxes ......................................          10,787                  8,225
Deferred Revenue .................................           3,740                  2,291
Tax Credits -- United States .....................           1,463                  1,414
Tax Credits -- Canada ............................           2,529                  3,594
Intangibles ......................................             (58)                  (405)
Depreciation -- United States ....................            (276)                  (495)
Depreciation -- Canada ...........................             158                    602
Depreciation -- Province (Canada) ................             218                    816
Other ............................................           2,000                  1,546
                                                    -------------------------------------------
                                                            79,734                 75,431
                                                    -------------------------------------------
Valuation Allowance -- United States .............         (61,137)               (55,849)
Valuation Allowance -- Canada ....................          (5,855)                (8,309)
Valuation Allowance -- Province (Canada) .........          (1,955)                (3,048)
Valuation Allowance -- State .....................         (10,787)                (8,225)
                                                    -------------------------------------------
Total Net Deferred Taxes .........................        $     --               $     --
                                                    ===========================================
</TABLE>

Given that significant uncertainty exists regarding the realizability of the
Company's deferred tax assets, a full valuation allowance is recorded.

13. SAVINGS AND INVESTMENT RETIREMENT PLAN

The Company has a defined contribution savings and investment retirement plan
under section 401(k) of the Internal Revenue Code, as amended, whereby
substantially all U.S. employees are eligible to participate, ("U.S. Plan"), and
a deferred profit sharing plan for substantially all Canadian employees. In June
1999 the Company started to make matching contributions to these plans, and
compensation expense in the amount of approximately $103,000 and $101,000 was
recorded for the years ended December 31, 2000 and 1999, respectively. The
trustee for the U.S. Plan is Fidelity Management Trust Company, which is
affiliated with a stockholder of the Company.

14. COMMITMENTS AND CONTINGENCIES

The Company is a defendant in a case entitled Nova Biomedical Corporation,
Plaintiff v. i-STAT Corporation, Defendant. The Complaint, which was filed in
the United States District Court for the District of Massachusetts on June
27,1995, alleges infringement by i-STAT of Nova's U.S. Patent No. 4,686,479. In
February 1998, the Court entered summary judgment in favor of the Company on the
issue of patent infringement. The plaintiff appealed the dismissal to the
Federal Circuit which affirmed two of the grounds of the dismissal (proper
interpretation of the Patent and the fact that the Company does not literally
infringe), but remanded the case to the District Court with instructions to
reconsider whether the Company's device performs a certain measurement in a
substantially equivalent way to a method covered by the Patent, and therefore
infringes under the "doctrine of equivalents." A jury trial was initially
scheduled to commence on November 6, 2000, but was postponed in order to allow
the Company to present argument that certain evidence pertaining to the
plaintiff's interpretation of the Patent should serve as the basis for dismissal
of the case. On February 23, 2001, the District Court decided not to dismiss the
case and accordingly, the case is expected to be tried in late Spring or early
Summer 2001. Should the plaintiff prevail in this case, it could have a material
and adverse impact on the financial position, results of operations and cash
flows of the Company.


                                      F-18
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Company was 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,
alleged infringement by i-STAT of Customedix's U.S. Patent No. 4,342,964. The
plaintiff sought injunctive relief and an accounting for i-STAT's profits and
the damages to Customedix from such alleged infringement. The Company was
prepared to contest the case vigorously, did not believe that it had infringed
the Customedix patent and had obtained an opinion from recognized patent counsel
to the effect that no infringement had occurred. However, management concluded
that the uncertainty inherent in any litigation as well as the drain on
management's time and the Company's resources merited an out-of-court resolution
of this lawsuit. Accordingly, on June 14, 2000, the Company entered into a
settlement agreement under which the Company paid the plaintiff $1.5 million and
the plaintiff agreed to permanently withdraw the complaint and to release the
Company from any and all claims of whatsoever nature that the plaintiff may have
had against the Company, whether under the referenced Patent or otherwise. A
charge in the amount of $1.5 million was recorded in the second quarter of 2000
in connection with the settlement of this litigation.

15. CONSOLIDATION OF OPERATIONS

In January 1998, the Company decided to consolidate all its cartridge assembly
operations in its manufacturing facility in Ontario, Canada. In order to
facilitate this move, the Company relocated its cartridge assembly operation
from Plainsboro, New Jersey to its manufacturing facility in Ontario, Canada.
The relocation of cartridge assembly commenced in June 1998, with the transfer
of one assembly line to Canada, and the Company completed the relocation by
April 1999. As a result of this consolidation of operations, 66 employees in the
cartridge assembly operations were notified during the first quarter of 1998
that their employment would be terminated. The Company's lease for its
instrument operations, engineering, customer support, selected research and
development, marketing and administrative facility in Princeton, New Jersey,
expired in September 1998. The Company relocated these activities to a 37,474
square foot leased facility in East Windsor, New Jersey. The product
distribution operations formerly located in the Company's Plainsboro, New Jersey
facility were relocated to the Company's East Windsor, New Jersey facility in
early 1999. The charge to earnings in 1999 was $70,000. The charge to earnings
in 1998 for these relocations, including severance and retention payments to
affected employees, the physical move of equipment, rent and utilities on the
unoccupied Plainsboro facility until that lease expired in February 1999, and
miscellaneous costs was approximately $1.1 million. The charge to earnings in
1998 comprises approximately $1.0 million for severance and retention payments,
and approximately $0.1 million for lease costs in respect to the unoccupied
Plainsboro facility and other expenses associated with the move to the East
Windsor facility. Retention payments are charged to expense over the retention
period.


                                      F-19
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


16. GEOGRAPHIC SEGMENT DATA

The Company is engaged in the development, manufacturing and marketing of its
proprietary blood analysis products in the health care sector. The Company's
operations are classified into the following geographic areas:

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS                       Year Ended December 31,
--------------------------------------------------------------------------------
                                      2000              1999              1998
Net revenues:
<S>                                 <C>               <C>               <C>
Domestic.........................   $ 39,973          $ 31,437          $ 29,270
Canada...........................        302               271               344
Japan............................      6,621             4,610             3,794
Other International..............      8,141             8,907             5,693
                                    --------------------------------------------
Total............................   $ 55,037          $ 45,225          $ 39,101
                                    ============================================
</TABLE>

<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS               Year Ended December 31,
--------------------------------------------------------------
                                      2000              1999
<S>                                 <C>               <C>
Long-lived assets:
Domestic.........................   $  3,991          $  3,839
Canada...........................     15,646            14,041
                                    --------------------------
Total............................   $ 19,637          $ 17,880
                                    ==========================
</TABLE>

The Company's net revenues from Abbott were approximately $45,927,000,
$35,499,000 and $4,515,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.


                                      F-20
<PAGE>
                               i-STAT CORPORATION
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                         2000
                                                                  First         Second          Third        Fourth
IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA         Quarter        Quarter        Quarter       Quarter
------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>            <C>            <C>
Net revenues ...............................................   $    11,154    $    14,809    $    13,453    $    15,621
Operating loss .............................................  ($     5,175)  ($     3,930)  ($       575)  ($       445)
Net income (loss) ..........................................  ($     4,669)  ($     3,491)  ($       114)   $       779
Basic and diluted net income (loss) per share, as restated .  ($      0.29)  ($      0.19)  ($      0.01)   $      0.04
Weighted average shares used in computing
     basic net income (loss) per share, as restated ........    15,871,683     18,004,095     18,060,265     18,104,346
Weighted average shares used in computing diluted net income
     (loss) per share, as restated .........................    15,871,683     18,004,095     18,060,265     19,305,728
</TABLE>

<TABLE>
<CAPTION>
                         1999
                                                                  First         Second          Third         Fourth
IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA         Quarter        Quarter        Quarter       Quarter
------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>            <C>            <C>
Net revenues ...............................................   $    10,337    $    11,426    $    11,377    $    12,085
Operating loss .............................................  ($     4,937)  ($     4,860)  ($     1,836)  ($     2,676)
Net loss ...................................................  ($     4,491)  ($     4,492)  ($     1,478)  ($     2,341)
Basic and diluted net loss per share, as restated ..........  ($      0.29)  ($      0.29)  ($      0.10)  ($      0.15)
Weighted average shares used in computing
     basic and diluted net loss per share, as restated .....    15,335,263     15,379,326     15,427,361     15,478,403
</TABLE>

Basic and diluted net loss per common share amounts are calculated independently
for each of the quarters presented. The sum of the quarters may not equal the
full year basic and diluted net loss per common share amounts.


                                      F-21